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July 26, 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.

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Hewitt Study Shows 401(k) Plan Cashouts Still Common
Excerpt: "A significant number of workers are taking their 401(k) money and running when they leave their companies, according to a new study. A Hewitt Associates news release said that 45% of the nearly 200,000 K plan participants studied took a cash distribution upon their departure, while 32% stayed in the plan and 23% rolled over into another qualified plan or an IRA." (PLANSPONSOR.com; one-time registration required)

Lessons Learned: Switch from Defined Benefit to Defined Contribution Plans Causing Benefits Divide
Excerpt: "Several major employers have frozen defined benefit plans to new hires and are offering them beefed up defined contribution plans instead. Citing competitive reasons for the plan changes, these employers have created a system of dual benefits that pose challenges for benefit managers." (Employee Benefit News)

Assessing the Roth 401(k): It May Not Be Around Forever, but There Are Real Benefits
Excerpt: "By now you've probably started to think about the new Roth 401(k), which begins on January 1, 2006. .... The Internal Revenue Service proposed regulations for the new plans in March and is still soliciting comments. But it may be worth spending some time considering the implications of the Roth 401(k) so that you are ready to go when regulations are final. This is very time sensitive since the entire EGTRRA is scheduled to end after 2010, unless Congress acts to extend it." (Investment Advisor)

Trend Turns Workers Into Savers: Some Companies Enroll Employees in 401(k) Plans Automatically
Excerpt: "Hewlett-Packard Co. last week joined a long and growing list of companies that have stopped offering traditional pension plans, shifting instead to 401(k) plans that leave most of the retirement burden to workers. But HP is at the forefront of a newer trend that helps workers tackle that responsibility -- automatic 401(k) enrollment." (The Oregonian, one-time registration required)

ERIC Issues Plain English Explanation of Pension Funding Rules for Single-Employer Plans (PDF)
3 pages. Excerpt: "The Senate Finance Committee will consider legislation on Tuesday July 26 that, among other things, revamps the rules that determine the minimum contributions employers must make to their defined benefit pension plans. The Senate HELP Committee is expected to consider changes to the pension funding rules in September. Understanding the minimum contribution rules can be a daunting task, especially for individuals who do not work in this area full time." (The ERISA Industry Committee)

ERIC PENSION POINTER: Assessing the Status of the Pension Benefit Guaranty Corporation (PDF)
4 pages. Excerpt: "The ERISA Industry Committee (ERIC) has proposed comprehensive reforms to current law regarding pension funding, the PBGC, and disclosure to participants (see, www.eric.org). The proposals are designed to redress issues in the current law funding rules while also creating a funding structure that encourages employers to establish and maintain defined benefit plans." (The ERISA Industry Committee)

ERIC Letter to Senate for July 26 Finance Committee Markup of the NESTEG Bill (PDF)
2 pages. The letter discusses pension funding issues in the proposed bill. (The ERISA Industry Committee)

Current Legislative Outlook, July 2005: Defined Benefit Funding and Hybrid Plans Dominate the Agenda
Excerpt: "This article reviews the process, timing and politics of Senate and House consideration of DB funding reform." (Chicago Consulting Actuaries, LLC)

Concerns with Funding Rules in Mark of National Employee Savings and Trust Equity Guarantee Act (PDF)
4 pages. Excerpt: "The Chairman's Mark of the 'National Employee Savings and Trust Equity Guarantee Act of 2005' includes very significant modifications of the funding rules applicable to defined benefit plans." (American Benefits Council)

Vermont Study Commission Kicks off Teachers Pension Plan Study
Excerpt: "A new state commission looking into Vermont's policy toward one of its public retirement plans was scheduled to have its maiden meeting Monday. Vermont lawmakers had told Treasurer Jeb Spaulding to chair the new commission to study the retirement fund for Vermont's more than 8,000 public school educators, the Associated Press reported." (PLANSPONSOR.com; one-time registration required)

Fiduciary Due Diligence When Selecting Investment Options (PDF)
2 pages. Excerpt: "One of the more important responsibilities of the fiduciary is the development of a due diligence process. Besides the prudence of such conduct, it also makes good sense. When money managers or funds are selected without a process, there are potential problems: ...." (Foundation for Fiduciary Studies)

Report Says that Raising the UK Retirement Age to 67 Would Solve the Pension Crisis
Excerpt: "An influential UK think tank now asserts that the country's retirement age should be bumped up to 67 by 2030 to solve the current pension crisis. But the report by Institute for Public Policy Research (IPPR) predicted that the move would be unpopular because younger people expect to die sooner than government life expectancy figures show they will, according to a report in The Guardian." (PLANSPONSOR.com; one-time registration required)

Panamanian Government Suspends Social Security Reform Law
Excerpt: "On June 1, 2005, Panama's Parliament approved a law to reform its social security system, however, due to pressure from opposition groups, the new measures will not be enacted for at least 90 days. Panama's Social Security Fund (Caja de Seguro Social-- CSS) is currently under funded by US$ 4.5 billion, and according to recent government estimates, it will go bankrupt by 2012 without reform." (Watson Wyatt Worldwide)

House Democrats to Offer Proposal for Retirement Savings
Excerpt: "House Democrats intend to propose a retirement-savings plan ... that will be their first leadership-backed alternative to Republican plans for a broad retirement-security package, which includes changes to Social Security. The Democratic plan, called AmeriSave, would increase incentives for middle-class workers to participate in 401(k) retirement accounts and individual retirement accounts. It would also create tax credits for small businesses that set up retirement accounts ...." (The Washington Post; one-time registration required)

Opinion: A Feasible Fix for Social Security
Excerpt: "The president's progressive-indexing idea is hardly revolutionary. It represents a change in degree, not in philosophy. Social Security benefits are already a radically 'progressive' income-transfer program, in which low-wage earners make out, relatively speaking, much better during retirement than do middle-income and top earners." (City Journal)

Links to Items on Executive Comp, Benefits in General

Fed Credit Unions May Continue Treating Nonqualified Deferred Comp Plans as Eligible Sec 457 Plans
Excerpt: "IRS has determined that, at least until Code Sec. 414(d) guidance ... is published, an already-existing plan that a federal credit union maintains as an eligible nonqualified deferred compensation plan under Code Sec. 457(b) (a 'section 457 plan') may be treated as an eligible section 457 plan. However, the federal credit union must have consistently claimed the status of a non-governmental tax-exempt organization for all employee benefit plan purposes." (Pension & Benefits Week via RIA News Briefings)

Tech Companies Still Like Stock Options
Excerpt: "In spite of the new stock option expensing rule of the Financial Accounting Standards Board (FASB), 89% of public technology companies say they will continue to offer stock options to employees." (PLANSPONSOR.com; one-time registration required)

Federal Government Releases the 2005 Form 5500
Excerpt: "Plan sponsors can take a look at the latest version of the Form 5500 as released Monday [July 25, 2005]. Issuing the key pension reporting document were the US Department of Labor's Employee Benefits Security Administration (EBSA), the Internal Revenue Service (IRS) and the Pension Benefit Guaranty Corporation (PBGC). [The form is available at http://www.dol.gov/ebsa/5500main.html#2005.]" (PLANSPONSOR.com; one-time registration required)

Newly Posted Press Releases

ERIC Provides Easy-to-Understand Explanation of Funding Requirements for Single-Employer Pension Plans, and Funding Status of the PBGC
(ERIC (ERISA Industry Committee))

Association Health Plans; Actuaries Still Raise Concerns as Congress Poised to Vote on Legislation
(American Academy of Actuaries)

U. S. Labor Department Extends Annual Reports Deadline After Hurricane Dennis Hits Alabama
(U.S. Department of Labor, Employee Benefits Security Administration)

U. S. Labor Department Extends Annual Reports Deadline After Hurricane Dennis Hits Florida
(U.S. Department of Labor, Employee Benefits Security Administration)

3d Annual 412i Summit concludes in Bellingham Washington
(412iCompany, The)

Newly Posted or Renewed Job Openings
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Health Insurance & Group Insurance Sales Executive
for Alliance Benefit Group of Kansas City, Inc.
in IA, KS, MN, MO

DB Implementation Analyst
for Milliman
in TX

Conversion Implementation Specialist
for BenefitStreet
in CA

Pension Administrator
for PennRock Financial Advisors
in PA

Defined Contribution Plan Administrator
for CBIZ Actuarial & Benefit Consultants
in AZ

Benefits Analyst II
for OfficeMax
in IL

Product Manager, EAP & Absence Mgmt
for Ceridian
in FL



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