BenefitsLink Retirement Plans Newsletter July 1, 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) 401(k) Spring a Leak: Boomers Switching Out of Accounts Excerpt: "When an employee retires or switches jobs, the industry manages to hold on to just 30 cents of every dollar in a 401(k) or similar plan. Now, the rate of rollovers out of fund companies is set to explode, from $198 billion in 2003 to $401 billion in 2010, according to market tracker Financial Research Corp. (FRC)." (BusinessWeek) Adding a Roth Account Option to 401(k) and 403(b) Plans Excerpt: "Starting in 2006, an account with most of these attributes (the 'Roth feature') can be added to 401(k) and 403(b) plans. Is it a good idea? We think so. But the attractive Roth features must be balanced against the cost of even more administrative complexity." (Rackemann, Sawyer & Brewster) A Fresh Look at Pension Risks Excerpt: "Having muscled its way up the corporate agenda, pensions now stand as an issue needing a disciplined approach. This article will cover several issues of concern to pension plan sponsors, including pension risks, how pension liabilities affect the balance sheet, and some insights into how analysts are viewing pensions." (Mercer) Does Your Company Have a Pension Funding Policy . . . and Is It Working? Excerpt: "In this Perspective, we take a look at why plan sponsors must take a more strategic, rather than a reactive, approach to pension funding to be prepared for future challenges and why contributing the minimum may not be a viable policy for many plan sponsors." (Mercer) United's Flight Attendants Threaten 'CHAOS' Excerpt: "United Airlines' flight attendants say they could strike the bankrupt airline this summer, now that the Pension Benefit Guaranty Corp. has taken over its pension plan.... 'CHAOS' stands for 'Create Havoc Around Our System' -- a tactic of surprise, intermittent strikes. CHAOS could be in the form of a systemwide, one-day strike, a strike targeted for one specific city, or an individual flight at a remote location." (Chicago Sun-Times) Streaming Video of Hearing on Pension Protection Act of 2005, H.R. 2830 Three hours and eight minutes; requires WindowsMedia Player version 9 or later to view. (U.S. House, Committee on Education and the Workforce) Recent Funding and Sponsorship Trends Among the FORTUNE 1000 Excerpt: "This article documents the evolving financial status and sponsorship trends among FORTUNE 1000 firms that sponsor defined benefit pensions through the end of 2004." (Watson Wyatt) Overview: Recent Guidance on Selecting and Monitoring 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. Below is a summary of the guidance along with suggestions for steps plan fiduciaries should take." (McDermott Will & Emery) Fido Attacks! Fidelity vs. Schwab Excerpt: "Long a distant second to Charles Schwab in the lucrative business of serving financial advisors, Fidelity is making an aggressive push to close that gap. And some advisors are taking notice." (Registered Rep.) ETF Disadvantage for Brokers: Fees Don't Match Those on Mutual Funds Excerpt: "Brokers 'don't have a lot of incentive to use ETFs if they are commission-based' ... The reasons are obvious. Reps receive a share of the front-end load and 12b-1 marketing-plan expenses that actively managed mutual funds often bear." (OnWallStreet) Opinion: Let's Get a Real Lockbox for Social Security Excerpt: "Do you know where your Social Security taxes are? Some of them went to pay for the National Cowgirl Hall of Fame and Museum in Fort Worth, Texas." (Michael D. Tanner, Cato Institute) Survey on the Prevalence of Traditional and Hybrid Defined Benefit Pension Plans March 2005. Excerpt: "[A]pproximately forty percent of private sector and a quarter of public sector defined benefit plan participants' benefits are determined by some form of hybrid benefit design feature." (Society of Actuaries) Employee Ownership Update for June 30 In his Employee Ownership Update for June 30, NCEO Executive Director Corey Rosen discusses an NCEO survey on employee attitudes toward stock options, a Belgian multinational's plan for encouraging employees to buy company stock, and a research project on how employers can help low-income employees access governmental support resources. (National Center for Employee Ownership) Links to Items on Executive Comp, Benefits in General Listed Transactions involving Employee Benefits Plans