| BenefitsLink Retirement Plans Newsletter |   |
November 21, 2005
Today's sponsor: www.ftwilliam.com
(Click on company name or banner to learn more.)
| Register for our free on-line demo! |
| www.ftwilliam.com offers the employee benefits professional the highest quality plan documents and forms at highly competitive prices. Plan documents on a per document basis are only $50/adoption agreement, or $100/volume submitter document (including cross testing). An annual subscription to all documents is only $1,500. The Form 5500 package and the IRS/PBGC form package are only $250 each. Prices include access for five concurrent users. |
| (Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor) |
May a Canadian Citizen Working for a U.S. Company Participate in the Company's 401(k)?
Excerpt: "Qualified plans may exclude nonresident aliens (NRAs) who have no US source income from the coverage test. This is often referred to as one of the statutory exclusions which all qualified retirement plans (including standardized prototype plans) may utilize. The term 'statutory exclusion' refers to the fact that NRAs are specifically allowed to be excluded from plan participation by a statute of law, specifically, Internal Revenue Code Section 410(b)(3)(C)." (McKay Hochman Co., Inc.)
Roth 401(k) Update -- What is the Situation?
Excerpt: "With 2006 just weeks away, we still await Roth 401(k) guidance from the IRS. At last week's ASPPA Annual Conference, we were informed that the guidance will be in three pieces; final regulations updating the proposed regulations on operational issues, proposed regulations on previously unaddressed tax issues and a 'sample amendment' to implement the first two guidance pieces." (McKay Hochman Co., Inc.)
Senate-Passed Pension Bill Encourages Automatic Enrollment for 401(k) Plans (PDF)
2 pages. Excerpt: "In an effort to ensure that their employees are adequately investing funds for their retirement, more and more companies are interested in automatic enrollment in their 401(k) plans, in which employees are presumed to participate in the plan unless they opt out of participating." (HR Policy Association)
Using Severance Compensation for a 403(b) Plan
Excerpt: "The Treasury Department has released long-awaited guidance on the treatment of post-severance compensation for 403(b) plans (as well as for qualified retirement plans and 457 plans). Specifically, the regulations permit a limited amount of post-severance compensation to be included for the purpose of making elective deferrals and determining employer contributions." (McKay Hochman Co., Inc.)
FASB's Herz Opposes Pension Smoothing
Excerpt: "The chairman's position is important because FASB has voted to consider an overhaul of postretirement benefit accounting." (CFO.com)
Chart: Leading Defined Benefit and Defined Contribution Plan Reform Issues (PDF)
4 pages. The chart compares the issues to current law, the administration proposal, H.R. 2830 and S. 1783. (THE BENEFITS GROUP OF DAVIS & HARMAN LLP via American Benefits Council)
Opinion by Elaine L. Chao, John W. Snow, and Carlos M. Gutierrez on Rescuing Your Retirement
Excerpt: "Congress must act now to secure the pension promises made to America's workers. The administration will oppose legislation that weakens rather than strengthens the already inadequate pension rules and puts more workers at risk over the long run. Special interests must not triumph over workers' interests, or the future of defined benefit pension plans is very much in doubt." (The New York Times; one-time registration required)
Proposed Rule Jeopardizes ESOPs at Foreign-Owned Firms
Excerpt: "One of the reasons companies offer employee stock ownership plans is to take advantage of the benefit's tax breaks. Now a proposed Treasury Department rule prohibiting foreign-owned firms' U.S. subsidiaries from claiming tax deductions for dividends paid to American employees who purchase shares under an ESOP could lead multinational companies to end their ESOPs for U.S. subsidiaries, ...." (Employee Benefit News)
Chile and Peru Governments Sign Social Security Agreement
Excerpt: "Chileans who work in Peru and Peruvians who work in Chile will be able to receive pension and health benefits in either country under an agreement signed by both governments." (Watson Wyatt Worldwide)
Workers' Retirement Account Contribution Rates Frozen in Argentina
Excerpt: "Fearing an increase in poverty, Argentina's government has opted to keep employees' contribution rates to individual retirement accounts at the current level of 7 percent for another year, rejecting a scheduled increase of two percentage points in both July and October 2005." (Watson Wyatt Worldwide)
Report Suggests Raising the United Kingdom Retirement Age to 67
Excerpt: "An influential UK think tank now asserts that the country's retirement age should be bumped up to 67 by 2030 to solve the current pension crisis. But the report by Institute for Public Policy Research (IPPR) predicted that the move would be unpopular because younger people expect to die sooner than government life expectancy figures show they will, according to a report in The Guardian." (PLANSPONSOR.com; one-time registration required)
Charts: Remedial Amendment Cycles
Excerpt: "Keep in mind that we are still living under the sunset provisions of EGTRRA which bring the EGTRRA changes to an end 10 years after the passage of EGTRRA in 2001-- unless Congress enacts a law to make the changes permanent. Otherwise, the EGTRRA document will contain many provisions that are no longer supported by law." (McKay Hochman Co., Inc.)
Michigan Bills to Crack Down on Companies that Endanger Pensions
Excerpt: "State House Democrats back legislation to ban businesses that violate federal pension regulations from getting tax incentives." (wwmt.com)
An Online Calculator that Figures the Real Costs of Mutual Funds
Excerpt: "If you own a mutual fund or if you're thinking about investing in one, perhaps for the first time, the one thing you absolutely need to do is pay attention to fees and expenses. .... NASD's expense analyzer, which can be found at http://www.nasd.com/ , replaces a previous version that required investors to manually enter quite a bit of information, such as sales charges and operating expenses." (The Washington Post; one-time registration required)
Links to Items on Executive Comp, Benefits in General
Senate Rejects Stock Option Provision Opposed by HR Policy Association
Excerpt: "[Last] week, the Senate passed a tax reconciliation bill that excluded a provision opposed by HR Policy that would have raised revenue by prohibiting the deferral of stock option gains and restricted stock." (HR Policy Association)
Newly Posted Events
NIPA Gears Up for 2006 Business Management Conference
in Arizona on January 14, 2006
presented by National Institute of Pension Administrators
Nonqualified Deferred Compensation Arrangements Under IRC 409A - After the Regs
in Ohio on November 29, 2005
presented by ASPPA Benefits Council of Greater Cincinnati
Newly Posted Press Releases
Center for Retirement Research Announces New Grant Programs
(Center for Retirement Research at Boston College)
New book on 412(i) Defined Benefit Plans available immediately!
(412iCompany, The)
Newly Posted or Renewed Job Openings
401k Account Executive
for BISYS Retirement Services
in PA
Retirement Plan Coordinator
for American Funds
in VA
Testing & Reporting Analyst
for Fidelity Investments
in MA
Account Executive Director
for The Principal Financial Group
in OR
ERISA/Employee Benefits Associate Position
for Parsinen Kaplan Rosberg & Gotlieb P.A.
in MN
Senior Plan Administrator
for American National Insurance Company
in TX
Pension Consultant
for Westchester Pension Consulting Firm
in NY
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.
Published by:
BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
Editor and Publisher: David Rhett Baker, J.D.
Housekeeping: