August 1, 2005 Today's sponsor: ASC & The ASC Institute (Click on company name or banner to learn more.)
Small Plans Buck Trend: Few Employees Play Catch-Up with 401(k) Contributions Excerpt: "Although most employers allow catch-up contributions that enable their Baby Boomer employees to stow more money in their defined contribution plans, only a small percentage of all participants are using the break to save more for retirement. Eighty-six percent of plans allow catch-up contributions, but only 13% of eligible plan participants made a catch-up contribution last year, according to an analysis by The Vanguard Group." (Employee Benefit News) Overview: Senate Finance Committee Approves Defined Benefit Plan Reform Bill (PDF) 2 pages. Excerpt: "On July 26, 2005, the Senate Finance Committee approved S. 219, the National Employee Savings Trust and Equity Guarantee Act (NESTEG) containing significant reforms to the defined benefit system. The bill adopts a rigid yield curve interest rate and requires financially weak firms, as determined by credit ratings, to contribute greater amounts." (HR Policy Association) Summary: The 'NESTEG' Bill as Reported Out of the Senate Finance Committee on 7/26/05 (PDF) 16 pages. Excerpt: "The bill is consistent with the funding reforms that were contained in both the Administration's funding proposal and H.R. 2830, the pension funding reform bill that was reported out of the House Education and the Workforce Committee on June 30th. Like them, this bill replaces the current funding rules with new funding rules." (Groom Law Group via American Benefits Council) How American Flew Back Into the Black: Emulating Low-Cost Competitors, Using Workers' Expertise Excerpt: "From the maintenance floor to the cockpit, American Airlines is daily scouring operations to increase efficiency and find even the smallest cost savings. It's paid off: Last week, the company announced its first profit in almost five years." (The Christian Science Monitor) Compliance Update: The Voluntary Fiduciary Compliance Program Excerpt: "The Department of Labor recently revised its Voluntary Fiduciary Correction Program (VFCP). Adopted by the U.S. Department of Labor (DOL) to encourage plan fiduciaries to comply with the provisions of ERISA by providing relief from certain penalties and enforcement actions, VFCP permits employers to proactively remedy fiduciary violations under ERISA by taking prescribed remedial actions." (Littler Mendelson) How Wall Street Wrecked United Airline's Pension Plan Excerpt: "[Doug Wilsman] is a retired pilot and a former fiduciary of United's pension plan for pilots, and in 1987 he discovered that the company had abandoned its older, tried-and-true approach of investing retirees' money in bonds timed to pay when the pensions came due. Instead, it had bought into the promises of Wall Street that it could put less money into the plan - and take out more later - if it just put most of the assets into the stock market." (The New York Times; one-time registration required) Overview: In Australia, Is Portability Bigger than Choice for Superannuation Fund Members? (PDF) 2 pages. Excerpt: "'Portability', in the Australian context, refers to the ability of superannuation fund members to require the trustee of their fund to transfer all or part of their benefit to another complying fund of their choice. Portability was introduced with effect from 1 July 2004, but with limited application. On 15 June 2005, one of the key restrictions on the application of Portability was removed, with the change taking effect from 1 July 2005." (Watson Wyatt Worldwide) Issue Backgrounder: The Benefits of Hybrid Pension Plans and the Efforts to Clarify their Legality (PDF) 7 pages. Excerpt: "Defined benefit pension plans have faced numerous economic, regulatory and demographic challenges over the past few decades. Hybrid pension plans offered plan sponsors an opportunity to begin to address these challenges and better meet the needs of a more mobile workforce. However, recent court decisions are undermining company efforts to adopt cash balance and hybrid pension plans. Legislative proposals are now being developed but they must be careful to avoid undue ...." (Employment Policy Foundation) Letter to Senate Finance Committee on Hybrid Defined Benefit Plans (PDF) 2 pages. Excerpt: "With respect to hybrid reform, we are concerned about the potential that the committee may take a prospective only approach. Currently, there are 1,500 hybrid plans providing benefits to over eight million employees. Failure to clarify the status of these plans risks placing the plans-- and the benefits for employees they cover-- in legal jeopardy." (HR Policy Association) Opinion: How President Bush's Social Security Reform Plan Died Excerpt: "Until two weeks ago, Social Security reform was sort of dead. But now it seems to be all dead. The breakdown occurred when the administration backed away from a proposal making its way through the House of Representatives that would have introduced personal accounts without specifically restoring solvency to the system." (Bloomberg News & Commentary) Links to Items on Executive Comp, Benefits in General Washington Regulatory Wrap Up, As of July 28, 2005 (PDF) 3 pages. The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of July 28, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html. (National Council on Teacher Retirement) Learning to Make the Most of Your Military Benefits Will Pay Off Excerpt: "While base salaries for service members can be modest, there are other opportunities to achieve financial security in the military. Troops who maximize their benefits could be the envy of their private-sector counterparts." (Stars and Stripes) Newly Posted Events Springboard to Change 2005 Health Care Symposium in Pennsylvania on September 8, 2005 presented by Pittsburgh Business Group on Health Newly Posted Press Releases Pyramid Promotes O'Neill to President (Pyramid Digital Solutions) Senate Finance Committee Approves COLI in Pension Reform Legislation (American Council of Life Insurers) Great-West Healthcare Consumer Health Care Survey Reveals Mixed Bag of Results; Participants Average Prediction Price of a Honda Accord within $300 but Are off by $8,100 on a Four-Day Hospital Stay (Great-West Life & Annuity Insurance Company) Labor Department Solicits Nominations for 2006 ERISA Advisory Council (U.S. Department of Labor, Office of Public Affairs, Washington, D.C.) New NCQA Standards Promote Wellness, Prevention; 57 Health Plans Schedule Surveys (National Committee for Quality Assurance (NCQA)) Digital Documents, LLC Releases dDOptimaOCR (c) 3.5 Optical Character Recognition Software to Provide The Highest OCR Accuracy and Most Flexible Text Formatting Solution (Digital Documents, LLC--The Leader in Document Scanning and Imaging Services) Man Sentenced To 57 Months For Embezzling Over $1.3 Million From White Plains-Based Employee Benefit Plan (U.S. Attorney's Office) Newly Posted or Renewed Job Openings 401(k) Account Manager for BISYS Retirement Services in PA Pension Administration Manager - San Diego for Polycomp Administrative Services, Inc. in CA Health Insurance National Account Executive for Great-West Healthcare in Advanced Sales Professional for National Life Group in VT Defined Contribution Administrator for Howard Simon & Associates, Inc. in IL Health & Welfare Consultant for Towers Perrin in CA, CT, NJ, NY, PA Operations Manager for New York Life Investment Management LLC in MA Senior Benefits Manager - Up to $100,000 per year for Uline in IL Pension Administrator - Midtown, NYC for Retirement System Group Inc. in NY Account Manager-Executive Benefits Practice for Clark Consulting in TX International Research Consultant for Hewitt Associates in IL Handy Links:
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