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July 19, 2005
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Central & Mountain States Benefits Conference

September 12-13, 2005 - Denver, CO Discuss employee benefits issues with colleagues and local, regional and national government representatives from the Internal Revenue Service, Department of Labor and PBGC.

ASPPA. For the Serious Retirement Plan Professional.


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Overview: Qualified Roth Contribution Programs Set to Debut in 2006 (PDF)
Excerpt: "[The target page] is a summary of the requirements applicable to a qualified Roth contribution program, and a discussion of the potential advantages and disadvantages of adding this feature to a 401(k) plan." (Dechert LLP)

Roth 401(k)s Are Not Just for the Rich, but May Not Be Accessible
Excerpt: "The Roth 401(k), a investment option that will be available next year, is garnering a lukewarm response from employers who are still waiting for other regulatory shoes to drop. [There are] uncertainties over record keeping, payroll implementation and IRS regulations .... In addition, 'The sunset provision that allows the Roth 401(k) to go away in 2010 is an additional concern,' ...." (Employee Benefit News)

U.S. and International Pension Accounting: Update on Swiss Discount Rates at End of June 2005
Excerpt: "Bond yields continue to decline quite strongly in 2005. As a result, many plan sponsors will see a substantial drop in the funded status of their plans, as measured under U.S. and international accounting standards. In many cases, this will result in a significant increase in pension expense in the following fiscal year." (Watson Wyatt Worldwide)

Overview: House Education and Workforce Committee Approves Pension Funding Reform Bill (PDF)
2 pages. This newsletter contains information for multiemployer plans. (Milliman)

Your Incredible Vanishing Pension
Excerpt: "Years ago, you entered into a contract with your employers. You'd work for them until retirement; they'd take care of you for the rest of your life. You've held up your end of the bargain, but will they hold up theirs?" (The Motley Fool)

Chart: Summary and Comparison of Leading Single-Employer Pension Funding Proposals (PDF)
20 pages. The chart compares H.R. 2830, The Pension Protection Act of 2005, to current law and to the administration's proposal. (Benefits Group of Davis and Harman via American Benefits Council)

Stocks Rebound, but Pensions Haven't, According to S&P Survey
Excerpt: "Stocks improved last year, which you might think would help solve Corporate America's pension problem. The trouble is, it has barely made a dent. A vast majority of pension plans still face massive cash shortfalls, according to statistics to be released Sunday by Standard & Poor's." (USA TODAY)

S&P 500 Pension Funds' Funding Status Remains Unchanged in 2004
Excerpt: "Standard & Poor's newly released Pension Status Report for the S&P 500 shows pension funds were underfunded $164 billion in 2004, only slightly changed from the $165 billion of underfun[d]ing seen in the 2003 report." (PLANSPONSOR.com; one-time registration required)

ERISA-Related Securities Litigation Imposes Undue Burden on Pension Plans and Participants (PDF)
4 pages. Excerpt: "[T]he federal courts simply must take into account the second-guessing to which plan defendants are subjected in failure-to-diversify cases. ERISA litigation can unnecessarily burden fiduciaries with substantial defense costs and require them to make bet-the-company decisions whether to try or settle a case. When cases are settled or judgments are paid, those expenses are ultimately borne by the plan sponsor through greater plan expenses, including higher insurance premiums." (Douglas E. Motzenbecker via Washington Legal Foundation)

ESOPs in the Construction Industry
This article examines the issues that arise for employee stock ownership plans (ESOPs) in the construction industry, particularly with respect to surety bonds. (National Center for Employee Ownership)

Comments and Links: District Court's Denial of Proposed Settlement in EDS ERISA Litigation
Excerpt: "The District Court for the Eastern District of Texas recently rejected a settlement submitted to the Court for approval in the case of In Re Electronic Data Systems Corp. ERISA Litigation. You can access the Memorandum Opinion and Order of the Court rejecting the settlement here [pdf]. The plaintiff-participants had sued EDS and its officers and directors for various fiduciary breaches and alleged, in general, violations of ERISA pursuant to a 'stock-drop' scenario." (Attorney B. Janell Grenier via BenefitsBlog.com)

Thrift Savings Plan's New Lifecycle Funds Allow Employees to Tailor Retirement Plans
Excerpt: "The Thrift Savings Plan announced yesterday that participants may start using 'lifecycle funds' Aug. 1 to save for their retirement. The TSP, a 401(k)-type program for government employees, will begin offering five L Funds, as they are being called, on that date. But employees may want to view them more as a diversification tool than as new funds, since they will use the TSP's existing five funds as their foundation." (The Washington Post; one-time registration required)

Remedies to Solve the World Pension Crisis
Excerpt: "It may provide cold comfort for people in Europe that they are not alone in worrying about the size of their pensions. A recent World Bank study of pension policies across the world shows that the crisis is a global one : many countries are unprepared for the huge demographic shift. Across the world, people are living longer and having fewer children." (www.guardian.co.uk via seniorscopie.com)

Time for Another Look at Treasury Inflation-Protected Securities?
Excerpt: "For the first two years of their existence, TIPS performed poorly, relative to conventional 'nominal' bonds, due less to inflation conditions than to investors' scant awareness of the new instruments .... After the Great Unpleasantness of 2000, however, sponsors' attention began to turn toward investments offering less uncertainty and volatility, like TIPS." (PLANSPONSOR.com; one-time registration required)

Special Report on Exchange-Traded Funds: A New Generation Emerges
Excerpt: "According to the Investment Company Institute, by the end of April 2005, total volume for ETFs reached $220.6 billion. In recent years, use of ETFs by institutions has exploded. Greenwich Research reports that 73% of all institutions were using exchange-traded funds in mid-2004, compared to 61% in 2003. Hedge funds are the biggest users of the instrument; hedge funds account for 70% of ETF volume, and the 'traditional long-only' investment community accounts for 25% of ETF volume.' (PLANSPONSOR.com; one-time registration required)

Secrets of the DOL and PBGC: What Happens When Pensions Are Taken Over by the Government?
Excerpt: "The Employee Retirement Income Security Act of 1974 was written to protect participants in pensions. Instead it has become a labyrinth that participants cannot possibly comprehend. Corporations, on the other hand, can afford to hire legal experts to navigate them through the statute to achieve their desired objectives." (Benchmark Advisory Services, Inc., and Benchmark Financial Services, Inc.)

House GOP Social Security Plan Swaps Benefits for Personal Accounts
Excerpt: "The House Republican plan to overhaul Social Security requires retirees to give up their guaranteed benefit level if they want a personal account that can be passed on to heirs, GOP aides said Monday.Only those who invest the accounts in government securities while they are working and in an annuity when they retire can be certain of receiving the full Social Security benefit they are promised, the aides said." (AP via The New York Times; one-time registration required)

Opinion: Getting Serious about the Ownership Society
Excerpt: "It seems safe to say that the 'ownership society' has lost a bit of its luster over the past six months, as the appeal of Social Security privatization has dimmed. Trading Social Security's promise of insurance against disability, the death of a family member, and old-age poverty for faith in the stock market and massive increases in the national debt seems to be a bit different from what most Americans have in mind when they think 'ownership.'" (The Century Foundation)

Opinion: Reaction to a Tired 'New' Idea for Social Security
Excerpt: "In the Sunday New York Times of July 17, Daniel Altman offers his Social Security plan. Noting that Social Security is a much better deal for low income workers than for high earners, he suggests that we give benefits in the future only to those who had low lifetime earnings. This would cost much less than our present Social Security system." (The Century Foundation)

Comments to IRS on LRM #25B -- Cross-Tested Profit-Sharing Plans
Excerpt: "The American Society of Pension Professionals & Actuaries (ASPPA) recognizes and applauds the various 'partnering initiatives' of the Service in recent years and believes that significant improvements have been made as a result. In that regard, ASPPA is especially pleased to have the opportunity to provide feedback before finalization of the Service's proposed cross-tested Listing of Required Modifications (LRM)." (American Society of Pension Professionals & Actuaries)

Are You Saving Too Much for Retirement?
Excerpt: "[F]inancial planner Ty Bernicke ... made waves earlier this year by suggesting that the ubiquitous online 'retirement calculators' actually overestimate how much Americans need to save. 'The reason they're inaccurate is that they don't account for the fact that as a person gets older, they spend less,' says Mr. Bernicke in Eau Claire, Wis. Even considering inflation, he says, 'an 85-year-old spends less than a 65-year-old.'" (The Christian Science Monitor)

Links to Items on Executive Comp, Benefits in General

DOL Solicits Nominations for 5 Vacancies on ERISA Advisory Council (PDF)
2 pages. Excerpt: "The terms of five members of the Council expire on November 14, 2005. The groups or fields they represent are as follows: (1) Employee organizations; (2) employers; (3) corporate trust; (4) the investment management profession; and (5) the general public." (Employee Benefits Security Administration, U.S. Department of Labor)

House Bill Would Offer Domestic Partner Benefits to Unmarried Federal Workers
Excerpt: "Rep. Barney Frank (D-Mass.), joined by 52 other House members, has introduced legislation that would allow unmarried employees of the federal government to apply for health insurance, retirement and other benefits for their domestic partners." (The Washington Post; one-time registration required)

Making a Business Case for Domestic Partner Benefits
Excerpt: "Generous perks have long helped employers hire and keep some of their best workers. But can a company also use its benefit offerings to reach out to its customers? The g.ay workforce, and its spending clout, hasn't gone unnoticed by corporate America." (Employee Benefit News)

Pennsylvania Adopts Legislative Fix for Nonqualified Deferred Compensation Plans
Excerpt: "Pennsylvania's Governor Rendell recently signed House Bill 176 effectively overturning the Pennsylvania Commonwealth Court's recent decision in Ignatz v. Commonwealth of Pennsylvania, 2004 WL 1057453 (Pa. Commw. May 12, 2004). Under the House Bill, elective deferrals into nonqualified deferred compensation arrangements will now be taxed at the time of distribution and not at the time of deferral." (Buchanan Ingersoll PC)

Install the BenefitsLink Search Engine in Your Mozilla Firefox Web Browser
Here's an easy way to get quick access to the BenefitsLink Search Engine if you're using the Mozilla Firefox web browser! Click on the link on the target page to install the BenefitsLink Search Engine as one of the options in your drop-down search bar (usually located in the top-right corner of your Mozilla browser.) There is no charge to install or use the BenefitsLink Search Engine. (BenefitsLink)

Newly Posted Events

How Can We Make Private Pensions Better?; NCPA Briefing to Feature Reps. Boehner and Johnson Explaining Their Reform Bill
in District of Columbia on July 19, 2005
presented by National Center for Policy Analysis (NCPA)

Labor Department Sponsors Kentucky Workshop on Complying With Federal Pension and Health Law
in Kentucky on August 3, 2005
presented by U.S. Department of Labor, Employee Benefits Security Administration

Pension, Profit-Sharing, Welfare, and Other Compensation Plans
in California on March 22, 2006
presented by ALI-ABA (American Law Institute-American Bar Association)

Newly Posted Press Releases

Two Step Releases Corporate Focus Version 5.0; Browser-Based Release Provides Easier Access to Corporate Governance and Capitalization Information for Attorneys and Their Clients
(Two-Step Software, Inc.)

Increasing Compensation of Executives Unaffected by Decreasing Performance of Companies
(FreeERISA.com)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Administrator
for G.M. Pensions, Inc. in the San Diego Area
in CA

Testing & Reporting Specialist II
for Fidelity Investments
in MA

Employee Benefits Trust Officer
for Regions Financial Corporation
in AL

Call Center Representative/Receptionist
for WESPAC
in CA

HRIS Analyst
for Providence Health System
in WA

Retirement Programs Specialist
for Providence Health System
in WA

Senior Retirement Program Specialist
for Providence Health System
in WA

Retirement Plan Administrator
for Heaton :: Eadie, PSC
in IN

Pension Administrator/Manager
for The Benefits Consulting Group
in IL

Healthcare Operations Behavioral Analytics Trainer
for Great-West Corporate
in KS

Benefits Specialist
for Milliman, Inc.
in WA

Retirement Plan Communication Associate (Bi-Lingual), #0502078
for John Hancock
in CA

Operations Delivery Leader
for Fidelity Investments
in MA, NH

Office Manager
for Great-West Retirement Services
in NY

Client Communication Specialist/Sr.
for Standard Insurance Company
in OR

Actuarial Services Associate - Pension Analyst
for NRECA
in VA

Actuarial Services Associate - Actuary
for NRECA
in VA

Internal Wholesaler
for BISYS Retirement Services
in PA

Benefit Manager
for Cottingham & Butler, Inc.
in IA

401k/Tiered Plan Administrator
for The Pension Group, Inc.
in CA



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