BenefitsLink Retirement Plans Newsletter June 20, 2005 Today's sponsor: Employee Benefits Institute of America (EBIA) (Click on company name or banner to learn more.) Explore the Seven Wonders of the Benefits Compliance World No HR or benefits professional's library would be complete without EBIA's compliance manuals. Save time and steer clear of compliance traps by joining thousands of professionals who rely on our manuals. "I know I can rely on your manuals, above and beyond any others, to be clear, concise, easy to understand, and accurate!" -Director of Flexible Benefits (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Pension Funding Reform Bill to Begin Moving Week of June 20 Excerpt: "[The week of June 20, 2005] Congress begins work on reshaping U.S. retirement policy. The House Employer-Employee Relations Subcommittee on June 23 will consider the pension funding reform legislation (H.R. 2830) introduced last week by Workforce Committee Chairman John Boehner (R-OH) and Subcommittee Chairman Sam Johnson (R-TX)." (HR Policy Association) House Pension Bill Improves on Complexity and Lack of Predictability in Administration Proposal (PDF) 2 pages. Excerpt: "In the pension reform legislation (H.R. 2830) discussed in [this HR Executive Brief], perhaps the most crucial area of reform deals with pension funding rules. [T]hese rules set the parameters for the actuarial assumptions that determine whether a plan is adequately funded. The key issues are the interest rate used to calculate funding requirements, the level of plan funding required to meet future liabilities, and the treatment of excess contributions employers make ...." (HR Policy Association) Opinion: America's Private Defined Benefit Pension System in Need of Major Overhaul Excerpt: "'We may be approaching a tipping point for defined benefit pension plans,' said David Zion, the accounting analyst at Credit Suisse First Boston. 'The accounting rules and funding rules have protected companies from their pension plans for a long time. 'With the use of smoke, mirrors, and various smoothing mechanisms, these rules make it appear as if the plans are not volatile, when they really are, and make plans appear healthier than they really are.'" (The Washington Post; one-time registration required) Letter of Support to the Honorable Earl Pomeroy on the Lifetime Pension Annuity for You Act of 2005 Excerpt: "ASPPA believes your proposal, which would allow a retiree to exclude from taxable income up to $5,000 in annual payments from a post-retirement annuity income stream, will encourage individuals to annuitize a healthy portion of their retirement income, thus allowing them a floor of retirement income that cannot be outlived. This is crucial for a worry-free retirement." (American Society of Pension Professionals & Actuaries) EBRI Fact Sheet on PBGC -- Basics of the Pension Benefit Guaranty Corporation (PDF) 4 pages. Excerpt: "A four-page fact sheet with background information, key data and charts, and information links about the Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures the traditional pensions of about 44 million Americans." (Employee Benefit Research Institute) Kennedy Unveils Pension Reform Principles Recognizing Need for 'Fair and Predictable' Rules Excerpt: "[S]en. Edward Kennedy (D-MA) unveiled Senate Democrats' principles for strengthening retirement security at a forum bringing together Democratic Senators, corporate and labor leaders, pension experts, and retirees. The principles include general ideas such as, 'all Americans should have a secure pension' and that the government should 'reward and encourage companies that provide good pensions to their employees.'" (HR Policy Association) GOP Senators to Propose New Tack on Social Security: Surplus Would Fund New Accounts Excerpt: "Key Republican lawmakers, scrambling to keep President Bush's Social Security proposals afloat, plan next week to embrace an idea that many have avoided thus far: funding personal retirement accounts with surplus revenue that now pays for other government programs. The strategy is controversial because it would create new budget problems. Either the diverted money would have to be replaced with new taxes, or Congress would have to slash programs now funded by Social Security's ...." (The Washington Post; one-time registration required) Special Report: President Bush's Social Security Privatization Plan (PDF) 4 pages. Full title is President Bush's Social Security Privatization Plan: Benefit Cuts, Red Tape, and Increased Costs for Small Businesses. (Democratic Policy Committee) Opinion: Kill Social Security Privatization; Reform 401(k)s Excerpt: "With the right kind of plan, everyone can save in a personal account they control. A ``Universal Savings Account'' (USA) is an expanded, 401(k)-like vehicle that anyone can own. It has been proposed by the Center for American Progress, a progressive research institute, and other groups." (Bloomberg News) Letter to the Editor from Robert Wexler: A Simple Save for Social Security Is Available Excerpt: "While I was pleased that a June 6 editorial urged Democrats to offer a Social Security plan, I was disappointed in the analysis of my legislation, which would restore Social Security's solvency by assessing a 3 percent payroll tax, matched by employers, on all income of more than $90,000." (The Washington Post; one-time registration required) Links to Items on Executive Comp, Benefits in General Complications Abound in Managing Expatriate Benefits Excerpt: "However, companies have difficulty convincing employees to move abroad when they mismanage expatriate programs and don't know what to do with people when they return to the U.S., Dwyer warns. The top reasons for assignment refusal are family concerns (47%), career aspirations (14%), compensation (13%) and spouse's career (10%), according to GMAC Global Relocation Services, which surveyed 134 multinational corporations." (Employee Benefit News) Letter to the Editor: An Accounting of Stock Options -- Reply to George F. Will's June 12 Column Excerpt: "Mr. Will's attempt to illuminate and defend Mr. Cox's position on employee stock options demonstrates the danger in having accounting standards determined in a political arena rather than by an independent board of experts overseen by the SEC." (The Washington Post; one-time registration required) Newly Posted Events Employee Benefits and Compensation Under the New Bankruptcy Act Nationwide on July 12, 2005 presented by American Bar Association (ABA) IRS Updates: New Determination Letter Procedures, EPCRS and Employee Benefit Audits Nationwide on June 28, 2005 presented by American Bar Association (ABA) LM-30s How DOL's New Enforcement Program Affects Your Funds Nationwide on June 29, 2005 presented by International Foundation of Employee Benefit Plans Newly Posted Press Releases Private Sector Defined Contribution Leaders Meet in Washington, D.C. (NAGDCA (National Association of Government Defined Contribution Administrators, Inc.)) TIAA-CREF Institute invites you to submit an entry for the 2005 TIAA-CREF Paul A. Samuelson Award (TIAA-CREF Institute) Treasury and IRS Issue Guidance on Single Insurer Arrangements (U.S. Treasury Department and Internal Revenue Service) Hedge Fund Performance Evaluation Wins With Monte Carlo (Metrics Partners) Newly Posted or Renewed Job Openings 401(k)/Defined Contribution or Defined Benefit Account Manager for National Retirement Services, Inc. (NRS) in CA, NC Pension Analyst for Benetrends, Inc. in CA Retirement Plan Specialist for Diversified Investment Advisors in MI ERISA Associate for Kilpatrick Stockton LLP in NC Sr Account Executive for AXA Financial in NJ Client Participant & Services Manager for Mercer HR Services in TX Client Services Team Leader/Project Manager for Mercer HR Services in TX Retirement Plan Administrator for Findley Davies, Inc. in OH 401(k)/Defined Contribution Plan Administrator for Professional Capital Services, LLC in PA Account Executive- Retirement Services for The Principal Financial Group in MI Business Analyst for Aon Corporation - Affinity Insurance Services in PA 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. 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