New Jersey Gov. Jon Corzine last week signed a legislation that requires new state officials to contribute to a 401(k) plan.
The legislation requires newly elected and appointed officials to participate in a 401(k)-type retirement plan, said Mark Perkiss, a spokesman for the state treasurers office. People who are being elected to office for the first time will have to join defined contribution plans. Its a necessary step needed to reform the pension system.
Bill would expand 401(k) to part timers
WASHINGTON Senate legislation that would require employers to allow long-term part-time employees to make contributions to a 401(k) plan was introduced May 3, according to a news release from the office of Sen. John Kerry, D-Mass.
The bill, called the Womens Retirement Security Act of 2007, would also require employers that do not now sponsor a retirement plan to allow employees to contribute a portion of their salary to an individual retirement account.
Unfortunately, due to unique circumstances women face in their lifetime, the current pension structure makes it more difficult for women to prepare for retirement, Sen. Gordon Smith, R-Ore., one of the bills co-sponsors, said in the release. It is important that we remove barriers in the current system and provide more opportunities for women to save for their future needs.
Wal-Mart contributes $667 million
BENTONVILLE, Ark. Wal-Mart Stores Inc., made a one-time contribution of $667 million to its profit-sharing and 401(k) plans for fiscal year 2006, ended Jan. 31, 2007, said Gary Karr, spokesman. Wal-Mart also contributed $51.4 million to its associate stock purchase plan, according to a news release.
Wal-Mart continues to contribute 2% of an employees pay to a profit-sharing plan and 2% of pay into a 401(k) plan. Employee matching contributions are not required.
Delta to raise DC plans company match
ATLANTA Delta Air Lines Inc. will increase the company match to its defined contribution program starting June 1, confirmed Lisa Gagnon, spokeswoman. Delta, which emerged from Chapter 11 bankruptcy protection on April 30, will contribute a guaranteed 2% of salary and match employee contributions up to 5% of salary. Previously, the company match was up to 2% of salary.
In March, Delta contributed $50 million to the defined benefit plan for active and retired ground employees and flight attendants, which was frozen in December 2005. The airline will continue to make necessary contributions to the frozen plan under the Pension Protection Act, which requires it to contribute another $50 million by the end of the year.
Ms. Gagnon declined to provide the asset size of the DB or DC plans.
The PBGC took over Deltas $1.6 billion pension plan for pilots in January; it was frozen in July 2005. The plan was underfunded by about $3 billion.
403(b) changes may cut provider hires
BOSTON Pending federal regulations on 403(b) plans could accelerate the switch to a single or limited number of providers, according to consultant Cerulli Associates annual survey on the 403(b) and 457 marketplace.
Plan sponsors are realizing that too much choice breeds inertia, according to a news release about the survey.
The report also found that 63% of 403(b) plan providers are opening their investment platforms to outside managers.