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June 10, 2005
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Measuring & Monitoring Long-Term Success of Defined Contribution Plan Participants, Updated 6/9/05 (PDF)
34 pages. Excerpt: "We utilize both asset allocation data and asset quality based upon the Unified Fiduciary Monitoring Index® to measure the real rate of return component of the overall success benchmarking system. No estimation method is perfect and the benchmark methodology we describe should be repeated at periodic intervals, generally annually, to make sure plan participants remain on track for success." (Unified Trust)

401(k) Plan Danger Signs for Employees Include Company Failing to Remit Contributions to Accounts
Excerpt: "Highlighting an often overlooked risk in 401(k) plans, the Department of Labor has sued a defunct San Francisco engineering firm for not forwarding employees' 401(k) contributions into their retirement accounts." (San Francisco Chronicle)

U.S. Pension Plan Underfunding under Scrutiny
Excerpt: "Total underfunding among the 1,108 weakest defined benefit pension plans in the U.S. reached $353.7 billion at the end of 2004, the Pension Benefit Guaranty Corp. announced on June 7. A May bankrup.tcy court decision allowing United Airlines, to offload its pension obligations to the federally backed PBGC will prod other airlines and struggling companies to embrace similar tactics--absent careful policy reform, a substantial government bailout may eventually be necessary." (Oxford Analytica via Forbes.com)

ERIC Commends Chairman Boehner, House Retirement Leadership, on Step Toward Pension Reform
Excerpt: "The ERISA Industry Committee (ERIC), the trade association that represents the retirement, health, and compensation plans of America’s largest employers, commended House Education and Workforce Committee Chairman John Boehner (R-OH) on today’s release of a proposal to reform pension funding rules." (The ERISA Industry Committee)

Memorandum: Sen. Chuck Grassley Comments on Substance of Pension Legislation Currently Being Drafted (PDF)
Excerpt: "“[W]e need completely new rules requiring accurate measurement of pension liabilities and full funding of all pension plans. The legislation I'm drafting will do just that. It'll adopt the Administration’s yield curve proposal and eliminate the so-called ‘smoothing’ techniques that let companies hide massive pension losses from their employees and the public at large.”" (U.S. Senate Committee on Finance via The ERISA Industry Committee)

Text: Pension Protection Act of 2005, H.R. 2830 (PDF)
305 pages. Introduced by Boehner et al to reform the pension funding rules and for other purposes. (U.S. House of Representatives via American Benefits Council)

Pension Funding Reforms Introduced in House Via the Boehner Bill
Excerpt: "Comprehensive pension funding reform legislation introduced Thursday by House Republican leaders would tighten many funding rules, but not as severely as an earlier, much-criticized Bush administration proposal. Like the administration plan, the Republican proposal would bar employers whose plans are less than 80% funded from improving benefits, while future benefit accruals would be barred for plans that are less than 60% funded." (Business Insurance)

GAO Forum Highlights: Future of Defined Benefit System and the Pension Benefit Guaranty Corporation
Excerpt: "GAO convened [February 3, 2005] a diverse group of knowledgeable individuals who have been influential in shaping the defined benefit pensions debate over the years. Participants included government officials, researchers, accounting experts, actuaries, plan sponsor and employee group representatives, and members of the investment community." (U.S. Government Accountability Office)

Testimony: Estimating the Costs of the Pension Benefit Guaranty Corporation (PDF)
13 pages. Statement of Douglas Holtz-Eakin, Director, Pension Benefit Guaranty Corporation, before the Committee on the Budget, U.S. House of Representatives, June 9, 2005. (U.S. Congressional Budget Office)

Audio: The Marketplace Report -- PBGC's Stressed Pension Net
Excerpt: "Madeleine Brand talks to John Dimsdale of Marketplace about signs of stress on the federal agency that insures private pension funds. A new report from the Congressional Budget Office predicts the agency's deficit will likely triple to $71 billion in the next decade." (Day to Day via National Public Radio)

Forget United Airlines. The Real Risk to Your Retirement Security Might Be Your Age When You Retire
Excerpt: "[T]here is a threat to your pension that you may have overlooked. Namely, you could cost yourself hundreds or even thousands of dollars a month for the rest of your life by making a poorly timed exit from your job." (CNN Money)

Phased Retirement Not Universal -- Regulations are Restrictive, Options Not Available to All
Excerpt: "At this time, not everyone can take advantage of phased-in retirement programs, and that's why many companies don't yet offer the flexibility. Different government regulations restrict how and when pensions and retiree benefits can be paid, and define what is and is not 'retirement.' Changes in the laws will be required to make phased-in retirement more common." (USA TODAY)

Towers Perrin Offers Pensions Blueprint to New UK Secretary of State for Work and Pensions (PDF)
8 pages. Excerpt: "LOOKING TO THE PRESENT, the Pensions Act 2004 and the new regulatory framework are beginning to feel like the dawn of a new, and worse, age of pensions bureaucracy. Let’s revisit the purpose of the Act and decide whether the current regulatory avalanche and its consequences are really what is needed." (Towers Perrin)

