BenefitsLink Retirement Plans Newsletter June 28, 2005 Today's sponsor: ASC & The ASC Institute (Click on company name or banner to learn more.) ASC-- YOUR PREMIER SOURCE FOR RETIREMENT PLAN SOFTWARE, DOCUMENTS & EDUCATION For over 25 years ASC has helped pension professionals build their businesses by turning advances in technology into opportunities to increase efficiency and profitability. ASC Software includes DC/401(k) and DB administration and valuation systems, Compliance Testing, DV Direct Daily Valuation, Gemini Participant & Plan Sponsor Web Access, AIM Case Management Database and Single-Step Processing. The ASC Institute offers Retirement Plan Documents, Education for pension professionals and ERISA Compliance Consulting. Contact us today! (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) Automatic 401(k) Options: How New Automatic 401(k) Investment Options Work Excerpt: "More and more companies are offering new ways of 401(k) investing that will allow you to sit back and hit 'autopilot.' .... In today's 5 tips, we look at what kind of changes you may be seeing in your 401(k) and what you should watch out for." (CNN Money) Plan Sponsors Pay Widely Varying 401(k) Administrative Fees Excerpt: "What does it cost a company to offer a 401(k) savings plan to its employees, and is that expense rising or falling? As with so many financial questions, it depends on which numbers are being measured and who is crunching the numbers. There are investment fees, trustee fees, administrative fees and more. Some are charged to the employer. Some are paid out of fund assets, which means primarily out of employee contributions." (Sacramento Business Journal via bizjournals.com; one-time registration required) 401(k) Plans' Asset Mix: Trading Costs -- The Hidden Expense in Mutual Funds Excerpt: "The mutual funds in your 401(k) plan may be costing your employees more than you think. .... Unfortunately, the expense ratios routinely disclosed by mutual funds reflect only some of the costs they pass on to investors. Returns also are reduced by the trading costs funds incur when buying and selling stocks, bonds, and other securities.' (PLANSPONSOR.com; one-time registration required) Can.ada's Regie des Rentes du Quebec Releases Working Paper on Defined Benefit Plan Funding (PDF) 88 pages. Excerpt: "The Regie des Rentes du Quebec (Regie) has released an 88-page working paper called 'Toward Better Funding of Defined Benefit Pension Plans' which presents a new funding framework that aspires to combine benefit security and funding flexibility. The paper builds upon the temporary legislative measures the Regie is proposing to ease the existing legal requirements for plan funding in Bill 102 (An Act Respecting the Funding of Certain Pension Plans)." (Regie des Rentes du Quebec) Avoiding Imminent Minimum Funding Violations for Multiemployer Plans (PDF) 5 pages. Excerpt: "Pension plans must satisfy certain 'minimum' funding standards under the Internal Revenue Code and ERISA. This article explains the three principal ways provided by the Code to avoid, or at least delay, an imminent violation. Trustees or professionals of multiemployer plans should consider the practical implications of each method on the plan, the participants and the bargaining parties." (International Foundation of Employee Benefit Plans) Overview of Recent Guidance on Selecting and Monitoring Retirement Plan Service Providers Excerpt: "The Department of Labor (DOL) and the Securities and Exchange Commission (SEC) jointly released tips for plan fiduciaries on selecting and monitoring investment consultants. In addition, the DOL previously released general guidance for plan fiduciaries on selecting and monitoring employee benefit plan service providers, such as recordkeepers. [The target page] is a summary of the guidance along with suggestions for steps plan fiduciaries should take." (McDermott Will & Emery) Board Member Responsibilities for ERISA Retirement Plan Management Excerpt: "ERISA, the Employee Retirement Income Security Act of 1974, the federal law that governs retirement plan management, does not articulate specific fiduciary governance processes. Indeed, this absence of a statutory example of retirement plan governance is a primary cause for dysfunction in the private retirement plan system