October 14, 2005 Today's sponsor: DATAIR Employee Benefit Systems, Inc. (Click on company name or banner to learn more.)
IRS Announces New Pension Limits for 2006 (PDF) 3 pages. Excerpt: "[T]he limitation under section 402(g)(1) on the exclusion for elective deferrals described in section 402(g)(3) is increased from $14,000 to $15,000... The limitation for defined contribution plans under section 415(c)(1)(A) is increased from $42,000 to $44,000." (Internal Revenue Service) Roth 401(k) Rules Rile Plan Sponsors and Consultants Excerpt: "Double your labor, double your drudgery. That's what critics fear the new Roth 401(k) rules will add up to for employers - one big administrative headache." (BenefitNews Connect) Fiduciary Reporting for Retirement Specia.lists in 5 'Easy' Pieces (PDF) 62 pages. Excerpt: "What is it? Why do it? Who does it? How it works? When to outsource or partner?" (The McHenry Group) Opinion: Raising the Retirement Age -- Ratio of Nonworking Retirees to Workers Is Growing Excerpt: "This demographic reality usually draws a simple political response: raise taxes or lower benefits, or both. In Congress, that way of thinking has led to stalemate on revising Social Security. Both political parties need to discuss a retirement age of at least 70 for both Social Security and Medicare for the next generation. Better yet, it should index the age requirement to rising longevity so this issue can be done with." (The Christian Science Monitor via CBS News) Corporate Pension Funding Reform Gathers Steam Excerpt: "The Employee Retirement Income Security Act (ERISA) created the PBGC in 1974 to insulate employees from some of the downside risk of a defined benefit (DB) pension fund collapse. The PBGC is in an increasingly precarious financial situation. Temporary legislation designed to shore up its finances will expire on Dec. 31. Lawmakers have taken seriously DB pension-plan underfunding and the precarious financial position of the PBGC: ...." (Oxford Analytica via Forbes.com) Overview: Hurricane Katrina Legislation and IRAs Excerpt: "On September 23, 2005, President Bush signed into law the Katrina Emergency Tax Relief Act of 2005 (KETRA). This legislation provides relief for qualified distributions from certain qualified retirement plans, including IRAs, 457 and 401 plans to eligible individuals." (ICMA-RC) District Court Grants State Street's Motion for Summary Judgement in United Airlines' ESOP Case Excerpt: "Der-Yeghiayan noted that State Street is a directed trustee and as such is required to administer the plan according to plan documents. The judge cited the opinion on a previous case involving WorldCom which stated, 'directed trustee has no duty to investigate the wisdom of [investment] choices or any obligation to render advice regarding the choices.'" (PLANSPONSOR.com: one-time registration required) Independent Board Controls South Carolina's State Pension Fund; It Must Police Itself under New Law Excerpt: "South Carolina has given oversight of $26 billion in state pension money to a group of appointees who answer to no one but themselves. Creation of the six-member S.C. Retirement Investment Commission follows a national trend of entrusting private financial advisers -- rather than state employees or elected politicians -- with public pension money." (TheState.com) Fiduciary Issues for Financial Professionals under ERISA (PDF) 16 pages. Excerpt: "This white paper focuses on whether, and to what extent, financial professionals-- brokers, investment professionals, consultants and other intermediaries ... take on a fiduciary role under the Employee Retirement Income Security Act of 1974 (ERISA) when they help their clients with these issues. It also discusses the implications of fiduciary status. This paper further examines certain services offered by plan providers and their value to the financial professionals." (Principal Financial Services, Inc.) Boomers Worried about Retirement, According to Survey by Metlife Inc.'s Mature Market Institute Excerpt: "The study compared data from similar research the institute sponsored in 2001. It found the number of boomers who say they are worried about retirement has doubled. Younger members, ages 41 to 49, are most likely to be concerned." (National Underwriter Life & Health; free one-time registration or paid subscription