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July 8, 2005
Today's sponsor: APSCREEN, Employee Locator

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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Overview of Outstanding 403(b) Issues
Excerpt: "The IRS issued proposed 403(b) regulations earlier this year. The proposal indicated that these rules would become effective in plan years beginning after December 31, 2005. We hope to see the final regulations in the next few months. However, there is an extensive list of outstanding issues regarding these regulations." (McKay Hochman Co.)

Opinion: Companies, Employees, and Government Must Work to Save for Future
Excerpt: "Responsibility to our employees' retirement plan's solvency is the company's responsibility. If the plan does not have sufficient funds in the future, additional funding must occur. In the case of Social Security, solvency is the first priority of the government." (The Des Moines Register)

Judge Sides with Automaker General Motors in Pension Fund Shortfall Case
Excerpt: "In a decision that may set a precedent for government contractors, a federal judge has given General Motors the green light to seek millions of dollars in pension shortfalls. Judge Nancy Firestone of the Court of Federal Claims in Washington, D.C., ruled that the government must pay some portion of the pension funding deficit accumulated under contracts held with Allison Gas Turbine, a unit GM sold in 1993, according to a report in The Wall Street Journal." (BenefitNews Connect)

Overview of IRS Circular 230
Excerpt: "Retirement plan practitioners may well be affected by the newly effective regulations governing practice before the IRS (contained in Circular 230). The regulations generally affect the content of the advice practitioners can provide to plan sponsors. In certain cases, the regs introduce new disclosure language requirements." (McKay Hochman Co.)

Pension Bill Could Cut Lump-Sum Payouts
Excerpt: "A bill designed to shore up corporate pension plans could have negative side effects for some workers, particularly those who want to take their benefits in a lump-sum payout. HR2850, the Pension Protection Act, passed the House Education and Workforce Committee Thursday [June 30, 2005]." (San Francisco Chronicle)

Lawsuit Intends to Roll Back San Diego City Pension Benefit Increases
Excerpt: "San Diego City Attorney Michael Aguirre has filed a lawsuit that intends to roll back city pension benefit increases from 1996 and 2002, and names eight individuals who he says are most responsible for the pension system's current widespread problems." (PLANSPONSOR.com; one-time registration required)

Technical Tip: Limiting HCE Deferrals through Corporate Resolutions
Excerpt: "Technical Tip 148: .... If a plan document provides that the administrative committee may limit HCE deferrals in order to prevent ADP testing violations, and the plan administrator takes that action through resolution and not by plan amendment, is this considered to be an 'employer-provided limit' so that contributions in excess of this imposed limit are eligible to be treated as catch-up contributions? Response: Yes" (Reish Luftman Reicher & Cohen)

Corrected Link: Board Member Responsibilities for ERISA Retirement Plan Management
Excerpt: "[T]he lack of a fiduciary governance safe harbor allowed service vendors to heavily influence the development of Plan Sponsor fiduciary behavior. As might be expected, the very nature of having non-fiduciary service vendors influence the evolution of the retirement industry has been counter productive to the fiduciary intent of serving as a guardian for long-term Trust assets." (Sarbanes-Oxley Compliance Journal)

Liability and Insurance Issues for Pension and Benefits Professionals
The outline has three parts: Categories of Liability Faced By Third Party Administrators and Consultants; Examples of TPA Lawsuits; and Insurance Issues. (Reish Luftman Reicher & Cohen)

International Update: Recent Developments in Foreign Public and Private Pensions
The contents include information on Norway, Italy, Argentina, Can.ada, Panama, and the World Bank. (U.S. Social Security Administration)

Bush Proposal Cuts Social Security Benefits for Family Members of Workers Who Die before Retirement
Excerpt: "President Bush's plan to change Social Security includes benefit cuts for the surviving family members of workers who die before retirement. The president's plan recommends a 9.4% benefit cut -- a loss of $3,009 (in today's dollars) in annual benefits -- for the family of a typical worker who is now 25 but who will die at age 45. These cuts in benefits will take place through the adoption of the Pozen index for Social Security benefits, ...." (Economic Policy Institute)

