| BenefitsLink Retirement Plans Newsletter |   |
May 17, 2005
Today's sponsor: ASPPA • Working for America's Retirement™
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| Meeting Midway Conference |
| July 24-27, 2005 * San Diego, CA
Health and welfare issues * 401(k) plans Employee compensation * Actuarial pension issues Health Savings Accounts * Legal & fiduciary issues You don't want to miss this one! Register online today. Brought to you by WP&BC and ASPPA. |
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Mutual Funds Consider Redemption Fees for Short-Term Investors in Light of SEC Rule
Excerpt: "The Securities and Exchange Commission will let mutual fund companies charge short-term investors fees if their rapid trading hurts long-term investors. The rule, approved in March and effective next year, is an effort to limit market timing, a legal practice that can lead to high costs for long-term investors, such as 401(k) participants." (Employee Benefit News)
The New Roth 401(k) Is Here
Excerpt: "When the Economic Growth and Tax Relief Reconciliation Act of 2001 was passed, there was a provision allowing employers to offer their employees the opportunity to make Roth 401(k) deferrals. This provision of the law received little fanfare, since the new provisions applied only in tax years beginning after 2005. Well, 2006 is almost here, and many people are beginning to take notice of this provision in the law -- including the IRS." (The Motley Fool)
Fee-Based Advisers Face 401(k) Boom in the Small- to Midsize-Plan Market
Excerpt: "The prospect for advisers who deal in 401(k) plans to take over business from existing plan providers has reached a high-point. The 401kExchange Inc. in Lake Worth, Fla., an adviser prospecting service that polls about 800 plan sponsors a week, finds that the number of employers that might switch or are actively searching for a new provider is at or near record levels." (Investment News; registration or subscription required)
Tips for 401k Plan Sponsors on How to Help Participants
Excerpt: "The three most common ways employees categorize themselves as investors are: Making Progress, Being Financially Confident, and Getting Started. To meet the needs of these investor types: Consider helping 401k participants put their plans on auto-pilot[.]" (401khelpcenter.com, LLC)
ERISA and Your Company's Retirement Plan: Managing the Risk of Federal Audit
Excerpt: "If your company sponsors a qualified retirement plan, whether a defined contribution plan-- such as a 401(k)--or a defined benefit plan, it faces two types of regulation. The Department of Labor (DOL) enforces regulations relating to the protection of employees. The Internal Revenue Service enforces the provisions relating to tax treatment. This article concerns the Department of Labor oversight and the risk of DOL audit. [Originally published in 2003]" (Greenwich Financial Management)
SEC Filings Don't Tell the Whole Pension Story
Excerpt: "You're entitled to think that the documents companies file with the Securities and Exchange Commission have some basis in economic reality. But when you run into something like United Airlines' pension numbers, you realize how big a difference there can be between SEC filings and the real world." (The Washington Post; one-time registration required)
Overview: IRS Provides Guidance on the Deferral of Experience Losses by Multiemployer Plans (PDF)
3 pages. Excerpt: "The IRS has issued Notice 2005-40, which provides guidance for eligible multiemployer plans that may elect to defer a portion of net experience losses under their funding standard account. The guidance, in the form of Q's and A's, explains the application process, the eligibility criteria and the conditions that must be satisfied to qualify for this relief." (Mellon Financial Corporation)
Pensions Are Becoming Even Scarcer and More Old-Line Industries May Default on Pension Obligations
Excerpt: "The nation's private pension system is fraying and at risk of unraveling altogether. The reason: More than three-quarters of the nation's traditional private pension plans are underfunded - which means they currently don't have enough assets to cover the benefits already promised to their workers and current retirees." (The Christian Science Monitor)
Request for Proposal: Focus Group Study of Retiree Behavior with Single Sum Distributions
Excerpt: "The Committee on Post-Retirement Needs & Risks is issuing this request for proposals to study how retirees manage large single sum distributions. This is anticipated to be a multi-phase effort. For the first phase of this effort, a focus group of recent retirees would form the basis for data collection and resulting report. In addition, observations gained from the focus group will help to frame future work in subsequent phases." (Society of Actuaries)
Opinion: H&R Block Experiment with IRA Matching Funds is a Guideline for Savings Policy
Excerpt: "For proof that people are able and willing to save when well-designed policies help them do so, lawmakers should pay close attention to the results of an experiment that was conducted this year at 60 offices of H&R Block in the St. Louis area. From March 5 to April 5, some 15,000 H&R Block clients, most of them low- or middle-income, were offered free help setting up I.R.A.'s." (The New York Times; one-time registration required)
Commentary on the SEC Release of the Staff Report on Pension Consultants
Excerpt: "The SEC ... announced the release of the 'Staff Report Concerning Examinations of Select Pension Consultants.' The Report comes on the heels of an examination by the SEC of 24 pension consultants who are registered with the SEC as investment advisers. The examinations focused on (i) the products and services provided by the pension consultants; (ii) the method of payment for such services; and (iii) the disclosure provided to their clients. ....'" (Attorney B. Janell Grenier via BenefitsBlog.com)
Powerful Panel Chairman Thomas Takes Aim at Social Security Reform
Excerpt: "House Ways and Means Chairman Bill Thomas (R-Bakersfield) is trying to breathe new life into the Social Security debate by marrying it to a plethora of other contentious issues, among them rewriting the tax code, financing long-term healthcare and shoring up private pensions. The strategy is vintage Thomas: No one ever accused the brainy but irascible chairman of thinking too small, or of having too little self-confidence to swing for the fences." (Los Angeles Times via Yahoo! News)
