BenefitsLink
Retirement Plans
Newsletter		To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

October 6, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.

(Click on company name or banner to learn more.)
Banner ad for DATAIR Employee Benefit Systems, Inc.

Software for DC/401(k) Plan Administration

DATAIR's IMPROVED BENEFIT ADMINISTRATION SOFTWARE for 401(k), Profit Sharing and all other Defined Contribution plans. Designed for administrators and consultants.

This Windows system features many important enhancements including flexible input for employee data, share and dollar accounting; redesigned easy-to-read report formats, a transaction database for time-weighting of allocations; electronic anniversary notification and data collection; and unlimited investment and source definitions. The system also allows for great flexibility in setting up graded class allocation (cross-tested new comparability) plans.

Training and support included. For free demo versions and pricing, contact sales@datair.com or call 1-888-328-2474.


(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
CBO's Cost Estimate for S. 1783, the Pension Security and Transparency Act of 2005 (PDF)
5 pages. Excerpt: "[T]he Congressional Budget Office has estimated the budgetary impact of enacting S. 1783, the Pension Security and Transparency Act of 2005, as introduced on September 28, 2005." (U.S. Congressional Budget Office)

Update on Senate Defined Benefit Pension Plan Funding Bill
Excerpt: "In this article, we revisit our comparison of the House and Senate DB funding reform proposals to reflect the combination of separate Senate Finance and HELP Committee bills into a single Senate proposal -- the Pension Security and Transparency Act." (Chicago Consulting Actuaries, LLC)

Overview: Pension Funding Reform -- Status of Cash Balance Provisions
Excerpt: "While it appears that there's no logical necessity for Congress to address cash balance plans at the same time it reforms DB funding, it's beginning to look inevitable that it will. Here we review current proposals to 'fix' or reform cash balance plans." (Chicago Consulting Actuaries, LLC)

U.S. Senators Think Airline Pension Dispute Solved
Excerpt: "Senate aides said that squabble had been resolved by agreeing to allow American and Continental to make use of the 14-year payment holiday without having to freeze the accrual of additional benefits, so long as they fund any new liabilities." (Reuters)

Text of Letter from Pension Rights Center to U.S. Senators on Upcoming Vote on Pension Bill (PDF)
Excerpt: "When the bill comes to the Floor, we urge you to oppose amendments to the bill that would retroactively legalize cash balance plans, undermining the rights of hundreds of thousands of employees. We also urge you to oppose amendments that would weaken fiduciary standards under ERISA." (Pension Rights Center)

Wall Street Pushes to Relax Pension Rules
Excerpt: "What the Wall Streeters want: looser fiduciary rules and easier conflict-of-interest limits in pension law. Securities firms have long been eager to run pension money with fewer controls by the Employee Retirement Income Security Act. Now they're leaping on pension reform -- a must-pass bill propelled by the latest airline bankruptcies -- to win some relief." (BusinessWeek)

Letter Requesting Colleagues Co-Sponsor the Pension Benefits Preservation and Protection Act (PDF)
2 pages. Excerpt: "Congress has a responsibility to provide immediate protections to millions of workers who have had their benefits slashed as a result of cash balance pension schemes. Therefore, we hope you will join us in co-sponsoring the Pension Benefits Protection Act." (Representatives Sanders, Gutknecht, Miller, and Hinchey via American Benefits Council)

Hybrid Plan Talking Points Regarding Pension Reform Bills (PDF)
2 pages. Excerpt: "The Senate Finance and HELP Committees have both approved pension reform bills that contain provisions addressing hybrid pension plans (cash balance and pension equity) and conversions. Yet there are fundamental flaws with the hybrid provisions of both bills." (American Benefits Council)

Summary of the Dewine-Mikulski Amendment to S. 1783 Regarding Funding Rules and Smoothing (PDF)
2 pages. Excerpt: "The DeWine-Mikulski amendment has two components: a smoothing component and a credit-rating component. As explained in more detail below, the amendment would apply the HELP bill rules with respect to asset and interest rate smoothing and with respect to the determination of a plan's at-risk status (i.e., the credit rating issue)." (American Benefits Council)

Talking Points: Key Concerns Regarding the Funding Rules Proposed in H.R. 2830 (PDF)
2 pages. Excerpt: "This legislation would restructure the funding rules applicable to single and multiemployer plans. It does not include an exit strategy for troubled companies. The proposal replaces the current law two-tiered system for calculating funding obligations with a single target approach that is modeled on the 'deficit reduction contribution' .... As drafted, the proposal raises several significant concerns." (American Benefits Council)

