Benefits Issues After the 2004 Elections: A Sneak Peek
Election Day has come and gone, but the effects on benefits-related issues are likely to be significant
and long-lasting. President Bush is expected to stay the course on health care and to move toward
Social Security reform. IRS Proposes Phased Retirement Regulations
The IRS has proposed regulations permitting phased retirement arrangements in qualified defined
benefit or money purchase pension plans under specified conditions. After the rules become final,
these plans will be able — for the first time — to provide in-service distributions to participants
younger than normal retirement age. Cash Balance Litigation Trend Continues
The wave of litigation against cash balance plans continues. A new lawsuit against the Bank of America's
cash balance plan alleges age discrimination and makes a variety of other claims based on the plan's
unique design and features. IRS Proposes 403(b) Rules
The IRS has proposed the first comprehensive guidance under section 403(b) in 40 years. 403(b)
plans involve retirement annuity contracts and mutual fund custodial accounts for employees
of 501(c)(3) tax-exempt organizations and public educational organizations, and retirement
income accounts established or maintained by churches or church-affiliated organizations. SEC's Beller's Perspective on Role of Compensation Committee and Proxy Disclosure Requirements
Alan L. Beller, director of the U.S. Securities and Exchange Commission's (SEC) Division of Corporation
Finance, recently shared his views on how companies should go about disclosing executive compensation
on their proxies and how compensation committees can ensure that executive compensation serves
the interests of shareholders. 2004 Legislative Session Saw Active Benefits-Related Discussions
The 2004 session of Congress continued into December, but benefits-related discussions were wrapped
up in November. The 108th Congress had a busy legislative agenda, enacting legislation on hybrid
pension plans, defined benefit funding and nonqualified deferred compensation.
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