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Board Approves New Constitution/By-Laws
Membership to Vote in January
The RVSHRM Board unanimously approved the
new constitution/by-laws for our Chapter. The Constitution/By-Laws Committee comprised of Dan Oyler, Charlotte Mason and Joy Hanson rewrote the document, designing it after the national SHRM model. This streamlines the new document, making it easier to read and interpret, while continuing to contain all of the locally necessary rules and procedures of the old constitution/by-laws.
You are encouraged to read it and come prepared to vote on its adoption at the January meeting.
Workplace issues will be a priority for Bush’s second term
By Bill Leonard
Social Security, income tax reform, pension matters and other workplace-related issues will be high on the Bush administration’s to-do list as a result of November elections that gave the president a second term and widened Republican majorities in the House and Senate.
One crucial workplace matter that might not get much attention during the next four years is the recent changes to white-collar exemptions to overtime regulations under the Fair Labor Standards Act. Unlike unsuccessful Democratic challenger John Kerry, President Bush supports the overtime rule changes that took effect in August.
That backing, coupled with diminished power among Democratic legislators, could make it less likely that the overtime rule revisions—the first substantial changes to the rules in a generation—will be altered substantially by Congress in the near future.
“The opponents to the overtime rules were really trying hard to politicize the issue before the election. But now that President Bush has won, I don’t think we will be seeing many more efforts to rescind the rules,” said Michael Aitken, director of governmental affairs for the Society for Human Resource Management
(SHRM).
“There may be some attempts to amend a bill or two, but with the larger majorities in both the Senate and House, I think any attempts will be voted down fairly quickly,” said Aitken. “It will quickly become a non-issue.”
Other matters will draw sometimes heated debate, however.
The war on terrorism and the effort to stabilize Iraq are sure to figure prominently in 2005. The Senate will start next year by focusing on confirming a new attorney general and secretary of state, and filling other cabinet seats that have opened up. There has been speculation that one or more Supreme Court justices could announce their retirements now that the election is over.
“It’s going to be a full political agenda. I believe that Congress will address all of these issues, including the HR-related ones,” said Frank McArdle, head of the Hewitt Associates Inc. research practice in Washington, D.C. “The issues will all move on different tracks and at different speeds, but there will be an effort from the Bush administration to push its agenda.”
Expect incremental change
Although Republicans won convincing victories on Nov. 2, employers and employees shouldn’t expect to see drastic changes or sweeping reforms to workplace-related legislation coming out of Washington, D.C., any time soon, say political observers.
“The Republicans only hold 55 seats in the Senate, which is still five away from the magic number of 60”—the number of votes needed to carry a cloture vote and end a filibuster, said
Aitken.
“The Democrats aren’t just going to roll over and play dead either, so both sides of the aisle will have to work together,” Aitken continued. “I think we are going to see some more bipartisan efforts to address some very important pieces of legislation.”
The day after the election, Bush outlined some of his priorities for his second term; chief among them were Social Security and income tax reform. The two initiatives could have wide-ranging effects on businesses and how HR professionals perform their jobs.
“Both these issues will affect the way employers administer the benefits that they offer to their employees,” said McArdle. “Since President Bush has stated that Social Security reform will be a top priority, retirement benefits definitely will be receiving quite a bit of attention from Congress.”
There likely will be a renewed emphasis on promoting policies designed to empower employees and consumers and to provide them with more options to secure health care for their families and to save for their retirement.
Finding ‘common ground’
“In his first term, President Bush demonstrated that he was able to push Congress to enact major legislation—tax reform and Medicare reform—with very little Democratic support,” said James A. Klein, president of the Washington, D.C.-based American Benefits Council. “The challenges for America’s private and public health and retirement systems are enormous. It is essential that the president plus the Republicans and Democrats in Congress find common ground on policies that will ensure health and retirement security. Failure to do so will make it even harder to accomplish in the future.”
Any major overhaul of the Social Security system is a huge task that could take years to resolve. With an estimated price tag of nearly $2 trillion to switch over to a new system, the president’s proposed plan to privatize parts of Social Security is sure to meet resistance on Capitol Hill.
