| BenefitsLink Retirement Plans Newsletter |   |
December 15, 2005
Today's sponsor: DATAIR Employee Benefit Systems, Inc.
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House to Vote on Bill for Pension System Reform
Excerpt: "The House will try to infuse new life into the nation's financially fragile, employer-based pension system with legislation requiring companies to meet their obligations to retirees while shielding the federal agency that takes over abandoned pension plans." (AP via The Washington Post; one-time registration required)
Opinion: House Pension Bill Would Make Some 2001 Tax Cuts Permanent for the First Time
Excerpt: "The bill's tax provisions also contain a serious inequity. They would fully protect the generous pension tax cuts for higher-income taxpayers enacted in 2001 from the effects of inflation over time, while allowing inflation to erode severely the one significant retirement tax benefit enacted in 2001 for lower- and moderate-income taxpayers. By 2015, a significant portion of this retirement tax benefit for lower- and moderate-income families -- known as the saver's credit -- would ...." (Center on Budget and Policy Priorities)
Help! My Company Keeps Changing My 401k
Excerpt: "To help employees do better, companies large and small are recasting their plans. The changes include automatic enrollment, a reduction in the number of funds offered, the use of 'lifestyle' funds tailored to employees, and advisory services. But even though they're designed to simplify your life, they can be daunting to digest." (Fortune)
Putting 401(k) Participants First -- Fee Dollars and Professionals Should Equal Financial Education
Excerpt: "Millions of participants continue to get statement stuffers/newsletters and educational websites - two of the least expensive forms of mass communication available. How many employees get a free paid lunch seminar with a live and knowledgeable speaker that helps them understand their retirement plan? The Federal Reserve does this for their employees ... because they feel that purely passive approaches to education will not work." (401khelpcenter.com)
Remarks: Bradley Belt to the American Institute of Certified Public Accountants, December 12, 2005
Excerpt: "I want to begin my remarks today with a discussion of the Pension Benefit Guaranty Corporation -- what we do, why you've been reading about us in the papers, and what we're doing to address the challenges facing the pension insurance program. I also will touch upon the role that financial accounting standards for pensions have played in leading to these challenges." (Pension Benefit Guaranty Corporation)
Future of Pension Reform Still Uncertain (PDF)
2 pages. Excerpt: "While a lot of progress has been made, significant differences still remain between reform bills being considered in the Senate and the House. If a compromise is to be achieved within Congress, it will likely not occur until 2006. If and when this happens, the President would then have to sign the compromise bill for it to become law. However, the President has voiced strong objections to each of the bills being considered by Congress and, ...." (Towers Perrin)
November 2005 Funded Ratio of 83.8% Remains Slightly Below the 85.1% Level at the Start of the Year (PDF)
4 pages. Excerpt: "The monthly Capital Market Update is designed to support our clients in the ongoing financial management of their U.S. retirement plans. Towers Perrin has been tracking the asset/liability performance of a hypothetical benchmark pension plan since 1990. This report reviews how capital market performance affected pension plan financing, with a focus on linked asset/liability results." (Towers Perrin)
Montana Could Face Lawsuit over Public Pension Systems
Excerpt: "Montana lawmakers were told in a Legislative Audit Committee hearing that they could face a lawsuit if they do not fix the public pension systems' financial problems soon." (PLANSPONSOR.com; one-time registration required)
Overview: 2005 Disaster Area Extensions for IRA and CESA Owners
Excerpt: "[Treasury Regulation Section 301.7508A-1] provides a list of tax-related deadlines eligible for postponement that the Internal Revenue Service (IRS) expands in Revenue Procedure 2005-27. This article discusses the specific deadline extensions that could affect owners, beneficiaries, and custodians/trustees of IRAs and Coverdell Education Savings Accounts (CESAs), and participants in qualified employer plans." (Bankers Systems, Inc.)
Employee Not Eligible for Early Retirement Benefits After Resignation
Excerpt: "The US District Court for the Northern District of Mississippi has ruled that a voluntary early retirement plan sponsor was correct in denying benefits to an employee who terminated six weeks prior to the plan's adoption." (PLANSPONSOR.com; one-time registration required)
Education Precedents: Workable Solutions for Monitoring Investment Education
Excerpt: "In my experience, few fiduciaries (for our purposes, those are plan committee members) realize that ERISA requires that they evaluate the providers of investment education, understand the content and delivery of those services, and monitor the effectiveness and quality of the education -- -e.g., is it working?" (Plan Sponsor magazine via Reish Luftman Reicher & Cohen)
Public Pensions, Private Jackpots: Government Workers Can Cash In
Excerpt: "A review of retirement plans for local governments, the state and police and fire departments showed that while retirees typically draw modest ... pensions, others have left public service with substantial retirement nest eggs they likely would not have received from private companies. Fattened pensions for select public servants skew a compensation system that years ago was meant to supplement low civil service wages and reward long-time public employees with a secure retirement." (Detroit Free Press)
Governments of Colombia and Spain Sign Social Security Agreement
Excerpt: "Spain and Colombia have signed a social security agreement that allows individuals who work in either country to receive pension and social security benefits." (Watson Wyatt Worldwide)
Overview: IRS Extension of Compliance Deadline for Heinz Guidance
Excerpt: "The IRS has extended the date by which a qualified retirement plan must be in operational compliance with Heinz guidance to January 1, 2007." (CCH INCORPORATED)
Opinion: The Social Security System -- Mandatory Private Accounts Are So Yesterday
Excerpt: "A funny thing happened after President Bush backed away from his effort to replace guaranteed Social Security benefits with private accounts. The U.S. Social Security System, deemed backward and patriarchal by administration critics, suddenly is being pointed to, implicitly if not explicitly, as a model safety net -- just what countries like Chile and Britain need as they struggle to fix their malfunctioning private account based pension systems." (The Century Foundation)
Overview: IRS Clarifies and Extends Certain Plan Amendment Deadlines (PDF)
4 pages. Excerpt: "The IRS issued Notice 2005-95, which extends the plan amendment deadlines for provisions relating to retroactive annuity starting dates, automatic rollover requirements and the final Code Section 401(k) and 401(m) regulations. It also clarifies certain other plan amendment deadlines." (Buck Consultants)
Links to Items on Executive Comp, Benefits in General
Countdown to Implementation: FAS 123R Preparation on a Tight Timeframe
Excerpt: "With the date of adoption for FAS 123R quickly approaching, companies with calendar year plans are left with just a few weeks to work through various strategic and tactical decisions. Here we offer steps to help streamline the transition process." (CCA Strategies, LLC)
The APIC Pool Shortcut: A Review of FSP 123-c
Excerpt: "Companies have one year from the earlier of their 123R adoption date or the issuance of the final staff position (11/10/2005) to make the one-time election of their APIC Pool method. This article is a compilation of the questions that have been raised." (CCA Strategies, LLC.)