Few Web Blogs Track Issues Related to Older Americans and Retirement; BenefitsLink Is Top Site Though
Excerpt: "Yes, there are plenty of worthwhile Web sites and plenty of list-serves that provide news, insight, commentary and information about retirement. But if you search the Web for blogs about retirement you'll find mostly flotsam and jetsam. So we asked a bevy of experts to provide us with their favorite blogs that address issues of concern to those in or near retirement. What did we find? Well, it's not good. Many don't have a list of bookmarked retirement-related blogs." (MarketWatch; one-time registration required)

Another Question is Answered in the Who's the Employer Q&A Column
How do the proposed 415 regulations affect Who's the Employer issues? (BenefitsLink.com)

Pension Fund Managers Come Knocking, in Vain, at Venture Capital Firms
Excerpt: "Venture funds are not created equal, and the ones willing to sign up pension funds won't be the top-tier players. The most lucrative venture firms are turning Johnny-come-lately investors away at the door, which is bad news for stodgy pension funds scrambling to get into the venture game. The rule of thumb in the venture world has long been that unless you can invest with a firm that has consistently cranked out returns that place it in the top 25 percent of firms, don't bother." (The New York Times; one-time registration required)

Working Paper: 'Money Attitudes' and Retirement Plan Design: One Size Does Not Fit All (PDF)
36 pages. Excerpt: "[The authors] analysis suggests that a significant group of workers lacks the psychological attitudes or interests needed to maximize retirement security. Our results have important implications for the degree of participant direction in retirement programs; the role of negative elections and default options in plans, and the design of programs to enhance worker financial literacy. (Originally published in 2003.)" (Pension Research Council via)

Plan Sponsor Survey Asks: Do You Have Regular Retirement Savings Education Meetings?
Excerpt: "One of the more effective ways to help participants better understand their retirement savings program is to offer in-person meetings to explain the program, the investment options, etc. This week, [Plan Sponsor] asked readers how often retirement plan education meetings (not enrollment sessions) were held for current workers." (PLANSPONSOR.com; one-time registration required)


Links to Items on Executive Comp, Benefits in General

Benefits for G.ay Partners More Common, According to Survey
Excerpt: "State legislatures passed more than a dozen anti-g.ay laws last year, but U.S. businesses continued to expand policies that create workplace equity for g.ay and les.bian employees, according to a new report. More employers are extending the same benefits to workers in same-sex relationships that they provide to married heterose.xual employees, according to a report by the Human Rights Campaign, a g.ay rights group." (Workforce Management; one-time registration required)

IRS Withdraws FICA, FUTA, and Federal Income Tax Collection at Source to Statutory Stock Options (PDF)
Excerpt: "ACTION: Withdrawal of notice of proposed rulemaking. SUMMARY: This document withdraws the notice of proposed rulemaking relating to the application of the Federal Insurance Contributions Act (FICA), Federal Unemployment Tax Act (FUTA), and Collection of Income Tax at Source to incentive stock options and options granted under employee stock purchase plans (collectively referred to as ''statutory stock options'') that was published on November 14, 2001." (Federal Register)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Retirement Associate
for Towers Perrin
in PA

Benefits Associate - Global Consulting Group
for Towers Perrin
in NY

Actuarial Associate - Global Consulting Group
for Towers Perrin
in NY, PA

Plan Administrator
for Matthews Benefit Group Inc
in FL

Sales Representative/New York
for BenefitStreet
in NY

Retirement Plan Administrator
for RSM McGladrey Retirement Resources
in MD

Conversion (Implementation) Specialist
for RSM McGladrey Retirement Resources
in IL, MN

Senior Reviewer
for Matthews Benefit Group Inc
in FL

FSA Administrator
for RSM McGladrey Employer Services
in CA

Retirement Plan Administration Specialist
for Consulting Actuaries Incorporated
in NJ

401(k) Compliance Analyst
for ADP
in NJ

Sales Professional
for Exit & Retirement Strategies, Inc.
in CA

Annual Plan Reporting Administrator
for The Vanguard Group
in PA

Benefits Generalist
for The Washington Post Company
in DC

Communications Specialist
for Invesmart, Inc.
in OH

Manager - Compensation Team
for Administaff
in TX




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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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Editor and Publisher: David Rhett Baker, J.D.

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