San Francisco City Attorney Sues AIG Over Losses to Pension System
Excerpt: "San Francisco City Attorney Dennis Herrera sued embattled insurer American International Group and its former top executives on Monday, blaming securities fraud for the stock market loss of more than $4.2 million to the San Francisco Employees' Retirement System. The suit was filed in U.S. District Court in New York, where AIG is under investigation by state Attorney General Eliot Spitzer and the Securities and Exchange Commission for its accounting practices." (San Francisco Chronicle)
Opinion: Confronting New Realities on Pensions
Excerpt: "This benefit erosion is part of larger changes in the economy. .... As the days of generous fringe benefits draw to a close, it is essential that we redefine the roles of the private and the public sector in meeting the needs once met by pension and health care fringe benefits." (The Century Foundation)
S.E.C. Investigating Pension Consultants' Disclosure of Conflicts of Interest
Excerpt: "The Securities and Exchange Commission is investigating about a dozen pension consulting firms over suspected failures to disclose conflicts of interest. The commission, after completing an 18-month review, said yesterday that most consultants that help pension funds invest their assets had business relationships that could be tainting their advice." (The New York Times; one-time registration required)
Report to President's Panel: Savings under Tax Reform -- What is the Cost to Retirement Savings? (PDF)
49 pages. Excerpt: "Given the costs of such [tax] reform policy changes and their significant distributional impacts, it is important to consider the effect on retirement savings. As tax reform proposals eliminate or dilute the incentives for qualified retirement plans, it is likely that many employers will cease to offer qualified retirement plans and the prospect for adequate retirement savings for the majority of Americans will diminish significantly." (American Society of Pension Professionals & Actuaries)
Links to Items on Executive Comp, Benefits in General
Overview: SEC and PCAOB Internal Control Reporting under Sarbanes-Oxley Section 404 Guidance
Excerpt: "On May 16, the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) issued additional guidance relating to their respective rules on internal control reporting under Sarbanes-Oxley Section 404. [Target page contains links to the relevant documents]" (Financial Executives International)
Accounting Regulators Suggest Potential SOX Streamlining Procedures
Excerpt: "Responding to complaints that implementing Sarbanes-Oxley is proving too onerous and expensive, the Public Company Accounting Oversight Board (PCOAB) has issued recommendations on how the process can be better streamlined. PCOAB Chairman William McDonough said the guidance is intended to help public companies and their auditors comply with internal-controls requirements through 56 questions and answers and a 14-page policy statement from the oversight board." (PLANSPONSOR.com; one-time registration required)
Washington State Firms Can No Longer Take Out 'Dead Peasant' Insurance on Workers
Excerpt: "Companies statewide will no longer be allowed to secretly take out corporate life insurance policies on their rank-and-file employees under a law signed this week by Gov. Christine Gregoire. Through a practice critics call 'dead peasant insurance,' many companies, particularly large ones, had bought life insurance policies on workers without telling them. The companies then collected the death benefits, often long after the employee had retired or left the company." (Settle Post-Intelligencer Reporter)
Summary of Survey on Benefit Programs for Domestic Partners and Same-Sex Spouses
Excerpt: "In a survey on Benefit Programs for Domestic Partners and Same-Sex Spouses conducted by Hewitt Associates, 56% of responding organizations indicated they offer domestic partner benefits to some or all of their employees. This reflects a 34 percentage point increase in the past five years of organizations offering benefits to domestic partners. This is just one of the findings of the survey of 281 U.S. employers." (Hewitt Associates)
Connecticut to Permit Civil Unions Between Same-Sex Partners Effective October 1, 2005 (PDF)
2 pages. Excerpt: "Connecticut has passed a law legalizing civil unions between same-sex couples eighteen years of age and older. Effective October 1, 2005, same-sex couples entering into a civil union will have the same legal benefits, protections and responsibilities afforded married couples in Connecticut. The new law does not require private employers to provide any new benefits, but could have implications under the state family leave law and for state and local employers." (Mellon Financial Corporation)
Regulators Seek to Trim Cost of Rules on Auditing
Excerpt: "Facing complaints from businesses about the expense of complying with a new law on internal financial controls, auditing regulators in the United States moved yesterday to ease the costs. But they also said that the rule had greatly benefited investors and that there was no need for Congress to revise the law." (The New York Times; one-time registration required)
Newly Posted Events
The 2nd Creating, Designing & Marketing Health Savings Accounts
in District of Columbia on September 12, 2005
presented by International Quality & Productivity Center (IQPC)
The ABCs of Cross-Tested Plans - A Special Two-Part Event
Nationwide on June 7, 2005
presented by SunGard Corbel
USERRA's Impact on Health Benefits and 401(k) Plans: What to Do When Employees Leave for & Return From Service
Nationwide on May 25, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Newly Posted or Renewed Job Openings
Senior Project Manager
for The Paragon Consulting Group, Inc.
in IN
Retirement Plan Analyst/TPA
for Fifty year old firm specializing in the healthcare industry
in NC
AVP of Retirement Programs
for UnumProvident Corporation
in ME
AVP, Health Management & Insurance Programs
for UnumProvident Corporation
in ME
Manager, Retirement Plans
for A Fortune 500 Company
in AZ
Account Coordinator
for Benefits Planning & Insurance Agency
in CA
Pension Administrator
for Pension Performance, Inc.
in IL
Pension Administrators/Calculation
for The Rosen Group, leader in placement of Benefits Professionals
in DE, NJ, PA
Defined Contribution Administrator
for Blue Chip Retirement Plans, Inc.
in WI
Retirement Benefits Administrator
for BPB America
in FL
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