in this country." (Sarbanes-Oxley Compliance Journal via Simplex Knowledge Company) Federal Thrift Savings Plan Evolves, Improves, Has More Changes Ahead Excerpt: "One of the TSP's more innovative plans calls for the mailing of DVDs to the 3.4 million participants and to federal agency representatives. The DVDs will allow civil service and postal employees to learn about the L funds in their homes with their spouses. The DVDs also will be sent to troops overseas, giving them an easy way to learn about L funds during their spare time." (The Washington Post; one-time registration required) South Carolina State Workers Challenge Pension Changes Excerpt: "Four South Carolina state employees have gone into court to challenge changes made this year to the state retirement system, which they charge will improperly cut their take-home pay." (PLANSPONSOR.com; one-time registration required) United Airlines Pension Takeover by PBGC Untouched by House Bill Excerpt: "An amendment passed by the U.S. House to prevent the Pension Benefit Guaranty Corp. from taking over the pension plans of UAL Corp.'s United Airlines will likely have no effect on the agreement, House Republicans and an independent analyst said." (Bloomberg News via Inside Bay Area) 80 Providers Respond to This Year's Plan Sponsor Recordkeeping Survey Excerpt: "Currently, providers respond to the RFP assuming the plan will stay as it is, says Nordquist. However, this is an opportunity for plan sponsors to get some great plan ideas, or ways to improve the operation of the plan, she says. 'Plan sponsors should ask providers if there is anything you'd change in our plan or what would make it run more efficiently.'" (PLANSPONSOR.com; one-time registration required) Protecting Low-Income Families' Savings: Retirement Account Treatment in Means-Tested Programs (PDF) 52 pages. Excerpt: "This Retirement Security Project Policy Brief, written by a team of authors from the Center on Budget and Policy Priorities, addresses a critical impediment to retirement savings among low- and moderate-income workers: the outdated asset tests in means-tested benefit programs." (The Retirement Security Project) Working Paper: The Evolution of Risk and Reward Sharing in Retirement (PDF) 26 pages. Excerpt: "This Pension Research Council Working Paper represents a summary of discussions at the PensionResearch Council's April 2005 conference; for further information seehttp://prc.wharton.upenn.edu/prc/prc.html." (Pension Research Council) Brief: Richard Langbecker v. Electronic Data Systems Corporation (PDF) 40 pages. Excerpt: "[A] broad decision accepting defendants' views would undermine if not eliminate the ability of both private plaintiffs and the Secretary to bring suit for fiduciary breach in the context of an individual account plan, even in cases, such as Enron, of significant fiduciary malfeasance leading to catastrophic losses." (U.S. Department of Labor) Brief: In re Merrimac Paper Company, Inc. (PDF) 59 pages. Excerpt: "This is a case of first impression in the courts of appeal regarding the subordination of ERISA claims in bankruptcy." (U.S. Department of Labor) Brief: Milofsky v. American Airlines, Inc. (PDF) 22 pages. Excerpt: "This case presents a question concerning the duties of fiduciaries with regard to individual account plans." (U.S. Department of Labor) Links to Items on Executive Comp, Benefits in General Deadline Approaches For The 2005 Spencer Survey Of Benefits Managers Excerpt: "Spencer Benefits Reports, Aspen Publishers, and CCH, Inc., continue to collect data for their 2005 Spencer Survey of Benefits Managers and employee benefits departments. This tenth biennial survey requests information concerning compensation, organization, and functional responsibilities of corporate employee benefits departments. All employers with employee benefits departments are encouraged to respond to the survey." (Spencer Benefits Reports) Summary of Statement No. 47, Accounting for Termination Benefits, Issued 6/27/05 Excerpt: "This Statement establishes accounting standards for termination benefits." (Governmental Accounting Standards Board) GASB Statement 47 Provides Involuntary Termination Benefits Guidance Excerpt: "The Governmental Accounting Standards Board (GASB) has issued Statement No. 47, Accounting for Termination