BenefitsLink Retirement Plans Newsletter August 10, 2005 Today's sponsor: www.ftwilliam.com (Click on company name or banner to learn more.) Register for our free on-line demo! www.ftwilliam.com offers the employee benefits professional the highest quality plan documents and forms at highly competitive prices. Plan documents on a per document basis are only $50/adoption agreement, or $100/volume submitter document (including cross testing). An annual subscription to all documents is only $1,500. The Form 5500 package and the IRS/PBGC form package are only $250 each. Prices include access for five concurrent users. (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) 401(k) Plan Company Stock Case Survives Employer Challenge Excerpt: "A group of participants won a significant legal battle in their employer lawsuit over the handling of their employer's company stock in their K plan when a federal judge declined to dismiss the case. Senior US District Judge William Schwarzer of the US District Court for the Northern District of California ruled that the participants' case that the company committed a breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) was strong enough to proceed, ...." (PLANSPONSOR.com: one-time registration required) Senator Warns Against Pension Fraud in June 14, 2005, Letter to Governors (PDF) 1 page. Excerpt: "Sen. Mike Enzi (R-WY) sent a letter to all governors warning about possible pension fraud schemes. The senator's letter talks about Ponsi-type schemes that defrauded over 300,000 pension plan participants. His letter warns governors and pension trustees that their funds could be at risk of fraud and urged them to be wary of such schemes." (Michael B. Enzi via National Conference on Public Employee Retirement Systems) Average 401(k) Plan Balance Climbs Up in 2004 Excerpt: "After a few years of declines, the average defined contribution plan balance is at its highest level since 1999, according to Fidelity Investments, the largest plan provider. The average balance grew 10% last year to $61,000 from $55,000 in 2003, Fidelity reports. Yet despite numerous employer efforts to show workers the value of their retirement plans, the average participation rates remained flat last year at 66%." (BenefitNews Connect) Bridging the Income Gap with Annuities-- A Plan Sponsor's Guide (PDF) 12 pages. Excerpt: "Employers sponsoring defined contribution plans should consider offering income annuities as a source of guaranteed lifetime income. This guide discusses why employers should play a leading role in providing retirement income security, as well as how to offer annuities -- without adding burdensome costs and administrative headaches to their company-sponsored pension plans." (Principal Financial Services, Inc.) Federal Employees' Thrift Savings Plan More Attractive than 401(k) Plans Excerpt: "Ask the average civil servant what he or she dislikes about the Thrift Savings Plan and you'll hear that it has too few choices, with only five funds, and makes it too difficult to trade quickly. Ask the average non-fed what's wrong with the Thrift Savings Plan and he or she will ask how to join it." (The Washington Times) Letter Urging that H.R. 2830, the Pension Protection Act of 2005, Include a 'Look-Back' Option (PDF) 2 pages. Excerpt: "On behalf of the American Academy of Actuaries' Pension Practice Council, I am writing this letter to alert you of our concern regarding a technical correction that is needed in H.R. 2830, the Pension Protection Act of 2005. The provision that presents this concern is related to the quarterly contribution requirement for the first quarter of 2006." (American Academy of Actuaries) Task Force Says Social Security Privatization Will Harm G.ay Americans Excerpt: "The National G.ay and Les.bian Task Force released a report ... that finds that LGBT Americans will be disproportionately harmed by President Bush's plan to privatize Social Security. According to 'Selling Us Short: How Social Security Privatization Will Affect Les.bian, G.ay, Bise.xual and Transgender Americans,' LGBT Americans, on average, have lower incomes than their heterose.xual counterparts, which translates into lower Social Security benefits when they retire." (OIA Newswire via Out in Harrisburg) Article: Retirement Investment, Fiduciary Obligations, and Socially Responsible Investing (PDF) 18 pages. Excerpt: "With respect to the fiduciary obligations of retirement plan trustees, SRI investment strategies are not in and of themselves impermissible. On