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January 30, 2006
Today's sponsor: InvestLink

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InvestLink Offers the "Best of Breed" Software for Defined Contribution Recordkeeping, Administration and Trading.

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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Don't Like Your 401(k)? Speak Up at Work
Excerpt: "If you're dissatisfied with any of your 401(k) options, now is a good time to press for change. Thanks to recent lawsuits over employee losses in 401(k) plans at WorldCom and Enron, among others, 'the environment is right for employees to at least get a hearing,' says Paul Bracaglia, a partner at PricewaterhouseCoopers in Philadelphia." (BusinessWeek)

Analysis of Proposed Regulations on Designated Roth Accounts Released January 25, 2006 (PDF)
3 pages. Excerpt: "Designated Roth contributions, which are elective contributions that are included in gross income, were authorized in the Economic Growth and Tax Relief Reconciliation Act of 2001 also known as EGTRRA, but with a delayed effective date of January 1, 2006. A subsequent distribution of the contributions is excludable from gross income (along with the earnings on the contributions if the distribution is a qualified distribution)." (American Benefits Council)

Study Shows New FASB Pension Rules Would Have Generated $331B in Liability in 2004
Excerpt: "Fortune 100 employers with defined benefit plans would have been forced to recognize an additional $331 billion in balance sheet liability at year-end 2004 instead of the existing $62 billion, if pension accounting reforms had been in place at the time. That's the conclusion of a new Towers Perrin analysis, which examined anticipated accounting rule changes for pensions and other post-retirement benefits expected to be released in March ...." (PLANSPONSOR.com; one-time registration required)

Colorado State Pension Fund Faces Changes
Excerpt: "Public employees do not make as much money as they might in the private sector, but one perk ... is the promise of a comfortable and secure retirement package. In Colorado, however, the future of that retirement benefit is now in question. The state's Public Employees' Retirement Association, or PERA, was hit hard during the recession earlier in the decade, and the value of its portfolio plunged. It now only has enough reserves to pay 71 cents on every $1 it owes future retirees." (The Gazette)

Iowa Lawmakers Taking First Step to Ending Pension Tax
Excerpt: "Iowa lawmakers will begin debate this week on ending the state's income tax on pension and Social Security income." (WQAD.com)

Opinion: When You Fly in First Class, It's Easy to Forget the Dots
Excerpt: "United is one of the proudest names in airline history. It has long been a synonym for fine service and extensive, convenient routes. In the early 1990's, when some investment bankers were casting around for a way to make tens of millions of dollars, they came up with a doozy: the employees of UAL would give up some of their salaries and benefits in exchange for stock in UAL, eventually becoming UAL's largest owner through an employee stock ownership plan." (Ben Stein via The New York Times; one-time registration required)

Pension System Reaches Out to IRS: San Diego Officials Volunteer for Compliance Program
Excerpt: "Despite being beaten down by years of turmoil over a growing pension deficit and suspect benefits, system administrators -- guided by Indiana attorneys noted for their tax expertise – have voluntarily joined an IRS compliance program in hopes of addressing potential problems with the nation's top tax cops." (The San Diego Union-Tribune)

Commentary: It's Just a Matter of Time Till Your Company Drops Its Defined-Benefit Retirement Plan
Excerpt: "Until recently, the cram-down -- the process in which a company walks away from pension and benefit promises -- had generally been confined to failed companies like Delphi. Struggling companies frequently terminate their pension plans and push the liabilities onto the Pension Benefit Guaranty Corp." (Slate)

Opinion: Make 'em Provide Pensions
Excerpt: "Until now, much of the debate over what to do about pensions has taken as a first principle that the system is voluntary. If you accept that, then it follows that doing too much tightening will simply cause companies to drop their plans. That principle needs reexamining." (The Washington Post; one-time registration required)

Commentary: Plan to Retire, but Don't Let the Numbers Rule
Excerpt: "Take this one teensy factor in retirement planning: death. How are you supposed to save enough when you don't know how long 'enough' is supposed to last?" (The New York Times; one-time registration required)

