May 30, 2003 - 13,197 subscribers

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Today's sponsor: Actuarial Systems Corporation

(Click on company name or banner to learn more.)

  ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS 
 
ASC provides complete automation for the pension office, including:
DC/401(k) and DB administration and valuation systems, sophisticated
Compliance Testing, DV Direct Daily Valuation, Advanced Information
Manager Database (AIM), and Single-Step Processing. All ASC Technical
Support Members were experienced Pension Administrators or Actuaries
before joining ASC -- and most have been with ASC for over 10 years.

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

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DOL Continues Focus on Late Deposits of 401(k) Elective Contributions (PDF)
At pp. 1-3 of 7 page document. Excerpt: "[R]evised [Form 5500] Line 4(a) now clearly requires plan administrators to disclose on Form 5500 all late 401(k) contributions and will, therefore, presumably be more successful in causing plan administrators to disclose late 401(k) deposits.... [T]he plan sponsor may wish to correct the fiduciary breach and the prohibited transaction by making a lost earnings contribution in the manner specified by the VFC Program." (Kirkpatrick & Lockhart LLP)

Overview: DOL Won't Assert ERISA Violation if Executives Excluded from Plan Loan Program (PDF)
At p. 6 of 7-page document. Excerpt: "Although FAB 2003-1 does not resolve the issue of whether the Sarbanes-Oxley Act requires the exclusion of executive officers from retirement plan loan programs, it does ensure that plan sponsors who think that it does (or that it might) will not, in an attempt to avoid violating the federal securities laws, thereby violate ERISA." (Kirkpatrick & Lockhart LLP)

401(k) Loans to Executives Remain in Question
Excerpt: "Congress made corporate loans to executives illegal, and yet pension laws require that all 401(k) participants be treated alike, putting top brass on the same footing as any employee. That puts employers in a bind: Complying with one law could force them to violate another. To be safe, some employers may eliminate 401(k) loans altogether, benefits experts warn ..." (Dow Jones/AP via SFGate.com)

What 401(k) Make-Up Contributions Are Required for Employees Returning From Military Leave?
Excerpt: "An employee who leaves current employment to serve in the military, and who is then reemployed by the employer pursuant to USERRA, has the right to make up any elective deferrals that could have been made if the service in the military had not intervened.... If the participant makes up deferrals by the deadline, the plan must make any corresponding matching contributions." (EBIA Weekly (Question of the Week))

FASB Withdraws Observation Concerning Cash Balance Discount Rate
Excerpt: "The [Financial Accounting Standards] Board agreed [on May 28, 2003] that the issue of discount-rate setting for cash balance plans that credit interest on a market-based rate should be studied further. No firm decision was made as to which group will consider the issue, and the timing of such consideration remains uncertain." (Watson Wyatt)

Some Companies See Pension Pangs Ahead
Excerpt: "War, stalled tax cuts and corporate scandals have driven the markets crazy. But there's another, very overlooked problem with certain large-company shares: pensions. Some big companies have been inflating their earnings by making unrealistic assumptions about returns on their pension funds." (Forbes via Yahoo! Finance)

Opinion: GAAP for Pensions-- Sanctioned Fraud Must Go
Excerpt: "SFAS 87 is not up to today's economic climate because it is an incredible paragon of artificial smoothing of volatile changes in asset values, actuarial estimates, and amended benefit formulas. Without going into great detail, SFAS 87 covers up the real volatility in several ways ..." (Accounting Today)

First Question is Answered in New Estate Planning for IRAs Q&A Column
I understand that under the new final IRA regulations there might be an opportunity for some post mortem planning with the IRA. How could this be accomplished? (BenefitsLink.com)

Divorce, Online Style
Excerpt: "[A]n ever-growing array of dot-coms, computer-savvy lawyers and state court officials are encouraging unhappily married Americans to arrange their breakups online. For fees ranging from $50 to $300 ... couples are being provided with the appropriate forms and varying degrees of help completing them.... Linda Elrod, a professor at Washburn University School of Law in Topeka, Kansas, said couples who have ... a pension plan to be divided should consult a lawyer." (AP via Wired.com)

Overview: Proposed Regulations on Deemed IRAs
Item dated May 29, 2003. Excerpt: "Probably the most disappointing aspect of the regulations is the one that provides for disqualification of the underlying employer plan if the deemed IRAs fail to satisfy the applicable requirements of IRC ??408 and 408A." (TRI Pension Services)

A New Beginning for Allocating Defined Contribution Plan Expenses (PDF)
4 pages. Excerpt: "Despite the broad new discretion granted by the FAB, the ultimate reality of allocating defined contribution plan expenses is that any allocation will reduce participant account balances. For this reason, some plan sponsors may decide to continue to pay plan expenses out of non-plan assets, rather than risk raising the ire of participants." (Kilpatrick Stockton LLP)

