November 2, 2005 Today's sponsor: DATAIR Employee Benefit Systems, Inc. (Click on company name or banner to learn more.)
Retirement Plan Providers Are Tempting Advisors with Numerous Products and Services Excerpt: "As investment advisors increasingly play a larger role in the distribution of retirement plans, retirement plan providers and the companies that partner with advisors to sell and service retirement plans are courting advisors like never before with new products and services." (Investment Advisors) PSCA Comments on Proposed Rule on Form 5500 E-Filing Regulation (PDF) Excerpt: "[The council disagrees] with proposing a mandate to file the Form 5500 electronically until the new filing system is fully described." (Profit Sharing/401(k) Council of America) Disaster Relief Relating to PBGC Deadlines in Response to Hurricane Wilma Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of damages from Hurricane Wilma, starting October 23, 2005, and continuing, in Florida." (Pension Benefit Guaranty Corporation) Opinion: There's More to Improving Participation in Retirement Plans than 'Auto-Everything' Approach Excerpt: "Advisors' efforts, coupled with a more paternalistic attitude among plan sponsors, have changed participant behavior for the better, but much work remains to complete the task. Advisors must not only encourage plan sponsors to adopt the 'auto-everything' model, we must also give participants the support they need to get actively involved in their plans and avoid the inertia allowed by automatic defaults." (Investment Advisors) A New Era in Retirement Planning: The Roth 401(k) Works Well for Business-Owning Clients Excerpt: "While the Roth 401(k) will hold appeal for millions of investors, perhaps no group will be more interested than high-income earners and proprietors of owner-only businesses. In addition to tax-free retirement income, it's a highly effective estate planning tool, potentially helping to stretch assets and minimize taxes for decades." (Investment Advisor) Lifetime Patterns of Voluntary Employee Pension Contributions (PDF) 2 pages. Excerpt: "Workers offered defined contribution plans must decide whether to participate, and how much to set aside from each paycheck for investment. Future retirement benefits will depend on participants' and employers' pattern of contributions and the returns earned by the contributions. Families must generally set aside funds over many years to accumulate significant retirement savings in their defined contribution plans." (Urban Institute) Working Longer to Enhance Retirement Security (PDF) 2 pages. Excerpt: "Our longer life span represents one of history's great achievements, but threatens to bankrupt Social Security. Because the typical retirement age has fallen over the last century while life spans have grown rapidly, retirees now collect benefits longer than ever before. If left unchanged, the system will soon pay out more than it collects, forcing policymakers to raise taxes on workers or cut benefits to retirees." (Urban Institute) More than 2,000 UK Pension Schemes May Face Funding Difficulty under Consultation Released Excerpt: "The Regulator's own figures show that more than a third of companies with final salary schemes-- perhaps more than 2,000 in total-- would have problems in meeting a funding target of covering their accounting liability within 10 years. These are all likely to require individual attention from the Regulator. [The Consultation document is at http://www.thepensionsregulator.gov.uk/pdf/schemeFundingConsultation.pdf.]" (Watson Wyatt Worldwide) How Will Boomers Fare at Retirement? (PDF) 2 pages. Excerpt: "As boomers approach retirement, the news on how they will fare is mixed. In absolute terms -- measured by higher wealth and income, and lower poverty -- boomers will be better off than current retirees. But in relative terms, measured as the ratio of postretirement income to preretirement income or to workers' incomes, boomers will be no better off or in some cases worse off than current retirees." (Urban Institute) Overview: Defined Benefit Plans Must Issue Minimum Required Payments (PDF) 4 pages. Excerpt: "All qualified plans must begin making payments, called Minimum Required Distributions (MRDs), by a participant's required beginning date (RBD). Most defined benefit plans begin making pension payments at a participant's RBD, rather than making just an MRD payment. However, MRD rules do apply and may be significant when an employee earns additional benefits after reaching his RBD." (Prudential Retirement) Spain: Equality in Pensions for Same Sex Couples Now a Reality Excerpt: "On 3 July 2005, the controversial amendment to the Spanish civil code ... which made marriages between homose.xual couple legal and thereby granted such couples the same rights in relation to pension as a heterose.xual couple came into force." (Watson Wyatt Worldwide) Towers Perrin U.S. Legislative Tracking Charts - Retirement (Updated October 31, 2005) (PDF) 18 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin) Links to Items on Executive Comp, Benefits in General Tax Reform Panel Report Shows Higher Tax Rates for Most Taxpayers and Breaks for Some Excerpt: "The commission issued two proposals. The first would simplify the income tax; the second would go further toward encouraging savings and investment. Tax experts said that both proposals faced a lot of resistance but that only the first proposal had any chance of enactment." (The New York Times; one-time registration required) Presidential Commission Recommends Overhaul of Federal Income Tax System Excerpt: "A presidential commission recommended changes in the federal income tax system that would lower rates, reduce paperwork and eliminate or scale back most tax breaks, including popular deductions for home mortgage interest and employer-provided health insurance." (The Washington Post; one-time registration required) Report of the President's Advisory Panel