| BenefitsLink Retirement Plans Newsletter |   |
October 28, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
(Click on company name or banner to learn more.)
| 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) |
IRS Provides Additional Minimum Funding Relief for Plans Affected by Hurricane Katrina (PDF)
3 pages. Excerpt: "As a result of the enactment of KETRA on September 23, 2005, the October 31, 2005, date described in Notice 2005-60 for compliance with specified Code requirements was extended to February 28, 2006. This notice provides corresponding extensions to February 28, 2006, for compliance with the ERISA requirements for which extensions were provided under Notice 2005-60." (Internal Revenue Service)
Three of Four Workers Ages 55 to 64 Have Less than $60,000 Saved for Their 20 to 25 Retirement Years
Excerpt: "'People spend more time choosing a TV than choosing their 401(k) investments,' says Jeffrey Miller, president, Mercer HR Services. And, he adds, there are 20 million workers who could be contributing to a 401(k) plan who aren't. 'What are they going to do at retirement?' he asks." (Workforce Management; one-time registration required)
Regulatory Information from the 2005 NCTR Convention -- Handouts from Three Pension Tax Experts (PDF)
54 pages. Excerpt: "[The handouts include information from:] Mary Beth Braitman, Ice Miller, on the proposed Section 415 rules; Carol V. Calhoun, Calhoun Law Group, P.C., on the automatic rollover provisions and phased retirement; and, Evelyn Small Traub, Troutman Sanders LLP, on the proposed 403(b) regulations and Hurricane Katrina and Rita tax relief." (National Council on Teacher Retirement)
Hitting the Retirement Target with Portfolio Building, Rebalancing and Tactical Asset Allocation
Excerpt: "Target retirement funds are one of the best 401k ideas to come around in a long time. .... These funds are slightly more than a twist on the 'life cycle' or 'life style' funds that came out a number of years ago. In a target retirement fund, a participant can create an asset allocation by simply checking off a single box for the fund which has the year which most closely approximates the year of their 65th birthday." (Michael Malone, MJM Financial)
Chart: Comparison of 457(b) Plans, 401(k) Plans, 403(b) Plans, and Deemed IRAs
Excerpt: "The ... chart sets forth some primary differences among the different types of plans: ...." (Carol V. Calhoun of benefitsattorney.com)
Kathleen Pender's Response to Comments on Her Recent Column Comparing Roth IRAs & 401(k) Plans
Excerpt: "My Sunday column comparing Roth individual retirement accounts to 401(k) plans sparked lots of comments and questions. .... It compared what would happen if you invested $1,000 in each type of account. For comparison purposes, it assumed that you earned 8 percent a year for 30 years and that your tax bracket remained unchanged at 25 percent." (San Francisco Chronicle)
Judging a Pension Plan by a Percentage Choice
Excerpt: "The investigation of General Motors' pension accounting, which the automaker disclosed on Wednesday, appears to be focused on whether G.M. has the data to justify the numbers it has reported to investors - something securities regulators have long been warning companies they would have to provide if challenged. In broad terms, the Securities and Exchange Commission wants to know whether G.M. has accurately measured the value of the benefits it is to pay its workers after they retire." (The New York Times; one-time registration required)
After 'Freezing' a Pension Plan, Decision-Making Really Heats Up (PDF)
4 pages. Excerpt: "Employers must evaluate the advantages and disadvantages associated with freezing their DB plans, taking into account each employer's employee value proposition (EVP), total rewards strategy, competitive environment and organizational objectives." (The Segal Company)
Labor Secretary Warns of Pending Pension Trouble
Excerpt: "U.S. Labor Secretary Elaine Chao says companies with traditional pension plans face the prospect of sharply higher pension costs next year unless Congress passes 'responsible' reform this year." (USA TODAY)
Investing in Private Equity (PDF)
4 pages. Excerpt: "Whether in Can.ada or the United States, private equity is an investment in a private company or a portfolio of private companies. This article gives the reader perspective on private equity not only as an asset class, but also how it integrates within a pension plan's investment governance process." (International Foundation of Employee Benefit Plans)
Thousands of Federal Employees Mistakenly Placed Into FERS System without Their Consent
Excerpt: "The glitch mostly affected employees who had worked under the old system, left government and later returned to the public sector, and employees who had experienced changes in appointment types or who had worked in excepted service agencies and then moved to the standard personnel system." (National Journal Group Inc. via GovExec.com)
CalPERS and CalSTRS Settle Lawsuit Against Former WorldCom Executives and Investment Banks
Excerpt: "In a press release it was revealed that the California Public Employees Retirement System (CalPERS) is expected to recover more than $200 million, while the California State Teachers' Retirement System (CalSTRS) will recover $38.7 million and the Los Angeles County Employees' Retirement Association (LACERA) will recover $18.7 million." (PLANSPONSOR.com: one-time registration required)
Rehired San Diego Retirees Should Get Increased Retirement Benefits, Judge Has Ruled
Excerpt: "The ruling, in essence, says that county employees who left their jobs before March 2002 and later returned are entitled to collect a higher level of retirement benefits, just as if they'd been there all along." (The San Diego Union-Tribune)