Overview: Proposed Section 409A Regulations: Deferral Elections (PDF)
3 pages. Excerpt: This is the final of four Alerts analyzing the Proposed Section 409A Regulations issued on September 29, 2005 by the Internal Revenue Service under Section 409A of the Internal Revenue Code. Section 409A imposes substantial new rules on all nonqualified deferred compensation arrangements. This Alert focuses on deferral elections under Section 409A." (Kirkpatrick & Lockhart Nicholson Graham LLP)
Overview: December 31, 2005 Deadline for Certain Transition Relief under Section 409A
Excerpt: "Section 409A, which has been in effect since January 1, 2005, affects virtually all employers and their employees, directors, or independent contractors who participate in compensation programs that provide deferred payments covered by the new law. The new regulations generally extend the deadline for amending plans to the end of 2006, which is over a year away. However, employers that want to take advantage of certain transition relief may need to act by December 31, 2005." (Faegre & Benson LLP)
Benefits Perspectives: Current Issues in Employee Benefits, Fall 2005 (PDF)
8 pages. This edition includes articles titled: IRS Guidance on Deferred Compensation Presents a Mixed Bag; Making the Case for Wellness in the Workplace; and, Evidence-Based Medicine: What Employers Need to Know. (Milliman)
Hewitt Federal Legislation Quick Guide Updated as of December 13, 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)
PSCA Takes Issue with Profit Sharing Plan/Medical Account Ruling
Excerpt: "The Profit Sharing/401(k) Council of America (PSCA) has taken issue with an IRS revenue ruling concerning profit sharing plans that include medical reimbursement accounts. According to Ed Ferrigno, PSCA's Vice President, Washington Affairs, Revenue Ruling 2005-55 invalidated profit sharing plans that include a medical expense reimbursement account, if the account is treated as a tax-free employer benefit." (PLANSPONSOR.com; one-time registration required)
Newly Posted Events
Advanced IRA Essentials
in Minnesota on January 19, 2006
presented by BISYS Retirement Services
Advanced IRA Issues
in Minnesota on January 19, 2005
presented by BISYS Retirement Services
Advanced IRA Issues
in Minnesota on January 25, 2006
presented by BISYS Retirement Services
Advanced IRA Issues
in Alabama on January 25, 2006
presented by BISYS Retirement Services
Advanced IRA Issues
in Georgia on January 27, 2006
presented by BISYS Retirement Services
IRA Essentials
in Minnesota on January 18, 2005
presented by BISYS Retirement Services
IRA Essentials
in Minnesota on January 18, 2006
presented by BISYS Retirement Services
IRA Essentials
in Minnesota on January 24, 2006
presented by BISYS Retirement Services
IRA Essentials
in Georgia on January 26, 2006
presented by BISYS Retirement Services
Newly Posted Press Releases
More Than a Quarter of Companies Anticipate Layoffs in 2006, Yet Many Don't Have Severance Plans, Say WorldatWork and Aon Consulting
(WorldatWork)
Disaster Relief Announcements
(Pension Benefit Guaranty Corporation (PBGC))
PBGC Names Hanley Director Of Legislative And Regulatory Dept.
(Pension Benefit Guaranty Corporation (PBGC))
Lump-Sum Distribution Study
(Employee Benefit Research Institute (EBRI))
Study of Health Care Costs
(Employee Benefit Research Institute (EBRI))
Resolved! Three Steps Toward a Secure Financial Future
(American Savings Education Council (ASEC))
New Case Study on Defined Benefit Pension Plans Released by Rotman International Centre for Pension Management
(International Centre for Pension Management (ICPM))
Newly Posted or Renewed Job Openings
Plan Accountant
for Benefit Consultants Group
in NJ
Retirement Plan Senior Testing Specialist
for Louis Kravitz & Associates
in CA
Enrolled Actuary
for Alliance Pension Consultants
in IL
Sr. Relationship Manager, Retirement Services
for AIG VALIC
in CA, TX
Defined Contribution (3rd party Administrator)
for RSM McGladrey
in IL
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