required) What Every Investor Should Know About Mutual Funds Excerpt: "Put these few simple bullet points on your refrigerator, enter them into your Palm Pilot, engrave them on your cufflinks, and if you have been contemplating a tattoo, consider inking them onto an easy-to-read spot. While they are just common sense, paying attention to these mutual fund pearls may make all the difference." (The American Association of Individual Investors) Opinion: Molly Ivins Says Making Pensions Disappear Is a New Corporate Art Form Excerpt: "Making your pension disappear is a new corporate art form. There is, for example, the ''wear away.'' The Star Tribune gives this example: Say you've been working for a company for 20 years, at the end of which you are entitled to a pension of $2,000 a month. But, your company decides to ''revise'' the plan and, lo, suddenly you have to have worked for 40 years to qualify for $2,000 a month." (Fort Worth Star-Telegram via The Salt Lake Tribune) Retirement Plan Participation and Contributions: Trends from 1998 to 2003 (PDF) 26 pages. Excerpt: "From February through May of 2003, the Bureau of the Census collected information about participation in employer-sponsored retirement plans among individuals in more than 29,000 U.S. households. These data are the most comprehensive source of information available on workers' participation in employer-sponsored retirement plans from a nationally representative sample of American households." (Congressional Research Service via 401khelpcenter.com) Issue in Brief: How Much Are Workers Saving? (PDF) 9 pages. Excerpt: "This brief ... attempts to separate the saving out of current income done by the working-age population (those under age 65) from that undertaken by retirees (those 65 and over). The first section describes the NIPA accounts. The second section estimates the share of NIPA personal saving that belongs to those under age 65. The third section broadens the calculation of household saving to include business saving." (Center for Retirement Research at Boston College) Links to Items on Executive Comp, Benefits in General 2006 IRS Benefit Limits and the Social Security Increases Now Available Excerpt: "Today the Bureau of Labor Statistics released the September inflation figures (CPI-U and CPI-W) and the Social Security Administration released the 2006 benefit and wage amounts. [Chicago Consulting Actuaries has] calculated 2006 IRS limits on qualified retirement plan benefits, ...." (Chicago Consulting Actuaries, LLC) Overview: Proposed 409A Regulations Issued (PDF) 7 pages. Excerpt: "In December of 2004, the IRS issued Notice 2005-1 setting forth initial guidance with respect to Code section 409A.1 The newly issued proposed regulations incorporate the guidance provided in Notice 2005-1 and provide substantial additional guidance." (Dechert LLP) Hewitt Federal Legislation Quick Guide Updated as of October 11, 2005 Excerpt: "Hewitt's Federal Legislation Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding health and welfare benefit plans, retirement plans, and human resources and employment law." (Hewitt Associates) Newly Posted Events Defined Contribution Plan Expenses Nationwide on November 17, 2005 presented by ERISA Fiduciary Guild & IBF Conferences*International Business Forum Fiduciary Responsibility Nationwide on October 24, 2005 presented by NAGDCA (National Association of Government Defined Contribution Administrators, Inc.) Newly Posted Press Releases Figures and Facts on U.S. Retirement Plan Participation (Employee Benefit Research Institute (EBRI)) New Harris Rothenberg Work/Life Portal Showcases Innovative Content Integration and Branding Customization Features (Harris, Rothenberg International (HRI)) Pat Byrnes To Receive the 2005 EIDSON Award (Actuarial Consultants, Inc.) Newly Posted or Renewed Job Openings Employee Benefits Tax (EB) Manager for Deloitte in FL Account Manager for CitiStreet in NJ Compliance Manager for PENCO, Inc. in OH Internal Wholesaler for MassMutual Financial Group in CT Manager, Enrollment Services for CitiStreet in NJ Client Service Consultant for The Principal Financial Group in NY Call Center Manager for Health Benefits Consulting Company in GA Controller for Major Midtown Group of Multi-Employer Funds in NY Handy Links:
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