| BenefitsLink Retirement Plans Newsletter |   |
May 19, 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) |
Overview: GUST Pre-Approved Plan Program Will Close June 15, 2005
Excerpt: "IRS Announcement 2005-36 also sets a deadline of October 31, 2005 for the submission of EGTRRA 'lead' defined contribution prototype and volume submitter plans by mass submitters. This only impacts SunGard Corbel (and other mass submitters). It does not impact the deadline by which submissions must be made on behalf of entities using these plans (the deadline for the submission of plans based on these plans is still January 31, 2006)." (SunGard Corbel)
Defined Benefit Pension Plan Management Complexities Presage a Boom in Investment Outsourcing
Excerpt: "Over the last 20 years, outsourcing of defined benefit plans began as a way for small sponsors to capture discounts from high management fees on accounts. Offloading the cost of running a plan is still part of the outsourcing decision but, with astute defined benefit management becoming more crucial and complex, sponsors look to a variety of outsourcing firms for their acumen in investing and asset-liability management." (PLANSPONSOR.com; one-time registration required)
Though Popular Elsewhere, Exchange-Traded Funds Are Rare in 401(k) Plans
Excerpt: "[T]he biggest attraction of having ETFs in retirement plans is lower fees. 'Participants are currently paying exorbitant fees for their 401(k) plans,' he says. 'We estimate that 70% to 90% of the cost of any 401(k) plan is tied to the associated mutual-fund fees. For the fiduciaries, the No. 1 advantage with having ETFs in a 401(k) plan is the transparency of fees -- that is, they won't have the problem of all the hidden fees, like 12b-1 fees. With ETFs, fees are 100% transparent." (BusinessWeek Online)
Opinion: Let's Legalize Unlimited Catch-Up Contributions in 401(k) Plans
Excerpt: "[C]ongress needs to remove the ridiculously low ceiling on catch-up contributions and instead allow an unlimited amount to be socked away in tax advantaged accounts--whether it's a bonus, tax refund, inheritance or 100% of a spouse's income. Pardon the following 'condiment metaphor overload,' but by implying that a few thousand dollars of catch-up contributions will cut the mustard, we are putting Boomers in a pickle that will be impossible to get out of by the time they realize ...." (401khelpcenter.com)
Overview: IRS Proposed Regulations on Roth 401(k) Plan Contributions (PDF)
Pages 1-4 of 12 pages. Excerpt: "Beginning in 2006, 401(k) plans and 403(b) plans may, but are not required to, allow participants to elect to make after-tax Roth IRA-like contributions to a 401(k) plan or a 403(b) plan. On March 2, 2005, the Internal Revenue Service ('IRS') issued proposed regulations regarding certain requirements for Roth 401(k) plan contributions." (White & Case LLP)
Congressional Estimates Put the Pension Benefit Guaranty Corporation's Bill at $120 Billion
Excerpt: "According to new congressional estimates, the government-run insurer of traditional pensions could face a bill of more than $120 billion over the next decade to cover pension fund losses, BusinessWeek has learned. That far exceeds the $23 billion that the PBGC estimates it needs to pay off workers and retirees. The PBGC's liabilities include the $6.6 billion in unfunded United Airlines (UAL ) pension obligations that the agency absorbed on May 10." (BusinessWeek Online)
Employer Can't Drop Retirement Benefit Agreements in Bankrup.tcy
Excerpt: "A federal appeals court has ruled that a Naugatuck, Connecticut company cannot drop retirement benefit agreements it had with four executives who it had fired before filing for US Bankrup.tcy Court protection. The US 3rd Circuit Court of Appeals said the four terminated executives of General DataComm Industries should have been given the procedural protections contained in federal bankrup.tcy law for retired employees." (PLANSPONSOR.com; one-time registration required)
Overview: Bankrup.tcy Protection for Retirement Plan Assets
Excerpt: "On April 20th, the President signed the Bankrup.tcy Abuse Prevention and Consumer Protection Act of 2005 ('Act'). The Act makes significant changes in the bankrup.tcy rules, including adding specific protections for retirement plans. The Act goes into effect for bankrup.tcy petitions filed after October 16, 2005. Retirement Plans. The new law exempts from the bankrup.tcy estate assets held by a qualified plan, 403(b) plan, 457 plan or IRA (traditional, Roth, SEP and SIMPLE)." (SunGard Corbel)
Argentina Court Ruling on Pensions Could Have Fiscal Cost of 3 Pct of GDP, According to Analysts
Excerpt: "The ruling by Argentina's Supreme Court in favour of a retiree claiming a retroactive pension adjustment could open the doors to further claims that may end up costing ... 3 pct of GDP .... .... Pensions used to be indexed to the changes in salaries, but this mechanism was scrapped in 1991 when the convertibility law was enacted prohibiting indexation. The Supreme Court ruled that the decision ... to stop indexing pensions ... was illegal, ...." (AFX News Limited via Forbes.com)
Ontario Government Tables Its 2005 Budget Containing Amendments to the Pension Benefits Act
Excerpt: "Highlights of initiatives announced in the Budget include the following: Increased funding for health care and post-secondary education; 'Modernization' of Ontario's commercial-law and financial regulation framework; New spending on public infrastructure projects; and Amendments to the Pension Benefits Act (PBA). The proposals to amend the PBA will be of particular interest to sponsors of certain multi-employer pension plans and pension plans with members in both Ontario and Quebec." (Watson Wyatt Worldwide)