“The main debate will not be whether we should privatize the system but how much it will cost to switch over and how to set the cutoff dates for benefits under the old system,” said SHRM’s Aitken. “And then, how can we be certain the new system will work once the government then commits to the change and to spending trillions of dollars? This will mean that we could be testing models and pilot programs in some states.”
Any changes to the current system will focus attention on how people are preparing for retirement and how employers can help them to save.
Pension and retirement benefit reform has been pushed before in Congress, but this time political analysts are speculating that the initiatives could go further. Analysts say that certain aspects of pension reform now have a better chance of succeeding.
“I believe we could see legislation passed that clarifies the rules on cash balance plans and cash balance conversions, and this would be a very welcome change among employers,” said Hewitt’s
McArdle.
Cash balance pension conversions
Rules proposed by the Treasury Department to regulate converting traditional pension plans to cash balance plans have met stiff resistance in Congress. A measure to block the rules from taking effect was attached in September to the Treasury appropriations bill. The measure was still pending but most likely will be removed if a proposed omnibus spending package is passed during the lame duck session of Congress.
“Cash balance conversions is definitely an issue that Congress will be addressing next year, along with a permanent replacement to the 30-year Treasury bond rate for calculating pension liabilities,” McArdle said.
Congress did enact a replacement rate by using a mix of corporate bond rates earlier this year, but the formula change is set to expire at the end of 2005. McArdle says a permanent solution is needed and that it has a good chance of passing Congress next year.
“The Republicans did gain seats and should have the votes to pass some of these needed changes, but it will take some time to get it all sorted out,” he said.
Some other proposals for retirement benefits from the Bush administration might include an effort to expand tax-deferred retirement savings plans by adding retirement savings accounts and lifetime savings accounts to the mix. As previously proposed, each account would have a maximum annual contribution limit of $5,000. Savers wouldn’t be able to deduct contributions on their income tax returns, but earnings from interest would accumulate tax-free.
The Bush administration has advocated new employer retirement savings accounts. These accounts would combine the existing array of retirement plans, such as 401(k) accounts, into one plan. While these savings proposals were sidelined during Bush's first term, some political observers say they could fare better in his second term because the Republicans will be ready to make changes and pass legislation that was stymied over the past four years.
Health care solutions elusive
Both presidential candidates during the election seemed to dance around detailed proposals for health care reform. The lack of a specific reform plan means there is no real mandate for pursuing specific policies—which may not be such a bad thing, according to the American Benefits Council’s Klein.
“This actually creates an opportunity and provides the freedom to do many things needed to better ensure Americans’ sense of personal financial security,” Klein said.
The Bush administration’s approach to health care reform will likely be similar to efforts during the first term and will focus on strategies to place more responsibility for choosing cost-effective health care options into the hands of consumers. The administration will seek to slow the rising costs of health care and attempt to improve health quality by providing tax breaks, free-market incentives and greater choice for individuals in selecting their care.
“The Bush administration has pushed the idea of the ownership society and for individuals taking personal responsibility to providing for themselves and reduce governmental involvement, and that’s likely to continue,” said Hewitt’s
McArdle.
Any major expansion of tax credits and health plans with tax incentives could further reduce revenue flow for the U.S. government. Political analysts are skeptical that the Bush administration will be able to make a major commitment to expanding health care proposals while income tax cuts for individuals remain a top priority and the nation continues to run a huge budget deficit.
Another initiative that could see some action is medical malpractice reform. With a larger GOP majority in the Senate, political observers say, the Bush administration may be able to win approval for legislation that caps the payouts in medical malpractice lawsuits, which Democrats have blocked in the past. Some states are already moving in that direction.
Tax code, FMLA reforms on tap
Bush has set reform of the federal tax code as another top priority for his second term. While changes to individual income tax rates may not affect employers or HR professionals directly, any reform of the law could change the way employers compensate and provide benefits to their employees.
“With a major reform effort on something as huge as the tax code, there could be a litany of ancillary issues that can have a tremendous impact on employer-provided benefits like life insurance or incentive compensation packages,” said McArdle. “So it’s definitely an issue that employers and HR professionals will need to monitor.”
