| BenefitsLink Retirement Plans Newsletter |   |
October 3, 2005
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Summary of S. 1783: The Pension Security and Transparency Act of 2005 (PDF)
6 pages. Excerpt: "S. 1783 combines provisions of S. 219, 'The National Employee Savings and Trust Equity Guarantee Act,' reported by the Finance Committee, and 'The Defined Benefit Security Act,' reported by the Committee on Health, Education, Labor, and Pensions. This report summarizes the major provisions of the compromise bill, as announced by the chairmen and ranking members of the two committees." (Patrick Purcell, Congressional Research Service, U.S. Library of Congress)
Finance Committee Staff Memorandum Re: S. 1783 - The Pension Security and Transparency Act of 2005 (PDF)
15 pages. Excerpt: The Finance Committee and the HELP Committee have reached a bipartisan compromise on a combined pension bill for full Senate consideration. The compromise has been introduced as S. 1783, the 'Pension Security and Transparency Act of 2005' ('S. 1783'). S. 1783 combines provisions of the Finance reported NESTEG bill and the HELPreported Defined Benefit Security Act." (U.S. Senate Committee on Finance)
UAW Letter to the Senate Re: Pension Bill S.1783
2 pages. (UAW via The ERISA Industry Committee)
Delphi Workers Must Take Action on 401(k) Plan Administration Goof
Excerpt: "A mistake in a Delphi Corp. 401(k) plan has cost some workers hundreds of dollars. But it's up to them to call by Oct. 12 to get a credit, according to a letter from plan administrator Fidelity Investments. The goof involves dividends that were reinvested into General Motors stock after Delphi separated from the automaker in 1999." (The Buffalo News)
Persuasion, Guidance, and Auto-Enrollment to Lead Wary Employees into 401(k) Plans
Excerpt: "With corporate pension plans on the wane and the future of Social Security in question, American workers are more than ever in charge of their own retirement destiny. Defined contribution plans such as 401(k)s are voluntary; workers have to sign up, fill out forms, and do some basic financial calculations. As piddling as these chores may seem, they are enough of a barrier --or excuse -- to keep many workers from enrolling." (The Boston Globe)
Be Like Bill -- Gates, That Is: Contribute Money to Your Employer's 401(k) Now
Excerpt: "So, a guy worth $50 billion is still pumping the maximum of $13,000 into his company retirement plan. That should send a clear message to every other worker out there who has been slow to jump on the retirement saving bandwagon. If the world's wealthiest man is taking advantage of free money from his employer, shouldn't you?" (North County Times)
Roth 401(k) Provides Benefits of Established Plans and More
Excerpt: "So far, only about one-third of employers say they're likely to make the plans available, according to a survey by benefits consultant Hewitt Associates. That means now's the time to bone up on the new plan -- and to lobby your bosses if you think you'd benefit." (The Oregonian)
Chart: Comparison of the Defined Contribution Plan Issues in NESTEG with those in PSTA (PDF)
6 pages. Excerpt: "[S.] 1783, the Pension Security and Transparency Act of 2005 (PSTA), was introduced on Sept. 28. While the bulk of the bill consists of substantive pension and hybrid plan reform provisions, the bill also contains many of the defined contribution plan provisions that were introduced in the Senate Finance Committee's NESTEG bill." (The ERISA Industry Committee)
Fear of Mass Retirement of Boomers Is Overblown, According to Canadian Demographer David Foot
Excerpt: "Foot also says the worry of a labor shortage due to the boomers' exodus from the working world is also overblown. According to the CP, he told the Funds Institute of Can.ada that exploding college enrollments mean there will 'plenty of bright, young, beautiful, aggressive and well-trained workers' in the next five to ten years." (PLANSPONSOR.com: one-time registration required)
General Motors and Pension Benefit Guaranty Corporation See GM Pension Fund Differently
Excerpt: "The federal government contends that General Motors' pension fund is $31 billion short of what it owes its work force, according to closely held government data, a figure in stark contrast to G.M.'s assurances that its pension plans are 'fully funded.'" (The New York Times; one-time registration required)
Bankruptcies Threaten Pensions -- Retirees Wonder How Long Checks Will Keep Coming
Excerpt: "Benefits that millions of Americans were promised in return for staying decades with the same company are disappearing or being reduced, as employers try to adjust to a changing economy." (The News & Observer)
More Information About Sole Participant Defined Benefit Plans
Excerpt: "In the last alert our FAQ discussed some of the issues that arise when a sole proprietor dies with a defined benefit plan in which he or she is the only participant. In this alert we will add some additional options that may able to be utilized." (McKay Hochman Co., Inc.)