Excerpt: "Many abusive tax shelters are identified as 'listed transactions.' Listed transactions require disclosure by participating corporations, individuals, partnerships and trusts, in accordance with Treasury Regulation section 1.6011-4." (Internal Revenue Service) Graying of the Workforce Is Better News Than You Think Excerpt: "Old. Smart. Productive. Rather than being an economic deadweight, the next generation of older Americans is likely to make a much bigger contribution to the economy than many of today's forecasts predict." (BusinessWeek) What Are Some of the Best and Worst Jobs? Consider Becoming an Actuary Excerpt: "Many children dream of one day being a cowboy or a cowgirl. Few, if any, want to be an actuary. Little do they know." (CareerJournal.com) Overview: Revised Financial Accounting Standards No. 123R Excerpt: "The Financial Accounting Standards Board (FASB) has significantly re-written the rules that apply to the expensing of equity-based compensation arrangements for financial accounting purposes." (Chang, Ruthenberg & Long) Two Grocery Chains Refuse to Race to the Benefits Bottom Excerpt: "While some supermarket chains slash benefits to cut costs, Wegmans and Stew Leonard's are bucking the trend, cementing employee loyalty and raking in big profits." (Workforce; one-time free registration required) Opinion: The End of the Private 'New Deal' Excerpt: "As Republicans loudly threaten the public New Deal, the corporate version quietly slips away.... The old corporate America that took responsibility for workers' pensions and health care is dying, and the nation's political leadership has hardly taken notice of the implications." (Paul Starr, in the American Prospect) Equity Compensation: The Future Is Now! Excerpt: "For the third time in four years, Mercer has conducted a Future of Equity survey to examine equity compensation trends. The most recent results, Compensation 2005: A Time to Question Everything, show continued and dramatic change in the marketplace." (Mercer) Late Career Faculty Perceptions: Implications for Retirement Planning and Policymaking Excerpt: "[I]nstitutions may have much to gain through policymaking that is attentive to late career faculty perceptions and faculty aspirations for life in retirement." (TIAA-CREF Institute) Newly Posted Events Benefits Management Web Seminar: Health Care Cost Containment Nationwide on July 20, 2005 presented by Employee Benefit News Newly Posted Press Releases PBGC To Protect Pensions At Techneglas Inc. (Pension Benefit Guaranty Corporation (PBGC)) Reports from Great-West Healthcare Help Employers Control Costs and Improve Health (Great-West Life & Annuity Insurance Company) CPI Decides It's Time For Change - Selects New Enrollment Kit Provider (Metrics Partners) MetLife Introduces New Voluntary Dental Benefits for Small Businesses (MetLife) Atlantic Benefit Services Launches 2005 Employee Benefits Survey for New England Businesses (Atlantic Information Services, Inc) Newly Posted or Renewed Job Openings 401(k) Plan Administrator - Fluent in Spanish for Boston Financial Data Services in MA Employee Benefits for Primary Consulting, Inc. in ANY STATE Project Manager-CCI for Transamerica in CA Plan Compliance Manager for Union Bank of California in CA Retirement Plan Administrator for PensionOne Advisors in CA Senior Retirement Plan Specialist/ERISA Attorney for Florida Power & Light in FL Manager of Benefits for The Rosen Group in PA Account Executive for Transamerica in NJ Defined Contribution/Defined Benefit Senior Consultant for Actuarial & Benefits Consulting Firm in NY Employee Benefits Tax (EB) Manager for Deloitte in FL Qualified Plan Administrator for Lane Gorman Trubitt, L.L.P. in TX Pension Benefits Analyst for PPL in PA Plan Manager - Executive Deferred Compensation Plans for Atlanta based TPA in GA Retirement Services Relationship Officer for Community Trust & Investment Company in KY Retirement Programs Administrator for Ogilvy & Mather in NY Retirement Services Account Management Manager for SunTrust in VA Implementation Consultant for Administaff in TX Conversion Team Leader for Administaff in TX Plan Document Processor for RSM McGladrey Retirement Resources in MN Section 125 Compliance Analyst for Administaff in TX Pension Services Consultant for CUNA Mutual Group in WI 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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