| BenefitsLink Retirement Plans Newsletter |   |
December 16, 2005
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Summary: Manager's Amendment of Pension Protection Act, H.R. 2830, for House Floor Consideration (PDF)
4 pages. (U.S. Congress. Committee on Ways and Means via American Benefits Council)
Statement of Administration Policy on H.R. 2830 -- Pension Protection Act of 2005 (PDF)
1 page. Excerpt: "Before being sent to the President for signature, the legislation must be strengthened with respect to the level of required plan contributions and premiums that are needed to return the PBGC to solvency and avert a taxpayer bailout. If the net effect of a final pension conference report is to weaken funding requirements for pension plans relative to current law, the President's senior advisors will recommend a veto of that conference report." (Executive Office of the President via American Benefits Council)
House Passes Bill to Fortify Pension Plans
Excerpt: "The House passed a measure [December 16] aimed at strengthening the United States' system of company pensions, but many members said they considered the bill flawed and hoped to amend it before final passage." (The New York Times; one-time registration required)
Text of Manager's Amendment of Pension Protection Act, H.R. 2830, for House Floor Consideration (PDF)
449 pages. Excerpt: "AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 2830, AS REPORTED" (U.S. House of Representatives via American Benefits Council)
Responding to Requests for 401(k) Loans without Providing Advice (PDF)
2 pages. Excerpt: "Many employers are faced with this dilemma as employees use their 401(k) funds to pay down debts, purchase a home, or cover medical expenses. Offering a loan provision in your retirement plan is an important feature that provides employees access to their money when they need it." (Best Practices in Compensation & Benefits via Financial Finesse)
GM Suspends 401(k) Match for Salaried Employees
Excerpt: "General Motors Corp. ... is suspending contributions to its 401(k) retirement savings plan for salaried workers, a spokesman said on [December 16]. 'We continue to monitor the business in determining when to reinstate the matching contributions,' GM spokesman Robert Herta said." (Reuters via The New York Times; one-time registration required)
Defined Benefit Pension Plan Sponsors Use Lower Discount Rates
Excerpt: "As regulators increase their scrutiny of pension accounting, defined benefit plan discount rates continue to drop, according to a report from financial firm SEI Investments." (BenefitNews Connect)
FASB Rules Pension/Benefit Changes Go in Other Comprehensive Income
Excerpt: "The nation's accounting rulemakers have given tentative approval to a plan requiring many US public companies cutting back pensions, retiree health care or other benefits to reflect those moves in their other comprehensive income bookkeeping category." (PLANSPONSOR.com; one-time registration required)
Pension Bill May Pinch Carmakers
Excerpt: "The U.S. House of Representatives has approved a bill reworking federal rules governing pension plans for about 44 million U.S. workers and retirees. .... The House bill, which had the support of the UAW and General Motors Corp., now must be reconciled with a version that passed the U.S. Senate carrying several provisions that would increase the financial strain on GM, Ford Motor Co. and Delphi Corp. Action is expected by April." (Detroit Free Press)
Pension Benefit Guaranty Corporation Has New Logo
(Pension Benefit Guaranty Corporation)
Court Denies Change of Pension Plan Beneficiary from Ex to Current Wife
Excerpt: "The US District Court for the District of Delaware has ruled that a pension plan retiree may not substitute his current wife for his ex-wife as beneficiary of survivor benefits." (PLANSPONSOR.com; one-time registration required)
Overview: IRS Notice 2005-92 Providing Guidance on the Katrina Emergency Tax Relief Act
Excerpt: "On September 23, 2005, KETRA became a law. The IRS issued Notice 2005-92 to provide clarifications and operational guidance with examples for implementing KETRA." (McKay Hochman Co., Inc.)
Employee Ownership Update for December 15, 2005
NCEO Executive Director Corey Rosen discusses how 100% ESOP-owned Acadian Ambulance Services provided assistance after Hurricane Katrina struck; new equity compensation guidelines from Institutional Shareholder Services; and the IRS's suspension of withholding requirements for 2005 with respect to deferrals of compensation covered by the deferred compensation rules of Section 409A of the Internal Revenue Code. (National Center for Employee Ownership)
Overview: DOL Expands and Simplifies Voluntary Fiduciary Correction Program (PDF)
6 pages. Excerpt: "The ... Program is available to anyone who may be liable for certain fiduciary violations under [ERISA], including employee benefit plan sponsors, officers, trustees, plan administrators or other parties-in-interest. The information in this publication does not apply to plans that are not subject to ERISA, such as governmental and nonelecting church plans, non-ERISA 403(b) programs, 457 plans, and non-qualified executive benefit plans that are not subject to ERISA." (Prudential Retirement,)
Overview: IRS Clarifies Interaction of Plan Amendment Deadlines with Other Published Guidance
Excerpt: "The IRS has also stated that it will not treat the adoption of good faith plan amendments that reflect the qualification changes in this latest piece of guidance as adversely affecting the pre-approved status of a master and prototype plan." (CCH INCORPORATED)
Overview: IRS Notice 2005-95 Addressing Plan Amendments
Excerpt: "This notice provides transitional relief for the following plan amendments: Roth 401(k) Deferrals; Automatic Rollover Requirements; Final 401(k) and 401(m) Regulations; Professional Employer Organizations; Hurricane Katrina; DB Plan Amendments; Final Retroactive Annuity Starting Date (RASD) Regulations; Required Minimum Distributions (RMD) for DB Plans; Suspension of Benefits Plan Amendment; and the Pension Funding Equity Act of 2004." (McKay Hochman Co., Inc.)
