August 15, 2005 Today's sponsor: www.ftwilliam.com (Click on company name or banner to learn more.)
Retirement News for Employers -- Helping Business Owners with Retirement Plans, Summer 2005 Edition (PDF) 7 pages. Contents include: 'All the News That Fits; SIMPLE IRA Plans for Small Businesses Publication; While We're on the Subject...; Choosing a Tax Professional; Critical FewPoints...by Michael Julianelle (Director, EP Examinations); The Fix Is In: Common Plan Mistakes; The Filing Cabinet; and, Let's Just Take It One Three-Month Period at a Time. (U.S. Internal Revenue Service) Retirement Plan Participant-Centered Advice: A Novel Approach that Works (PDF) Pages 1-3 of 6 pages. Excerpt: "Impacting participant behavior. It is an issue that has nagged at plan sponsors and investment advisors for the last few years. The retirement industry has evolved to a place where most participants are saving less than half of what they should, and investing far too conservatively to meet their retirement goals." (Invesmart, Inc.) Are You 401(k) Liable? Here's How Directors Can Protect Themselves Excerpt: "More employees are suing boards for savings that went south with the company's stock price. .... Maybe they should rename the popular employee savings plan the 401(c-a), in honor of all the class-action lawsuits it's attracting. These suits, which seek to hold corporate officers and directors liable for retirement-plan losses when a company's stock sinks, are becoming big business." (Corporate Board Member) Lawmakers Aim to Secure America's Private Pensions by Seeking Adequate Funding by Employers Excerpt: "Both the Grassley-Baucus and Boehner plans would address the underfunding issue by cracking down on some of the techniques companies use to overvalue pension assets and undervalue liabilities. They also would raise the premiums companies pay per worker for PBGC insurance." (Pittsburgh Post-Gazette) Airlines Want Special Breaks to Keep Pension Plans Going, Warning of Bankruptcies Excerpt: "The Air Line Pilots Association (ALPA) International's- Jack Parrack remembers the good old days for the industry's pension plans -- three or four years ago. 'We had plans that were more than 100% funded as recently as 2002,' says Parrack, .... The long post-September 11-- --travel slump, rising fuel prices, volatile equity markets,- and depressed interest rates helped change that. 'Now, they are suddenly below 80%. Plans that were quite well funded deteriorated quite quickly.'" (PLANSPONSOR.com: one-time registration required) Oregon Supreme Court Turns Away Public Employees' Retirement System Ruling Challenge Excerpt: "The Oregon Supreme Court has dismissed appeals to a lower court's ruling that will decrease public retirees' benefits by some $1.6 million and require some to repay benefits received, ...." (PLANSPONSOR.com: one-time registration required) Overview: IRS Issues Proposed Regulations on Anti-Cutback Rules Excerpt: "The Internal Revenue Service has issued proposed and final regulations under IRC Sections 411(a) and 411(d)(6) to address a recent Supreme Court decision as well as to reflect changes in the law under [EGTRRA]. .... The final rules allow for the reduction or the elimination of certain protected benefits through two methods. Plans must satisfy each of the conditions of the method used. No amendment is permitted if it affects any participant in more than a de minimis manner." (PLANSPONSOR.com: one-time registration required) Sell Your Business and Defer the Tax Hit with an ESOP The ESOP buys and holds company stock on behalf of its employees. (BusinessWeek) Illinois Teachers' Retirement System Considers Proposal to Ban Outside Consulting Middleman Deals Excerpt: "The Illinois Teachers' Retirement System (TRS) is considering a proposal to ban outside consulting deals like the one with Republican National Committee treasurer Robert Kjellander that is now under investigation. Kjellander earned $4.5 million representing an investment firm The Carlyle Group for business it has done with the pension board ...." (PLANSPONSOR.com: one-time registration required) Rule Requires United Kingdom Employers to Consult with Employees on Pension Plan Changes (PDF) 2 pages, Excerpt: "Under draft regulations recently issued by the government as part of the reforms under the Pensions Act 2004, employers must consult with employees before making any changes listed in the regulations. In broad terms, these are changes that would increase the cost of the plan to employees or reduce the value of benefits provided for future service." (Towers Perrin) Retirement Plans Exiting Fidelity Magellan as Performance Lags Excerpt: "[I]n Fidelity's own backyard, advisory firm New England Pension Consultants expects one of its two remaining clients in Magellan to drop the fund soon -- joining at least a dozen other defectors over the