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August 4, 2005
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Pension Kickbacks Alleged: GOP Insider Levine Called Brains of Alleged Extortion Scheme
Excerpt: "A wealthy Republican insider and two prominent Chicago attorneys were indicted Wednesday on charges of extorting hundreds of thousands of dollars in kickbacks from investment firms seeking business from a multibillion-dollar pension plan." (Chicago Tribune; one-time registration required)

Study Says Costs in 13 of Top 20 Mutual Fund Families Have Increased
Excerpt: "[T]his year, the [mutual fund] industry is trying to convince us that expenses are dropping. A new Morningstar study says 'No!' In spite of huge economies of scale, the industry's overall expense ratio has not changed much in the past 15 years. In fact, Morningstar's research reveals some disturbing trends that will scare you every time you buy a fund." (MarketWatch, Inc.)

Online Survey Responses to the Question: Why Don't More Retirement Plans Use Auto Enrollment?
Excerpt: "Automatic enrollment-- or at least talking about automatic enrollment-- seems to be all the rage these days. Recent studies seem to make a compelling case for the approach, and it's not like it is a brand new concept." (PLANSPONSOR.com: one-time registration required)

Commentary on 401(k) Plan Administrative Fees that the Plan Charges Its Participants
Excerpt: "Participants in 401(k) plans are currently not adequately informed about the fees associated with the day-to-day operational costs of running increasingly more complex plans. These fees include the costs of mailings and other record-keeping, telephone voice response systems, daily valuation services, educational seminars, retirement-planning software -- and all the rest of the clutter." (The Motley Fool)

Overview: Plan Amendments for Roth 401(k) Provisions, Final 401(k) Regs, and Proposed 415 Regs
Excerpt: "The 415 regulations are only proposed. However, certain provisions may currently be relied upon, such as the provisions relating to the treatment of post-severance compensation. The changes in the regulations are not integrally related to EGTRRA - therefore the guidance on Notice 2001-42 does not appear to apply. This means we need IRS guidance regarding any plan amendment requirements." (SunGard Corbel)

Overview: United Kingdom's PPF Announces Details of Risk-Based Levy (PDF)
8 pages. Excerpt: "The long-awaited Pension Protection Levy Consultation Document has been published. The document contains the proposals for the introduction of the risk-based levy for all schemes from the 2006/7 financial year. While this year's levy is based on only scheme membership numbers, the long-term intention is to link the future levies to the risk of each scheme becoming a 'claim' on the PPF." (Towers Perrin)

NCCMP Comments to IRS on the Proposed Code Section 415 Regulations (PDF)
4 pages. Excerpt: "These comments focus on three features of the proposal of special concern to multiemployer plans: the special rules for plans maintained by more than one employer, the exclusion from the definition of compensation of payment for services after the end of direct employment, and the rules on multiple annuity starting dates." (National Coordinating Committee for Multiemployer Plans)

Overview: IRS Revenue Ruling 2005-36 Deals with Partial Disclaimers After an IRA Owner's Death
Excerpt: "The IRS in recently released Revenue Ruling 2005-36 states that a beneficiary's disclaimer of his/her interest in an IRA after the owner's death is a qualified disclaimer under IRC Section 2518 (if all of the requirements of that section are met), even if, prior to making the disclaimer, the beneficiary takes his/her share of the decedent's final required minimum distribution (RMD)." (Bankers Systems, Inc.)

Shining a Light on Shadow Retirement Accounts
Excerpt: "Of the alleged misdeeds that former MassMutual CEO Robert J. O'Connell stands accused of, none has stirred as much outrage as his alleged abuse of a notional, or unfunded, account set up to track his deferred compensation. O'Connell, who was dismissed from MassMutual in June, is accused of improper trading in that account.' (CFO.com)

ICI Comments on Labor Department's Proposed Form LM-10 Filing Requirements for Service Providers
Excerpt: "In a recent letter to the Labor Department, the Institute expresses its concerns with filing requirements the Department intends to impose on certain retirement plan service providers. .... The Labor-Management Reporting and Disclosure Act of 1959 (LMRDA) requires public disclosure of financial transactions or arrangements made between an employer and one or more of the following: a labor organization, union official, employee, or labor relations consultant." (The Investment Company Institute)