the contrary, the farther we move from self-directed plans toward institutionally invested DB plans the narrower the range of allowable investment options becomes, yet basic SRI investment strategies are always at least permissible." (Journal of Deferred Compensation) Lifecycle Funds: Making A 'Model Retirement Program -- The Thrift Savings Plan' Even Better Excerpt: "Lifecycle funds spread your money throughout the different TSP funds.You can do that on your own as well but many people don't like to make financial decisions or never get around to it. A lifecycle fund makes the decisions for you and automatically adjusts your investments in the different funds as you get closer to retirement." (FedSmith.com) Opinion: The UK Pension System and International Best Practice Excerpt: "With the second report of the Independent Pensions Commission due in November 2005, the UK is considering whether to undertake further pension system reforms and what it can learn from international best practice. In this article [Robert Laslett takes] a look at how the UK is performing by international standards, and at what is interesting us in the international scene." (AARP) State of the Policy Sector Regarding Pension & Retirement Benefits Excerpt: "As 401(k) plans become the retirement savings vehicle of choice for employers, politicians on Capitol Hill are looking to take the best features from defined-benefit plans and 401(k) plans and meld them together." (Workforce Management; one-time registration required) Resources for Learning about SRI or 'Socially Responsible Investing' Excerpt: "'Mission-based investing' is also a term used interchangeably by the industry, [and can be defined as] 'the incorporation of an institution's mission into its investment decision-making process.' The paper goes on to note that '[a]n institution's mission is its purpose or calling which is often summarized in a mission statement' and that the 'institution's mission may serve as a guide in determining what, if any, non-financial objectives it may set for its portfolio.')" (Attorney B. Janell Grenier via Benefitsblog.com) Links to Items on Executive Comp, Benefits in General Hewitt Associates' Benefit Cuts to Save $45 Million Annually Excerpt: " Hewitt Associates, which advises large companies on how to craft their benefits, announced Monday it would restructure its own benefits to save the company $45 million annually. The Lincolnshire-based firm is raising health insurance premiums and making significant changes to its retirement benefits." (BenefitNews Connect) FAS 123(R) Resource Group Discussion Document -- Meeting No. 2 on July 21, 2005 (PDF) 15 pages. Excerpt: "On July 21, 2005, the FASB staff ... held a meeting with the FASB Statement 123(R) Resource Group ... to discuss several issues relating to the implementation of Statement 123(R), Share-Based Payment. The information [on the target page] summarizes the issues and discussion of the Group." (Financial Executives International) Wal-Mart's New Workforce Management Plans Will Cut Pay and Benefits Excerpt: "The world's largest retailer has instituted a new computerized plan for matching customer traffic with employee schedules, forcing many workers to lose pay and benefits as their hours fall below the full time level." (The NewStandard) Newly Posted Events Consumer Driven Benefits...Providing Solutions to Control Benefit Costs in New York on September 8, 2005 presented by Mass Marketing Insurance Institute (MI2) Newly Posted Press Releases Ceridian Adds Streaming Video Tips To Its EAP And Work-Life Online Services; Enhanced Service Available to Employees of Companies Offering Ceridian's LifeWorks Online Service (Ceridian) New Model Predicts Retirement Satisfaction for Business Owners (Christman Group) Newly Posted or Renewed Job Openings Retirement Analyst for Stanford University in CA Retirement Benefit Specialist for Stanford University in CA Pension Analyst I for Milliman, Inc. in WA OmniPlus Consultant for DC Specialists, Inc in ANY STATE Manager, Employee Benefits for MTA - New York City Transit in NY Compliance Administrator - PA for Vanguard in PA Compliance Analyst for ING US Financial Services in CA Pensions Plan Consultant for Nationwide Financial Services in OH Handy Links: View Today's Active Message Threads Search BenefitsLink Using the Web for Employee Benefits Research (hypertext article) Employee Benefits Library Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission. 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