| BenefitsLink Retirement Plans Newsletter |   |
September 14, 2005
Today's sponsor: Bankers Systems - Part of Wolters Kluwer Financial Services
(Click on company name or banner to learn more.)
| Taking Advantage of IRAs |
| The Wall Street Journal, on July 21, 2004, predicted that rollovers from 401(k) plans could reach as much as $300 billion a year by 2008. The opportunity to increase IRA deposits is real, but administering IRAs can be challenging. By automating many of the tasks involved with opening and maintaining IRAs, a financial organization can truly take advantage of the benefits tied to IRAs-- instead of being the one taken advantage of.
Find out more. |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
Chart: Summary and Comparison of Defined Contribution Provisions in Pension Reform Bills (PDF)
12 pages. Current law is compared to the Education and Workforce version of the Pension Protection Act of 2005 (H.R. 2830) and the National Employee Savings and Trust Equity Guarantee (NESTEG) Act (S. 219). (American Benefits Council)
Overview: New 401(k) Plan Hardship Withdrawal Safe Harbors
Excerpt: "The final 401(k) regulations created two new safe harbor reasons for hardship withdrawals; one for funeral expenses and the other for casualty damages. There are many inquiries about how to use these new safe harbors following Hurricane Katrina. Using the safe harbors right now might require the incorporation of all the 401(k) final regulations into the plan. But the lack of IRS model language for incorporating the regulations poses a challenge." (McKay Hochman Co.)
The Hidden World of Mutual Fund Expenses: Opportunity and Price Impact Costs (PDF)
Page 4 of 4. Excerpt: "Plan fiduciaries must become knowledgeable about all expenses in a mutual fund -- explicit, buried and non-disclosed. Until either mutual funds start disclosing all of the costs -- be it voluntarily or required by law or by regulators -- turnover ratios are the best proxy for the substantial hidden costs in mutual funds." (The 401(k) Company)
Overview: 401(k) Best Practices and Legal Requirements (PDF)
Pages 2 & 3 of 4. Excerpt: "The obligation of plan sponsors and fiduciaries to prudently select their investments and service providers has received a great deal of attention. However, an equally important responsibility is the duty to monitor those decisions and solve problems that become apparent through the monitoring process. The first step in monitoring is to determine the effectiveness of the current investments and services." (The 401(k) Company)
Barbarians at the Gate: 401(k) Plan Trading Restrictions and Mutual Funds (PDF)
Pages 1 & 3 of 4. Excerpt: "There are two main types of trading restrictions: 1) limits on trading frequency and, 2) short-term redemption fees. Examples of the former include limiting the number of trades, or the number of 'round trips' (sale/purchase) within a period of time, or prohibiting a purchase after a sale for a period of time. A short term redemption fee is a fee imposed on a sale within a certain period of time after a purchase." (The 401(k) Company)
Plan Sponsor Responsibilities Regarding Erroneous Distribution from 401(k) Plan
Excerpt: "Suppose you have a 401(k) plan that fails ADP/ACP testing where the correction will be made by making distributions to the HCEs. Suppose you find this out after an HCE has already taken a complete termination distribution from the plan and it was directly rolled into an IRA or another plan. What is the plan's responsibility?" (Reish Luftman Reicher & Cohen)
Public Employee Retirement Fund Survey -- Summary of Findings for FY 2004 (PDF)
21 pages. Excerpt: "The Public Fund Survey is an online compendium of key characteristics of 103 public retirement systems that administer pension and other benefits for a combined 12.6 million active public employees and 5.8 million retirees and other annuitants, and that hold more than $2.1 trillion in trust for these participants. The membership and assets of systems included in the survey are estimated to represent approximately88% of the nation's total public retirement system community." (National Association of State Retirement Administrators and the National Council on Teacher Retirement)
Summary of the Defined Benefit Security Act Chairman's, Enzi-Kennedy[-DeWine-Mikulski], Substitute (PDF)
3 pages. Excerpt: "The Chairman's substitute adopts a stringent new funding regime to ensure that defined benefit plans are fully funded. The new rules require the amortization of all liabilities over ten years, based on assets averaged over no more than 3 years and liabilities measured over a modified yield curve (3 segments) that is smoothed over 3 years. Full funding is raised under the bill from 90% to a 100% target, but phased ...." (The ERISA Industry Committee)
The Enrolled Actuaries Report of the American Academy of Actuaries -- Fall 2005 Edition (PDF)
8 pages. Excerpt: "The Enrolled Actuaries Report is a quarterly Academy newsletter that focuses on the concerns of pension actuaries. The EAR covers federal legislation and regulations that affect pension actuaries, the Academy's work to advance sound pension policy, and related topics." (American Academy of Actuaries)
Former Azon Workers Win $9.35m Settlement: Money Was Taken from Employee Stock Ownership Plan
Excerpt: "Former Azon Corp. workers will recover up to 60 percent of the money they were due in an Employee Stock Ownership Plan allegedly plundered by plan trustees in 1999. A federal judge is expected to approve a settlement Oct. 7 between the former employees and plan trustees and advisers. The settlement calls for workers to be paid $9.35 million collectively for their interest in an ESOP that plaintiffs say was rifled by Azon owners before the company declared bankrup.tcy." (Binghamton Press & Sun-Bulletin)
New Role of Pension Fund Trustees in a Global Company (PDF)
5 pages. Excerpt: "'Having just passed the five-year mark since global equity markets began their decline in ... 2000, many trustees are probably questioning privately why they got themselves into this business in the first place. Funded ratios have fallen, mainly due to the sudden drop in investment returns, but also because of the continued fall in long-term nominal bond yields. For US companies with global operations reporting under FAS 87, this resulted in higher pension plan liabilities." (Benefits & Compensation International via Towers Perrin)
Socially Responsible Investing: An Evolving Concept in a Changing World (PDF)
71 pages. Excerpt: "[The author begins] by describing how SRI came to mean different things to different investors. [He then classifies] the approaches termed SRI and analyze[s] the sources of the dissonance among the approaches in terms of their social, legal and political characteristics. [He concludes] that the differences, while real, should not prevent SRI's constituents from making common cause on issues of corporate accountability and-- in its broadest sense-- corporate governing." (KLD Research & Analytics, Inc.)
