| BenefitsLink Retirement Plans Newsletter |   |
October 11, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
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Pension Bill at Risk of Dying in Senate
Excerpt: "The Senate may not take up a pension overhaul bill when it returns from a one-week recess, leaders said Friday, suggesting the legislation could be dead for the year." (AP via Law.com)
Stalemate Could Boost Pension Contributions, According to Senator Mike Enzi
Excerpt: "If Congress does not pass pension funding reform soon, some employers could end up having to contribute a lot more money to their pension plans, the chairman of a Senate committee is warning." (Business Insurance)
Opinion: Pension Reform Requires Balance
Excerpt: "Rep. John Boehner had it exactly right when he said balance must be the foundation of pension funding reform legislation. If the rules are too tough, the Ohio Republican and chairman of the House Education & Workforce Committee warned recently, employers will stop offering defined benefit plans. But if the rules end up being too loose, he said, the Pension Benefit Guaranty Corp., the deficit-ridden federal agency that insures pension benefits, will end up with more big losses." (Business Insurance)
From ERIC & Deloitte: Comparison of Significant Pension Reform Proposals Updated October 7, 2005
23 pages. Excerpt: "[The chart is] an updated side-by-side of the pension funding and hybrid plan legislation moving through Congress. The side-by-side was prepared for ERIC by Deloitte Consulting. It outlines ERIC's proposals for pension funding and hybrid plan reform and compares the bills that have been approved by the House Education and Workforce, Senate Finance, and Senate Health Education Labor and Pensions committees." (The ERISA Industry Committee)
Chart: Automatic Enrollment Legislation Introduced in the 109th Congress (PDF)
2 pages. This chart summarizes the bills introduced in the 109th Congress on the issue of Automatic Enrollment. (American Benefits Council)
Senator Introduces Two Pension Proposals -- One on Auto Enrollment and One for Multiemployer Plans
Excerpt: "An influential Republican US senator has introduced two pension proposals including one dealing with multi-employer plans and a second to encourage auto enrollment programs. Senator Rick Santorum (R-Pennsylvania) said in a Web statement that his Multi-Employer Plan Funding and Deduction Reform Act of 2005 (S 1825) was designed to give the same attention to multi-employer plans as many lawmakers are already giving to the nation's much-troubled single employer pension system." (PLANSPONSOR.com: one-time registration required)
Suing Employer Is One Way to Redress a Flawed 401(k)
Excerpt: "It's been almost four years since Enron Corp. filed for bankrup.tcy. Is your 401(k) any safer? Other than passing the Sarbanes-Oxley accounting oversight law, Congress has done almost nothing to safeguard or enhance these retirement savings plans. That doesn't mean that employees and regulators haven't gotten bolder in tackling 401(k) abuses. In thousands of cases, they are suing employers to recover retirement-plan losses." (Bloomberg News)
Comparison of 457(b) Plans, 401(k) Plans, 403(b) Plans, and Deemed IRAs updated
The chart comparing 457(b) plans, 403(b) plans, 401(k) plans, and deemed IRAs as vehicles for voluntary employee savings has now been updated to reflect recent developments, including changes in the bankrup.tcy rules relating to such plans. (Calhoun Law Group, P.C.)
Retirement Planning Web Site Just for Teachers
The SEC has set up a Web site to help teachers learn how to save and invest and provided some useful resources for teaching others about saving and investing. (U.S. Securities and Exchange Commission)
Secret Pension Data Skew the Playing Field
Excerpt: "Pension-fund information -- and the lack of it -- links Northwest Airlines chairman Gary Wilson and 9/11 widow Ellen Saracini, whose husband was a United Airlines pilot. Guess what? Wilson benefited by having access to all of Northwest's pension numbers, while Saracini paid a steep price for not having access to United's pension fund numbers." (The Washington Post; one-time registration required)
Public Pension Funding Likely to Vex Next Governor of New Jersey
Excerpt: "Call it one of those gut-churning issues politicians in the state capitol love to skirt. Pension reform. The rising cost of providing retirement benefits and health care to the Garden State's retired government workers, elected officials, teachers, police and firefighters is expected to rise by $500 million in the coming year alone." (Gloucester County Times)
Editorial: Slouching Toward Pension Reform
Excerpt: "Congress must find a way to protect employees and retirees - and taxpayers, too, who would be on the hook for a debilitating bailout should defaults overwhelm the federal pension insurance agency. Doing so requires a legislative balancing act because reform invariably means imposing new costs and regulations that - if perceived to be too burdensome - could dissuade employers from offering traditional pensions." (The New York Times; one-time registration required)
ERISA Stock Drop Litigation: A Primer for Prevention and Litigation (PDF)
36 pages. Excerpt: "When the employer stock declines in value and there are some indicia of a securities violation, the ERISA class action bar has filed ERISA class actions charging a variety of defendants with breaches of fiduciary duty. These complaints are often filed as parallel actions to securities claims. These claims, which should be addressed with some preventative actions discussed in this outline, raise unique litigation challenges." (Groom Law Group via American Benefits Council)
Retirement Income Planning: What Income Planning Will Look Like in 2010 (PDF)
4 pages. Excerpt: "The future lies in comprehensive planning strategies for retirees, because nothing less will work." (Still River Retirement Planning Software, Inc.)