Overview: DOL Changes Position on Allocation of Plan Expenses in a Defined Contribution Plan
Excerpt: "The DOL guidance does not require any changes to a plan document. Furthermore, since modification to a pre-approved document (prototype or volume submitter) would require resubmission to the IRS, we do not intend to make any changes to the plan documents. However, after resolving certain issues with the IRS, we will add some language options to our SPD and provide a sample summary of material modifications." (SunGard Corbel)

Overview: DOL Makes 180-degree Turn on Allocation of DC Plan Expenses
Item dated May 29, 2003. Excerpt: "An expense may be allocated on a per capita basis ... only for certain fixed administrative expenses (e.g., recordkeeping, legal, auditing, annual reporting, claims processing). Where expenses are charged to the plan on the basis of account balances (e.g., investment management fees), it is not appropriate to allocate those expenses on a per capita basis." (TRI Pension Services)

A New Retirement Savings Tactic for a New Tax Law
Excerpt: "The new tax law raises a tricky question: How should you divvy up your stocks and bonds between your tax-advantaged retirement accounts and your taxable accounts?" (The Wall Street Journal via SFGate.com)

Text of 2003 Florida Retirement Confidence Survey
Originally released May 6, 2003. Excerpt: "People who have ... retired in Florida are more confident about their financial prospects than American retirees in general, because they have planned and saved for retirement, according to the 2003 Florida Retirement Confidence Survey (RCS)." (American Savings Education Council)

Text of 2003 Texas Retirement Confidence Survey
Excerpt: "According to the 2003 Texas Retirement Confidence Survey (Texas RCS) released [May 14, 2003], while Texas workers resemble American workers overall in many ways when it comes to saving and planning for their future, they still fall behind in some key areas." (American Savings Education Council)

Can Pension Funds Use 'Socially Responsible' Mutual Funds?
Excerpt: "[T]he DoL is of the opinion that, once it is determined that an investment alternative is prudent for participant direction--based on an analysis of only the investment considerations--the fiduciaries can then, and only then, consider the collateral issues, like the socially responsible screen. The DoL opinion is not averse to SRI funds. In fact, it lays out the road map for prudently selecting and monitoring those funds." (Attorney Fred Reish in PLANSPONSOR.com; one-time registration required)

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Links to Items on Executive Comp, Benefits in General

Early Release Copies of New Income Tax Withholding Tables (PDF)
3 pages. Excerpt: "Attached are early release copies of the new Percentage Method of Withholding tables that will appear in Publication 15-T, New Withholding Tables. This publication is scheduled to be mailed to employers by June 18, 2003. The new tables are the result of the Jobs and Growth Tax Relief Reconciliation Act of 2003. Effective immediately, employers should begin using the revised tables for wages paid through 2004." (Internal Revenue Service)

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Newly Posted or Renewed Job Openings


Employee Benefits Specialist
for Goodman & Company
in VA

Benefits Assistant
for BFP Associates
in MA

ESOP Administrator
for Pentegra Group
in NY

Project Consultant
for Blue Cross and Blue Shield of Florida
in FL

Trust Attorney
for M&I
in MO

401K Client Service Rep
for ADP
in NJ

Compliance/Plan Document Analyst
for Mayo Clinic
in MN

Daily Administrator Opportunity
for Benefit Consultants, LLC
in AL

Group Insurance Coordinator
for United Business Media, Inc.
in NY

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Newly Posted Conferences
( Post Yours! )

Retirement Plan Design, and Legislation, Litigation and Regulation in Employee Benefits
in MA
June 16, 2003
Sentinel Benefits

Retirement Plan Design, and Legislation, Litigation and Regulation in Employee Benefits
in MA
June 18, 2003
Sentinel Benefits

Retirement Plan Design, and Legislation, Litigation and Regulation in Employee Benefits
in MA
June 20, 2003
Sentinel Benefits

Employment Practices Liability Insurance
in ALL STATES
June 18, 2003
Thompson Publishing Group

Green Light for Debit Cards?
in VA
June 24, 2003
Employers Council on Flexible Compensation

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Newly Posted Press Releases
( Post Yours! )

BREAKING THE LANGUAGE BARRIER: GE Financial Employer Services Group Helps Hispanic Employees Better Understand Their Benefits In the Language Of Their Choice
(GE Financial Employer Services Group)

Humana and Evolution Benefits Introduce the First-of-its-Kind Combined ID and Prepaid MasterCard? Card for Health Plan Members
(Evolution Benefits)

ASPA Releases RFP for Pension Course Textbooks
(American Society of Pension Actuaries)

Alliance Benefit Group Selects Public Relations Firm
(Alliance Benefit Group)

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