past five years. .... The retirement plans join a growing exodus from Magellan, as the $56 billion large-company stock fund - once the jewel in the Fidelity crown - struggles to regain its luster." (MarketWatch via Investor's Business Daily) Opinion: Social Security Reform Effort Lessons Excerpt: "[T]he campaign for privatization provided an object lesson in how the administration sells its policies: by misrepresenting its goals, lying about the facts and abusing its control of government agencies. These were the same tactics used to sell both tax cuts and the Iraq war. And there are two reasons to study that lesson. One is to be prepared for whatever comes next on Mr. Bush's agenda." (The New York Times; one-time registration required) Social Security 70th Anniversary Survey Report: Trends Over Time (PDF) 27 pages. Excerpt: "The latest assessment of Social Security by the American public continues to reflect the strong support that has also characterized two earlier assessments." (AARP) Democrats Demand Conditions on Social Security to Go Forward on Reform Excerpt: "On the eve of Social Security's 70th anniversary, Democrats said [August 13] they are ready to move toward revamping the financially troubled retirement program but warned against stripping away benefits to retirees and relying on private accounts for funding. 'We have a moral obligation to stand up and protect Social Security for the next 70 years and beyond -- that means stopping privatization and dropping partisan demands for private accounts,' said Rep. John Salazar, ...." (Reuters via The New York Times; one-time registration required) Links to Items on Executive Comp, Benefits in General Staying Ahead of the Game with Your 457(f) Plan (PDF) 4 pages. Excerpt: "With the passing of Section 409A of the Internal Revenue Code last fall, the spotlight has turned to 457(f) plans and the definitions of 'substantial risk of forfeiture' used for deferral purposes. As a result, the viability and usefulness of 457(f) plans as effective deferral and retention devices has become an open question." (Gardner Carton & Douglas LLP & Sullivan Cotter & Associates, Inc.) Regulatory Update as Published in the August 2005 Employee Benefit Plan Review (PDF) 3 pages. Topics include pres.cription benefit notice requirements, the modified Voluntary Fiduciary Correction Program and the treatment of unvested restricted stock under Code Section 280G. (Employee Benefit Plan Review via Gardner Carton & Douglas) Stock Plan Administration Enters a New Phase with Focus on Accounting Excerpt: "While the implementation of the Financial Accounting Standards Board (FASB) rule regarding stock option expensing has been delayed -- again -- most firms have already bitten the bullet, and taken steps to deal with what now appears to be inevitable. In many cases, that will mean less stock-based compensation for non-executives. However, it also means that the task of administering these programs is now more difficult and complicated than ever before." (PLANSPONSOR.com: one-time registration required) FASB Changes Stock Option Grant Date Interpretation Creating an Accounting Nightmare Excerpt: "Officials at a national compensation manager trade group are warning of a potential problem with a new interpretation by the Financial Accounting Standards Board (FASB) defining a stock option's grant date. According to a WorldatWork report, FASB staff said in recent private discussions with major accounting firms that the option grant occurs when the terms of the award have been communicated to the affected employee." (PLANSPONSOR.com: one-time registration required) Newly Posted Events ERISA Workshop in Louisiana on October 18, 2005 presented by SunGard Corbel ERISA Workshop in Colorado on October 20, 2005 presented by SunGard Corbel ERISA Workshop in New Mexico on October 21, 2005 presented by SunGard Corbel ERISA Workshop in Wisconsin on October 25, 2005 presented by SunGard Corbel Regulatory and Legislative Update: Roth 401(k)s, Directed Trustees, Plan Expenses and Much More in California on September 21, 2005 presented by Western Pension & Benefits Conference, San Francisco Chapter Newly Posted Press Releases Meet the COBRApoint Team at the Nebraska SHRM Annual Conference (COBRApoint) Pittsburgh Business Group on Health Elects New Board (Pittsburgh Business Group on Health) Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel (Post Yours!) John J. Gallagher (Sentinel Benefits Group) Newly Posted or Renewed Job Openings Defined Benefits Operations for Recruiting Firm in MA Vice President of Operations for Retirement Capital Group in CA Client Service Specialist for US Bank in OR Director, Advisor Services for Charles Schwab & Co, Inc. in AZ, CA Benefits Administrator for Toshiba America Medical Systems, Inc. in CA Handy Links:
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