Working Paper: The Decline in Household Saving -- What Can We Learn from Survey Data?
Excerpt: "[The authors] examine the saving decline from the perspective of microeconomic survey data on the wealth position of American households. Can the surveys provide information on the nature and causes of the saving decline that are not evident in the macroeconomic information? The analysis concentrates on data obtained from six Surveys of Consumer Finances (SCF) covering the period of 1983-2001. The SCF had a panel dimension only in the 1983-89 period." (Center for Retirement Research at Boston College)
High Net Worth/High Net Risk: Meeting Retirement Goals (PDF)
15 pages. Excerpt: "It may seem unnecessary, at first glance, to think that someone with millions of dollars would need to engage in retirement planning in the way a person of more modest means would. .... In this special report, experts from Wharton, financial advisors, and financial professionals from State Street Global Advisors (SSgA) weigh in on the potential strategies available to these individuals as they prepare for the future." (State Street Global Advisors and Wharton School of the University of Pennsylvania)
Working Paper: The Retirement Consumption Conundrum -- Evidence from a Consumption Survey
Excerpt: "The retirement consumption puzzle does not tell the whole story on the well-being of the elderly. While we find that consumption-expenditures decrease by about 2.5 percent when individuals retire, expenditures continue to decline at about a rate of 1 percent per year after that." (Center for Retirement Research at Boston College)
Links to Items on Executive Comp, Benefits in General
Overview: IRS Election to Defer Section 409A Reporting Requirements (PDF)
3 pages. Excerpt: "On December 8, the Internal Revenue Service issued Notice 2005-94 to provide a temporary reprieve from the reporting requirements for nonqualified deferred compensation that were enacted in the American Jobs Creation Act of 2004 ...." (Sutherland Asbill & Brennan LLP)
Q&A on Effect of New IRC Section 409A on Stock Options and Other Types of Equity Grants
Excerpt: "Congress directed the Internal Revenue Service (IRS) and the Treasury Department to draft regulations providing much of the detail. In December 2004, the IRS released Notice 2005-1 to provide initial guidance and on September 29, 2005, the IRS issued proposed regulations under Section 409A. Companies may rely on this guidance until final rules are enacted." (Mintz Levin Cohn Ferris Glovsky and Popeo P.C.)
Revised Chapter: A Tiered Approach to Equity Design with Multiple Equity Compensation Vehicles (PDF)
18 pages. Excerpt: "This article updates the discussion of using multiple equity compensation vehicles, taking into account developments over the past several years, including the adoption of FAS 123(R). This article has been republished in the revised edition of Beyond Stock Options. (2006)" (National Center for Employee Ownership via Janich Law Group)
Newly Posted Events
2005 White House Conference on Aging
Nationwide on December 16, 2005
presented by Kaiser Family Foundation
The ESOP Solution for Private Companies
Nationwide on January 26, 2006
presented by Beyster Institute
U.S. Labor Department Sponsors New York Seminar On Compliance With Federal Employee Benefits Law
in New York on January 13, 2006
presented by U.S. Department of Labor, Employee Benefits Security Administration
Newly Posted Press Releases
Passage Of The Pension Protection Act Of 2005 Is A Major Step Forward For Employer Provided Defined Contribution Plans
(Profit Sharing/401(k) Council of America (PSCA))
Gilsbar, Inc. Expands Sales Force into Texas
(Gilsbar, Inc.)
ACLI Praises House Passage Of Pension Reform Legislation
(American Council of Life Insurers)
ftwilliam.com Announces The Availability Of 2005 DOL-Approved 5500 Forms.
(ftwilliam.com)
Minnesota Life Study Shows Benefits Brokers Want Good Service, Not Free Lunches
(Minnesota Life)
Newly Posted or Renewed Job Openings
Senior Due Diligence Analyst
for Vanguard
in PA
Technical Compliance Analyst
for ICMA-RC
in DC
Financial Planner/Investment Specialist
for Diversified Investment Advisors
in MI
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