BenefitsLink Retirement Plans Newsletter October 5, 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) Chairmen Scrap for Upper Hand with Pension Reform on the Hill Excerpt: "Between Senate disputes and uncertainty in the House, K Street has been tossed and turned by the rocky trajectory of pension legislation -- and speculation continues over who's in control of overhauling the nation's employee benefit system." (The Hill) Airline Fight Complicates U.S. Senate Pension Bill Excerpt: "Texas Republican Sen. John Cornyn said he placed a 'hold' -- a procedural maneuver blocking action -- on the pension reform bill that might otherwise have moved to the Senate floor this week, until the argument over airline aid is resolved." (Reuters) American Benefits Council's Letter to Senators Re: S. 1783 ''The Pension Security and Transparency Act'' (PDF) Excerpt: "The American Benefits Council (Council) urges you to insist on certain changes to S. 1783, the ''Pension Security and Transparency Act,'' when it is considered in the coming days, so that the legislation may achieve the desired goal of strengthening the nation's defined benefit pension system." (American Benefits Council) Dewine-Mikulski Amendment to S. 1783 Regarding Funding Rules and Smoothing (PDF) 10 pages. (U. S Senate via American Benefits Council) Lifestyle Investing Trumps Other Strategies for John Hancock's 401(k) Plan Participants Excerpt: "Participants in John Hancock's 401(k) plans who contributed to a target-risk lifestyle fund between 2000 and 2004 experienced better investment performance than those who selected their own investment options, according to a recent survey." (InvestmentNews.com) Using Corrective Amendments to Preserve Cross-Tested Allocations Determined Before Year End Excerpt: "The following question and answer were from the IRS Q&A Session at the 2004 ASPPA Annual Conference: An employer with a cross tested profit sharing plan receives a contribution projection/allocation estimate approximately two months prior to its year end and approves the recommendation. After that date but before the year end, a NHCE participant quits. The plan has a last day employment provision." (Reish Luftman Reicher & Cohen) Delta Wants to Stop Funding Some Pilots' Pensions Excerpt: "Delta, which filed for bankrup.tcy last month, has said it could miss pension payments for 3,500 retired Pilots, Reuters reports. According to Reuters, the Delta's Pilots Pension Preservation Organization argues that the bankrup.tcy code bars companies from unilaterally changing or eliminating benefits that were agreed upon as part of union contracts." (PLANSPONSOR.com: one-time registration required) Local Public Plans Saw Funding Improvement in 2004 Excerpt: "The funding level of 55 city and county retirement systems improved markedly between 2003 and 2004, according to a new Wilshire Consulting report. A news release from Wilshire, which also issues studies of state (See Wilshire: State Pension Systems' Funding Ratios Improve in 2004) and corporate pension funds, said the local plans' shortfall fell to $17.8 billion in 2004 from $25.2 billion the year before, a $7.4 billion decline." (PLANSPONSOR.com: one-time registration required) Editorial: Pensions Endgame in Washington Excerpt: "The House and Senate, which have been utterly feckless on the pensions crisis, have this time produced bills that would probably ameliorate it. But neither bill is as robust as the administration's proposal." (The Washington Post; one-time registration required) Protest Song Sheds Light on GE Pensioners' Plight Excerpt: "The General Electric Retirees' Association went the creative route last week at a rally outside the GE River Works aircraft engine factory in Lynn. To highlight frustrations over their pension and health plan benefits, the retirees officially debuted their new country music ballad, ``The Plight of the GE Pensioner,'' on a boombox." (Boston Herald) Overview: Hurricane Katrina Relief for Retirement Plan Loans and Distributions Excerpt: "The IRS will not treat a retirement plan that makes a hardship (or, unforeseeable emergency) distribution or a loan for any need arising from Hurricane Katrina as failing to comply with any plan, statutory or regulatory requirement. The relief thus expands the hardship events to any need arising from Hurricane Katrina. This expansion also applies to the safe harbor hardship distribution rules." (SunGard Corbel) Literature Review of Long-Term Mortality Projections