| BenefitsLink Retirement Plans Newsletter |   |
September 13, 2005
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401(k) and IRA Early Distribution Rules May Be Eased for those Affected by Hurricane Katrina
Excerpt: "Victims of Hurricane Katrina would be able to tap into 401(k)s and individual retirement accounts without penalty under a tax-relief package proposed by a Senate committee yesterday. The Senate Committee on Finance unveiled a broad package of tax breaks for workers and their employers, as well as individuals who take victims displaced by Katrina into their homes." (The Baltimore Sun; one-time registration required)
Bill Waives 401(k) Plan Early Distribution Penalty for Katrina Victims
Excerpt: "Legislation unveiled Monday would exempt employees living in areas affected by Hurricane Katrina and taking preretirement distributions from 401(k) and other retirement plans from the 10% federal penalty tax that applies to such distributions." (Business Insurance)
Katrina Bill Could Ease Retirement Plan Withdrawals and Allow Charitable Rollovers of Funds
Excerpt: "Congress is moving to free up retirement plan assets for Katrina survivors and encourage taxpayers to donate individual retirement account assets to Katrina relief efforts." (National Underwriter Life & Health; free one-time registration or paid subscription required)
JPMorgan Company Stock K Plan Suit Dismissed by District Court
Excerpt: "A court ruling in a case involving company stock in the K plan of JPMorgan Chase has brought to the forefront a key issue about whether stock plan participants can sue over a fiduciary breach under the Employee Retirement Income Security Act (ERISA)." (PLANSPONSOR.com: one-time registration required)
San Diego City Council Reviews Options to Fix Pension Funding Gap
Excerpt: "Despite considerable reservations about selling city land, the San Diego City Council approved a package of preliminary proposals yesterday to tackle the billion-dollar deficit in its employee pension system. The council voted 5-1 to accept a report that contains suggestions for raising $600 million to offset the shortfall of at least $1.4 billion." (The San Diego Union-Tribune)
ERIC Issues Report/Alert on HELP Committee Actions on Pension Funding and Hybrid Plan Legislation
Excerpt: "Regarding Pension Funding Rules: REQUIRED CONTRIBUTIONS: The HELP Committee bill generally follows H.R.2830 -- including three-year averaging of the required interest rate and three-year smoothing of assets -- regarding amounts that employers are required to contribute to pension plans. Important differences include: ten-year amortization of unfunded amounts (instead of seven); five-year limit imposed on assumptions when computing an 'at risk' liability; and rules for credit ...." (The ERISA Industry Committee)
The PBGC's Plan to Save Pensionville (PDF)
5 pages. Excerpt: "On Tuesday, March 8, 2005, the U.S. House of Representatives' Ways and Means Subcommittee on Select Revenue Measures held a public hearing on the Bush administration's proposal to change the current pension funding rules. The following article is an adaptation of my oral testimony, presenting the business community's perspective on that proposal." (Henry C. Eickelberg via Contingencies)
GAO Letter: Questions Concerning PBGC's Practices Regarding Single-Employer Probable Claims (PDF)
11 pages. Excerpt: "[The GAO provides] answers to several ... questions about single-employer probable claims regarding (1) PBGC's methodology for determining single-employer probable claims, (2) PBGC's efforts to monitor probable claims, and (3) PBGC's practices for disclosing financial information about these claims." (U.S. Government Accountability Office)
Pensions Made Worse: You Thought You Knew about Political Payoffs in Sacramento? Read On
Excerpt: "Upset by outlandish pension schemes for government employees? It's worse than you thought. A year ago, the Sacramento Bee published a fine series of articles, 'Chief's Disease,' describing outright pension thievery among the upper ranks of the California Highway Patrol. As a result, a Northern California politician, Assemblyman Alberto Torrico, D-Fremont, stepped forward with tough legislation to correct the problem. What a hero." (Long Beach Press Telegram)
Commentary: Social Security Super Bowl (PDF)
2 pages. Excerpt: "THE MAY/JUNE ISSUE OF CONTINGENCIES contained a high-level debate regarding private accounts. It raised a fundamental issue: safety net or ROI? As Canadian actuaries, we were enticed to compare how our two countries have tackled similar problems." (Contingencies)
A Small-Business Retirement Plan -- The Simplified Employee Pension Plan
Excerpt: "A Simplified Employee Pension is an efficient, low-cost retirement plan for employers and offers several key advantages to employees. Sole proprietors, independent contractors, partnerships and S corporations may create Simplified Employee Pension plans, or SEPs. Administrative costs are typically lower than traditional Individual Retirement Accounts, and record keeping is a snap." (Forbes.com)