Replacing Income Tax with a Consumption Tax Might Cut Retirement Savings, According to Tax Expert
Excerpt: "A tax expert who worked in the U.S. Treasury Department during the Reagan era is warning against the perils of shifting to a “consumption-based” approach to taxation. .... Today, employees have an incentive to contribute to 401(k) plans because the plans reduce income taxes, Burman said. “Under a consumption tax, all saving is exempt from tax so there is nothing special about pensions,” Burman said." (National Underwriter)

Disaster Relief Relating to PBGC Deadlines in Response to Severe Storms and Flooding in New York
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and flooding during the period April 2-4, 2005, in New York. The PBGC is taking this action under its authority in section 4002(i) of ERISA, which was added by the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427." (U.S. Pension Benefit Guaranty Corporation)

Convicted Executive Says DOL's Pension Oversight Is Lax
Excerpt: "The former president of an Oregon investment firm involved in the largest pension fraud in U.S. history said Thursday that federal officials did little to stop the scheme despite investigating the firm for nearly a decade. Barclay Grayson, former president of Portland-based Capital Consultants LLC, told a Senate committee that the Labor Department lacks the skills and knowledge to protect private pension plans that invest hundreds of millions of dollars in often risky schemes." (AP via The Washington Post; one-time registration required)

GOP Leaders Weigh Raising Social Security Retirement Age
Excerpt: "[S]enate Republicans are considering raising the retirement age and holding down future benefits for highly paid workers." (AP via The New York Times; one-time registration required)

Disaster Relief Relating to PBGC Deadlines in Response to Severe Storms and Flooding in Pennsylvania
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and flooding during the period April 2-23, 2005, in Pennsylvania. The PBGC is taking this action under its authority in section 4002(i) of ERISA, which was added by the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427." (U.S. Pension Benefit Guaranty Corporation)

Disaster Relief Relating to PBGC Deadlines in Response to Severe Storms and Flooding in New Jersey
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and flooding during the period April 1-3, 2005, in New Jersey. The PBGC is taking this action under its authority in section 4002(i) of ERISA, which was added by the Victims of Terrorism Tax Relief Act of 2001, Pub. L. No. 107-134, 115 Stat. 2427." (U.S. Pension Benefit Guaranty Corporation)


Links to Items on Executive Comp, Benefits in General

GM Has Announced 25,000 Layoffs and Other Industries Face Similar Benefits' Cost Burdens
Excerpt: "An increasing part of production costs in America comes from the price of promises. There are corporate commitments to provide a pension - some 44 million Americans get a monthly check - that add up to as much as $124 billion a year. There are also healthcare benefits that many companies have agreed to provide, either voluntarily or by union contract, at a cost of billions more each year." (The Christian Science Monitor)

Senate Testimony: John Endicott's Statement on the Collapse of Capital Consultants and Its Effects
Excerpt: "I want to tell you about the serious impact that the collapse of Capital Consultants had on me and on my fellow union members and the debacle that we all faced when we first heard that much of our hard-earned pension, health and other benefits had been stolen, misappropriated or lost through reckless and fraudulent schemes concocted by corrupt money managers who we had entrusted to handle our funds." (The Oregonian)

Milliman's Monthly Benefit News and Developments, June 2005 Edition (PDF)
2 pages. Includes Legislative Activity on the Benefits Front; 2005 Health Care Costs; Upcoming Key Dates for Benefit Plans; and a Regulatory Roundup. (Milliman)


Newly Posted Events

Understanding Current Pension and Employee Benefits Law and Practice
in Massachusetts on August 15, 2005
presented by ALI-ABA (American Law Institute-American Bar Association)


Newly Posted Press Releases

HMOs Propose Lowest Rate Increases in Five Years; Hewitt Associates Data Shows Aggressive Cost Management Strategies Paying Off
(Hewitt Associates LLC)

The Pension Benefit Guaranty Corporation (PBGC) has issued Disaster Relief Announcements
(Pension Benefit Guaranty Corporation (PBGC))

Smith, Conrad Bill Addresses Nation's Retirement Security Crisis
(American Council of Life Insurers)

U.S. Labor Secretary Elaine L. Chao Applauds Chairman Boehner for Introducing Pension Reform Legislation
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)

Labor Department Testifies on Enforcement of Employee Benefits Law
(U.S. Department of Labor, Office of Public Affairs, Washington, D.C.)

Statement of Treasury Secretary John W. Snow Regarding Introduction of Pension Reform Legislation
(U.S. Department of Treasury)


Newly Posted or Renewed Job Openings
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Pension Administrator
for Benefits Consulting Group
in MA

Employee Benefits Consultant
for CUNA Mutual Group
in IA, KS, MN, MO

Market Research Analyst
for BISYS Retirement Services
in PA

Benefits Analyst
for MTA, New York City Transit
in NY

Account Executive - Client Services
for Diversified Investment Advisors
in CA




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