CBO Analysis of H.R. 3304, Growing Real Ownership for Workers Act of 2005 (PDF)
65 pages. Excerpt: "The legislation would have three main effects: It would create individual accounts (called GROW accounts) and reduce traditional Social Security benefits for account holders; the net impact on total retirement benefits would depend on whether an account earned more or less than the Treasury rate of return. H.R. 3304 also would defer the exhaustion of the Social Security trust funds, permitting some cohorts to receive greater benefits and raising federal outlays ...." (U.S. Congressional Budget Office)
Links to Items on Executive Comp, Benefits in General
Summary of the Grassley-Baucus Tax Relief Package for Individuals Affected by Hurricane Katrina (PDF)
5 pages. (U.S. Senate Committee on Finance)
Janice Wegesin of Form5500Help.com Seeks Your Opinion on Proposed Mandatory Electronic 5500 Filings
Excerpt: "In an effort to gather meaningful data to respond to the DOL's proposal to mandate e-filing ... a group of interested parties have developed a short survey about the affect this proposal may have on practitioners and plan sponsors. We need your opinions! Please take a moment to complete the survey." (Form5500Help.com)
Milliman's Employee Benefits Perspectives -- Current Issues, Summer 2005 (PDF)
8 pages. This edition contains articles titled: Before Cashing Out, Plan Sponsors Must Consider Automatic Rollover Roulette; What 401(K) Plan Sponsors Need to Know Before January 2006; and, Providing Paid FMLA Leave Through Short-term Disability Insurance. (Milliman)
Newly Posted Events
ASPPA Benefits Council of Greater Cincinnati September 27, 2005 Meeting
in Kentucky on September 27, 2005
presented by ASPPA Benefits Council of Greater Cincinnati
The Role of Real Estate and Other Non-Cash Assets in Pension Plans
Nationwide on September 21, 2005
presented by Capital Strategies Group of Wachovia Securities
Newly Posted Press Releases
Ceridian Introduces Solution to Reduce Employee Absenteeism Caused by Temporary Breakdowns in Child, Adult and Elder Care
(Ceridian)
The Principal Financial Group Honored in National WebAward Competition
(Principal Financial Group)
Retirement Plan Document Choices for EGTRRA from DATAIR
(DATAIR Employee Benefit Systems, Inc.)
California Teachers' Pension System Expands Credit Enhancement Program
(California State Teachers' Retirement System (CalSTRS))
Survey of Reaction to DOL's Proposed Mandatory Electronic Filing of Form 5500
(Form5500Help.com)
Health Savings Technology Announces Joint Venture with SaveDaily.com
(Health Savings Technology LLC)
Newly Posted or Renewed Job Openings
Pension Professionals
for The Rosen Group
in PA
Pension Administrator
for Full Service Employee Benefit Consulting Firm
in NY
Associate Counsel
for CitiStreet - A State Street and Citigroup company
in MA
401k Sales
for Compass Investment Partners
in ANY STATE
Corporate Counsel, Corporate Services
for Charles Schwab & Co., Inc.
in ANY STATE
Financial Planner / Investment Specialist
for Diversified Investment Advisors
in GA
Account Executive
for MetLife
in NY, OH, VA
Retirement Planning Specialist
for Martin Memorial Health Systems
in FL
Benefit Service Representative
for NRECA
in VA
Retirement Policy Coordinator
for University of California, Office of the President
in CA
401(k) Compliance Analyst
for ADP
in NJ
Handy Links:
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- Using the Web for Employee Benefits Research (hypertext article)
- Employee Benefits Library
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