| BenefitsLink Retirement Plans Newsletter |   |
November 14, 2005
Today's sponsor: CCA Strategies
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| Introducing RewardSmart from CCA! |
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Roth 401(k) Update
Excerpt: "As of November 10, 2005, the indication from the IRS is that the Final Roth 401(k) Regulations may not be issued until either very, very late in 2005 or early 2006. The exact date is not known at the time of the drafting of this E-Alert." (McKay Hochman Co., Inc.)
Overview: Legislation Includes Automatic Enrollment Incentives for 401(k) Plans (PDF)
2 pages. Excerpt: "The comprehensive pension reform measure recently passed by the House Ways and Means Committee -- H.R. 2830 -- includes a safe harbor for employers that adopt automatic enrollment." (HR Policy Association)
How to Make Employees Take Their 401(k) Medicine
Excerpt: "The failure of many employees even to participate in their 401(k)'s - or to save enough in them for retirement when they do sign up - now has the attention of corporate boards. 'A decade ago there was a laissez-faire attitude on the part of the corporate sponsor,' said Russell K. Ivinjack, a principal at Ennis Knupp, .... 'Now we try to avoid the word 'paternalism,' but that's what is going on. Corporations are taking action to make sure the participant does what is needed ....'" (The New York Times; one-time registration required)
'We Regret to Inform You that You No Longer Have a Pension'
Excerpt: "If you think the two Time reports were scary ..., you must read the October 30, 2005 cover story in the New York Times Magazine, entitled 'We Regret to Inform You That You No Longer Have a Pension.' Subtitled 'America's next financial debacle,' the article recounts how corporations were happy to offer rich retirement plans to their workers as long as accounting tricks and federal insurance made it easy to delay the day of reckoning. But now the game is up." (Cypen & Cypen)
Pensions May Go on the Balance Sheet: FASB Will Decide
Excerpt: "In a unanimous vote, the accounting standards board decided last week to look into an overhaul of the retiree-benefit accounting system. Employers would be facing a bumpy road ahead if they're no longer permitted to smooth results over a number of years when they account for the pensions and retiree health benefits they provide." (CFO.com)
Companies Playing Charade on Pension Accounting
Excerpt: "Pension accounting remains one of the great financial charades that U.S. companies play on investors and employees. After a recent wave of pension defaults by steel companies and airlines, and with the possibility of more busted pensions in the auto industry, the charade may be coming to an end." (Houston Chronicle)
Thorny Issue for Board: How to Value Pension Plans
Excerpt: "The board that writes the professional accounting rules for American businesses voted unanimously ... to start a far-reaching revision of the rules for reporting pensions and other retirement plans, .... To keep the project from bogging down from the start, the Financial Accounting Standards Board agreed to focus on a single issue at first: how to express the true economic value of a company's retirement plans on its balance sheet." (The New York Times; one-time registration required)
FASB Pushes On with Pension Accounting Standards Rewrite
Excerpt: "The Financial Accounting Standards Board (FASB) has accepted a staff recommendation to kick off a wide-ranging exam of pension fund and post retirement benefits accounting including the suggestion that companies should be forced to better reflect those benefits in their net worth statements." (PLANSPONSOR.com: one-time registration required)
U.K. Rules Push M&A Buyers to Halve Pension Gaps
Excerpt: "A reform of Britain's creaking pension schemes has led to radical changes in some merger and acquisitions deals as bidders have come under pressure to halve the pension deficits at their target companies." (Reuters Limited via Business Insurance)
Aloha Airlines and Unions Butt Heads over Pension Plan Terminations
Excerpt: "Federal Bankrup.tcy Court Judge Robert Faris pleaded with Aloha Airlines, Inc. and unions for its pilots and flight attendants to reach an agreement on contract terminations. Creditors, including the Pension Benefit Guaranty Corporation (PBGC), have filed objections to the disclosure statement submitted by the airline. The air carrier is reorganizing in the US Bankrup.tcy Court for the District of Hawaii in Honolulu ...." (PLANSPONSOR.com: one-time registration required)
Vendors Improve Retirement Plan Participant Statements to Get Rollover Biz
Excerpt: "Firms are enhancing their participant statements in an attempt to bolster relationships with participants that may lead to rollover or retail business." (Defined Contribution & Savings Plan Alert)
Comments on Proposed Regulations Relating to Protected Benefits under Code Section 411(d)(6)
Excerpt: "The Proposed Regulations are welcome guidance in response to the US Supreme Court's decision in Central Laborers' Pension Fund v. Heinz, 541 US 739 (June 7, 2004). However, ASPPA requests that the Proposed Regulations be modified with respect to the issues described [in this comment letter]." (American Society of Pension Professionals & Actuaries)
CRS Study Chronicles Post Retirement Income Trends
Excerpt: "A new Congressional Research Service (CRS) study of post retirement income trends reported that 35% of Americans age 65 and older received income from a private or public pension last year." (PLANSPONSOR.com: one-time registration required)
