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May 31, 2005
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IRS Proposes Retirement Plan Contribution Changes for Activated Guard Members and Reserve
Excerpt: "The Internal Revenue Service wants to update the rules that govern efforts by activated members of the Guard and Reserve to contribute to their civilian employers' 401(k) plans. The IRS has included the proposed changes in a package of updates to Section 415 of the Internal Revenue Code." (National Underwriter Life & Health; free one-time registration or paid subscription required)
IBM Strives for the Security of Defined Benefit Plan Programs as It Shifts Focus to 401(k)s
Excerpt: "Managed accounts, automated features and annuities are aimed at ensuring that employees have enough to last after retirement. .... [I]BM has been busy adding a suite of options to its 401(k) plan--now the only retirement savings vehicle available to new employees--to offer employees the same type of paternalistic help found in defined-benefit plans." (Workforce Management; one-time registration required)
DOL Seeks to Bolster 401(k)s with Group Annuities
Excerpt: "The Department of Labor, as part of its overall effort to beef up 401(k) retirement savings as DB plans decline, is encouraging people to think about making group annuities a feature of 401(k) plans. Doing so would help replicate the benefit of a DB pension in that it provides an assured income for life. One key component of the department's effort is the decision by its outside ERISA Advisory Council on May 12 to make this subject one of its three assignments for 2005." (Defined Contribution News)
ASPPA Comment: Designated Roth Contributions to Cash or Deferred Arrangements under Sec. 401(k)
Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) appreciates this opportunity to comment on the proposed amendments to the regulations under Internal Revenue Code (IRC) §§401(k) and 401(m) that provide guidance regarding designated Roth contributions to qualified cash or deferred arrangements under IRC §401(k) (Proposed Regulations)." (American Society of Pension Professionals & Actuaries)
Tax Benefits Should Make the New Roth 401(k) Plan Appealing to Workers
Excerpt: "Jan. 1 may seem a long way off, but employers and employees looking for ways to get the most out of their retirement benefits should start thinking about it. That's the date on which 'Roth 401(k)' plans become legal, allowing companies to begin offering workers the option of funding a 401(k) account with after-tax dollars, in addition to or instead of their traditional 401(k)." (The Washington Post via Sun-Sentinel)
Male Self-Directed Brokerage Accounts Clients Taking More Risk, According to Schwab
Excerpt: "Men take more risk with their retirement savings than women, but women are executing trades in their self-directed brokerage accounts (SDBA) more often than they have before, a new Charles Schwab SDBA report indicated. A Charles Schwab news release said the company's latest data on its 65,000 participants in its Personal Choice Retirement Account as of March 31, 2005 indicated male SDBA clients had a lower cash level in their portfolio ... and more in equities ...." (PLANSPONSOR.com; one-time registration required)
Proposed Regs on Section 415 Limits, As Published in Today's Federal Register (PDF)
44 pages. Excerpt: "The proposed amendments would provide comprehensive guidance regarding the limitations of section 415, including updates to the regulations for numerous statutory changes since regulations were last published under section 415. The proposed amendments would also make conforming changes to regulations under sections 401(a)(9), 401(k), 403(b), and 457, and would make other minor corrective changes to regulations under section 457." (Internal Revenue Service)
Opinion: It Is Clear from the United Airlines Action that No Private Pension Is Really Safe
Excerpt: "Want to demoralize and marginalize a large and once-vibrant workforce? Here's the recipe: ...." (Workforce Management; one-time registration required)
United Airlines and Its Largest Union under Pressure on New Contract Agreement by a Judge's Deadline
Excerpt: "United, a unit of Elk Grove Village, Ill.-based UAL Corp., was seeking $175 million in annual concessions from the IAM to complete a company-wide package of $700 million in yearly labor savings. The key remaining hurdle was a pension plan to replace the defined-benefits fund the company is terminating. The company wants the money put into an investment-based 401(k) savings plan, while the union says it should be placed in its own defined-benefits fund - the IAM's National Pension Plan." (The Washington Post; one-time registration required)
Pension Insurance Data Book 2004, Produced by the Pension Benefit Guaranty Corporation (PDF)
105 pages. Excerpt: "This edition of the Pension Insurance Data Book has been expanded and the order of the tables has been slightly revised. Tables related to the growing number of plans using hybrid benefit formulas have been added to provide more data on this significant trend in retirement benefits." (U.S. Pension Benefit Guaranty Corporation)
Illinois Budget Pact Will Divert Pension Dollars to State's Budget Deficit, Again
Excerpt: "Illinois officials have worked out a two-year plan to take hundreds of millions of dollars in earmarked pension funding and use it to help plug the state's gaping budget hole. The plan could begin working its way through the state's General Assembly as early as Friday, .... The concept ... marks the third consecutive year that the state's pension systems have been used to balance the budget .... The systems are among the most underfunded in the nation." (PLANSPONSOR.com; one-time registration required)
Brademas Supports Pension Reform: Former Lawmaker Fears Taxpayer Bailout of PBGC
Excerpt: "John Brademas has long had a keen interest in ERISA, a federal law that protects workers' pensions. Reached by telephone in New York, Brademas expressed concern that unless reforms are made, American taxpayers could be hit with an expensive bailout of a government program that guarantees traditional pensions." (South Bend Tribune)
Abstract of the June 2005 Segal Bulletin on 'SAVE Initiative Legislation'
Excerpt: "Primarily, this Bulletin summarizes the main provisions of ERSAs, the aspect of the proposed legislation that is likely to be of the most direct interest to sponsors of public sector retirement plans. The Bulletin discusses proposed provisions for contributions to and distributions from ERSAs. It also mentions proposed changes to nondiscrimination rules." (The Segal Company)
Canadian Pension Ownership Laws under Scrutiny
Excerpt: "Can.ada's federal government announced Thursday that it will reexamine pension legislation and regulation in light of a funding crisis that has impacted most of the country's defined benefit pension plans. The review will explore the most controversial topics in pension laws and regulation, including the existence of partial plan wind-ups and a requirement that companies fund any deficits within five years." (Business Insurance)
Opinion: 'Going Dutch' One Approach for Pension Reform –- Courtesy of the Netherlands
Excerpt: "Like many European countries, Holland has a fairly generous state-sponsored pension in addition to industry-supported plans and private savings. Yet the Netherlands was facing a demographic problem common to most developed countries that are funding retirements: fewer workers to pay for current and future retirees." (Bloomberg News)
Under ERISA, No Padding Profits with Revenue Sharing between Mutual Funds and Plan Advisors
Excerpt: "Under a recent Department of Labor (DOL) directive, revenue-sharing arrangements between mutual funds and advisors to employee benefit plans are likely to remain in place. However, they will no longer be used to pad profits." (Registered Rep.)
