June 21, 2006 Today's sponsor: www.ftwilliam.com (Click on company name or banner to learn more.)
Overview from EBSA: Special Terminal Report Instructions For Abandoned Plans Excerpt: "The qualified termination administrator (QTA) of each plan terminated under 29 CFR 2578.1 must file the Special Terminal Report for Abandoned Plans (STRAP) ... Follow these instructions to satisfy the requirements set forth in 29 CFR 2520.103-13." (Employee Benefits Security Administration, U.S. Department of Labor) Lawmakers Near $450B Pension Fix Excerpt: "Key lawmakers have reached a framework plan to identify pension plans at risk of default as part of new funding rules in a broad pension reform bill, a Republican senator in charge of the negotiations said Tuesday." (CNNMoney.com) Opinion: New Developments on At-Risk Liability-- Conferees Need to Hear from You Excerpt: "The conferees are currently inclined to adopt a test for at-risk status ... that will have very adverse effects on some well-funded plans ... Please urge your congressional representatives to reject this new at-risk liability formula, which ignores a company's credit balance and would significantly increase required pension contributions for companies solely because of their defined benefit plan's features or particular company demographics." (American Benefits Council) PBGC Gets Notice of Intention to Terminate Delta Pilots' Pension Plan Excerpt: "The nation's third-largest carrier filed the notice by overnight mail and it was received by the Pension Benefit Guaranty Corp. on Tuesday." (AP via MSN Money) Little Relief for PBGC's Growing Burden Excerpt: "The PBGC currently holds assets worth $56 billion and is managing to send monthly checks to the 682,820 retirees that count on it to help pay the bills. But a cursory glance at the nation's troubled airline or auto sectors shows a growing number of companies poised to offload their defined-benefit pension plans on the agency." (MarketWatch) Testimony at Hearing on 'Managing Retirement Assets: Ensuring Seniors Don't Outlive Their Savings' Includes links to written testimony presented at hearing on June 21, 2006, and a link to webcast of the actual hearing. Participants are Ben Stein, C. Robert Henrikson of MetLife, Stephen P. Utkus of the Vanguard Center for Retirement Research and LeRoy Gilbertson representing the AARP. (U.S. Senate Special Committee on Aging) Stock Options and Angry Pension Funds Excerpt: "The San Jose Mercury News reports a litigation backlash against thirteen Silicon Valley firms in connection with questions about their stock option programs. While arguably newsworthy, what is perhaps more telling is the role played by U.S. and foreign pensions." (Pension Risk Matters) Government Workers Feeling Pressure to Move to Defined Contribution Plans Excerpt: "Now police officers, teachers, public health workers and the unions that represent them in many states are scrambling to defend the treasured [defined benefit type of retirement plan]-- one that the vast majority of them still enjoy but is rapidly disappearing from the corporate world. For the most part they are winning ..." (MSNBC) Federal Government's Thrift Savings Plan to Cease Administrative Use of Social Security Numbers Excerpt: "In light of the well publicized Veterans Affairs Department data breach last month, another federal agency with its hands on a lot of personal information -- the Thrift Savings Plan -- is concentrating on information security. Participants will switch to using account numbers, rather than Social Security numbers, to access their TSP accounts online." (GovExec.com) California and Largest State Employees' Union Reach Agreement on Pension Calculations Excerpt: "The Sacramento Bee and the union's Web site report that, according to the agreement, employees hired beginning January 1, 2007, will have retirement benefits based on an average of their final three years' salary rather than a single 'spike' year as is in effect for current employees." (PLANSPONSOR.com; one-time registration required) Department of Energy Halts Change in Reimbursement Policy for Contractors' Retirement Plan Costs Excerpt: "Bowing to criticism from lawmakers, the U.S. Department of Energy said on Tuesday it had suspended for a year its decision to stop reimbursing contractors for traditional pension costs for new hires." (Reuters) ERIC Applauds Withdrawal of DOE Policy to Deny Reimbursement of Costs for Contractors' DB Plans Excerpt: "In both the May 15 letter and a June 14 letter to the Senate, ERIC argued that the DOE policy set a dangerous precedent that would allow government agencies to advance a patchwork quilt of benefit design preferences through their procurement policies." (ERISA Industry Committee) Retirement at 62: Is Receiving Social Security Early Worth It? Excerpt: "Although many retirees don't have the financial flexibility to defer Social Security benefits, those who do must