| BenefitsLink Retirement Plans Newsletter |   |
May 12, 2005
Today's sponsor: Penchecks, Inc.
(Click on company name or banner to learn more.)
| Penchecks, Inc. Announces the National Registry of Unclaimed Retirement Benefits! |
| Coming in May 2005, the National Registry is a web-based service
designed to reunite plan participants with their unclaimed retirement benefits. Plan Administrators and IRA custodians may register their missing participants in the National Registry’s database. Participants will be able to check the database online. If a record is found, contact information is provided. There is no charge to individual participants to use the service.
All Penchecks, Inc. missing participants IRAs are automatically included in the National Registry Database. PenChecks, Inc. is the industry leader in Benefit Distributions, Missing Participant, and Automatic/Default Rollover IRA Programs. For more information click above or call 800-541-3938. |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Administration and Business Seeking Pension Plan Remedies
Excerpt: "In an unusual clash between traditional allies, Big Business and President Bush are debating the fate of troubled corporate pension plans -- and how to ensure the survival of the government-backed entity that insures them. The Bush administration wants to shore up the Pension Benefit Guaranty Corp., which faces a $23 billion shortfall as more troubled companies shed their costly defined-benefit pension programs." (USA TODAY)
Capital Market Update: Funded Ratio Plunges in April (PDF)
4 pages. Excerpt: "The funded ratio for our benchmark plan declined 3.1 percentage points in April, due to the combined impact of a decline in long bond yields and negative equity returns. The resulting funded ratio of 79.2% is the lowest level seen in almost two years." (Towers Perrin)
Quebec Proposes Legislation Relaxing Pension Funding Rules
Excerpt: "On May 5th, Quebec's Minister of Employment and Social Solidarity introduced Bill 102, An Act respecting the funding of certain pension plans. The purpose of Bill 102 is to temporarily relax certain funding rules for defined benefit (DB) and hybrid pension plans. Given the number of Quebec-registered pension plans in solvency deficit (seven out of 10 by some estimates), the legislation may provide some welcome relief to plan sponsors." (Watson Wyatt Worldwide)
United Kingdom Pension Funding Deficits Up in 2004
Excerpt: "The largest 350 publicly listed companies in the U.K. had a pension funding deficit of £76 billion ($145.6 billion) at the end of 2004, up slightly from £73 billion ($130.3 billion) at the end of 2003, according to research by Mercer Human Resource Consulting in London." (Business Insurance)
Opinion: United Airline's Pension Debacle -- What the Government Must Do to Protect Employees
Excerpt: "On Tuesday, when it received a federal bankrup.tcy court's permission to terminate its pension plans, United Airlines became the biggest pension defaulter in the history of corporate America. Analysts fear that Delta may also default, as well as other ailing airlines, followed by auto parts companies and perhaps even, in five years or so, the carmakers themselves." (The New York Times; one-time registration required)
Letter to IRS on Communication Under Relative Value Regulations (PDF)
6 pages. Excerpt: "On behalf of the American Academy of Actuaries' Pension Committee, I thank you for this opportunity to suggest further refinements to the relative value regulations. [W]e would like to highlight some concerns and offer suggestions for simplifying the benefit communication material that must be offered to participants under the relative value rules." (American Academy of Actuaries)
Pension Committee Letter to IRS on Applying Parts of Circular 230 to Pension Actuaries' Work (PDF)
4 pages. Excerpt: "On behalf of the members of the American Academy of Actuaries Pension Committee, I would like to take this opportunity to comment on the recently finalized revisions to Circular 230, which raise questions among pension actuaries regarding how Sections 10.33 and 10.35–10.37 apply to their work. In particular, committee members are concerned over the extent to which a pension actuary's work product may constitute a 'covered opinion.'" (American Academy of Actuaries)
U.S. Bankrup.tcy System Creating Transfer of Wealth from Retirees to Junk Bond Investors
Excerpt: "William J. Rochelle, a bankrup.tcy lawyer with Fulbright and Jaworski in New York, said Congress needs to devise some way for airlines and other businesses, such as automakers and truckers, to lighten their pension burden outside of bankrup.tcy court, .... The current system isn't fair to retirees, Rochelle said, in that they lose their pensions and any money they had invested in the company's stock, which typically becomes worthless during the bankrup.tcy reorganization." (BusinessWeek Online)