Special Treatment for Airlines Flaws a Strong Senate Pension Bill
Excerpt: "Taxpayers should not be expected to bail out companies that have over-promised and underfunded pension plans. Even worse, bankrupt companies such as Delta and Northwest should not receive special treatment that will almost certainly end up costing taxpayers billions. The Senate should remove the airline bailout provisions from its Pension Security and Transparency Act." (The Heritage Foundation)

409A & 401(k) Can Get Along Together
Excerpt: "Section 409A was added to the Internal Revenue Code to address perceived problems and abuses in the area of non-qualified deferred compensation. The changes brought about by 409A are so broad and sweeping that many commentators have referred to this new statutory provision as 'ERISA for non-qualified plans.'" (MJM Financial)

Roth 401(k) to Provide New Retirement Wrinkle
Excerpt: "For starters, while the Bush tax cuts of 2001 gave birth to the concept of the Roth 401(k), there's no requirement that your employer offer such a plan. So if you want access to a Roth 401(k), now is the time to lobby your human resources department." (U.S.News & World Report)

Roth 401(k) Update
Excerpt: "[N]ote that there is a possibility another interim amendment may be needed to implement the final 401(k)/(m) regulations, as well as the post-severance compensation provisions of the proposed 415 regulations. In addition, there is also the possibility (but it is looking much more remote) that the IRS may develop its own good-faith or model Roth 401(k) amendment." (SunGard Corbel)

401(k) Plans Moving from Publicly Traded Mutual Funds to Separately Managed Accounts?
Excerpt: "Institutionally managed funds tend to be much less expensive than publicly traded ones, since your employer has more leverage to negotiate fees." (CNN Money)

Overview: DOL Issues 'Plan Asset' Advice for Insurance Company Investment Transactions (PDF)
2 pages. Excerpt: "In Advisory Opinion 2005-19A, issued August 26, 2005, the Department of Labor opined on the treatment under the ERISA 'plan asset' regulations of investments held by insurance company subsidiaries." (Sutherland Asbill & Brennan LLP)

Oklahoma and Mississippi Public Pension Funds Sue Delphi Corp
Excerpt: "Two state pension funds, a pension fund in Europe, and mutual fund company in Europe have filed suit against Delphi Corp. for allegedly using improper accounting moves to overstate profits." (PLANSPONSOR.com: one-time registration required)

Opinion: Pennsylvania's Lawmaker Cost-Benefit Ratio Doesn't Add Up
Excerpt: "For those who think we're just being out-of-touch nags in harping on the recent exorbitant pay hike Pennsylvania's legislators voted for themselves, consider how their compensation compares with other states. In base pay, Pennsylvania lawmakers rank second only to California's lawmakers. .... Because pensions are tied to salaries, Pennsylvania's lawmaker pension plan is the most costly in the nation as a result of the recent pay hike." (The Williamsport Sun-Gazette)

IRS Weighted Average Interest Rate Table Updated for October 2005
Weighted average for October 2005: 4.89% (U.S. Internal Revenue Service)

IRS Composite Corporate Bond Rate Table Updated for October 2005
Corporate Bond Weighted Average Interest Rate = 5.81 for October 2005 (U.S. Internal Revenue Service)

Links to Items on Executive Comp, Benefits in General

Goeres Amicus Brief in Louis Gerard Goeres v. Charles Schwab & Co., Inc., et al., July 11, 2005
Excerpt: "[T]his court should reexamine its precedents and conclude that a monetary award to remedy a fiduciary's breach is 'equitable' under section 502(a)(3)." (U.S. Department of Labor)

Pereira Amicus Brief Supporting Appellant's Rehearing Petition, July 25, 2005
Excerpt: "The decision in this case effectively overrules Strom, and thus appears to preclude the recovery by ERISA plan participants and beneficiaries of monetary relief for the losses caused by fiduciaries who have violated ERISA's stringent obligations." (U.S. Department of Labor)

'Stealth' Pensions Hide Huge CEO Payouts
Excerpt: "First, studies show companies that pay their executives too much are more likely to be on the road to a credit downgrade. That's usually not good for a company's shares. If you don't know the size of the CEO's pension, you may not really understand whether a CEO is overpaid. Bebchuk found that pension plans on average tack on an extra 34% to pay packages." (MSN Money)

Overview: Relief for Hurricane-Affected Plan Sponsors, Administrators, and Participants (PDF)
26 pages. Excerpt: "It is important to note that, to date, the majority of guidance issued by the Service, DOL, and PBGC, along with the recently enacted tax relief package, has been limited to individuals and businesses affected by Hurricane Katrina. In response to the devastation caused by Hurricane Rita, however, the Service, DOL, and PBGC have recently issued guidance relating exclusively to Rita victims. It is unclear whether any legislative proposals will be advanced ...." (The Groom Law Group)

