| BenefitsLink Retirement Plans Newsletter |   |
November 18, 2005
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Summary of DC Provisions in The Pension Security and Transparency Act as of November 16, 2006 (PDF)
10 pages. Description of Private Sector Defined Contribution Provisions in S 1783, The Pension Security and Transparency Act As Passed by the Senate on November 16, 2005 (Profit Sharing/401(k) Council of America)
Statement of Administration Policy on S. 1783 -- The Pension Security and Transparency Act of 2005 (PDF)
2 pages. Excerpt: "The Administration supports Senate passage of S. 1783, but believes that the reforms in this legislation remain inadequate with respect to the level of required plan contributions and the premiums that are needed to return the Pension Benefit Guaranty Corporation (PBGC) to solvency and avert a taxpayer bailout." (Executive Office of the President)
Overview: Final Anti-Cutback Rules from the IRS (PDF)
7 pages. Excerpt: "These rules apply to qualified defined benefit and defined contribution plans that are subject to ERISA. Governmental plans and plans sponsored by churches that do not elect to be covered by ERISA ('non-electing church plans') are not subject to these rules. However, these rules do apply to employer contributions made to 403(b) plans that are covered by ERISA." (Prudential Retirement)
A Guide for Employers to Effect Meaningful Participant Behavioral Change (PDF)
6 pages. Excerpt: "The auto-everything model tackles most of the core issues that have historically impeded participants from reaching their retirement goals. It exploits inertia to the participant's benefit when it comes to saving and carrying out a strategy for increasing their savings over time." (Invesmart, Inc.)
Research Brief: Why Not Retire? The Time and Timing Costs of Market Work (PDF)
2 pages. Excerpt: "Overall, the results suggest that market work imposes significant constraints on those who choose it, constraints that increase the incentives for complete retirement rather than a gradual reduction in market hours as people become eligible for public and/or private pensions." (University of Michigan Retirement Research Center)
Court Rejects California's Attempt for $525 Million Pension Bond Sale
Excerpt: "A plan to sell $525 million in bonds to cover part of the state's pension obligation this year violates constitutional mandates that voters approve all large loans, a Sacramento County judge ruled Thursday." (AP via The Mercury News; one-time registration required)
Life is Cheap: Using Mortality Bonds to Hedge Aggregate Mortality Risk (PDF)
36 pages. Excerpt: "Using the Lee-Carter mortality model, we quantify aggregate mortality risk, the risk that annuitants might live longer than predicted by the model." (Center for Retirement Research at Boston College)
ESOPs Have One-for-All Appeal
Excerpt: "ESOPs are a popular way for owners of privately held companies to create a market for their shares, allowing the company to make tax-deductible cash contributions to the trust to buy out an owner's shares." (ST. LOUIS POST-DISPATCH)
OPM to Step Up Federal Employee Retirement Financial Education Efforts
Excerpt: "By next spring, federal employees will be able to compare their retirement savings progress with their peers as part of a new education effort underway in federal workplaces. The federal Office of Personnel Management (OPM) said in the education plan posted to its Web site that the new Retirement Readiness Index Profile should be ready by April 1, 2006." (PLANSPONSOR.com: one-time registration required)
Retirement Financial Literacy and Education Strategy for Federal Employees
Excerpt: "The Thrift Savings Plan Open Elections Act of 2004 (Public Law 108-469) requires the Office of Personnel Management (OPM) to develop and implement a retirement financial literacy and education strategy for Federal employees as part of the retirement training offered by OPM under 5 U.S.C. 8350. The implementation of the strategy must educate Federal employees on the need for retirement savings and investment, and ...." (U.S. Office of Personnel Management)
Availability of United Kingdom Defined Benefit Pension Plans Changing
Excerpt: "British companies continued to shut defined benefit pension plans to new staff in 2005 as companies acted to cap expected rising burdens of an aging population, according to a survey published on Thursday. More than half of firms polled by the National Assn. of Pension Funds no longer allow new employees to join final-salary, or defined benefit, pension schemes." (Business Insurance)
United Kingdom Pension Commission to Recommend Retirement Age Increase
Excerpt: "The forthcoming report from the UK's Pension Commission is likely to recommend increasing the country's retirement age to 67 years, according to a story in the press." (Insurance Business Review Online)
U.K. Regulator Sets Approach to E.U. Pension Rules
