Benefits April 21, 2005

TSP Real Estate Fund Option Gaining Support in Congress

April 21, 2005 (PLANSPONSOR.com) - A new bill that would give the Thrift Savings Plan (TSP) a real estate investment option seems to be garnering support from federal lawmakers and equally strong opposition from Thrift Board members.
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According to GovExec.com, members of the US House Government Reform Subcommittee on the Federal Workforce and Agency Organization are showing support for the bill, which was introduced last week by Representative Chris Van Hollen (D-Maryland) and Representative Jay Porter (R-Nevada) (See House Bill Would Give TSP a Real Estate Fund Option ).

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The bill would add a sixth option – one based on real estate investment trusts – to the retirement plan for federal workers.

The Federal Retirement Thrift Investment Board announced last week that it is unanimously opposed to the plan, however. According to testimony before the committee, Board officials called for lawmakers to reject the bill, citing the plan’s simplicity as one of its strengths. The Board also said it was unwise to create a fund option around a single industry, regardless of how it is performing at the moment.

“The purpose of this hearing is to discuss an investment that in many ways is quite different from the existing TSP investments … this would be the wrong fund at the wrong time,” Thrift Board Chairman Andrew Saul said, according to the news report. “Investment policy should not be developed one fund at a time on a case-by-case basis. Sound investment policies can only be developed in a comprehensive fashion.”

Despite these warnings, GovExec.com claims that there was strong bipartisan support for the move.

The only note of caution came from Representative Richard Neal (D-Maryland), co-chairman of the Congressional Real Estate Caucus, according to GovExec.com. He supposedly supports the bill, hut has reminded other lawmakers of other industries that at one time did look good, only to go belly up.

“I hope we don’t forget the dot-coms, the Enrons, the [savings and loan] busts,” Neal said.

Benefits April 20, 2005

HR Outsourcing Brings Cost Savings, Satisfaction

April 20, 2005 (PLANSPONSOR.com) - The latest examination of the cost savings from human resource outsourcing asserted that there is a high satisfaction rate with both quality and savings.
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PricewaterhouseCoopers has released a statement reporting that of the nation’s fastest-growing companies, 83% outsource at least some HR functions and 61% are seeing cost savings. Overall, the report states that 81% of CEOs polled say their experience with outsourcing has met or exceeded expectations, while only 15% reported a “mixed” experience. Ninety-four percent are satisfied with quality levels and 87% are satisfied with cost-savings, which average 16.7%, according to the news release.

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Seventy-four percent of those polled said that their HR outsourcing budget has held steady for the past two years, while 4% said that it has decreased. Going forward, 62% expect no change in this budget, while 3% expect it to decrease.

There are a wide array of reasons to outsource, according to the poll. At these companies, 82% cited compliance with complicated federal and state regulations as a reason to outsource, while 71% cited the need to reduce and control operating costs. Other reasons were eliminating costs of in-house systems (71%), improving process inefficiencies (70%), and eliminate difficult-to-manage functions (67%).

The most often outsourced HR functions of those in the poll were 401(k)/DC plan administration (71%) and payroll processing (64%).

The report stands in contrast to another released Tuesday that stated that many firms are repatriating outsourced function because of lack of costs savings and dissatisfaction (See Many Companies Repatriating Outsourced Functions ).

PricewaterhouseCoopers’ “Trendsetter Barometer” is compiled with the help of BSI Global Research.

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