in Relation to the OASDI Trust Funds (PDF) 15 pages. Excerpt: "This article reviews a range of predictions about long-term mortality improvement and assesses where the Trustees' 75-year mortality projection falls within this range. In general, the predictions of future mortality declines in the 2004 Social Security Trustees Report tend to be in the mainstream of professional actuarial and international official government opinion and to be lower than the majority of the small group of demographers who produce comparable estimates." (U.S. Social Security Administration) Opinion: Defined Benefit Plans Benefit Taxpayers Excerpt: "[The target page promotes] these traditional pension plans and why they benefit taxpayers, employers, employees, and state and local economies [with links to fact sheets; Expert Testimonials; Facts & Myths; Supporting Research; and Recent Op-Eds and Letters to the Editor.]" (National Conference on Public Employee Retirement Systems) Serbia and Montenegro Pensions: Retirement Age to Rise Excerpt: "Draft legislation to reform state retirement and disability pensions and to provide for the creation of voluntary supplementary private pension funds is now before the Serbian parliament. But many of the details of both measures remain to be worked out. " (Watson Wyatt Worldwide) Individual Accounts in Other Countries That Are Part or All of a Mandatory Retirement Income Program (PDF) 31 pages. Excerpt: "To date, more than 30 countries have established some form of individual accounts in their retirement systems. This article identifies those countries, categorizes how the individual accounts fit into their retirement income systems, and identifies some basic characteristics of the accounts." (U.S. Social Security Administration) Pensions Trump Job Security in Strike at Boeing Excerpt: "During the weeks of heated negotiations preceding the strike that began September 1, the union, whose members' average age is 49, refused to budge on the issue of pensions." (Workforce Management; one-time registration required) Results of CIEBA Survey on Pension Reform Impact on Defined Benefit Plans (PDF) 5 pages. Excerpt: "In the spring of 2005, the Committee on Investment of Employee Benefit Assets (CIEBA) asked its members-- chief investment officers of many of the nations' largest corporate pension plans-- to respond to a survey on the impact of proposed changes to rules governing defined benefit pension plans and how these changes could affect pension plans and the workers and retirees in those plans." (Committee on Investment of Employee Benefit Assets) Americans Say, 'Want Us to Save More for Retirement? Pay Us More!' Excerpt: "[R]espondents to Allstate's fifth annual Retirement Reality Check survey asserted, for them to set aside more for retirement than they are doing now, their income would have to go up and the economy would have to improve, according to an Allstate news release." (PLANSPONSOR.com: one-time registration required) Lifetime Earnings, Social Security Benefits, and the Adequacy of Retirement Wealth Accumulation (PDF) 20 pages. Excerpt: "Issues addressed in this article include the adequacy of household retirement saving, controlling for lifetime earnings levels and uncertainty, and the examination of the role of Social Security in bolstering financial security. The authors show that reductions in Social Security benefits could have significant deleterious effects on the adequacy of saving, especially among low-income households." (U.S. Social Security Administration) A Program and Policy History of Social Security (PDF) 15 pages. Excerpt: "The history and development of the Social Security program from its inception to the present is discussed. Special attention is given to historical debates that have relevance to today's policy discussions. In particular, the article discusses themes regarding program growth, pay-as-you-go financing, reserve funding, rates of return on payroll contributions, and the adequacy of benefits." (U.S. Social Security Administration) Links to Items on Executive Comp, Benefits in General Immediate Employer Issues in Responding to Hurricane Katrina, Updated 9/29/05 Excerpt: "This article has been updated to reflect actions taken by Congress, federal agencies, and others during the past three weeks. .... This article outlines some of the most urgent HR issues, with a focus on legal and tax considerations affecting employee benefits. It includes frequently asked questions about expense