compare the trade-off between receiving benefits for a greater number of years versus the cost of permanently reduced monthly benefits. The examples provided here outline methods of analyzing the early-retirement decision." (The CPA Journal) Links to Items on Executive Comp, Benefits in General Overview: Intermediate Sanctions and Tax-Exempt Organizations Excerpt: "The IRS has stepped up its scrutiny of compensation packages and employee benefits in tax-exempt organizations and is using IRC section 4958 to sanction 'disqualified persons' and organizational managers, rather than the organizations, for excess-benefit transactions.... This article outlines how IRC section 4958 works, describes the potential pitfalls for exempt organizations, and discusses recent developments." (The CPA Journal) CCA Strategies Offers Compromise for FASB Consideration Excerpt: "As the Financial Accounting Standards Board (FASB) begins to analyze the comments it received regarding its first step towards overhauling postretirement benefit accounting, CCA Strategies offers an approach that balances FASB's short-term objective with the primary concerns raised about its two-step approach to comprehensive reform." (CCA Strategies) DOL's Bureau of Labor Statistics Releases 'Employer Costs for Employee Compensation' Report Excerpt from press release: 'Employer costs for employee compensation averaged $26.86 per hour worked in March 2006, the U.S. Department of Labor's Bureau of Labor Statistics reported [Wednesday June 21]. Wages and salaries, which averaged $18.82, accounted for 70.1 percent of these costs, while benefits, which averaged $8.04, accounted for the remaining 29.9 percent." (Bureau of Labor Statistics, U.S. Department of Labor) Third-Party Plan Administrators and SAS 70 Originally published February 2006. Excerpt: "Since the passage of the Sarbanes-Oxley Act (SOA), many plan sponsors have required that their third-party plan administrators, custodians, and corporate trustees demonstrate that they have adequate controls and safeguards. An independent Statement on Auditing Standards (SAS) 70 audit report is ... a way for plan sponsors to monitor the delegation of authority and responsibility." (The CPA Journal) Investigations into Stock Options Spur Companies to Review Their Own Practices (PDF) 2 pages. Excerpt: "Backdating consists of targeting the grant date of a stock option to correspond to a low point in the company's stock price so that the holder can obtain an increased profit when the option is exercised and the shares are sold at the prevailing market price. Although backdating is not per se illegal, it can violate accounting rules and SEC disclosure regulations, as well as create tax problems." (Gardner Carton & Douglas) Newly Posted Events Introduction to Retirement Plans - Webcast Nationwide on October 30, 2006 presented by McKay Hochman Navigating Form 5500-- A Guided Tour for Health & Welfare Plan Sponsors and TPAs Nationwide on June 1, 2006 presented by Employee Benefits Institute of America Inc. (EBIA) Plan Amendment Update - Webcast Nationwide on July 25, 2006 presented by McKay Hochman Third Quarter 2006 Update - Webcast Nationwide on August 10, 2006 presented by McKay Hochman Third Quarter 2006 Update - Webcast Nationwide on August 11, 2006 presented by McKay Hochman Update to IRS Correction Programs (EPCRS) - Webcast Nationwide on June 27, 2006 presented by McKay Hochman Update to IRS Correction Programs (EPCRS) - Webcast Nationwide on June 29, 2006 presented by McKay Hochman Update to IRS Correction Programs (EPCRS) - Webcast Nationwide on July 26, 2006 presented by McKay Hochman Webcast: The Future of Employee Benefits Delivery: Consumerism Changes Everything Nationwide on June 21, 2006 presented by Authoria, Inc. What's Your Problem? - Compliance Problems Webcast Nationwide on September 19, 2006 presented by McKay Hochman What's Your Problem? - Compliance Problems Webcast Nationwide on November 1, 2006 presented by McKay Hochman Newly Posted Press Releases DOE Withdraws Defined Benefit Pension Preclusion Under Pressure From Employers and Congress (ERIC (ERISA Industry Committee)) Actuaries Commend DOE's Suspension of Controversial Pension Policy for Contractors (American Academy of Actuaries) A Better 'Mouse Trap' for 401(k) Participants and Plan Sponsors (J.W. Thompson Investments) TransitCenter Introduces New TransitChek Card to Pay for Commuting Tax-Free (TransitCenter) Newly Posted or Renewed Job Openings 401(k) Client Relationship Manager for The Douglas Group in CA, FL, IL, NJ, NY, PA Plan Document Specialist for Louis Kravitz & Associates in Encino, CA in CA 401 (k) Plan Administrator for Polycomp Administrative Services, Woodland Hills (LA) in CA Benefits & Retirement Specialist for Aerojet - Sacramento in CA Product Development Manager for New York Life Investment Management LLC in NJ Handy Links:
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