Excerpt: "The U.K. Pensions Regulator set out its proposed approach to implementing E.U. requirements for cross-border pension plans in a consultation document published Monday." (Business Insurance)
In the Netherlands: Practical Aspects of the Life Cycle Savings Plan
Excerpt: "On 1 January 2006, the new savings plan, 'Levensloopregeling', will become available. This new Life Cycle Plan is a means whereby employees may save, on a pre-tax basis, up to 12% of gross salary each year into a special savings account (these accounts will be offered by banks and insurance companies). The maximum amount that can be saved will be 210% of salary." (Watson Wyatt Worldwide)
The Emerging Era of Corporate Pensions in Korea (PDF)
Pages 32-37 of 40 pages. Excerpt: "A new occupational, or corporate, pension law (the Employee Retirement Security Act or 'ERSA') was passed by the Republic of Korea (South Korea) National Assembly on Dec. 29, 2004. It will allow for private sector defined benefit (DB) and defined contribution (DC) pension plans for the first time in the world's 10th largest economy ...." (International News, Society of Actuaries)
Management Alert -- IRS Establishes Cyclical Determination Letter Filing Periods (PDF)
3 pages. Excerpt: "Under recent guidance, the IRS announced the re-opening of the determination letter program that will use fixed filing cycles of generally 5 or 6 years, for individual and pre-approved tax-qualified plans such as 401(k) and retirement plans. Employers need to determine their cycle, as early filing will not be efficient." (Seyfarth Shaw LLP)
Sorting Out Social Security Replacement Rates (PDF)
6 pages. Excerpt: "For anyone interested in retirement income policy, the most basic question is how much are people receiving today from Social Security, the backbone of the nation's retirement income system." (Center for Retirement Research at Boston College)
Oregon Congressman's Key Provisions Included in Pension Bill Approved by Senate
Excerpt: "Under the first provision, employees of Portland General Electric (PGE) would be allowed to increase their Individual Retirement Account (IRA) contributions, or 'catch -up' on their retirement savings, when they lose retirement savings due to their company's misconduct." (MedfordNews.com)
Senator Akaka Wins More Money for Retired Pilots with Bill Amendment
Excerpt: "The U.S. Senate has approved changes to pension payments that will increase payments to thousands of retired pilots. Sen. Daniel Akaka won passage, 58-41, of his amendment to require the Pension Benefit Guaranty Corp. to take into account, when calculating benefits, that pilots are required to retire at the age of 60." (Pacific Business News via bizjournals.com; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Overview: Federal Regulation of Corporate Jet Perk for Executive Use Takes Off (PDF)
12 pages. (Benefits Law Journal via Kirkpatrick & Lockhart Nicholson Graham LLP)
Company Boards Tally Up Executive Pay
Excerpt: "Boards of directors are adopting a new tool, known as tally sheets, in an effort to tackle the increasingly confusing issue of how much they are paying their top executives. Executive pay has grown multi-layered over the years, going beyond base pay and bonuses to include various forms of stock grants, performance and severance payments." (AP via The New York Times; one-time registration required)
Survey Finds More Sponsors Minding Governance Ps and Qs
Excerpt: "A new survey has found that 85% of plan sponsors now have a written investment policy statement (IPS) indicating a continuing focus on improving the process for plan oversight." (PLANSPONSOR.com; one-time registration required)
Hewitt Federal Legislation Quick Guide Updated as of November 15, 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
401(k) Regulatory Update with speaker Sal Tripodi
in Connecticut on December 8, 2005
presented by National Institute of Pension Administrators-CT Chapter
Highlights of Deferred Compensation Regulations Under 409A
Nationwide on November 17, 2005
presented by Retirement Capital Group
Older and Out of Work: Jobs and Social Insurance for a Changing Economy
in District of Columbia on January 19, 2006
presented by National Academy of Social Insurance
Newly Posted Press Releases
ERIC Questions Senate Action on Pension Bill
(ERIC (ERISA Industry Committee))
Innoviant Introduces "Wise Choice Rx" to Propel Members into Consumer Role
(Fiserv, Inc.)
Former Secretary Tommy Thompson Makes Business Case for Medicare's New Drug Benefit at National Business Coalition on Health Conference
(National Business Coalition on Health)
Newly Posted or Renewed Job Openings
ERISA Consultant
for BISYS Retirement Services
in MN
Senior Plan Administrator
for WESPAC
in CA
Pension Professionals
for Associated Pension Consultants
in CA
Financial Planner/Investment Specialist (Part-Time)
for Diversified Investment Advisors
in CT
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