U.S. Retirement Perspective: The Retirement Shares Plan -- A Breakthrough in Retirement Plan Design
Excerpt: "The Retirement Shares Plan (RSP) is a new concept in pension benefit design. An RSP provides predictable and stable cost to the plan sponsor with little chance of unfunded liabilities; lifetime income, guaranteeing that retirees will never outlive their benefits; a benefit accrual pattern comparable to traditional pension plans that preserves value for older, long service employees; and potential inflation protection for retirees." (Mercer Human Resource Consulting; one-time registration required)
Opinion: The Retirement Gap-- Working Women and Retirement Security
Excerpt: "[A] recent survey released by the Heinz Family Philanthropies showed that more than 40 percent of women ages 25-55 fear they will live their retirement years at or near the poverty level. Eighty percent of this group is at least somewhat concerned that they will not have enough money to live on. Nearly 50 percent predict they will have to keep working past retirement age just to make ends meet." (Teresa Heinz via The Boston Globe)
Turning TIAA-CREF into a Household Name
Excerpt: "Even as it tries to become better known, this giant pension manager with the unwieldy name - it stands for the Teachers Insurance and Annuity Association-College Retirement Equities Fund - has gotten a black eye with many of its longtime customers. TIAA-CREF angered investors by trying to raise some of its mutual funds' management fees, which have been among the lowest in the industry. Shareholders voted against the increases at 9 out of 12 affected funds in late August." (The New York Times; one-time registration required)
How Mutual Fund Rankings Can Cause Stocks to Gyrate
Excerpt: "Mutual funds are a main cause of the boom-and-bust cycle that so often occurs among individual stocks and industry sectors, a new study has concluded. Titled 'Asset Fire Sales (and Purchases) in Equity Markets,' the study was conducted by Joshua D. Coval and Erik Stafford, both associate professors of finance at the Harvard Business School. The paper has been circulating since the summer in academic circles; a version is at http://papers.ssrn.com/sol3/papers.cfm?abstract-id=718201." (The New York Times; one-time registration required)
Maximizing Long-Term Wealth Accumulation: What Investments to Make and Where to Make Them (PDF)
12 pages. Excerpt: "In this article, academic researchers discuss the advantages of placing equities in taxable accounts and taxable bonds in tax-deferred accounts in order to maximize the tax efficiency of one's overall portfolio." (TIAA-CREF Institute)
Links to Items on Executive Comp, Benefits in General
Heads-Up on Deferred Compensation Guidance (PDF)
5 pages. Excerpt: "This alert letter highlights the major aspects of the proposed regulations, which are lengthy and extensive." (Frederic W. Cook & Co., Inc.)
Overview: Proposed Regs for Nonqualified Deferred Comp Plans under Code Section 409A-- Part IV (PDF)
6 pages. Excerpt: "The fourth and final 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 the application of Code Section 409A to Code Section 457(f) plans. This bulletin also discusses the aggregation of plans for Code Section 409A purposes, the treatment of performance based compensation, and the concept of short term deferrals." (Sherman & Howard L.L.C.)