Judge Dismisses San Diego City Attorney's Lawsuit Against Pension Board Staff and Former Members
Excerpt: "Aguirre's suit had alleged that San Diego City Employees' Retirement System (SDCERS) administrator Lawrence Grissom, general counsel Lori Chapin, and former board members Bruce Herring, Cathy Lexin, Ron Saathoff, John Torres, Terri Webster, and Sharon Wilkinson granted pension benefits illegally .... [A]guirre claimed they violated the Political Reform Act, which prohibits a public official from participating in any decision where he or she has a 'financial interest.'" (PLANSPONSOR.com: one-time registration required)
Recent Legislative and Regulatory Proposals Affecting ESOPs
Excerpt: "Legislation was recently introduced in Congress proposing enhancements to current ESOP law, and the IRS issued regulations affecting tax deductions for ESOP sponsors." (Leading Companies Online Magazine)
Directed Trustees Not Expected to Second Guess a Plan's Named Trustee
Excerpt: "In the case of DiFelice v. US Airways Inc., US District Judge T.S. Ellis III wrote 'By including [Section] 403(a) in ERISA, Congress plainly meant to create a subset of ERISA fiduciaries with a statutorily defined duty different from and more narrowly circumscribed than the general duty of ordinary care imposed on other ERISA fiduciaries,' BNA reports." (PLANSPONSOR.com: one-time registration required)
Illinois Pension Investment Fees Get Close Look and Calls for Reform
Excerpt: "Questionable fees amounting to millions of dollars that have been paid to middlemen for the placement of Illinois' government employee pension investments have resulted in subpoenas from federal investigators and calls to end the practice." (The Heartland Institute)
Proposal Backs Government Rules for Tribal Pensions
Excerpt: "A pro-sovereignty initiative to ensure that tribal pension plans fall under government regulations has garnered widespread support in Indian country, and awaits action by Congress. .... The problem is that the statute dealing with pension plans under government regulations does not include 'tribal governments' along with federal, state and municipal governments in the definition of 'government.'" (Indian Country Today)
Pensions Regulator Publishes a Report that Offers a Mixed Assessment of the UK Pension Market
Excerpt: "In the Pensions Regulator's Occupational Pension Schemes (OPS) Regulatory Survey, nearly two-thirds (62%) of small pension plans (schemes) said that trustees were not provided with training, compared with just 3% of large schemes - though only half of large schemes had at least one trustee that had attended an investment training course in the past three years. Nearly a quarter (23%) of medium-size schemes said trustees were not provided training." (PLANSPONSOR.com: one-time registration required)
Recovery Of Erroneously Paid Benefits Following Suspension Of Pension Benefits Did Not Violate ERISA
Excerpt: "A multiemployer pension plan did not violate the anti-cutback rule of ERISA Sec. 204(g) when it suspended the pension benefits of retirees who became reemployed. This was the decision of the Seventh Circuit U.S. Court of Appeals in Herman, et al. v. Central States, Southeast and Southwest Areas Pension Fund, et al. (Nos. 03-4023 and 04-1375)." (Spencer Benefits Reports)
Tax and Social Security Reform: Thinking Outside the Box
Excerpt: "This study examines the effects of fundamental tax reform as well as combining tax reform with fundamental Social Security reform." (National Center for Policy Analysis)
Overview: IRS Adopts Staggered Determination Letter Procedures (PDF)
2 pages. Excerpt: "The IRS recently released Revenue Procedure 2005-66 which adopts the agency's previously proposed system of staggered remedial amendment periods for the issuance of determination letters for qualified retirement plans. This is a discussion of this new system." (Milliman)
Audio: Ken Dychtwald on Aging Baby Boomers
Excerpt: "Beginning on Jan.1, 2006, every 8 seconds, another North American baby boomer will be turning 60. That's around 11,000 each day -- and 4.5 million each year. So what will it mean for society -- and the nation's finances. David Gardner talks about the changing face of retirement with Ken Dychtwald, author of The Power Years: A User's Guide to the Rest of Your Life." (The Motley Fool via National Public Radio)
Interview: Father of EGTRRA Speaks Out on How to Secure Americans' Retirement
Excerpt: "Cardin has a new retirement bill on the table that encourages employer matches, automatic enrollment and aggressive saver's credits as solutions to the American public's less-than-stellar savings behavior." (Employee Benefit Adviser via Employee Benefit News)
Links to Items on Executive Comp, Benefits in General
Issue in Brief: Work Opportunities for Older Americans -- What Makes Older Women Work? (PDF)
