BenefitsLink Retirement Plans Newsletter May 23, 2005 Today's sponsor: DATAIR Employee Benefit Systems, Inc. (Click on company name or banner to learn more.) Software for 401(k), DB and Flexible Benefits DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Defined Benefit and Cafeteria/Flex plans. Designed for administrators and consultants. System modules include: 5500s Proposals Administration Plan Documents Client & Task Manager Training and support included. For free demo versions and pricing, contact sales@datair.com or call 1-888-328-2474. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Automatic Signup In 401(k)s Backed: Provision Eyed for Social Security Bill Excerpt: "House Ways and Means Chairman Bill Thomas ... will include a provision in his Social Security legislation to help employers make enrollment in 401(k) plans automatic unless workers choose to opt out.... The provision could have substantial impact on the nation's savings rate, which has declined from 7.2 percent in 1992 to barely 1 percent today. Recent academic research has shown that employee participation rates soar among companies with automatic enrollment in retirement plans." (The Washington Post; one-time registration required) Comments: Proposed Regulations under Code Section 401(k) Concerning Designated Roth Contributions Excerpt: "The mutual fund industry's interest in these proposed regulations is substantial, because Institute members offer mutual fund shares as investment options under section 401(k) plans and section 403(b) arrangements. .... The [ICI] comments recommend clarifications to the proposed regulations in the areas of the separate accounting requirement, and the taxation and reporting of distributions." (Investment Company Institute) EBSA Advisory Opinion 2005-11A on Behalf of Midminnesota Federal Credit Union 401(k) Plan Excerpt: "Whether a registered representative of a broker-dealer who provides brokerage services to the customers of a credit union may also provide brokerage services to the credit union's participant-directed 401(k) plan, provided that the representative does not provide investment advisory or management services to the plan." (U.S. Employee Benefits Security Administration) More Plan Sponsors View Offering Investment Advice to Participants As a Manageable Risk Excerpt: "The advice market has reached a tipping point. After years of teeth-gnashing and soul-searching, it appears that a majority of plan sponsors will conclude this year that the risk of making investment advice available to participants in defined contribution plans is less worrisome than not doing so." (PLANSPONSOR.com; one-time registration required) Clarification of Form 5500 Reporting for Delinquent Deposits of Participant Contributions Excerpt: "Must all delinquent participant contributions be reported on Line 4a of Schedule I (for small plans) or Schedule H (large plans) of the Form 5500 or only those that have not been corrected during the year? DOL Response: Schedule H and Schedule I filers must report all delinquent participant contributions for the plan year on Line 4a regardless of whether they have been corrected under the VFCP and the conditions of PTE 2002-51 have been satisfied." (Reish Luftman Reicher & Cohen) Technical Tip: Calculating the Excise Tax on Prohibited Transactions Excerpt: "A calendar year 401(k) plan has not been remitting deferrals timely. The plan sponsor would now like to make the plan whole and send in all outstanding deferrals. Is the amount that must be shown on the 5330 (and hence, subject to the 15% excise tax penalty) the TOTAL amount of all late deferrals or is it only the trust income lost due to the deferrals not being deposited timely? Response: Neither. When the deposit of participant contributions are untimely, the participants have ...." (Reish Luftman Reicher & Cohen) Retirement Income Planning, Part 7: Toward Truly 'Holistic' Planning (PDF) Excerpt: "The term ['holistic planning'] represents an increasing recognition that companies serving the retiree market need more than product-specific approaches, more than particular sales concepts (such as 'inherited' or 'stretch' IRAs), and more than the ability to give quick answers to one or two financial questions. But no one is defining just how far this 'holistic' doctrine should extend. This paper is an attempt to fill that gap." (Still River Retirement Planning Software, Inc.) Alaska Lawmakers Set to Try Again on Public Pension Plan Reform Excerpt: "Alaska lawmakers have scheduled another attempt to pass pension reform legislation amid an increasingly tense and combative atmosphere. The state Senate on Thursday named another set of negotiators for a bill that would partly privatize the state's retirement systems for new employees (See Alaska Grapples With Pension Reform) - the third such grouping to focus on that controversial measure, the Associated Press reported." (PLANSPONSOR.com; one-time registration required) Thoughts On Personal Account Proposals Related To Experiences In Other Countries Excerpt: "During the past three months, Spencer Benefits Reports has published articles about Social Security programs in other countries to illustrate the successes and problems that they have experienced with the use of personal accounts. The following comments reflect more than 40 years of experience in the benefits business by the author of those country reports, Bruce F. Spencer, founder and recently retired editor of the International Benefits Information Service (IBIS)." (Spencer Benefits Reports) Overview: GUST Program Closed for Some Pre-Approved Plans; VS Practitioners' Amendment Authority Explained Excerpt: "The IRS is continuing to streamline its plan qualification review procedures and these announcements take two more steps toward that goal. Pre-approved plan practitioners will welcome these clarifying announcements." (Employee Benefits Institute of America Inc.) EBSA Advisory Opinion 2005-09A on behalf of Vanguard Fiduciary Trust Company Excerpt: "Whether in-kind investments in a bank collective investment fund are covered by ERISA section 408(b)(8), if the stated conditions are met." (U.S. Employee Benefits Security