FAS 123(R) Resource Group Discussion Document of Meeting No. 3 Held September 13, 2005 (PDF)
8 pages. Excerpt: "On September 13, 2005, the FASB staff ... held a meeting with the FASB Statement 123(R) Resource Group ... to discuss several issues relating to the implementation of Statement 123(R), Share-Based Payment. The issues and the summary of the issues were provided by the FASB staff, while the grey shaded boxes represent the discussions of the Resource Group. The information ... summarizes the issues and discussion of the Resource Group." (Financial Executives International)
Adams and Reese Employee Benefits Bulletin, Fall 2005 (PDF)
6 pages. This issue includes articles titled: Time To Care About Medicare Pres.cription Drug Program and Roth 401(k) Plans and the Cary Brown Thesis. (Adams and Reese)
Rethinking the Role of Older Workers: Promoting Older Worker Employment in Europe and Japan (PDF)
32 pages. Excerpt: "Concern about the sustainability of public pension and health care systems in the face of aging populations has policymakers in developed countries looking to the contributions that older workers might make to economic growth and the alleviation of rising support burdens." (AARP)
Overview: Hurricane-Related Relief for Benefit Plan Sponsors, Participants and Beneficiaries
Excerpt: "This article summarizes recent regulatory and legislative Hurricane Katrina and Rita relief relating to employee benefit plans. Primarily, the relief discussed below affects plan sponsors, participants, and plans located directly in the Hurricane Katrina and Rita disaster areas. However, some relief extends to participants who have certain relatives who are directly affected by the Hurricane Katrina." (Ice Miller)
Bill Introduced to Aid Continued Employment of Retirement Age Workers
Excerpt: "US Senator Herbert Kohl (D-Wisconsin) has introduced a bill to help older workers and baby boomers who chose to pass on retirement keep working. In a press release The Democratic Party of Wisconsin said the bill addresses the problems faced by those who want to continue working and by businesses who want to retain the experience of older workers as the workforce is drained by the 77 million baby boomers approaching retirement age." (PLANSPONSOR.com: one-time registration required)
Milliman's Monthly Benefit News and Developments, October 2005 (PDF)
The newsletter summarizes benefits legislative activity and provides a regulatory roundup. (Milliman)
Informal DOL Views on Claims Procedures, MEWAs, Transferring Assets to TPAs, and Other ERISA Issues
Excerpt: "The American Bar Association's Joint Committee on Employee Benefits (JCEB) has posted the report of its annual question and answer session with DOL officials. These sessions address questions submitted to the DOL in advance; the 2005 session involved several ERISA compliance issues." (Employee Benefits Institute of America Inc.)
A New Tool for Searching the Top Benefits and ERISA Related Web Sites
Excerpt: "[Attorney B. Janell Grenier has] created a new search tool at Rollyo ... which will allow you to search all of the ... sites in one fell swoop ...." (Attorney B. Janell Grenier via BenefitsBlog.com)
Major Post-ERISA Benefit Legislation Listed by Hewitt Associates
Excerpt: "[Hewitt provides] lists of major post-Employee Retirement Income Security Act (ERISA) legislation, and descriptions of each piece of legislation, [by five-year groups]." (Hewitt Associates)
Book Review: The Battle for the Soul of Capitalism: How the Financial System Undermined Social ...
Excerpt: "Here is Mr. Bogle's clear, well-reasoned and forcibly stated argument in a nutshell: Over the last 100 years, we have moved from 'owner's capitalism,' a system in which the bulk of investment returns went to the people who put up the risk capital, to 'manager's capitalism,' which provides 'vastly disproportionate rewards' to those hired to watch their interests - people like company executives and mutual fund managers." (The New York Times; one-time registration required)
Baby Boomers Augur Old Age, New Needs
Excerpt: "In little more than five years, the oldest members of the baby boom generation will turn 65, causing alarms in some quarters about a retirement tsunami that will challenge state policy planners severely. But many experts believe the impact of this demographic shift on budgets and services won't be as negative as doomsayers claim." (Stateline.org via Kansas City infoZine)
Newly Posted Events
24th Annual ISCEBS Employee Benefits Symposium Rescheduled
in Arizona on December 4, 2005
presented by International Society of Certified Employee Benefit Specialists (ISCEBS)
72(t) Payments Web/Telephone Seminar