Halliburton Repays $8.6 Million to Pension Holders
Excerpt: "Oil field services company Halliburton Co. repaid $8.6 million to pension holders in 2003 and 2004 for failing to properly fund the plans and for a bookkeeping error, according to a letter from the Labor Department. The Labor Department closed its investigation into the pension violations after the payments were made, according to a copy of the Oct. 6 letter obtained by Reuters [November 11]." (The San Diego Union-Tribune)
U.S. Department of Labor Inquiry Found Halliburton Mishandled Some Pension Funds
Excerpt: "A federal investigation of Halliburton's pension plans has uncovered three violations of the law, including charging some costs of Halliburton's executive pension and bonus plans to the workers' pension fund, correspondence from the Labor Department shows." (The New York Times; one-time registration required)
Morgan Lewis on ESOPs, November 2005 Edition (PDF)
6 pages. This edition covers: Best Plan Practices for Retirement Plans Holding Company Stock; and, Mckesson Revisited Yet Again-- District Court Applies a Bright-Line Test to Exempt ESOP Fiduciaries from Liability for Failure to Diversify. (Morgan Lewis)
The Fiduciary Duty to Administer a Successful Plan (PDF)
19 pages. Excerpt: "In this White Paper, [the authors] evaluate the BluePrint Design model in terms of the assistance it provides to plan fiduciaries in performing their duties under the Employee Retirement Income Security Act (ERISA)." (Ameriprise Retirement Services)
ERIC Summary of Pension Provisions in President's Tax Panel Recommendations
Excerpt: "ERIC has prepared a summary of the pension related provisions contained in the recommendations issued by the President's Advisory Panel on Federal Tax Reform. The Reform Panel's Report was issued on November 1, 2005. The summary explains the treatment of employer sponsored retirement plans under the proposed Save At Work, Save for Retirement, and Save for Family accounts, and discusses the expanded Saver's Credit." (The ERISA Industry Committee)
IRS Guidance Coming 'Soon' on a Number of Plan Amendment Issues
Excerpt: "Marty Pippins, Manager, Employee Plans Technical Guidance and Quality Assurance, Internal Revenue Service, gave a very helpful presentation at the recent ASPPA Annual Conference in D.C. .... While he refrained from answering some of the questions posed at the meeting, he did provide the audience with some 'nuggets' of information ... useful to ... assist plan sponsors with plan amendments and plan compliance issues." (Attorney B. Janell Grenier via BenefitsBlog.com)
The Best Pension for You May Be a Cash Balance Plan
Excerpt: "One of the hottest -- and hardest to understand -- policy battles going on in Washington right now concerns the kinds of pensions that employers should be allowed to offer. The fight features arcane formulas and obscure abbreviations that quickly cause the eyes of most normal people to glaze over." (The Washington Post; one-time registration required)
Retirement, Saving, Benefit Claiming and Solvency under a Partial System of Voluntary Personal Accts (PDF)
30 pages. Excerpt: "This paper is based on a structural model of retirement and saving, estimated with data for a sample of married men in the Health and Retirement Study. The model simulates how various features of a system of personal Social Security accounts jointly affects retirement, saving, the choice of whether benefits are taken as an annuity or lump sum, taxes paid and the course of benefits with age." (Michigan Retirement Research Center, University of Michigan)
Working Paper: Does Social Security Privatization Produce Efficiency Gains? (PDF)
42 pages. Excerpt: "While privatizing Social Security can improve labor supply incentives, it can also reduce risk sharing when households face uninsurable risks." (Michigan Retirement Research Center, University of Michigan)
Links to Items on Executive Comp, Benefits in General
FAS 123(R)-3: Transition Election Related to Accting for the Tax Effects of Share-Based Pymt Awards (PDF)
7 pages. Excerpt: "This [FASB Staff Position] provides a practical transition election related to accounting for the tax effects of share-based payment awards to employees." (Financial Accounting Standards Board)
More Companies Now Courting Older Workers
Excerpt: "Companies' growing awareness of the aging workforce recently prompted IBM Corp. to launch a consulting service to help businesses cope with the expected loss of knowledge and talent as boomers retire." (KNIGHT RIDDER NEWSPAPERS via The Pueblo Chieftain)
Rep. Frank Proposes Broad Executive Compensation Disclosure Mandates
Excerpt: "A prominent US House Democrat has waded into an always controversial topic in corporate governance circles with a new bill mandating additional executive compensation disclosure. Representative Barney Frank (D-Massachusetts) ... proposed the The Protection Against Executive Compensation Abuse Act that would give shareholders more information about management pay packages and empower shareholders to take action against management abuse and self-dealing, ...." (PLANSPONSOR.com: one-time registration required)
Hewitt Federal Legislation Quick Guide Updated as of November 8, 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)
Overview of Form 5500 Issued for the 2005 Plan Year
Excerpt: "Three significant modifications have been made to Form 5500 (Annual Return/Report of Employee Benefit Plan) for the 2005 plan year: ...." (McKay Hochman Co., Inc.)