on Federal Tax Reform, November 2005 The 359 page final report is presented in four sections of PDF content. (President's Advisory Panel on Federal Tax Reform) Branding Makes Benefits Communication More Personal for Employees Excerpt: "Elizabeth Borton, president of Write on Target, offers ... tips to those who want to apply marketing techniques to benefits communications: ...." (Employee Benefit News) Changing Demographics of the Retired Population (PDF) 2 pages. Excerpt: "The changing demographics of the retiring population have consequences for Social Security financing and retirement policies. The shifting marital status and racial composition of the population will increase the numbers of retirees in groups (divorced women and minorities) who have been at higher risk of poverty." (Urban Institute) Overview: Proposed Regulations on Deferred Compensation from Treasury Excerpt: "The U.S. Department of the Treasury and the IRS recently issued proposed regulations under section 409A, which governs plans and arrangements that provide non-qualified deferred compensation (NQDC). In January 2005, the Treasury and IRS issued Notice 2005-1, which provided some guidance on implementing section 409A .... These proposed regulations, ..., make some changes to Notice 2005-1 and fill in some gaps." (Watson Wyatt Worldwide) Overview: IRS Proposed Regulations for Nonqualified Deferred Compensation Plans (PDF) 2 pages. Excerpt: "Some of the transition period relief that was available for 2005 is not available for 2006. As a result: Participants must make deferral elections on regular compensation to be received in 2006 by December 31, 2005. Participants who want to lower or cancel deferral elections or terminate their plan participation for 2006 must do so by December 31, 2005. Plan sponsors that want to terminate plans for reasons not allowed under the proposed rules must do so by the end of 2005." (Prudential Retirement) Overview: Guidance on Deferred Compensation Rules under Code Section 409A (PDF) 5 pages. Excerpt: "The Treasury Department and the IRS recently issued long-awaited proposed regulations regarding the application of Section 409A of the Internal Revenue Code (the 'Code') to nonqualified deferred compensation plans or arrangements. This Client Alert focuses on the items that must be completed in 2005 to comply with Section 409A and addresses the transitional rules and revised deadlines provided for under the proposed regulations." (Powell Goldstein LLP) Towers Perrin U.S. Legislative Tracking Charts - Human Resources (Updated October 31, 2005) (PDF) 8 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin) Smelling a Rat: How to Catch Shady Moves in Employee Benefit Plans Excerpt: "To get the low-down on detecting malfeasance in benefit plans, EBN associate editor Leah Carlson conferred with U.S. Assistant Secretary of Labor Ann Combs, who heads the Employee Benefits Security Administration, which enforces employment-related laws like ERISA." (Employee Benefit News) The Benefits of a Formal Repatriation Program for the Organization and the Expatriate Excerpt: "While approaching this process six months in advance is ideal, it is more often at three months that the wheels are set in motion; any time frame less than three months can lead to a hectic, stressful transition. For these reasons and more, including the fact that many organizations do not have the staff to support these concurrent activities, a relocation provider can be a cost-effective resource for ensuring that each step happens as needed." (Employee Benefit News) Overview: IRS Announces Limited-Time Settlement Initiative for Certain 'Abusive' Transactions (PDF) 1 page. Excerpt: "Eligible participants in the initiative will have the opportunity to settle with the IRS at a reduced penalty rate. In order to participate in the settlement initiative, taxpayers must file an Election Form with the IRS by January 23, 2006." (Morgan, Lewis & Bockius LLP) Chart: 2006 Benefit Limits Excerpt: "The IRS has announced the annual cost-of-living and statutory adjustments of various dollar limits for employee benefit plans." (Watson Wyatt Worldwide) Newly Posted Events Come Play Jeopardy . . . Benefits Jeopardy, that is! in Georgia on November 17, 2005 presented by Worldwide Employee Benefits Network (WEB) - Atlanta Chapter Defined Contribution Plan Expenses Nationwide on November 17, 2005 presented by ERISA Fiduciary Guild & IBF Conferences*International Business Forum The Latest Guidance on HSAs and HRAs Teleweb Nationwide on November 3, 2005 presented by International Foundation of Employee Benefit Plans Newly Posted Press Releases Tax Reform Proposals Threaten Workers' Retirement Security-- "Don't Take Away America's 401(k)" (ASPPA (American Society of Pension Professionals & Actuaries)) Council To Measure Bush Tax Reform Panel Proposals By Effect On Health Coverage And Savings Rates (American Benefits Council) 401kLoans, LLC Hires Industry Veteran As New CEO, Adds CIO (Metrics Partners) PensionOnline Announces 401k Rewards (Metrics Partners) SHPS Breaks Ground with New, No-Fee Debit Card for Health Spending Accounts (SHPS) Newly Posted or Renewed Job Openings Compliance Testing Manager for Diversified Investment Advisors in NY Retirement Plan Specialist Wanted! for SS&G Financial Services in OH Consulting Actuary (Pension) for United Actuarial Services, Inc. in IN Consulting Actuary (Health Care) for United Actuarial Services, Inc. in IN Implementation/Data Management for Precept in CA Plan Specialist for Transamerica in CA Defined Contribution Administrator - Phoenix for RSM McGladrey Inc. in AZ Benefits Assistant for Raley's in CA Plan Technical Support Representative for Great-West in CO Junior Pension Administrator for Huron Pension Services, LLC in CA Employee Benefits Tax Senior or Manager for Deloitte in CA Enrolled Actuary Manager for RSM McGladrey Inc. in AZ Handy Links:
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