PBGC Enhances Reporting and Disclosure Web Application
Excerpt: "The Pension Benefit Guaranty Corporation (PBGC) has updated its e-4010 Web-based application for reporting financial, actuarial and other identifying information in compliance with section 4010 of the Employee Retirement Income Security Act (ERISA)." (PLANSPONSOR.com; one-time registration required)


Links to Items on Executive Comp, Benefits in General

Research Report: The State of 50+ America 2006 (PDF)
Excerpt: "Compared with a decade ago, the state of 50+ America seems to have improved, but AARP's third annual 'report card' on the quality of life of midlife and older Americans finds that the picture has become less favorable and the outlook more bleak during the most recent year." (AARP)

The Golden Years: Travels, Hobbies and a New Job, Too
Excerpt: "While many retirees are still focused on leisure activities, a growing number are returning to the work force. A recent study by Putnam Investments estimated that seven million previously retired people, or about 10 percent of the work force over the age of 40, are now back at work or looking for jobs." (The New York Times; one-time registration required)

Overview: Medicare Subsidy Disregarded in Determining Employer Deduction
Excerpt: "Employers that transfer excess pension plan assets to a retiree health account need not take into account the Medicare Part D pres.cription drug subsidy when demonstrating that the plan meets the minimum cost requirement that applies to such transfers. The IRS's Rev. Rul. 2005-60 confirms that the 28% federal subsidy is disregarded in determining the deductibility of employer healthcare expenditures." (BNA Tax Management)

Overview: USERRA Rules and Notice Requirements: Do the Final DOL Rules Affect You?
Excerpt: "The Department of Labor (DOL) published final regulations and issued a new notice under the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. §§4301 et seq., that took effect on January 18, 2006. 70 Fed. Reg. 75246 (12/19/05)." (BNA Tax Management)

Blog: SEC Proposed Exec Comp Disclosures -- Pensions and Other Post-Employment Compensation
Excerpt: "The proposed regulations include significant revisions to disclosure of post-employment compensation covering named executive officers ...." (BeneBlog)

Text of 370-Page Proposed Regs from SEC on Executive Compensation Disclosure (PDF)
These were issued Friday, January 27, but have not yet appeared in the Federal Register. (Securities and Exchange Commission)

The New Corporate Outsourcing
Excerpt: "Under pressure from foreign competitors with lower labor costs, big companies have become more willing to pare away workers' health care and pensions, abandoning an informal social contract that existed for much of the 20th century." (The New York Times; one-time registration required)

EBSA Achieves Total Monetary Results Exceeding $1.7 Billion for FY 2005
Excerpt: "Through its enforcement of [ERISA], the Employee Benefits Security Administration ... is responsible for ensuring the integrity of the private employee benefit plan system in the United States. .... Total monetary results for FY 2005 were more than $1.7 billion .... Included in this figure is $709 million in assets restored to plans and benefits recovered for individual workers-- an increase of nearly 120% over FY 2004, and up 161% from FY 2001." (U.S. Employee Benefits Security Administration)

Incentive Stock Options Create Tax Bills
Excerpt: "When paying tax, it doesn't get much worse than racking up a tax bill on profits you never actually receive. But for holders of incentive stock options, that's a potential headache of the alternative minimum tax. The reasons are complicated, but a quirk in the AMT -- the parallel tax system conceived to prevent overuse of tax deductions, but which has instead trapped millions of middle-class taxpayers -- could create a huge tax bill on paper gains that never materialized." (AP via The New York Times; one-time registration required)


Newly Posted Events
(Post Yours!)

College for Advanced Management of Health Benefits
in Nevada on February 21, 2006
presented by National Business Coalition on Health


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Compliance Manager - AZ
for Vanguard
in AZ

Pension Assistant
for White Plains law firm with growing retirement plan administration and pension consulting department
in NY

Pension Administrator
for Pension Parameters, Inc.
in NJ

Principal Consultant - Insurance
for NRECA
in VA

Client Integration Transition Manager
for Diversified Investment Advisors
in NY

Benefits Administrator (20 hours/week)
for City Colleges of Chicago
in IL




Handy Links:

Copyright 2006 BenefitsLink.com, Inc.; except that you may reprint this newsletter in full (including this sentence) without obtaining our permission.

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Editor and Publisher: David Rhett Baker, J.D.

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