Overview: IRS Addresses Impermissible Amendments Suspending Accrued Benefits (PDF)
4 pages. Excerpt: "In Central Laborers' Pension Fund v. Heinz, et al., the Supreme Court ruled that a plan amendment expanding the categories of postretirement employment that trigger a suspension of a retiree's accrued early retirement benefit is a violation of ERISA's anti-cutback rule. The Internal Revenue Service has now issued Revenue Procedure 2005-23, which clarifies the time period to which the Supreme Court decision applies for purposes of the Internal Revenue Code's anti-cutback rule." (Mellon Financial Corporation)
Boston's Catholic Archdiocese May Cut Priests' Pensions
Excerpt: "Seeking to save money, the Roman Catholic Archdiocese of Boston is proposing cuts in its pension benefits for priests. The archdiocese says that its pension fund has had poor returns in recent years and has suffered from many of the same problems as corporate America's pension funds." (The New York Times; one-time registration required)
CalPERS Increases 'Clean' Investments for the Pension Fund
Excerpt: "The California Public Employees' Retirement System (CalPERS) has decided to invest up to $500 million in companies it deems environmentally responsible. CalPERS, the nation's largest public pension fund, will take a position in environmentally screened stock funds, according to California state Treasurer Phil Angelides, who sits on the CalPERS board, Dow Jones reported." (PLANSPONSOR.com; one-time registration required)
Canadian Ruling on Retirees' Pension Rights on Use of Fund Surplus Appealed
Excerpt: "A recent Quebec Court of Appeal ruling that expanded Canadian employers' control over ongoing pension plans has been appealed to the Supreme Court of Can.ada. In Provincial Assn. of Hydro-Quebec Retirees vs. Hydro-Quebec, the Quebec Court of Appeal in Montreal ruled in March that retirees do not have to be consulted on the use of a surplus in an ongoing pension plan (BI, April 18)." (Business Insurance)
Issue Brief: Productivity Growth and Social Security's Future (PDF)
4 pages. Excerpt: "As productivity increased in the 1950s, 1960s, and 1970s, the United States made substantial improvements in Social Security benefits -- raising benefits in tandem with wages ..., incorporating disability benefits, and allowing for early retirement. Although the share of the population in retirement will rise in coming decades, the U.S. economy can readily afford to maintain a strong Social Security program because productivity will rise faster than population." (The Economic Policy Institute)
Experts Are at a Loss on Investing for Retirement
Excerpt: "Nobel winners and top academics fumble the sorts of decisions Bush's Social Security overhaul plan would ask average Americans to make." (Los Angeles Times; one-time registration required)
ICI President's Remarks at 2005 Membership Meeting on Saving for Retirement
Excerpt: "For millions of Americans saving for retirement, one of the most frustrating aspects of the tax law is this: For taxable accounts, they must pay taxes today on fund shares they may not sell for years. Obviously, fund shareholders, like other investors, expect to be taxed when they sell their shares. But not before. Nor should they be. Not when they are still building for retirement." (Investment Company Institute)
Opinion: Stop Raiding the Social Security Trust Fund and Start the Private Accounts
Excerpt: "For decades, the federal government has raided the Social Security trust fund to finance other government spending. Social Security's surplus is taken each year to finance all the other federal programs, from foreign aid to welfare. It is time to stop this inexcusable raiding, and give the surplus instead to workers to start their own, individual, personal accounts." (Larry Hunter and Peter Ferrara via The Washington Times)
Links to Items on Executive Comp, Benefits in General
May 23, 2005 Deadline for Settling Compensatory Stock Options Transferred to Related Persons (PDF)
Excerpt: "Notice 2003-47 identifies as a listed transaction for purposes of sections 6111 and 6112 ... a transaction ... in which an officer, director, or employee ... to whom a compensatory nonstatutory stock option or restricted stock is granted ... transfers the option or restricted stock to a related person in exchange for a deferred payment obligation.... Taxpayers have until May 23, 2005, to notify the Service of their intent to participate in the settlement described in the announcement." (Internal Revenue Service)