Overview: DOL Proposal of Mandatory Electronic Filing of Form 5500
Excerpt: "As part of its continuing effort to update and streamline the annual reporting process, the U.S. Department of Labor's Employee Benefits Security Administration (EBSA) has published a proposed regulation that would require plans to file the Form 5500 Series report electronically beginning with plan filings due in 2008, i.e. for plan years beginning on or after January 1, 2007." (McKay Hochman Co., Inc.)
GAO Reviewing DOL Unit on ERISA
Excerpt: "The Government Accountability Office is taking a look at ERISA enforcement procedures at the Employee Benefits Security Administration, a unit of the Department of Labor." (Defined Contribution & Savings Plan Alert)
Effective Marginal Tax Rates on Labor Income (PDF)
40 pages. Excerpt: "This paper examines the effective marginal tax rates that people face on income from labor -- federal and state individual income taxes as well as payroll taxes for Social Security and Medicare -- under current law." (U.S. Congressional Budget Office)
Newly Posted Events
401(k) Focus
in Massachusetts on June 27, 2006
presented by SunGard Corbel
Advanced Pension Conference - Chicago
in Illinois on September 6, 2006
presented by SunGard Corbel
Advanced Pension Conference - Orlando
in Florida on February 22, 2006
presented by SunGard Corbel
Advanced Pension Conference - Orlando
in Florida on February 12, 2007
presented by SunGard Corbel
National Tax Sheltered Accounts Association's 2006 National Conference
in California on February 3, 2006
presented by National Tax Sheltered Accounts Association
New America Foundation and Leading State Decision Makers Begin Debate on the Major Health Care Proposals For 2006
in California on November 15, 2005
presented by New America Foundation
Newly Posted Press Releases
PSCA Lauds Chairman Thomas For Action On EGTRRA Permanency
(Profit Sharing/401(k) Council of America (PSCA))
Gilsbar, Inc. Unveils myGilsbar.com - Health, Wellness & Benefit Portal
(Gilsbar, Inc.)
Employers' Amicus Brief In Cooper v. IBM Accepted by Appellate Court
(ERIC (ERISA Industry Committee))
Trustmark Mutual Holding Co., Charles Schwab and Alliance Benefit Group Unite To Bring Consumers More HSA Investment Options
(Alliance Benefit Group of Illinois)
CitiStreet Names West Coast Sales Directors for Broker/Dealer Channels
(CitiStreet)
Ftwilliam.com Introduces the ftwLink Feature
(ftwilliam.com)
Transamerica Affinity Services Enhances Insurance Program to Include a Part D Option and Early Retiree Benefits
(Transamerica Affinity Services, Inc.)
Newly Posted or Renewed Job Openings
Senior Account Manager
for Kelley & Swain Inc.
in CA
Defined Benefit Client Account Manager
for New York Life Investment Management LLC
in MA
Senior DC Plan Administrator - Signing Bonus!!
for Berlin Ramos & Company
in DC, MD, VA
Director of Insurance Services
for A business alliance for a group of hospitals with nearly 100,000 employees.
in KS
Employee Benefits Plan Specialist
for Union Bank of California
in CA
Plan Administrator for Retirement Plan & ERISA Specialists
for Small Chicago TPA & law firm
in IL
Manager, Retirement Services
for The Newport Group
in NC
Defined Contribution Administrator
for Milliman, Inc.
in CO
ERISA Attorney / Compliance Manager
for ABD Insurance and Financial Services
in CA
Associate Consultant
for SHPS, Inc.
in GA
Director of Sales
for InvestLink Technologies, LLC
in NY
Marketing Executive
for InvestLink Technologies, LLC
in NY
401K/Pension Administrator
for Pension Specialists, Inc.
in CA
Pension Administrator
for Pension Investors Corp. of Orlando
in FL
Benefits Administrator
for Ralcorp Holdings, Inc
in MO
401(k) DC/DB Contract Administrator
for Secured Retirement Incorporated
in CA
Individual (k) Product/Relationship Manager
for BISYS Retirement Services
in MN
DC Compliance & Relationship Specialist
for Matthews, Gold, Kennedy & Snow
in AZ
Pension Administrator
for Jordan & Andrews
in CA
Senior Retirement Program Specialist
for Providence Health System
in WA
Defined Contribution Plan Administrator
for Southern California Third Party Administrator
in CA
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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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