Administration) EBSA Advisory Opinion 2005-10-A on Behalf of COUNTRY Trust Bank Excerpt: "When fees received by a bank or an affiliate, in connection with investments in certain mutual funds by IRAs or other qualified retirement plans, are offset against management fees charged by the bank to the plans, would the receipt and offset avoid prohibited transactions under Code section 4975(c)(1)(E) or (F)?" (U.S. Employee Benefits Security Administration) Parishioners in Boston Plan Suit over Alleged Misuse of Priests' Pensions' Funds Excerpt: "Parishioners in the Roman Catholic Archdiocese of Boston say they plan to file a complaint of public fraud with the Massachusetts attorney general because they believe that millions of dollars collected over many years through special appeals for the priests' pension fund was used for other purposes. The parishioners ... said they intended to file the complaint ... as part of a package of legal actions involving the handling of money and other assets by the archdiocese." (The New York Times; one-time registration required) Links to Items on Executive Comp, Benefits in General Overview: State Court Decides that Divorce Decree Controls Over Beneficiary Designation Excerpt: "While this decision does not indicate whether the plan knew of the divorce decree, the case is another reminder that ERISA plans must remain on guard against competing claims to benefits payable at death and that the judicial procedure called 'interpleader,' although not without costs, is used by some plans to resolve such claims." (Employee Benefits Institute of America Inc.) Sixth Circuit Denies Claim for Statutory Penalties: Company Provided Participant-Requested Info Excerpt: "This case reminds us of a rule that may surprise some--participants or beneficiaries may claim statutory penalties under ERISA Section 502(c)(1) only when a plan administrator fails to comply with a request for information (there are some exceptions to this, most notably for COBRA initial notice and election notice failures, for which penalties may be awarded whether or not these documents were requested)." (Employee Benefits Institute of America Inc.) EBSA Advisory Opinion 2005-06A Regarding Applicability of the Claims Procedure Regs under ERISA Excerpt: "Whether accidental death and dismemberment benefits are subject to the requirements in 29 C.F.R. § 2560.503-1 for 'disability benefits' or whether they are 'other' welfare benefits subject to the general claims procedure provisions of 29 C.F.R. § 2560.503-1." (U.S. Employee Benefits Security Administration) EBSA Advisory Opinion 2005-08A on behalf of Blue Cross and Blue Shield of Minnesota Excerpt: "Whether certain distributions from insurance companies to their policyholders are 'plan assets.'" (U.S. Employee Benefits Security Administration) Newly Posted Events Newkirk Fund Central System - Online Demonstration Nationwide on June 14, 2005 presented by Newkirk Products, Inc. Newkirk Fund Central System - Online Demonstration Nationwide on July 12, 2005 presented by Newkirk Products, Inc. Newkirk Fund Central System - Online Demonstration Nationwide on August 16, 2005 presented by Newkirk Products, Inc. Newkirk Fund Central System - Online Demonstration Nationwide on August 31, 2005 presented by Newkirk Products, Inc. Newkirk Guidance Plus - Online Demonstration Nationwide on June 10, 2005 presented by Newkirk Products, Inc. Newkirk Guidance Plus - Online Demonstration Nationwide on July 15, 2005 presented by Newkirk Products, Inc. Newkirk Guidance Plus - Online Demonstration Nationwide on August 12, 2005 presented by Newkirk Products, Inc. Newkirk Guidance Plus - Online Demonstration Nationwide on August 19, 2005 presented by Newkirk Products, Inc. Newkirk Guidance Plus - Online Demonstration Nationwide on August 29, 2005 presented by Newkirk Products, Inc. Newkirk HMO Plus Online Document Publishing System - Online Demonstration Nationwide on May 24, 2005 presented by Newkirk Products, Inc. Newkirk HMO Plus Online Document Publishing System - Online Demonstration Nationwide on June 14, 2005 presented by Newkirk Products, Inc. Newkirk HMO Plus Online Document Publishing System - Online Demonstration Nationwide on June 28, 2005 presented by Newkirk Products, Inc. Newkirk SmartStatement - Online Demonstration Nationwide on June 21, 2005 presented by Newkirk Products, Inc. Newkirk SmartStatement - Online Demonstration Nationwide on July 19, 2005 presented by Newkirk Products, Inc. Newkirk SmartStatement - Online Demonstration Nationwide on August 23, 2005 presented by Newkirk Products, Inc. Newkirk SmartStatement - Online Demonstration Nationwide on August 31, 2005 presented by Newkirk Products, Inc. Teleweb: Global Health Care Issues- HIV/AIDS, Country Comparisons and Expatriates Nationwide on June 2, 2005 presented by International Foundation of Employee Benefit Plans Newly Posted Press Releases Federal Court Bars Former New York Resident From Selling Abusive Tax Plan To Employers (U.S. Department of Justice) Benefit Advisors Network Welcomes The Plexus Groupe Inc Dallas Ft. Worth Office (Benefit Advisors Network) Prescription Solutions' Online Pharmacy Receives Prestigious Accreditation by the National Association of Boards of Pharmacy (Prescription Solutions) Missing Connection -- Stakeholders May Lose When a Member's Only Resource for Prescription Coverage Information is the Internet (Rx Detections, Inc.) Newly Posted or Renewed Job Openings Trust Counsel for The Northern Trust Company in IL Senior Manager/Team Leader Qualified Retirement Plans for Advanced Benefits Consulting in MO Handy Links: View Today's Active Message Threads Search BenefitsLink 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. Published by: BenefitsLink.com, Inc. https://benefitslink.com/about.html 1298 Minnesota Avenue, Suite H Winter Park FL 32789 (407) 644-4146 Fax: (407) 644-2151 Editor and Publisher: David Rhett Baker, J.D. Housekeeping: How to Sponsor an Issue Subscribe to a Daily Email Announcing Publication of Each Day's Newsletter Privacy Policy Archive of Previous Newsletters If you'd like to STOP this newsletter, just click on this link: STOP sending this newsletter to me