December 2004

Welcome to Prairie Post, Blue Prairie Group's monthly e-Newsletter about Human Resource and Institutional Retirement & Investment issues.

In this Issue...

  - Plan Sponsors Demand More Employee Financial Education

  - Financial Counseling Critical Component of Retirement Planning; Education Not Sufficient

  - Lifestyle Funds Pose Communication Challenges

  - Employers Seek Consultants Without Conflicts of Interests

  - Year-end Review for Plan Sponsors and Administrators

  - How to Retain Those Key Employees

  - Overview: For Nonqualified Deferred Compensation Plans, It's Back to the Drawing Board

  - The Family Medical Leave Act: Compliance Reminders

  - What to Watch for in '05: Health Care and Employer Friendly Policies

  - Many Health Care Consumers Would Tolerate Some Managed Care Utilization Management Practices

  - As Skilled Workforce Becoming More Diverse; Manufacturers Adding More Training, Flexibility

Many plan sponsors are focused on increasing the number and quality of financial education programs offered by their plan providers, vendors and consultants say. The coming wave of retiring baby boomers and the perceived ineffectiveness of financial education programs are driving plan sponsors to re-evaluate their retirement plans.

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Financial Counseling Critical Component of Retirement Planning; Education Not Sufficient

A new study conducted by Ernst & Young LLP and ExecuNet revealed that personalized financial counseling is critical to help employees effectively manage retirement planning. The survey of human resource and employee benefits professionals found that financial education alone is not enough to influence a change in employee behavior.

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Lifestyle Funds Pose Communication Challenges

Lifestyle funds, also known as premixed portfolios and lifecycle funds, have been embraced by plan sponsors as a way to simplify retirement options for their employees. Yet many 401k participants own these funds along with other investments, which defeats the goal. It's a problem that plan sponsors need to address through education and plan design, financial advisors and consultants say.

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Employers Seek Consultants Without Conflicts of Interests

An overwhelming majority of 85 percent of so-called plan sponsors - employers who sponsor employee retirement plans - said it is 'extremely important' that their consultants are free of conflicts of interest.

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Year-end Review for Plan Sponsors and Administrators

Mellon has prepared a year-end review for plan sponsors and administrators. They have compiled a list of changes made by recent laws and regulatory pronouncements, as well as unfinished business in Congress, that affect employee benefit plans. Some of these items may require employer action, including plan amendments.

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How to Retain Those Key Employees

By educating your employees, you help them become healthy, wealthy and wise... not to mention loyal!

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Overview: For Nonqualified Deferred Compensation Plans, It's Back to the Drawing Board

The restrictions, which are contained in the American Jobs Creation Act of 2004, amount to a broad overhaul of the deferred compensation rules that companies follow in their reward programs for senior executives and other employees, outside directors and independent contractors. If the new requirements are not satisfied, plan participants are subject to accelerated tax on deferred amounts as well as an additional 20% tax and interest on the taxes that would have been paid.
 

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The Family Medical Leave Act: Compliance Reminders

This article reviews some compliance reminders for the Family and Medical Leave Act (FMLA) and discusses a recent US DOL Opinion letter on the FMLA and contingent workers.

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What to Watch for in '05: Health Care and Employer Friendly Policies

The new look of Washington, D.C., is likely to be more business-friendly than the past four years have been. .... [There may be an] ... effort by regulators to clarify parts of the Family and Medical Leave Act, reducing some confusion among employers about which health conditions qualify [and t]ax changes to facilitate the spread of health savings accounts.

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Many Health Care Consumers Would Tolerate Some Managed Care Utilization Management Practices

Despite their mistrust of managed care in general, individuals would accept some managed care strategies if it would help them lower health care costs, according to a study recently conducted by researchers from NORC, a national organization for research at the University of Chicago. The study results, Public Perceptions of Cost Containment Strategies: Mixed Signals for Managed Care, were published in the November 10 issue of Health Affairs.

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As Skilled Workforce Becoming More Diverse; Manufacturers Adding More Training, Flexibility

An aging population and other demographic facts-of-life ... will alter both the availability of skilled labor for manufacturers and the relationships between manufacturing employers and employees in the near future. Benefits will be affected -- and to a greater degree than is generally recognized. As large, global manufacturers demand more flexibility in capacity and outsourcing decisions, workers want more benefits that will improve their current and future quality of life:

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The articles have been carefully chosen from a variety of high-quality sources including government, research and academic institutions.

Please note: Blue Prairie Group checked each of these links before sending you this e-Newsletter. However, some links are only available for a limited period of time, so, you may occasionally find that a link has expired. If this happens, we apologize for any inconvenience.

Disclosure Statement:
Blue Prairie Group, L.L.C. does not endorse and disclaims any and all responsibility or liability for the accuracy, content, completeness, legality, or reliability of the material. All articles are copyrighted to their publishers.