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    May 21, 2003 - 13,225 subscribers
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    Full Text of DOL FAB on Allocation of Expenses in a Defined Contribution Retirement Plan
    Field Assistance Bulletin 2003-3 (May 19, 2003). Excerpt: "Issue: What rules apply to how expenses are allocated among plan participants in a defined contribution pension plan? ... When the plan documents are silent or ambiguous on this issue, fiduciaries must select the method or methods for allocating plan expenses. A plan fiduciary must be prudent in the selection of the method of allocation." (U.S. Department of Labor, Employee Benefits Security Administration)

    PSCA Publishes Section-by-Section Overview of House-Passed Pension Security Act (PDF)
    4 pages. HR 1000, the Pension Security Act of 2003. (Profit Sharing/401(k) Association of America)

    Members of Oregon's Public Pension System Grapple with Changes
    Excerpt: "There's no shortage of ways to sense the uncertainty and panic triggered by the recent overhaul of Oregon's public pension system. It's heard in the drone of classical music as callers wait on the line to find out how much retirement they'll lose-- and what they should do about it. It's felt in the break rooms where public employees spend their spare time debating what the changes mean." (The [Eugene, Ore.] Register-Guard via NewsAlert.com)

    Opinion: Osama Bin Laden Didn't Cause Outrageous New York Municipal Pension Costs
    Excerpt: "[T]he umbrella group that speaks for New York City's cosseted municipal workforce blamed 9/11 for the 386 percent increase-- that's right: 386 percent!-- in city-employee pension costs now being forced on the taxpayers.... Ultimately, of course, 9/11 did no such thing." (The New York Post)

    Government Pension Costs Are Newest California Budget Concern
    Excerpt: "As city officials face budget cuts because of the state's fiscal crisis, another devastating drain is poised to deplete municipal pocketbooks in the coming years: the cost of maintaining public employees' retirement pay. Officials say it's skyrocketing. In particular, public agencies that have contracted with the California Public Employee's Retirement System are groaning under the increasing cost of paying their retirees because of poor performance by that agency, known as CalPERS." (The San Gabriel Valley Tribune via NewsAlert.com)

    House G.O.P. Leaders Agree to Eliminate Tax on Dividends
    Excerpt: "House Republican leaders agreed [on Tuesday, May 20, 2003] to go along with the White House and the Senate and eliminate the tax on stock dividends, if only briefly, and Congressional Republican leaders promised to move swiftly to complete action on the bill this week." (New York Times; one-time registration required)

    In-Kind Contribution Might Be Solution for Underfunded Pension Plan
    Excerpt: "Plans may want to contribute qualified employer securities (QES) ... which are issued by an employer participating in the plan or an affiliate. These securities include: (1) stock; (2) a marketable obligation; or (3) an interest in certain publicly traded partnerships. Many of these types of transactions can occur based solely on the terms of the ERISA statutory exception for investments in QES." (Thompson Publishing Group)

    Overview: SEC Wants Greater Pension Disclosure
    Target page includes link to SEC document with more details. Excerpt: "The U.S. Securities and Exchange Commission (SEC) is asking certain companies for expanded pension disclosure in the management discussion and analysis portion of annual and quarterly reports. The SEC has asked for greater disclosure in five areas ..." (Watson Wyatt)

    Opinion: Older Minority Women Need Retirement Help Now
    Excerpt: "For an adequate retirement that will sustain them above poverty, most workers rely on income from a financial 'three-legged stool' of pensions, personal savings and Social Security benefits. However, significant numbers of African American, Asian American and Hispanic women are coming up short in all three income categories. Only 15 percent of older black women and 8 percent of Hispanic older women received pension income in 2000." (Cindy Hounsell and Pat Humphlett, published by WomensENews)

    Links to Items on Executive Comp, Benefits in General

    Senators Clash on Stock Options, Probe CEO Pay
    Excerpt: "Two Republican lawmakers crossed swords on Tuesday over the divisive issue of corporate stock options, as legislation to stifle a coming change in the accounting treatment of options appeared to stall. In a hearing on skyrocketing U.S. executive pay, Sen. John McCain and Sen. George Allen argued about whether stock options can be accurately valued -- a key question in the debate over how to treat them in company financial statements." (Reuters via Yahoo! News)