9 pages. Excerpt: "This brief explores the extent to which older women -- particularly those who are married -- face different employment opportunities and incentives than men. The first section provides background on trends in labor force participation. The second ... describes different factors -- demographic, financial and family-related -- that might affect whether older women are employed. The third ... assesses how influential these factors are by presenting the results ...." (Center for Retirement Research at Boston College)
A Hurricane of Relief - A Summary of Employee Benefit Plan Provisions
Excerpt: "In the devastating wake of Hurricane Katrina, Congress and federal governmental agencies have moved swiftly to provide relief to the individuals and businesses that have been affected by this natural disaster. .... This Legal Alert summarizes the current state of the relief as it affects employee benefit plans." (Kilpatrick Stockton LLP)
Michigan Same-Sex Benefits Decision Appealed
Excerpt: "State Attorney General Mike Cox announced Friday he would appeal last week's ruling in favor of domestic partner benefits. The American Civil Liberties Union of Michigan, which filed the lawsuit resulting in last Tuesday's ruling, has indicated it will fight attempts to overturn the decision. The Ingham County Circuit Court ruling permits public institutions in the state to provide benefits such as health care to the same-sex partners of employees despite Michigan's constitution ...." (The Michigan Daily)
Overview: Proposed Regulations Under Section 409A Issued; Year-End Action Might Be Desirable
Excerpt: "The proposed regulations do not provide for any extension of time for a participant to terminate participation or cancel elections under Q&A 20 of Notice 2005-1 or for an employer to amend applicable nonqualified deferred compensation plans for any termination or cancellation election. As a result, in some instances, actions to terminate a deferral for 2005 may need to be taken before December 31, 2005 to comply with Section 409A." (McDermott Will & Emery LLP)
Microsoft Settles 'Permatemp' Case for $97 Million
Excerpt: "Microsoft hired the so-called 'permatemps' through 'temp' agencies, allegedly so that the software giant could avoid paying pensions, health care and stock options that they would have been entitled to as full time workers." (PLANSPONSOR.com: one-time registration required)
Newly Posted Events
409A Regs at Last: How Employers Should React
Nationwide on October 6, 2005
presented by Paul, Hastings, Janofsky & Walker LLP
Advisory Council on Employee Welfare and Pension Benefit Plans Working Group on Communications to Retirement Plan Participants and Working Group on Retirement Plan Distributions and Options; Notice of Meeting
in District of Columbia on October 20, 2005
presented by U.S. Department of Labor, Employee Benefits Security Administration
Advisory Council on Employee Welfare and Pension Benefit Plans Working Group on Improving Plan Communications for Health and Welfare Plan Participants; Notice of Meeting
in District of Columbia on October 19, 2005
presented by U.S. Department of Labor, Employee Benefits Security Administration
Form 5500s: Tips and Traps for Health & Welfare Plan Filings
Nationwide on June 2, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Health FSAs and HSAs: How They Can Work Together--Design a Plan That Works for You
Nationwide on September 8, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Health Plan Eligibility Audits: Getting Rid of the Ineligibles--Pros, Cons, Whys, and Hows
Nationwide on October 20, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Medicare Part D: What All Health Plans Need to Do by November 15
Nationwide on August 24, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Processing Benefits Claims and Appeals for Self-Funded Health Plans, Health FSAs, and HRAs: How to Make Plan Decisions That Stand Up to Scrutiny
Nationwide on June 30, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Teleconference Briefing: Proposed IRS Guidance on Deferred Compensation Plans
Nationwide on October 6, 2005
presented by Seyfarth Shaw LLP
The "New" Use-It-or-Lose-It Rule: How the May 2005 IRS Guidance Affects Employers, Health FSAs, and DCAPs
Nationwide on June 1, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
What Your Insurer Might Not Take Care Of: Compliance Steps for Employers With Insured Health Plans
Nationwide on October 6, 2005
presented by Employee Benefits Institute of America Inc. (EBIA)
Newly Posted Press Releases
Federal Pension Insurance Program Will Speed Replacement Of Lost Checks In Hurricane-Hit Texas, Louisiana
(Pension Benefit Guaranty Corporation (PBGC))
Partners Spread the Word on Leave-Donation Program
(Internal Revenue Service (IRS))
IRS Reaches Agreement With Doctors Benefit Insurance Company, LTD.
(Internal Revenue Service (IRS))
Newly Posted or Renewed Job Openings
Relationship Manager
for BISYS Retirement Services
in PA
Defined Benefit Calculation Consultants
for Constantin Control Associates
in NJ
Investment Consultant
for Invesmart, Inc.
in TX
Manager, Benefits Services
for The Coca-Cola Company
in GA
401(k) Manager
for Retirement System Group Inc.
in NY
Benefits Consultant/Account Manager
for Aflac
in TX
Benefits and Training Manager
for NASCAR
in FL
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