Benefits April 22, 2005

PSCA Throws Weight Behind Automatic Enrollment Bill

April 22, 2005 (PLANSPONSOR.com) - The Profit Sharing / 401k Council of America (PSCA) has come out in support of recently proposed legislation that encourages retirement plans with automatic enrollment and contribution increases.
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Introduced by US Senator Jeff Bingaman (D-New Mexico) the legislation supports and encourages defined contribution plans thatinclude both automatic enrollment and an automatic increase in aparticipant’s savings rate, unless the participant elects otherwise. According to the PSCA, such plans – when combined with a default investment that is appropriate – can and have demonstrated their ability to increase savings meant for retirement. This effect is seen most strikingly in low- and middle-class households.

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Under the bill, employers will be encouraged to automatically increase their employees’ contribution annually by 1%, according to a press release from Bingaman. Employers who offer these features will be deemed to have a “non-discriminatory” plan, the release stated, provided that they quickly vest the employers’ contributions and match savings at least 50% for the first 7% of the employee’s contribution.

The bill is being referred to the Senate Finance Committee, which Bingaman sits on.

“Senator Bingaman is a recognized leader on retirement issues on boththe Finance and Health, Education, Labor and Pensions committees,”remarked PSCA President David L. Wray, in a Web statement. “The legislation containsimportant PSCA – supported provisions that provide fiduciary protectionsand clarifications for automatic enrollment, automatic contributionincreases, and default investments appropriate for accumulating retirement savings. We look forward to working on other issues that webelieve will improve the bill so that even more companies will use thisnew plan design.”

A similar bill has been introduced in the House, with Rep.Rahm Emanuel (D-Illinois) attempting to make it so automatic enrollment is not inhibited by state laws (See 401(k) Automatic Enrollment Support Bill Introduced in Congress ).

Benefits April 21, 2005

Man Who Cashed Dead Mother's Pension Checks Sentenced to Jail Time

April 21, 2005 (PLANSPONSOR.com) - The man accused of fraudulently cashing his dead mother's pension checks has been sentenced to a prison term, which he is expected to start in July.

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Phillip Hyde, 63, who has Master’s degrees from both Harvard and New York University, cashed his dead mother’s pension checks for 18 years and then, when the Teachers’ Pension Fund of Chicago inquired about her status, claimed she was in a coma.

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Over the 18 years, Hyde cashed 220 checks from the pension fund, which amounted to $317,678, according to the Boston Globe. His scheme started to come apart four years ago, when, after checking Social Security records, the pension fund called Hyde’s home.

To avoid being caught, Hyde stated that she was in a coma. In an attempt to cover up the truth, he then took out a death notice in local newspaper, 18 years after his mother passed away.

In the ruling, he was ordered to pay the money back and spend a year plus one day in prison.

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