Compliance September 8, 2005

Schwarzenegger Shoots Down Same-Sex Marriage Bill

September 8, 2005 (PLANSPONSOR.com) - California Governor Arnold Schwarzenegger said he will veto the bill legalizing same-sex marriage "out of respect for the will of the people."
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The bill passed by a vote of 41-35 in the Assembly this week after a previous defeat in the Assembly in June (See  CA Legislature Approves Same-Sex Marriages ).   The Senate approved the bill earlier by a vote of 21-15.   The Associated Press points out that a veto override in California requires a two thirds vote in both the Assembly and Senate.

The AP reports that the governor’s press secretary Margita Thompson said in a statement that, in spite of his plan to veto the bill, Schwarzenegger still believes “gay couples are entitled to full protection under the law and should not be discriminated against based upon their relationship.”  

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Thompson also said the governor is proud of the fact that California provides “the most rigorous protections in the nation for domestic partners.”   California gives same-sex couples many of the rights and duties of marriage with the state as domestic partners.

But gay rights advocates said the governor had betrayed the bipartisan ideals that helped get him elected in the 2003 recall election, according to the AP.

Schwarzenegger has until October 9 to issue the veto.

While the same-sex issue has been gaining attention in California, the Massachusetts Attorney General ruled thata proposed ballot initiative that would ban same-sex marriages would be permitted under a section of the Massachusetts Constitution allowing voters to overturn court decisions.   The AP reports that this decision clears the way for conservative groups to begin gathering signatures and lobbying lawmakers to put the issue before voters in 2008.

Benefits September 7, 2005

Increased Plan Participation Among Health Care Workers

September 7, 2005 (PLANSPONSOR.com) - The American Hospital Association (AHA) reports that the median participation rates of health care employees for 403(b) and 401(k) plans each increased 5% over the last year.
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This is a finding of the third annual survey, Retirement Plan Trends in Today’s Healthcare Market – 2005, conducted with Diversified Investment Advisors. In an AHA press release on the survey, David Ray, a vice-president and not-for-profit practice leader at Diversified attributes the increase in participation to the loss of defined benefit plans, uncertainty about social security, improved investment returns, less strict age and service requirements, and the great amount of press on the need for retirement saving.

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The survey also shows a correlation between employer matching rates and participation, according to the news release. As the 2004 survey showed, retirement plans with a “dollar-for-dollar” match have much higher average participation rates (69%) than plans that match 25 cents on the dollar (See Health Care Employers Find Plan Participant Success with Matches ).

More small plan sponsors offer an employer contribution, the survey showed, 90% offered one this year compared to just 80% in 2004 and 73% in 2003. Ray added, in the release, that there is also an increase in the offering of 401(a) plans, usually funded solely with employer contributions. However, 403(b) plans are the most prevalent in the health care market, with 75% of employers offering them. Forty percent of respondents offer 457(b) plans, while 34% offer 401(k) plans, according to the news release.

Survey respondents indicated that they are outsourcing more functions to their providers than they did last year. The most commonly outsourced functions were processing minimum distributions (59%), administering loans (58%), and processing hardship withdrawals (55%).

Other key findings of the survey, mentioned in the release, were:

  • 80% of respondents said they were still concerned with both educating and encouraging employees to take appropriate actions such as enrolling in their plans, saving adequately and investing appropriately when asked about their top challenges as a plan sponsor. Forty-six percent are concerned about keeping up with regulations.
  • For plans other than 403(b) plans, 27% of plan sponsors have no minimum age requirement for plan entry, and 30% of those same plan sponsors have no service requirement for entry.
  • Plan sponsors offer a more limited number of funds than in the past two years. For example, only 26% of plans offer more than 20 investment options, compared with 30% of plans just a year ago and 40% of plans two years ago.
  • Employee education and guidance continue to be critical to a plan’s success, the 2005 Survey showed employee education is the top priority of anticipated plan changes, with 80% of plan sponsors having this goal. In fact, 95% of plan sponsors with 10,000 employees or more expect to improve their employee education programs.

To request a copy of the report on the survey of 360 hospital administrators, go to www.aha-solutions.org or call 800-242-4677.

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