    Excessive Executive Pay Eroding Investor Confidence, Experts Say
    Excerpt: "Lavish pay packages, stock options and special deals for executives whose companies have failed and laid off employees have eroded investor confidence already shaken by the accounting scandals, experts told Congress Tuesday." (AP via the New York Times; one-time registration required)

    Written Statements of Witnesses at Senate Commerce Committee Hearing on Executive Compensation
    Prof. Brian Hall, Harvard Business School; Damon A. Silvers, American Federation of Labor and Congress of Industrial Organizations; Joseph E. Bachelder, The Bachelder Firm; Peter C. Clapman, TIAA-CREF; and Sean Harrigan, California Public Employees' Retirement System. (U.S. Senate Committee on Commerce, Science & Transportation)

    Retirees Score Hits Battling Executive Perks
    Excerpt: "Corporate retirees have long battled against cutbacks in their own health benefits and pension plans. But lately, some are setting their sights on bigger targets: pay and benefits of top executives." (The Wall Street Journal via SFGate.com)

    Rising Benefit Costs Fuel Conflicts Between Management, Rank-and-File
    Excerpt: "More than wages and even job security, the big battle now between executives and employees is over benefits. Employees feel increasingly vulnerable as companies pare or eliminate their two most valuable benefits-- medical insurance and retirement accounts-- at the same time their savings have shriveled and their salaries have frozen or fallen." (AP via SFGate.com)

    Shareholders Disapprove of Glaxo CEO's Pay
    Excerpt: "Critics of lavish corporate pay hailed a vote by shareholders against a proposed multimillion dollar pay deal for executives at GlaxoSmithKline, the biggest revolt yet in Britain against 'fat cat' deals." (AP via the New York Times; one-time registration required)

    Stock Option Indexing Concept for Executive Comp Aims at Fairness
    Excerpt: "Is it possible to devise a compensation system that provides executives with solid incentives and realistic targets through a long economic slump? 'You can,' contends compensation expert Graef Crystal, 'if you have the will.' Crystal, along with a number of other observers, says 'indexing' the stock options CEOs receive would make compensation packages more fair and more effective in rewarding the best-performing executives." (Newsday.com)

    The Effect of Stock Option Repricing on Employee Turnover (PDF)
    38 pages; Excerpt: "We examine whether repricing stock options reduces both executive and overall employee turnover ... We find little evidence that repricing underwater stock options affects executive turnover. However, using forfeited stock options to proxy for overall employee turnover, we find evidence that overall employee turnover decreases significantly in repricing firms in 1999, while turnover for nonrepricing firms does not change." (http://knowledge.wharton.upenn.edu/PDFs/1083.pdf)

    Corporate Policies On Benefits, Compensation Vary For Employees Called To Active Military Duty
    According to a survey recently conducted by Mercer Human Resource Consulting, while major combat in Iraq has ended, U.S. employers still are affected by the large numbers of their employees who have been called to active duty as National Guard members and reservists. This Web-based survey, which was conducted in late March and early April, garnered responses from 201 employers across the country. (Spencer Benefit Reports)

    Older Americans Staying in Work Force
    Excerpt: "The number of Americans past retirement age and in the job market has risen by half in the last two decades, the Census Bureau says." (Washington Post)

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    Roadmaps to Coverage: Exploring Options for the Uninsured
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    Washington Update featuring ASPA's Executive Director Brian Graff
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    Employee Benefits Security Administration Releases Field Assistance Bulletin on Allocation of Expenses by Defined Contribution Plans
    (U.S. Department of Labor, Employee Benefits Security Administration)

    ALEXANDER HAMILTON INSTITUTE RELEASES NEW FREE REPORT: "Investigations 101"
    (Alexander Hamilton Institute)

    AHI?s BENEFITSALERT.COM RELEASES NEW FREE REPORT: "Family And Medical Leave Liabilities Abound In Courts"
    (Alexander Hamilton Institute - AHI's BenefitsAlert.com)

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