Benefits to provide guidance for state and local governments on how to account for early retirement or severance payments." (PLANSPONSOR.com; one-time registration required) Benefits Perspectives: Current Issues in Employee Benefits, Spring 2005 Edition (PDF) 8 pages. Contents: Fiduciary Responsibilities for Stock-Based Retirement Plans; An Executive Survival Guide for Tax-Exempt Employers Sentenced to Section 457; Managing Health Care Costs: The Need for Better Cholesterol Control. (Milliman) A Popular Reward for Executives: Restricted Stock -- Job Performance Link Is Debatable Excerpt: "As stock options become costlier and more controversial for companies, another form of executive compensation is gaining favor -- and drawing criticism. It's known as restricted stock, a grant of stock that generally passes to an executive over a period of time." (The Washington Post; one-time registration required) EU Prospectus Required by July 1, 2005, for Offerings under an Employee Share Purchase Scheme Excerpt: "On June 6, 2005, the United Kingdom Financial Services Authority published its policy statement and near final rules on the implementation of the EU Directive on Prospectuses, which is effective for offers beginning July 1, 2005. .... U.S. issuers whose home member state is the United Kingdom may wish to defer offerings in July 2005 under an employee share purchase scheme until the proper documentation is prepared and distributed." (Pillsbury Winthrop Shaw Pittman LLP) Newly Posted Events 3rd Annual Manage the Cost of Specialty Pharmaceuticals, Biotech Therapies and Injectables Nationwide on January 23, 2006 presented by The Center for Business Intelligence 3rd Annual Multicultural Marketing for Financial Services and Insurance Companies Nationwide on March 23, 2006 presented by The Center for Business Intelligence Back to Basics: Annual Reporting and Disclosure in Georgia on July 21, 2005 presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter Get the Most Out of Your ESOP in Missouri on September 26, 2005 presented by National Center for Employee Ownership Solid Organ Transplantation in Connecticut on September 19, 2005 presented by The Center for Business Intelligence The 3rd Annual Forum for Hospitals and Health Systems on Captives and Alternative Risk Financing for Medical Liability in Texas on July 11, 2008 presented by The Center for Business Intelligence The Rising Prevalence Of Treated Disease: Effects On Private Health Insurance Spending Nationwide on June 28, 2005 presented by Kaiser Family Foundation Newly Posted Press Releases Plan Sponsor Forum July 2005: Digging Deeper with the right tools; A workshop for 401(k) (Caterpillar Investment Management Ltd.) DataPath Releases Revolutionary Claims Vault: Providing secure electronic storage of all plan participant receipts and claims (DataPath, Inc.) Baby Boomers To Hit Retirement Savings Milestone; Retirement Leader Cautions, ''Don't Touch That Nest Egg Yet''; The First Boomers Turn 59 1/2 on July 1 (Principal Financial Group) GASB Completes Accounting Standards for Termination Benefits (Governmental Accounting Standards Board (GASB)) Web Site Makes CRS Reports Available (Center for Democracy and Technology) Companies Offer Nation's First Credit Line to Owners of Health Savings Accounts; MedDirect Health Benefits, 1Point Solutions Team Up To Overcome Top Employer Objections to HSAs (MedDirect Health Benefits) Newly Posted or Renewed Job Openings Key Account Consultant for ING U.S. Financial Services in IL Compliance Analyst for Transamerica in CA Supervisor TPA Firm for Chicago TPA Firm in IL HGB Benefits Operations Manager for Hewitt Associates in IL Underwriting Associate for M Benefit Solutions in OR Relationship Mgr/Admin : Institutional Retirement Svcs. for Channel Synergy (exec recruiter) in FL Retirement Plan Specialist for American Funds, a part of the Capital Group Companies, Inc. in TX Enrolled Actuary for Central New Jersey Wealth Management Firm in NJ Plan Administrator for Retirement Plan & ERISA Specialists for Small Chicago TPA & law firm in IL Employee Benefits Manager for Contra Costa County in AK, AZ, CA, CO, HI, ID, IL, IN, KY, MI, MO, MT, NM, NV, OH, OR, TX, UT, WA, WV, WY 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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