November 1, 2005 Today's sponsor: DATAIR Employee Benefit Systems, Inc. (Click on company name or banner to learn more.)
Chart: Automatic Enrollment Legislation Introduced in the 109th Congress (PDF) 2 pages. The chart compares three pieces of legislation. (American Benefits Council) Merged Senate Finance and HELP Pension Reform Bills Are Not the 'Best of Both Worlds' (PDF) 2 pages. Excerpt: "On September 27, 2005, the Chairmen and Ranking Democrats of the Senate Finance and Health Education Labor and Pensions (HELP) Committees introduced compromise legislation for consideration by the full Senate. The Pension Security and Transparency Act (S. 1783) merges the provisions of legislation previously approved by the Senate Finance (S. 219) and HELP Committees ...." (HR Policy Association) Survey: Offering Participant Advice and Access to a Registered Investment Advisor Very Important Excerpt: "In its press release on the survey, Invesmart said providing a personalized retirement income gap analysis to participants ranked second, with 60% of respondents choosing that option. A close third, 59% chose providing recommended savings rates and automatic deferral increases. Lastly, 55% said delegating account management to an investment professional was very important." (PLANSPONSOR.com: one-time registration required) Tax Diversification and the Roth 401(k) Excerpt: "[The publication] examines the impact to defined contribution savings plans of the new Roth 401(k) feature, which becomes available on January 1, 2006. For participants who are already making sensible savings and investment choices, the Roth 401(k) offers the dual benefit of diversifying tax risks and increasing savings in retirement." (Vanguard Center for Retirement Research) Employee Ownership Update for November 1, 2005 NCEO Executive Director Corey Rosen discusses a recent study showing that 73% of large companies want their top executives to be at or above the median compensation levels for their industries; a new study of employee investments in 401(k) plans showing that the percentage of allocations going to company stock has gradually declined from a high of 19% in 1996 to 15% in 2004; newly released limits for qualified plans in 2006; and NCEO board election nominations. (National Center for Employee Ownership) The Great Controversy: Current Pension Actuarial Practice in Light of Financial Economics Symposium 605 pages. From this target page, you can download all chapters in one complete pdf file at http://library.soa.org/library-pdf/m-rs04-1_final.pdf or each chapter separately. (Society of Actuaries) Opinion: The Broken Pension Promise and the Elimination of the Issuance of the 30-Year Treasury Bond Excerpt: "But the most significant 'betrayal' of the pension promise, IMHO, comes from the accounting community-- more specifically the Financial Accounting Standards Board (FASB)-- which, in the 'interests' of accuracy and transparency, have transformed the long-term nature of these commitments into short-term obligations." (PLANSPONSOR.com: one-time registration required) Text of PBGC's Semiannual Regulatory Agenda, Issued October 31, 2005 (PDF) Excerpt: "The agenda lists regulations that are currently under development or review or that PBGC expects to have under development or review during the next 12 months. The effect of this agenda is to advise the public of PBGC's current and future regulatory activities." (Pension Benefit Guaranty Corporation) United Kingdom's Pension Regulator Releases Guidelines to Determine At-Risk Pension Plans Excerpt: "Reuters reports that the agency has published a consultation document telling the methods it intends to use to identify those plans in trouble of not funding members' retirement. The Regulator proposes that if a plan can not make up its shortfall within 10 years, the group may intervene with the plan." (PLANSPONSOR.com: one-time registration required) DOL Offers Informal Views on Making Plan Loans during Leaves of Absence Excerpt: "The ... questions and answers are based on informal discussions between private-sector representatives of the Joint Committee on Employee Benefits (JCEB) and Department of Labor (DoL) staff." (Employee Benefits Institute of America Inc.) NCEO releases new edition of S Corporation ESOPs book The NCEO presents excerpts from the new edition of its book S Corporation ESOPs, which has been updated for recent developments (as of late 2005). (National Center for Employee Ownership) Fiduciaries Beware: Dual ERISA and Securities Claims Can Impact Fiduciary Liability Coverage Excerpt: "A topic that has been discussed ... previously has been the dual claims filed by plaintiffs' lawyers under ERISA and securities laws. Marc Mayerson in his blog, Insurance Scrawl, discusses a very interesting case--Federal Ins. Co. v. Raytheon Co. (1st Cir. Oct. 21, 2005)--which focuses on the topic of insurance coverage for such dual claims." (Attorney