Opinion: Retirement Services as a Team Sport
Excerpt: "The segmenting market offers opportunities for TPAs, a few traditional advisor-sold providers and non-traditional providers. On the other hand, providers not capable of offering open architecture, large menus of no-load funds, no/low proprietary fund requirements and supporting fee-based business may be better off focusing on generalists, specialized niches, the small plan market and investment-only business." (The McHenry Group)
An Office Club for Savings -- Workplace Investment Clubs Tap Co-Workers' Expertise
Excerpt: "[In the Summit Investment Club a majority decision is needed before a stock can be bought or sold.] So far, the modus operandi could apply to any investment club. But here's what's different: The company offers its blessing to the Summit club in the form of meeting space and a payroll deduction for members' monthly contributions. The contributions ... go into a brokerage account, where they're available when the club is ready to purchase a stock." (BusinessWeek)
Issue in Brief: Why Do Women Claim Social Security Benefits So Early? (PDF)
10 pages. Excerpt: "This brief summarizes the incentives facing older women when claiming their Social Security benefits. The analysis shows that single women and married women face very different choices. For most married women, the Social Security benefit structure actually encourages them to grab their benefits as soon as possible. These incentives reinforce the tendency for wives, who are usually younger, to retire when their husbands do." (Center for Retirement Research at Boston College)
Links to Items on Executive Comp, Benefits in General
IRS Fact Sheet Provides Summary of Announcement on Settlement Initiative for Abusive Transactions (PDF)
Excerpt: "The [IRS] today announced a settlement initiative for taxpayers to resolve their tax disputes with the IRS over certain abusive tax avoidance transactions. The initiative is open until January 23, 2006. The settlement program, described in Announcement 2005-80, provides a onetime opportunity for taxpayers voluntarily to come forward and resolve their civil tax disputes over sixteen listed and five other potentially abusive transactions.' With hypertext links added by BenefitsLink. (Internal Revenue Service)
Federal Judge Imposes $100 Daily Fine on Employer for Not Producing Plan Documentation
Excerpt: "US Judge Michael Baylson of the US District Court for the Eastern District of Pennsylvania ordered Rohm and Haas Co. to pay to participant Gerald Kollman $9,800 in statutory penalties under the Employee Retirement Income Security Act (ERISA). Baylson imposed the fine because of what he said was Rohm and Haas's 98-day delay in providing Kollman with information about the calculation of his benefits." (PLANSPONSOR.com: one-time registration required)
A Discussion of Domestic Partnership Benefits
Excerpt: "Despite the fact that an estimated mere 10% of American families are made up of a working husband, a stay-at-home wife, and children, our legal and social systems still provide benefits and protections based on that model. Having been left out, les.bian and g.ay activists in the early 1980s sought recognition of their relationships and new definitions of family. And so domestic partnerships were born." (G.ay.com)
Perspective: U.S. Compensation Planning 2006: Caution Gives Way to Optimism
Excerpt: "In this Perspective, [Mercer examines] the emerging trends and changing approaches in reward program design, especially the ways companies are developing or refining compensation strategy to drive business performance. [They] conclude with a number of recommended design strategies for 2006." (Mercer Human Resource Consulting; one-time registration required)
Navigating the Proposed 409A Regulations -- General Rules (PDF)
26 pages. Excerpt: "The purpose of this alert is to highlight for employers what the proposed regulations clarified and their impact. [Gardner Carton & Douglas hopes] the attached [table] assists ... clients and friends in identifying the key areas of their nonqualified deferred compensation plans that will be affected by the proposed regulations once finalized. Note that until the regulations are finalized, they do not have the full force and effect of law." (Gardner Carton & Douglas LLP)
Overview: Application of the Proposed 409A Regulations to Equity Compensation Arrangements (PDF)
10 pages. Excerpt: "On September 29, 2005, the Department of Treasury released proposed regulations pertaining to Code Section 409A. In general, the proposed regulations incorporate the guidance provided in IRS Notice 2005-1 and provide substantial additional guidance. This alert solely focuses on the issues raised under the proposed regulations as they specifically relate to equity compensation arrangements." (Gardner Carton & Douglas LLP)
Newly Posted Press Releases
IRS Settlement Initiative
(Internal Revenue Service (IRS))
IRS Launches Abusive Transaction Settlement Initiative
(Internal Revenue Service (IRS))
Banks Choose Fast Track to Profit from Consumer-Directed Healthcare; ConnectYourCare's HSA Private Label Express(SM) Puts Banks in Control of Healthcare Offerings
(ConnectYourCare)
New Report by FAME Explores HSA Features, Concerns
(Council of Insurance Agents & Brokers)
Newly Posted or Renewed Job Openings
Sr. Brokerage Administrator
for American United Life
in IN
External Insurance Wholesaler
for Great-West Retirement Services
in TN
ERISA Compliance Officer
for City National Bank
in CA
Compliance Analyst
for Transamerica
in CA
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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