European Union Update: Pensions Act 2004 (PDF)
Pages 6-10 of 12 pages. Excerpt: "Various sets of regulations and guidance implementing the detail of the Act have been issued for consultation and further regulations and codes of practice are expected. Set out [on the target page] are the key changes made by the Act, and the guidance and regulations issued to date." (White & Case LLP)
Symposium Presentations at The Evolution of Risk and Reward Sharing in Retirement Conference
Excerpt: "Retirement systems unavoidably balance a variety of economic and political risks, including capital market and mortality shocks, firm bankrup.tcy risks, funding changes, and policy shifts. These are in turn reapportioned among various stakeholders. This conference will analyze how recent changes in risk and reward patterns are being shared among the parties to private and public retirement systems. Our goal is to assess how these risk sharing arrangements are evolving and ...." (Wharton School, Pension Research Council)
Boosting Income and Contribution Limits for Pension Savings Would Swell Deficits
Excerpt: "This analysis explores proposals to eliminate income limits on IRAs, raise contribution limits on IRAs and 401(k)s, and establish 'health IRAs' or similar mechanisms." (Center on Budget and Policy Priorities)
Overview: SEC Adoption of New Rule on Mutual Fund Redemption Fees (PDF)
Pages 4-6 of 12 pages. Excerpt: "Rule 22c-2 applies to all funds except money market funds, exchange traded funds, and funds whose purpose is to permit market timing of fund shares. Should those funds opt to impose a redemption fee, they would have to satisfy the rule's requirements." (White & Case LLP)
Report on Conference: Retirement Programs Face an 'Aging-Population Tsunami'
Excerpt: "Against the backdrop of rising concerns over both public and private pension systems in the U.S., industry experts convened at a recent Wharton conference to debate ways in which retirement programs can be better managed. Participants discussed such topics as the problems facing Social Security, the solvency of the Pension Benefit Guaranty Corp., and the consequences of an increase in defined contribution plans like 401(k)s along with a corresponding decline in defined benefit plans." (Wharton School of the University of Pennsylvania)
Links to Items on Executive Comp, Benefits in General
Domestic Partner Benefit Offerings Continue to Spread
Excerpt: "More than half of employers surveyed offer domestic partner benefits to their employees, according to Hewitt Associates. A Hewitt announcement said that its survey of 281 US employers, Benefit Programs for Domestic Partners and Same-Sex Spouses, found that 56% of responding employers gave such benefits to at least some of their workers - a whopping 34% hike over the past five years." (PLANSPONSOR.com; one-time registration required)
Overview: Action Required to Avoid 409A Penalties
Excerpt: "New §409A of the Internal Revenue Code has the snappy title 'Inclusion in gross income of deferred compensation under nonqualified deferred compensation plans.' The statute lists four types of 'plan failures', any of which will trigger taxation, penalties, and late payment interest. Two additional requirements apply if trusts are involved. 'Deferred compensation plan' does not just mean a SERP or an elective deferral program. The term may include bonuses, severance, ...." (Rackemann, Sawyer & Brewster)
Brief of the Secretary of Labor as Amicus Curiae in Roland H. Bickley v. Caremark, Inc. (PDF)
28 pages. Excerpt: "Questions presented: 1. Whether a plan participant has standing under sections 502(a)(2) and 502(a)(3) of ERISA, 29 U.S.C. §§ 1132 (a)(2) and 1132(a)(3), to bring an enforcement action for a breach of a fiduciary duty. 2. Whether a plan participant must exhaust internal administrative remedies applicable to benefit denials before bringing suit under sections 502(a)(2) and 502(a)(3) of ERISA to remedy fiduciary breaches." (U.S. Department of Labor)
Hewitt Federal Legislation Quick Guide Updated as of May 17, 2005
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)
Newly Posted Events
ASPPA Summer Conference and Western Pension & Benefits Conference Annual Conference
in Nevada on July 16, 2006
presented by ASPPA (American Society of Pension Professionals & Actuaries)
Taking Care of Our Troops on the Home Front: New USERRA Guidance
Nationwide on June 16, 2005
presented by ABA Joint Committee on Employee Benefits
Newly Posted Press Releases
EBRI President Dallas Salisbury Outlines Americans' Reliance On and Use of Various Retirement Options
(Employee Benefit Research Institute (EBRI))
Treasury and IRS to Provide More Time to Spend FSA Funds
(U.S. Treasury Department and Internal Revenue Service)
Newly Posted or Renewed Job Openings
Daily Valuation Administrator
for Pension Consulting Firm
in NJ
Wealth Management Consultant
for Phoenix Life
in MA
401(k) / Defined Contribution Administrator
for E.R.I.S.A., Inc.
in IL
Compliance Coordinator
for Fred S. Shapiro & Associates, Inc.
in MD
Sales Consultant
for Benetech, Inc.
in ANY STATE
Remittance Services Specialist
for ICMA-RC - Building Retirement Security
in DC
Client Solutions Associates
for ICMA-RC - Building Retirement Security
in DC
Enrolled Actuary / Pension Consultant
for Madison Pension Services, Inc.
in NY
Senior Manager, Treasury
for Computer Associates
in NY
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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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