No Ordinary Retiree Is Trying to Save His Life's Work -- Social Security
Excerpt: "Like many other retirees, Bob Ball is concerned about what's going to happen to Social Security. From his cluttered office in his otherwise tidy retirement community home, he has proposed his own formula for shoring up Social Security's financial future. His relatively modest tax increases and benefit cuts, combined with some government investment in the stock market, offer a contrast to President Bush's call for individual investment accounts, which Ball abhors, ...." (Los Angeles Times via Yahoo! News)
Opinion: Is Proposal for Indexing Social Security Benefits 'Progressive' or a Cut for Middle Class
Excerpt: "Rep. Sander Levin of Michigan, senior Democrat on the House Subcommittee on Social Security, concurs. 'Social Security is not a poverty program,' he says. 'It is a retirement system that people have worked hard for and paid into and earned. No one should be misled by offers of 'progressive' or 'sliding-scale' benefit cuts -- because they mean only one thing: major across-the-board reductions in future retirement benefits.'" (AARP Bulletin)
Opinion: Social Security's Sham Guarantee
Excerpt: "How many times during the recent debate over Social Security reform have you heard someone refer to Social Security's 'guaranteed benefit'? The AARP says 'Social Security is the guaranteed part of your retirement plan.' [T]he Democratic leader in the House, touts the system's 'guaranteed retirement benefit.' The liberal activist group ProtectYourCheck.org ... is running ads calling Social Security 'a guarantee you earned.' But Social Security benefits are not guaranteed." (Cato Institute)
Editorial: Mr. Bush's Social Security Benefits Reform Proposal
Excerpt: "Is President Bush advocating cruel cuts in Social Security? Consider these calculations by the Urban Institute's C. Eugene Steuerle: Government-provided retirement benefits for the average couple retiring in 1960 amounted to $195,000. Today, that amount has grown to $710,000 ($439,000 in Social Security and $271,000 in Medicare, which didn't exist in 1960). For a couple retiring 25 years from now, lifetime benefits are scheduled to exceed $1 million." (The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Employee Benefits Administration: Common Errors to Avoid
Excerpt: "It happens all the time. An employee misses an intended benefit because of some oversight. If it is your fault, there can be huge liability. Even if it is the employee's fault, he or she will suffer. Know the 'cracks' that benefits can fall through and seal them: ...." (Washington Business Journal via bizjournals.com; one-time registration required)
DOL's Wirtz Labor Law Library Lists Labor & Employment Blogs
Excerpt: "Blogs are chronologically ordered online journals. They can be a useful source of current information for a particular area of law. The blogs [on the target page] are written by a lawyer and a law professor who specialize in labor and employment law." (U.S. Department of Labor)
Newly Posted Events
College for Advanced Management of Health Benefits
in Illinois on July 25, 2005
presented by National Business Coalition on Health
Newly Posted Press Releases
PenChecks, Inc. Announces the National Registry of Unclaimed Retirement Benefits
(Pension Group, Inc., The)
Newly Posted or Renewed Job Openings
Benefits Administrators
for Coty & Bruce Benefits, Inc.
in CA
Compensation Analyst
for Giant Eagle
in PA
Account Executive
for Transamerica
in MD
Contract Analyst
for Transamerica
in CA
Client Administration
for M Benefit Solutions
in OR
Regional Service Coordinator
for Standard Insurance Company
in TX
Mutual Fund Analyst/Asst Portfolio Manager
for Kravitz, Davis, Sansone
in CA
Relationship Manager
for Morningstar Inc.
in IL, IN, MI
Defined Contribution Plan Administrator
for Suburban Philadelphia Pension Consulting Firm
in PA
Associate Attorney
for Blitman & King LLP
in NY
Pension Administrator
for A & S Shapiro Pension Consultants, Inc.
in MD
ERISA Associate
for Edwards & Angell, LLP
in MA
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