Cisco Systems Pushes a New Twist on Employee Stock Options
Excerpt: "Adding a new twist to the continuing fight over the expensing of employee stock options, Cisco Systems is seeking regulatory approval for a novel financial instrument that could allow the company to assign a lower value to the stock options than under current valuation models." (The New York Times; one-time registration required)
Spitzer Probes Raise Fears of Employer Liability in Employee Benefits Administration
Excerpt: "Eliot Spitzer, the New York state attorney general (below), has brought big companies to heel. But his probes will have consequences for little guys, too. That's because his investigations have underscored the idea that employers have a fiduciary responsibility to ensure that employees are not overcharged for benefits. If your 401(k) provider or insurance company overcharges your workers, you may be liable. This news has set the staid benefits-administration world abuzz." (Inc. Magazine)
Cracks Grow in Retirement Nest Eggs: Pensions, Social Security and Medicare Are Looking Shaky
Excerpt: "A court decision Tuesday that frees United Airlines from its pension fund obligations leaves the carrier's employees face-to-face with a growing reality for U.S. workers: The retirement of the future will be a lot less secure. Years ago, it was easy for the federal government and employers to promise retirement benefits; .... But it's not so easy to make good on those promises now that the baby boom is on the verge of retirement and the cost of meeting those obligations has swelled." (St. Petersburg Times)
CBO Paper: The Effects of Reserve Call-Ups on Civilian Employers (PDF)
42 pages. Excerpt: "This Congressional Budget Office (CBO) report examines the combined effects of reservists' activations and federal job protections on civilian employers. It also addresses the question of financial losses among self employed reservists, a group that some people maintain deserve special assistance because they may have experienced particularly negative effects from the recent rise in activations." (Congressional Budget Office)
Newly Posted Events
Fundamentals of 401(k) Plans
in North Carolina on June 2, 2005
presented by SunGard Corbel
Fundamentals of 401(k) Plans
in Minnesota on June 9, 2005
presented by SunGard Corbel
Fundamentals of 401(k) Plans
in Texas on June 9, 2005
presented by SunGard Corbel
Fundamentals of 401(k) Plans
in Kansas on June 23, 2005
presented by SunGard Corbel
Fundamentals of 401(k) Plans
in Texas on June 29, 2005
presented by SunGard Corbel
Fundamentals of Qualified Plans
in Ohio on June 29, 2005
presented by SunGard Corbel
Fundamentals of Qualified Plans
in Washington on June 29, 2005
presented by SunGard Corbel
Plan Design Workshop - Exploring New Directions
in District of Columbia on June 15, 2005
presented by SunGard Corbel
Plan Design Workshop - Exploring New Directions
in Texas on June 16, 2005
presented by SunGard Corbel
Plan Design Workshop - Exploring New Directions
in California on June 16, 2005
presented by SunGard Corbel
Newly Posted Press Releases
Many Companies Revamp Executive Compensation, Says Hewitt; Accounting and Governance Issues Lead to Major Changes
(Hewitt Associates LLC)
United Airlines Decision Underscores Need To Focus On Pension System, Not Just PBGC
(American Benefits Council)
New CPI Services Help Investment Professionals Manage Mutual Fund Short-Term Redemption Fees
(CPI Qualified Plan Consultants, Inc.)
Allied Pilots Association on United Airlines, Overall Pension Situation: 'Skeptical That Stripping Employee Benefits Will Ensure Long-Term Success'
(Allied Pilots Association (APA))
Newly Posted or Renewed Job Openings
Implementation Specialist
for ExpertPlan, Inc.
in NJ
Defined Benefit Plan Administrator
for Actuarial Consultants, Inc.
in CA
Sr Compensation Specialist
for JM Family Enterprises, Inc
in FL
Defined Benefit Administrator
for Creative Benefit Strategies, Inc.
in OH
Customer Support & Product Quality Manager: FSA Reimbursement Web Application
for BenSoft, Inc.
in CA
Benefits Associate - Global Consulting Group
for Towers Perrin
in NY
Actuarial Associate - Global Consulting Group
for Towers Perrin
in NY, PA
Reconciliation/Technical Analyst
for Professional Capital Services
in PA
Regional Vice President (Jacksonville/Orlando, FL)
for BISYS Retirement Services
in FL
Regional Vice President (Cleveland, OH)
for BISYS Retirement Services
in OH
Implementation Specialist
for Precept
in CA
Annual Plan Reporting Services Manager - PA
for Vanguard
in PA
Key Account Executive
for AIG VALIC
in ANY STATE
Handy Links:
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- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.
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