Officials with U.S. Department of Labor (DOL) have stated that they will be making proposals to change regulations under the Family and Medical Leave Act (FMLA). DOL announced earlier this year that it would not meet its June 2004 deadline to publish proposed revisions to the regulations governing FMLA. It now targets March 2005 for issuing proposed rules.
These are expected to focus on issues raised in recent court decisions that interpret the law’s notification requirements under the 2002 U.S. Supreme Court ruling in Ragsdale vs. Wolverine Worldwide.
“The Labor Department is looking at changing the FMLA regulations affecting issues such as the definition of serious illness and tracking incremental leave time,” said McArdle. “But I think after their experience with implementing the overtime regulations last year, they will be proceeding very cautiously.”
This article was presented in HRWeek, November 22, 2004. Bill Leonard is senior writer for HR News.
For the latest HR-related business and government news, go daily to
www.shrm.org/hrnews.
SHRM Foundation
If you have been at a meeting lately you know that we have been promoting a 50/50 raffle to benefit the SHRM Foundation. It occurred to me that there may be some of you who do not know what the Foundation does, and why we as an organization might be promoting and contributing money to this arm of SHRM. Below are a few facts:
The SHRM Foundation:
· is a 501 (c)(3) charitable, not-for-profit organization that operates as the research and development arm of the HR profession.
· advances the profession and enhances the knowledge and competency of HR professionals through its funding of research, publications and educational programs.
· is governed by a volunteer Board of Directors from the HR profession. It includes academics, practitioners and representatives from the Society for Human Resource Management.
· is supported by tax deductible contributions from individuals, companies and organizations. The Foundation recognizes all contributors in its Annual Report and in a special insert in HR News, and in other materials.
· funds major research projects that have a direct and practical impact in advancing the profession. It no longer funds doctoral dissertations.
· funds practical publications on specific issues (such as Issues on Employee Leave). And supports scholarships, SHRM chapter educational matching grants and other educational initiatives.
For more information on the SHRM Foundation, please write to Sandi Peyton,
speyton@shrm.org, Foundation administrator or go to the Foundation web site at
http://www.shrm.org/foundation/about.asp
We will continue to sell raffle tickets at each meeting to benefit the Foundation. Cost is $1.00 per ticket or 6 tickets for $5.00. See you in January !!
Diversity
Program
The Diversity Committee teamed up with the Program Committee and the Hotel Roanoke to present a program that underscored our diverse environment. From the random seating arrangements to the international buffet to the commonalities ice-breaker to the problem solving exercises, the members were fully immersed in diversity. The prize for the diversity ice-breaker was “$10,000” (actually a candy bar that has Spanish peanuts as an ingredient). As an added bonus, the program also earned the attendees CEU for their participation.
HRM Certification Course
Mary Baldwin College will offer a spring study course for HR professionals interested in sitting for the PHR or SPHR designation exams. This certificate program comprises twelve three-hour classes that meet weekly on Thursday evenings from 6:00-9:00 p.m. beginning on January 20. MBC has offered this program for RVSHRM members and valley–wide businesses and organizations for several years, and Dan Oyler facilitates the classes. Participants receive the 2005 SHRM Learning System, from which the certification exams are taken, and a certificate and CEUs from the college. For information on this program, contact Dan Dowdy at (540) 343-8724, or visit the web site at
www.mbc.edu/learninc.
The Roanoke Chapter Sponsors Memberships
In 2004, the Roanoke Chapter will sponsor memberships for several HR Professionals whose employers do not fund their National and Local SHRM memberships. Through these one-year memberships, the Chapter hopes to better serve the community and to reach persons engaged daily in the field of HR who may not currently be participating in the either organization.
Recipients of the Chapter-sponsored memberships will be expected to pay their own fees for the Chapter’s monthly luncheons and other events. They will not be identified to Chapter members as recipients of sponsored memberships.
Persons interested in applying for the one-year membership should submit the following items as soon as possible:
· Letter of interest, describing their current position and the
benefits they hope to receive from National and Local
SHRM membership
· Resume
· Letter of recommendation from their employer that includes
confirmation their memberships will not be employer-paid.
If you’re interested, please contact Barbara Phelps,
Matt Duffy, or
Debra Lovelace. Funds available for this new program are limited, so you are encouraged to act promptly to ensure your request is fully considered.
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