Overview: Labor Department Amends Class Exemption for Qualified Professional Asset Managers (PDF)
5 pages. Excerpt: "On August 23, 2005, the Department of Labor ... published final amendments ... to prohibited transaction class exemption ... 84-14, which covers transactions involving employee benefit plans managed by qualified professional asset managers as defined in the exemption ('QPAMs'). The Amendments generally reduce the administrative burdens associated with compliance with the exemption but also raise the standards that QPAMs must meet ...." (Pillsbury Winthrop Shaw Pittman LLP)
Pension Simplification -- The Factor of 11 and U.S. Pension Reform (PDF)
4 pages. Excerpt: "[The target article] is a philosophical model for creating one single consistent pension system in the United States with one set of rules, limits, and regulations. It's based on a model that has existed in Can.ada since 1990." (Contingencies)
Saving for Retirement? Be Aware of this Tax Credit
Excerpt: "A lot of people have difficulty funding their retirement accounts. It's just a situation where a lot of individuals have expenses that are more of a priority. However, there is a tax credit available that makes saving for retirement more affordable. The credit is called the Retirement Savings Contribution Credit. This non-refundable credit is available to eligible taxpayers who ...." (MaineToday.com)
Links to Items on Executive Comp, Benefits in General
FEI Summary: SEC Statements on Use of Market Instruments to Value Stock Options for FAS 123R
Excerpt: "On September 9, 2005, the SEC issued statements of Chairman Christopher Cox and Chief Accountant Don Nicolaisen regarding use of market instruments in valuing employee stock options for purposes of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 123R, 'Accounting for Share-Based Payment' (FAS123R or Statement 123R). A related memo of the SEC's Office of Economic Analysis (OEA) was also issued." (Financial Executives International)
Benefits Industry News Summaries for Benefit Professionals (PDF)
6 pages. This News Scan includes articles on the following: Senate Finance Committee Approves Pension Reform Bill; CRS Report Compares Proposed Pension Reform Legislation; IRS Rules Indian Tribal Police Department Constitutes Governmental Plan; and, Social Security Bill to Establish Individual 'GROW' Accounts. (Gabriel, Roeder, Smith & Company)
Number of Centenarians in Japan over 25,000, and Growing
Excerpt: "Japan's population of centenarians has doubled in just five years, lending urgency to government efforts to shore up its overburdened public pension system as the country's population rapidly grays. Japan is expected to have nearly 1 million people aged 100 and over by 2050 -- the highest number in the world, according to the United Nations." (AP via The New York Times; one-time registration required)
Newly Posted Events
Managing ERISA Risk Series Finale: Derivatives for Pension Plans
Nationwide on September 15, 2005
presented by Financial Executives International and Denali Fiduciary Management Corporation
Retirement Plans: What Every Employer Must Know
in North Carolina on October 26, 2005
presented by SunGard Corbel
Retirement Plans: What Every Employer Must Know
in Georgia on October 27, 2005
presented by SunGard Corbel
Tales from the Audit Front: Managing ERISA Retirement Plan Risk
Nationwide on September 14, 2005
presented by Denali Fiduciary Management
The Roth 401(k)
in Maryland on October 6, 2005
presented by Worldwide Employee Benefits Network (WEB) - Baltimore Chapter
Newly Posted Press Releases
Financial Services Firm CEO Calls For Public and Private Sectors To Unite Crisis Looms: Americans' Savings Practices Must Change
(ICMA Retirement Corporation)
Who Are the Uninsured? Study Offers Clues
(Employee Benefit Research Institute (EBRI))
Two Step Software Announces the First Browser-Based Utility to Convert Excel Spreadsheets to Capitalization Tables
(Two-Step Software, Inc.)
Crisis Looms: America's Savings Practices Must Change
(ICMA-RC)
Newly Posted or Renewed Job Openings
Pension Professionals
for Associated Pension Consultants
in CA
2nd Vice President, Plan Administration
for New York Life Investment Management LLC
in MA
Operations Manager
for New York Life Investment Management LLC
in MA
Sales Manager
for ING US Financial Services
in CT
Retirement Services Trust Sales Administrator
for Regions Financial Corporation
in IA, KY, MS, TN
Senior Pension Administrator/ Conversions Management Specialist
for American Pensions, Inc.
in SC
Sales Consultant (New Position)
for Miami Valley Pension, A Brady Ware Company
in OH
Manager of Executive and Institutional Benefit Design
for GuideStone Financial Resources of the Southern Baptist Convention
in TX
Actuarial Valuation Specialist
for Actuarial Designs & Solutions, Inc.
in ME
Compliance Analyst
for New York Life Investment Management LLC
in MA
OmniPlus Training Development and Implementation
for Chesapeake Benefit Partners
in ANY STATE
Retirement Actuarial Associate
for Towers Perrin
in CO
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