B. Janell Grenier via BenefitsBlog.com) Transitional Period Announced for New Tax Treatment of Malaysian Employee Share Schemes (PDF) 3 pages. Excerpt: "On 26 October 2005, Malaysia's Ministry of Finance issued a press statement to clarify that as a transitional arrangement, where employees have been granted options under ESOS that are exercisable before 1 January 2006, but exercised in 2006, they would be given a choice to apply for the existing tax treatment on all or part of their entitlement." (KPMG LLP) Committee Approves Senate Version of FDIC Bill Increasing Limits on Retirement Funds Excerpt: "The Senate Banking Committee gave the nod Oct. 18 to a bill that would increase the limit on federal deposit insurance available for retirement funds held at banks, thrifts and credit unions. S. 1562, introduced in July by Sen. Michael Enzi, R-Wyo., is similar to H.R. 1185, which was passed by the House in May. For a look at either bill, go to http://thomas.loc.gov." (InvestmentNews.com) Bill Aims to Tackle One Aspect of Social Security Reform Excerpt: "A bill that would guarantee Social Security benefits to anyone born before 1950 was recently introduced, even as overall reform of Social Security has stalled. Called the Social Security Guarantee Act of 2005, S. 1750 is an effort to assure that any changes made to the Social Security program would not adversely affect those in or nearing retirement. The bill was introduced by Sen. Rick Santorum, R-Pa., and was referred to the Senate Finance Committee." (InvestmentNews.com) Transition Management: Seeking to Minimize Pension Plan Trading Costs (PDF) 4 pages. Excerpt: "This issue discusses transition management, the process of using a third party to systematically move assets from one portfolio to another while attempting to minimize the costs and risks associated with making the change. As noted, transition management is a growing segment of the investment industry. Transition managers are actively marketing their services to pension plan sponsors." (The Segal Company) Where is My Determination Letter Request? Excerpt: "Many practitioners and plan sponsors may have noticed an increase in the timeframe to process an Application for Determination for an Employee Benefit Plan. (Forms 5300, 5307, 5310 and 6406) In an effort to provide better service, we will attempt to keep you updated on our progress in reducing the backlog of EP Determination Letter Applications by posting to this web page information regarding the Application Number and the Received Date we are currently processing." (U.S. Internal Revenue Service) IBM Brief in Cooper v. IBM; 7th Cir. Ct of App. -- 10/27/05 (PDF) 129 pages. (United States Court of Appeals for the Seventh Circuit via The ERISA Industry Committee) Opinion: Do Seniors Need Saving? Or the 'Paradox of Thrift' Excerpt: "John Maynard Keynes famously wrote about the 'paradox of thrift,' explaining how excessive saving can drive an economy into depression. But today we face a paradox of non-thrift: Crazy Americans saved back in 1950, when male life expectancy was 66 years and China was walled off by Mao, but they don't save now even though life expectancy is 75 and China is a fierce competitor. Why has saving collapsed just when the reasons to save have gotten stronger?" (The Washington Post; one-time registration required) U.S. Household Ownership of Mutual Funds in 2005 (PDF) 6 pages. Excerpt: "Nearly as many households own mutual funds inside employer-sponsored retirement plans as outside these plans: The number of U.S. households owning mutual funds inside employer plans totals 35.6 million, while the number owning outside these plans is 38.9 million." (Investment Company Institute) Links to Items on Executive Comp, Benefits in General Michigan Appeals Court Halts Same - Sex Partner Benefits Ruling Excerpt: "The Michigan Court of Appeals temporarily halted a ruling Monday that allowed governments and public universities to provide health insurance to the partners of g.ay employees." (AP via The New York Times; one-time registration required) Alaska Lawmaker Against Benefits for G.ays Excerpt: "A state Republican lawmaker said Monday that he plans to draft a constitutional amendment to counter last week's Alaska Supreme Court decision to grant public employee benefits to g.ay couples. State Sen. Fred Dyson said the legislation would exempt the state from having to extend the rights and benefits currently given to married couples to ''any other union, partnership or legal status.''" (AP via The New York Times; one-time registration required) Overview: Deferred Compensation and Section 409A -- Equity Compensation Excerpt: "On September 29, 2005, the Internal Revenue Service issued a comprehensive new set of proposed regulations under Code Section 409A, the tax law regulating nonqualified deferred compensation plans. This Client Alert is the second in a series discussing the issues ... clients