Nationwide on December 15, 2005
presented by BISYS Retirement Services
Advanced HSAs Web/Telephone Seminar
Nationwide on December 13, 2005
presented by BISYS Retirement Services
Advanced IRAs: The Ever-Changing IRA
in New Mexico on December 7, 2005
presented by BISYS Retirement Services
Advanced IRAs: The Ever-Changing IRA
in Arizona on December 9, 2005
presented by BISYS Retirement Services
Advanced IRAs: The Ever-Changing IRA
in California on December 14, 2005
presented by BISYS Retirement Services
Advanced IRAs: The Ever-Changing IRA
in California on December 16, 2005
presented by BISYS Retirement Services
Basic IRA's
in Arizona on October 8, 2005
presented by BISYS Retirement Services
Basic IRA's
in Arizona on December 8, 2005
presented by BISYS Retirement Services
Basic IRAs
in New Mexico on December 6, 2005
presented by BISYS Retirement Services
Basic IRAs
in California on December 13, 2005
presented by BISYS Retirement Services
Basic IRAs
in California on December 15, 2005
presented by BISYS Retirement Services
Code Section 409A
in Colorado on November 1, 2005
presented by SunGard Corbel
Code Section 409A
in Kansas on November 2, 2005
presented by SunGard Corbel
Code Section 409A
in Illinois on November 3, 2005
presented by SunGard Corbel
Code Section 409A
in Michigan on November 3, 2005
presented by SunGard Corbel
Code Section 409A
in Ohio on November 4, 2005
presented by SunGard Corbel
Code Section 409A
in Minnesota on November 4, 2005
presented by SunGard Corbel
Defined Contribution Plan Year-End Roundup
Nationwide on October 25, 2005
presented by Morgan Lewis & Bockius LLP
Defined Contribution Plan Year-End Roundup
Nationwide on November 3, 2005
presented by Morgan Lewis & Bockius LLP
Direct Rollovers and Other Portability Issues Web/Telephone Seminar
Nationwide on December 8, 2005
presented by BISYS Retirement Services
Estate Planning Considerations for Qualified Plans and IRAs
in Kansas on November 1, 2005
presented by SunGard Corbel
Estate Planning Considerations for Qualified Plans and IRAs
in Illinois on November 2, 2005
presented by SunGard Corbel
Estate Planning Considerations for Qualified Plans and IRAs
in Minnesota on November 3, 2005
presented by SunGard Corbel
Internal Revenue Code Section 409A Series: Year-End Deadlines for 2005
in California on October 13, 2005
presented by Paul, Hastings, Janofsky & Walker LLP
IRA Compliance Web/Telephone Seminar
Nationwide on December 6, 2005
presented by BISYS Retirement Services
Long-Awaited Guidance on Deferred Compensation Rules Arrives
Nationwide on October 17, 2005
presented by Trucker Huss
Update on Employee Compensation for 2006 Teleweb
Nationwide on October 27, 2005
presented by International Foundation of Employee Benefit Plans
Newly Posted Press Releases
U.S. Companies Face Lowest Health Care Cost Increases Since 1999
(Hewitt Associates LLC)
PSCA Applauds Senators Santorum and Bennett for 401(k) Enhancement Act
(Profit Sharing/401(k) Council of America (PSCA))
PSCA Releases 48th Annual Survey of Profit Sharing and 401(k) Plans
(Profit Sharing/401(k) Council of America (PSCA))
Expert Consultant added to Pension Consultants, Inc. Staff
(Pension Consultants, Inc.)
Ameriprise Retirement Services to Host President's Council
(Ameriprise Retirement Services)
Newly Posted or Renewed Job Openings
Compliance Administrator - PA
for Vanguard
in PA
Defined Contribution Plan Administrator
for New York Life Investment Management LLC
in NJ
Service Center Representative
for Employee Benefit Solutions, Inc.
in TX
Health & Benefit Team Leader
for Mercer HR Services
in MA
Compliance Manager, Employee Benefits
for ABD Insurance and Financial Services
in CA
Retirement Plan Consultant
for CDM Retirement Consultants, Inc.
in MD
Defined Contribution Administrator
for Merit Benefits Group, Inc.
in IL
Account Executive - Client Services
for Diversified Investment Advisors
in OH
Marketing Consultant
for Diversified Investment Advisors
in NY
Retirement Plan Administrator
for Quantum Plan Services, Inc.
in WA
Field Sales Coordinator
for Transamerica
in IL
Pension Administrator
for San Diego Pension Consultants, Inc.
in CA
401(k) Administrative Assistant
for 401(k) Advisors
in CA
Defined Benefit Data Implementation Administrator - PA
for Vanguard
in PA
Defined Benefit Data Implementation Project Lead - PA
for Vanguard
in PA
Health and Welfare Benefits Analyst
for Aon Corporation
in MD
Defined Benefit Pension Plan Administrator
for The Angell Pension Group, Inc.
in ANY STATE
OmniPlus Consultant
for DC Specialists, Inc
in ANY STATE
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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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