Opinion: Social Security Reform Can Be Bipartisan
Excerpt: "As Democrats in Congress continue to reject President Bush's overtures to work together to strengthen Social Security, it's worth remembering that a bipartisan consensus for reform existed long before the president put this issue on his agenda." (Tim Penny via The Christian Science Monitor)

Opinion: Behind the Social Security Curve? How Not to Fix the Solvency Problem
Excerpt: "The Democrats last week announced their own plan for personal investment accounts. Substantively, the plan is quite poor and vulnerable. But politically Republicans face real trouble if they follow the badly conceived reform plans the White House still advances." (Peter Ferrara via The Washington Times)


Links to Items on Executive Comp, Benefits in General

Monthly Benefit News & Developments, August 2005 Issue from Milliman (PDF)
2 pages. The edition includes information on the following: Advance Form 5500; Legislative Activity on the Benefits Front; Upcoming Key Dates; Flexible Work; Foreign Pensions; Regulatory Roundup; and, Accounting Items. (Milliman)

Overview: Proposed Regulations for Employee Benefit Plan Electronic Notices, Elections, and Consent (PDF)
4 pages. Excerpt: "The proposed regulations are intended to apply prospectively only and cannot be relied on until they are issued as final regulations. Written or electronic comments must be submitted to the IRS by October 12, 2005 and a public hearing is set for November 2, 2005. In the meantime, the regulations give plan sponsors a good idea of what needs to be done to provide employee benefit plan notices and other communications electronically." (Buck Consultants)

Commentary on a Recent Tax Court Case Involving AMT and Incentive Stock Options
Excerpt: "Please note this recent Tax Court case--Robert J. Merlo, TC Memo 2005-178--in which a taxpayer sought to stave off the ravages of AMT by arguing that the stock was subject to a substantial risk of forfeiture due to the employer's policy against insider trading." (Attorney B. Janell Grenier via Benefitsblog.com)

Tax Bill Introduced to Ease Burden of Phantom Gains for Stock Options
Excerpt: "US Representative Sam Johnson (R-Texas) introduced a bill intended to give a tax break to those who were granted stock options that generated 'phantom' gains that were hit with a high alternative minimum tax (AMT)." (PLANSPONSOR.com: one-time registration required)


Newly Posted Events

Fundamentals of 401(k) Plans
Nationwide on September 22, 2005
presented by SunGard Corbel

Fundamentals of Qualified Plans
Nationwide on September 22, 2005
presented by SunGard Employee Benefit Systems

How Medicare Part D Affects Your Company
in Georgia on August 18, 2005
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter


Newly Posted Press Releases

New Study Finds Significant Cost Savings Under Optional Federal Charter for Life Insurance Proposal
(American Council of Life Insurers)

Treasury And The IRS Issue Guidance On Employee-Owned Tools
(U.S. Treasury Department and Internal Revenue Service)

Keenan Introduces 'Futuris' -- Comprehensive GASB Retiree Health and Welfare Benefit Compliance Program
(Keenan)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Defined Contribution Administrator
for third party administration firm in one of the most affordable cities in the country
in OK

Healthcare Consultant
for Employee Benefit Solutions, Inc.
in TX

Supervisor
for Benefit Consultants Group
in NJ

Benefits Coordinator
for EarthLink
in CA

Financial Planner / Investment Specialist
for Diversified Investment Advisors
in WI

Retirement Solutions Proposal Manager
for CUNA Mutual Group
in WI

401 (k) Administrator
for GAP-Pension Inc.
in NJ

Systems Support Manager
for TPA in Atlanta, Georgia
in GA

Account Representative
for Great-West Retirement Services
in CA

Consultant/Senior Recordkeeper
for ATR, Inc.
in PA

Client Services Consultant- St. Louis Regional Office
for American United Life Insurance
in MO

Senior Account Manager
for The 401(k) Company
in TX




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