reimbursements, health benefits, death benefits, retirement benefits, compliance deadlines, and laws regulating employment practices." (Mercer Human Resource Consulting; one-time registration required) A Guide for Hurricane Survivors on Restoring Social Security and Employee Benefits Excerpt: "WISER has launched a one-stop web page for Hurricane victims and their families who need up-to-date information on Social Security, 401(k)s and other pensions, and health benefits as well as Medicare and Medicaid." (WISER) Court Finds No Requirement to Recognize Beneficiary's Waiver outside Plan Docs Excerpt: "We find the court's reasoning consistent with the Egelhoff case and other precedent of the U.S. Supreme Court. In Egelhoff, the Court held that a state law revoking spouse beneficiary designations upon divorce was not applicable to an ERISA plan because it conflicted with 'ERISA's requirements that plans be administered, and benefits be paid, in accordance with plan documents.'" (Employee Benefits Institute of America Inc.) Overview: Separation Pay Agreements and Nonqualified Deferred Comp Plans Linked to Qualified Plans (PDF) 5 pages. Excerpt: "The third installment of our coverage of the proposed regulations issued by the Internal Revenue Service (IRS) on September 29, 2005, under Section 409A of the Internal Revenue Code of 1986, as amended (the 'Code'), addresses severance plans, referred to in the proposed regulations as 'Separation Pay Arrangements,' and nonqualified deferred compensation plans linked to qualified plans, such as so called 'wrap-401(k) plans.'" (Sherman & Howard L.L.C.) Materials from the National Coordinating Committee for Multiemployer Plans 2005 Annual Conference Excerpt: "[The target page lists the] presentations and documents from [the] recent 2005 Annual Conference which [are] available to you in PDF format. [Examples of material posted include: Impact of Knudson Decision on Health Plan Subrogation; Impacts of Health Care Reform: Projections of Costs and Savings; and, Is Your Plan Document the Final Word? A Review of Banuelos v. Construction Laborers Pension Trust for Southern California.]" (National Coordinating Committee for Multiemployer Plans) Washington Regulatory Wrap Up, As of October 4, 2005 (PDF) 3 pages. The chart of federal regulatory proposals concerning employee benefits of interest to NCTR members has been updated to be current as of October 4, 2005. The federal updates referenced in the chart are available at http://www.nctr.org/federal/index.html." (National Council on Teacher Retirement) Newly Posted Events 401(k) Plan Expenses: The Cost of Not Knowing, Not Disclosing and Not Being Reasonable Keeps Going Up in California on April 20, 2006 presented by Western Pension & Benefits Conference - Orange County Chapter 401(k) Plans in California on December 6, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) 401(k) Plans-The Roth 401(k) Provision and Final Regulations in Pennsylvania on October 13, 2005 presented by Central Pennsylvania Chapter - ISCEBS Cafeteria Plans in California on December 7, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) COBRA Compliance for Group Health Plans in California on December 9, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) Employment & Benefits Update in Georgia on October 20, 2005 presented by Seyfarth Shaw LLP ERISA Compliance for Health & Welfare Plans in California on December 8, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) HIPAA Portability, Privacy & Security in California on December 9, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) HSAs, HRAs, and Consumer-Driven Health Care in California on December 8, 2005 presented by Employee Benefits Institute of America Inc. (EBIA) Newly Posted Press Releases Higher Benefit Costs, New Plan Designs, Highlight Open Enrollment Season (Watson Wyatt) PBGC Pays Pensions At Huffy Corporation (Pension Benefit Guaranty Corporation (PBGC)) PensionOnline Announces New Roth 401k Analysis Tool (Metrics Partners) Newly Posted or Renewed Job Openings Benefits Manager for Capital Group Companies, Inc. in TX Manager, Compliance and Benefits Administration for Kansas City Based Defined Benefits Plan Administrator in MO Compliance Manager for ABD Insurance and Financial Services in CA, NV Senior Management for ERISA Compliance Consulting Firm & TPA in CA Retirement Specialist for ProNvest in GA 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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