face as a result of the proposed regulations. The first Client Alert in this series focused on compliance deadlines. We are now turning to the substance of the new rules, starting with equity compensation." (O'Melveny & Myers LLP) Text of SEC's Semiannual Regulatory Agenda, Issued October 31, 2005 (PDF) 24 pages. Excerpt: "The Division is considering recommending that the Commission propose amendments that would enhance disclosure regarding executive compensation, the independence of a registrant's board of directors, related party transactions between executive officers and directors, and related party transactions with an issuer." (Securities and Exchange Commission) Panel to Recommend Tax Overhaul Designs Excerpt: "Chosen to find a simpler way to tax the nation, a presidential panel gets set to recommend two designs that would rewrite virtually every tax law for individuals and businesses. Under the plan, most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax." (AP via The New York Times; one-time registration required) IRS Listing of Published Guidance for January -- October 2005 Guidance published by the Service relating to retirement plans: Treasury Regulations; Revenue Rulings; Revenue Procedures; Notices; and, Announcements. (U.S. Internal Revenue Service) Chart: Annual Cost of Living Adjustments for 2006 Excerpt: "The Internal Revenue Service and Social Security Administration have announced the cost of living adjustments to the dollar limitations on benefits, contributions, and other amounts under tax-qualified employee benefit plans. The increases become effective January 1, 2006. The ... chart summarizes the primary limitations for 2006 and prior years." (LeBoeuf Lamb Greene & MacRae LLP) Tax Relief Granted for Hurricane Wilma Victims Excerpt: "The Internal Revenue Service today announced relief for taxpayers affected by Hurricane Wilma. The President issued a major disaster declaration covering impacted areas of Florida, effective Oct. 23, 2005. Taxpayers affected by the hurricane are eligible for relief. Deadlines for affected taxpayers to file returns, pay taxes and perform other time-sensitive acts have been postponed to Feb. 28, 2006, the same date granted to taxpayers affected by Hurricanes Katrina and Rita." (U.S. Internal Revenue Service) Newly Posted Events Benefits and Leave Basics Nationwide on November 2, 2005 presented by Thompson Interactive, A Division of Thompson Publishing Group Current Retirement and Welfare Plan Issues Nationwide on November 17, 2005 presented by Ballard Spahr Andrews & Ingersoll, LLP How to Keep Your Executives Happy, Even Under New Rules for Nonqualified Deferred Compensation Plans Nationwide on November 15, 2005 presented by Thompson Interactive, A Division of Thompson Publishing Group Tales from the Crypt IV: Health Care Claims and Eligibility Audits Contracting and Performance Management in Ohio on November 17, 2005 presented by WEB (Worldwide Employee Benefits Network) Cleveland Chapter The New Face of the IRS - A Q&A Session with Paul Shultz in California on November 8, 2005 presented by Western Pension & Benefits Conference Los Angeles Welfare Plan Update - Plan Year-End Roundup Nationwide on November 16, 2005 presented by Morgan Lewis & Bockius LLP Welfare Plan Update - Plan Year-End Roundup Nationwide on November 21, 2005 presented by Morgan Lewis & Bockius LLP Newly Posted Press Releases Mercer HR Services Launches Mercer Retirement Solutions(TM); Sets a New Standard in the Fast-Growing Market for Total Retirement Outsourcing (Mercer Human Resource Consulting) Still River Announces Release of Retirement Income Planning Software (Still River Retirement Planning Software, Inc.) Employers Place High Value On Participant Advice In 401(k) Plans, Survey Says (Invesmart, Inc.) MetLife Introduces New Retirement Income Education Center on MyBenefits, MetLife's Employee Benefits Portal (MetLife) Issues and Actions Under Section 409A Proposed Regulations (Bell, Boyd & Lloyd LLC) Newly Posted or Renewed Job Openings Manager, Client Services for BISYS Retirement Services in PA Qualified Plan Services for Professional Staffing of St. Louis in IL, MO Pension Administrator for PENSERVCO, Inc. in FL Pension Administrator for Matthews, Gold, Kennedy & Snow, Inc. in AZ Financial Services Manager - Advised Assets Group, LLC for Advised Assets Group, LLC in CO Investment Services Representatives for ICMA-RC in DC Defined Contribution Document Specialist for J. P. Schlachter and Associates - Third Party Administration in OH Compliance Testing Consultant for Diversified Investment Advisors in MA Account Managers- Retirement Services for MassMutual Financial Group in MA 401(k) Employee Communications Specialist for 401(k) Advisors in CA 401(k) Enroller for 401(k) Advisors in CA Retirement Compliance and Administration Associate for Towers Perrin in NJ Handy Links:
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