Overview: The Proposed Nonqualified Deferred Compensation § 409A Regulations (PDF)
24 pages. Excerpt: "This Legal Alert provides a brief summary ... in the following order: (1) effective dates and extended transition relief, (2) general description of plans subject to section 409A, (3) application of the rules to specific arrangements (such as stock options, stock appreciation rights, foreign plans and severance pay), (4) deferral election rules, and (5) time of payment. Also included is a short summary of some key rules ... not addressed in this guidance." (Sutherland Asbill & Brennan LLP)

Overview: The New Section 409A Guidance - Implications for Equity Compensation (PDF)
6 pages. Excerpt: "The most recent round of guidance furnished by the Treasury Department and the Internal Revenue Service with respect to deferred compensation arrangements under section 409A of the InternalRevenue Code provides a number of important clarifications with respect to equity compensation vehicles, such as stock options, stock appreciation rights, restricted stock, restricted stock units and phantom stock." (Morgan, Lewis & Bockius LLP)

Overview: Deferred Compensation Rules under Code Section 409A-- Actions to Take Before Year-End (PDF)
5 pages. Excerpt: "The newly released proposed regulations incorporate and expand upon the guidance provided under IRS Notice 2005-1 and extend certain key transition deadlines set forth in Notice 2005-1." (Morgan, Lewis & Bockius LLP)

Newly Posted Events

401(k) Fiduciary Liability Update
in Ohio on October 19, 2005
presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter

411(d)(6):Clearing Out the Underbrush
Nationwide on October 26, 2005
presented by ABA Joint Committee on Employee Benefits

Course Basics on COBRA
in Georgia on October 18, 2005
presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter

Crisis Management/Disaster Recovery? Are You Prepared?
Nationwide on October 20, 2005
presented by International Foundation of Employee Benefit Plans

ERISA Advisory Council to Hold October Teleconferences
in District of Columbia on October 19, 2005
presented by U.S. Department of Labor, Office of Public Affairs, Washington, D.C.

ERISA Advisory Council to Hold October Teleconferences
in District of Columbia on October 20, 2005
presented by U.S. Department of Labor, Office of Public Affairs, Washington, D.C.

Estate Planning Considerations for Qualified Plans and IRAs
Nationwide on November 1, 2005
presented by SunGard Corbel

Highlights of Deferred Compensation Regulations Under 409A
Nationwide on October 19, 2005
presented by Retirement Capital Group

Monitoring Your 401(k) Plan: Best Practices in Due Diligence Reviews
Nationwide on October 11, 2005
presented by Benefit Management Group

Nonqualified Plans - The Wait Is Over
Nationwide on October 25, 2005
presented by SunGard Corbel

Retirement Plans: What Every Employer Must Know
in Ohio on November 2, 2005
presented by SunGard Corbel

Retirement Plans: What Every Employer Must Know
in Pennsylvania on November 3, 2005
presented by SunGard Corbel

Tax Exempt Charitable Organizations
in District of Columbia on December 1, 2005
presented by ALI-ABA (American Law Institute-American Bar Association)

The 16th Annual National Institute on Health and Welfare Benefit Plans: Responding to Change
in District of Columbia on October 27, 2005
presented by ABA

Newly Posted Press Releases

Great-West Healthcare Unveils New Wellness Program; Program Gives Employers Opportunity to Lower Costs and Increase Employee Productivity
(Great-West Life & Annuity Insurance Company)

Since You Care Guide: Alzheimer's Disease - Caregiving Challenges, Free to the Public from the MetLife Mature Market Institute
(MetLife)

Teacher Pension System's Winning Web Program Gives Educators Sound Investment Tool
(California State Teachers' Retirement System (CalSTRS))

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Licensed 401(k) Plan Enroller
for Freedom One Financial Group
in MI

Pension Analyst II
for First Charter
in NC

Retirement Sales Manager
for Charles Schwab
in AL

Relationship Manager II
for T. Rowe Price
in MD

Senior Corporate Counsel
for Financial Engines
in CA

Assistant Pension Administrator
for Benetech, Inc.
in DC, VA

Defined Contribution Administrator
for Benetech, Inc.
in DC, VA

Director Benefits
for HR Architect
in ANY STATE

Employee Benefits Advisor (Outside Service)
for The Protector Group Insurance Agency, Inc.
in MA

Retirement Plan Account Manager
for Alerus Retirement Solutions
in MN

Sr. Director - Benefits Operations
for Automatic Data Processing (ADP)
in FL

Benefits Specialist
for Automatic Data Processing (ADP)
in FL

Senior Actuary
for Invesmart, Inc.
in MA

Senior Actuary
for Invesmart, Inc.
in OH



Handy Links:
Copyright 2005 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

Published by:

BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

Editor and Publisher: David Rhett Baker, J.D.

Housekeeping: