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July 22, 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)
JCT Description of Chairman's Mark of NESTEG Bill Scheduled for July 26, 2005 Mark-Up (PDF)
168 pages; the 'National Employee Savings and Trust Equity Guarantee Act of 2005' is scheduled for a mark-up before the Senate Committee on Finance on July 26, 2005. (Joint Committee on Taxation, U.S. Congress)

EGTRRA Document Updates -- Where Are We Now in This Process?
Excerpt: "The EGTRRA document restatement process is very different from the one used for GUST. Where are we now in this process? In June of 2005, the IRS confirmed that, although the deadline for lead document submissions by document drafters ... remains October 31, 2005, adopting prototype sponsors of lead document drafters would have until January 31, 2006, to make their document submissions. However, the IRS has not yet released all the guidance, including model document language, ...." (McKay Hochman Co.)

401(k) Participants Continue Trend of Fleeing Stock in Favor of Fixed Income
Excerpt: "Continuing the trend for 2005, participants are fleeing equity funds in favor of fixed income investments. According to the Hewitt 401(k) Index, participant transfer activity remained at normal levels in June. Participants who made transfers chose to flee equity funds, with 47.8% of participant dollars moving out of large US equity and 15.94% moving out of Balanced funds." (PLANSPONSOR.com; one-time registration required)

Catch-Up Contributions Underutilized by Eligible Workers, New Study Finds
Excerpt: "A recent study from the Vanguard Center for Retirement Research suggests that, while the overwhelming majority of age-50-and-older participants in defined contribution plans are eligible to make catch-up contributions to their accounts, few avail themselves of the opportunity.' (The Vanguard Group)

Overview: Final 401(k) Regulations-- Part Six
Excerpt: "The final 401(k) regulations very clearly outline the restrictions on distributions. In part five, we covered hardship distributions. In part six, we describe the rest of the distribution rules." (McKay Hochman Co.)

Audio: The Shifting Rites, and Timing, of Retirement
Excerpt: "As boomers approach retirement age, a big question looms: How long will they keep working? One clue might come from today's senior citizens. One person in two draws Social Security benefits at age 62, even though that means smaller checks than if they waited a few years longer." (All Things Considered via National Public Radio)

Checking Your Pension's Health and What It Means to You
Excerpt: "If you work for United Airlines, you don't need to be told that your pension is in trouble. Earlier this year, the airline said it was defaulting on its pension, resulting in benefits cuts for thousands of workers. But what if you work for another troubled company? How can you determine whether your pension is underfunded, and what does that mean?" (USA TODAY)

Senate Eyes 15-Year Limit on Airline Pension Funding Fix
Excerpt: "U.S. Senate legislation to strengthen the private pension system is unlikely to give financially struggling airlines more than 15 years to stretch out their pension payments -- a decade less than they have sought, finance committee aides said on Thursday." (Reuters via The Washington Post; one-time registration required)

Global News Briefs: United Kingdom Plan Funding Shifts from Partnership to Negotiation
Excerpt: "Starting in September, new legislation will replace the U.K.'s minimum funding requirement (MFR) for pension plans with a less prescriptive scheme-specific regime. The change in regulation from detailed funding rules to broad principles will require plan sponsors to engage much more closely with plan trustees." (Towers Perrin)

Global News Briefs: Australian Phased Retirement Regulations Take Effect
Excerpt: "New government regulations to encourage phased retirement took effect July 1. The rules, which will allow Australian workers access to their pension benefits prior to retirement, are designed to encourage older employees to stay in the workforce and to assist workers wanting to make a gradual transition to retirement." (Towers Perrin)

Text of IRS Notice 2005-58 Addressing 457 Issues for Federal Credit Unions (PDF)
4 pages. Excerpt: "Pending further guidance, a federal credit union that has consistently claimed the status of a non-governmental tax-exempt organization for all employee benefit plan purposes may treat § 457(f) as applying to any nonqualified plan it maintains (other than an eligible § 457(b) plan) that provides for a deferral of compensation. Note that § 409A applies to arrangements to which § 457(f) applies." (Internal Revenue Service)

Global News Briefs: South Korean Employers Get Alternative to Lump Sum Severance Benefit
Excerpt: "Employers are reviewing the new pension legislation that will allow them to set up retirement plans instead of paying a lump sum severance benefit. The Employee Retirement Security Act (ERSA), approved by South Korean lawmakers last December, will take effect on December 1, 2005 for employers with five or more employees. Employers with less than five employees will have to comply with ERSA by 2010." (Towers Perrin)

Shifting Risk: Workers Today Near Retirement More Vulnerable and with Lower Pensions
Excerpt: "As employers continue to lower contributions to employees' pensions and shift market risk from themselves to their employees, Congress is considering similar measures for the Social Security system. For an analysis of how the private pension wealth of typical Americans is both smaller and less secure than it was a decade or two ago, read Shifting Risk, the final in a three-part Social Security series called Who Will Pay?" (Economic Policy Institute)

Opinion: TIAA-CREF's Fees Headed in the Wrong Direction
Excerpt: "In a July 8, 2005, filing with the SEC, TIAA-CREF announced plans to ask fund shareholders to approve dramatic management fee increases. If the proposal, which would initially impact the firm's actively managed Institutional fund lineup, is accepted, management fees would range from 0.45% to 0.50% annually, up sharply from the 0.10% or less charged by those funds currently." (Morningstar.com via Yahoo! Finance)

Opinion: A New Approach on Social Security Reform
Excerpt: "I believe the president should focus on putting Social Security on a sound footing. The best way to do that is to adjust benefits by increasing the retirement age, cutting back payments further for those who choose to retire early and indexing the growth in benefits to the consumer price index ... rather than to wages. Raising payroll taxes -- or increasing the ceiling below which those taxes are collected -- should be off the table." (James K. Glassman via Tech Central Station)

40 Firms to Be Granted Licenses in China to Manage Corporate Pensions
Excerpt: "China would grant licenses for 40 institutions to manage corporate pensions by early August, the China Securities Journal reported Wednesday, in a long-anticipated move to lure more than US$4 billion into the domestic securities markets." (China View)

Links to Items on Executive Comp, Benefits in General

JCT Description of 'Tax Technical Corrections Act of 2005' (PDF)
17 pages; the bill was introduced on July 21, 2005, as H.R. 3376 in the House of Representatives and as S. 1447 in the Senate. Addresses expansion of bank S corporation eligible shareholders to include IRAs, uniform definition of a child, nonqualified deferred compensation plans. (Joint Committee on Taxation, U.S. Congress)

Summary: Proposed Regulations on Use of Electronic Technologies for Notices, Elections and Consents (PDF)
2 pages. Excerpt: "The proposed regulations coordinate the existing written notice and election rules applicable to employee benefit plans with the requirements of the Electronic Signatures Global and National Commerce Act (E-SIGN)." (American Benefits Council)

Analysts Leaving Out Cost of Stock Options in Investor Reports
Excerpt: "AccountingWEB.com reports that, although companies are now required to include costs for stock options in their company earnings data, some Wall Street analysts are not including them in their earnings-per-share figures." (PLANSPONSOR.com; one-time registration required)

Can.ada 4th Nation to OK G.ay Marriage
Excerpt: "Can.ada legalized g.ay marriage yesterday, becoming the world's fourth nation to grant full legal rights to same-sex couples." (AP via The Seattle Times)

Hewitt Federal Legislation Quick Guide Updated as of July 19, 2005
Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates)

NCCMP's 'Legislative Scorecard' Page Updated July 2005
Excerpt: "NCCMP has culled proposed legislation from the current Congressional session. The chart ... describes those bills and resolutions that we feel are of interest to our multiemployer pension and health plans. The chart also tracks bill status and gives our comments to the upcoming legislation." (National Coordinating Committee for Multiemployer Plans)

Stock Option Taxation in People's Republic of China Clarified by New Guidance (PDF)
Excerpt: "The People's Republic of China's (PRC) Ministry of Finance and State Administration of Taxation have jointly issued a new Circular, Caishui [2005] No.35 ('Circular 35') to provide more specific guidelines on the taxation of stock option income. Circular 35 came into effect on 1 July 2005." (KPMG Huazhen)

Free Database of Support Resources for Active-Duty Employees
Excerpt: "The EUSA Resource Center is a national clearinghouse designed to be a comprehensive resource for information about services from governmental and non-governmental organizations for Guard, Reserve and military personnel. The EUSA Resource Center provides a complete one-stop listing of a wide range of support programs." (Employers United for a Stronger America)

Overview of the Record Retention Guidelines Pertaining to Form 5500
Excerpt: "ERISA sets forth specific reporting and disclosure obligations with respect to qualified retirement plans. A lesser-known fact is that ERISA also requires plan sponsors to retain for a fixed period of time the records that support the information included in the 5500 filing and other reports." (McKay Hochman Co.)

Newly Posted Events

Consumer Finance Litigation & Class Actions
in New York on September 26, 2005
presented by American Conference Institute

Managing Legal Risks in Conducting & Promoting Clinical Trials
in California on September 19, 2005
presented by American Conference Institute

Newly Posted Press Releases

Travis Software Releases WebCOBRA.com's July '05 Release, with Enhanced Third Party Administrative Features
(Travis Software Corp.)

Identity Theft Benefit
(Credit Guard Services)

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Pension Consultants/Administrators
for Northern NJ Mid-Size Pension Consulting Firm
in NJ

401k Account Executive
for BISYS Retirement Services
in PA

Pension Administrator
for Pension Benefit Consultants, Inc.
in CT

Paralegal - ERISA, 401(a) Plans (certification not required)
for Jim Poekert & Associates, Inc.
in FL

Benefits Administration Support
for Chesapeake Benefit Partners
in DC, MD, VA

Senior Advisor, Community Health Care
for NRECA
in VA

401(k) Plan Administrator
for TPA Firm in Wayne, PA
in NJ, PA



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