Winter 05-06 NEWSLETTER

HRASM 2006 Events

We have an educational and exciting year planned for you to get the most out of your HRASM membership. Our meeting format is typically the second Thursday of the month and will vary between breakfast, lunch and dinner programs, locations also vary. The following highlights our tentative schedule of topics to be covered throughout the year. Don’t forget that you are always welcome to bring guests and prospective members to the meetings, (please note the guest fee on each meeting invitation).

Beginning in January, we will be sending our meeting invitations via e-mail, so be sure to update your e-mail address with our membership chair, Jennifer Hunter, jhunter@ubat.com.

January 2006 Meeting

January 12, 11:30 am

Evans Street Station

110 S Evans Street, Tecumseh

Topic: Building a Talent Pipeline

February 2006 Meeting

February 9

Time and Location to be determined

Topic: Building Your HR Network

March 2006 Meeting

SOCIAL EVENT!

Date and Time to be determined

Roundtable Discussion

Date and Time to be determined

April 2006 Meeting

April 27, 11:00 am

(This program is 1 ½ hours)

Location TBD

Topic: Changing Resistance to Understanding

May 2006 Meeting

Date and Time to be determined

Topic: Employment Law

June 2006 Meeting

Date and Time to be determined

Topic: Staffing Metrics

July & August 2006 No Meeting

September 2006 Meeting

Date and Time to be determined

Topic: Joint program with Jackson’s group, SCHRMA

October 2006 Meeting

½ Day Seminar

Date and Time to be determined

Topic: Strategic Planning

November 2006 Meeting

Date and Time to be determined

Topic: Benefits

December 2006 Meeting

Date and Time to be determined

Topic: Legislative Update

To register to attend an upcoming meeting, please contact Amy Bergman at abergman@bankoflenawee.com or 517-266-5098.

SHRM 2006 Learning System

~Amy Bergman

SHRM has updated the learning system for 2006 exam preparation. Visit the SHRM website for information on the new system in January 2006. This system will prepare you for the Professional in Human Resources (PHR) or Senior Professional in Human Resources (SPHR) certification examination. If you don’t have the time to spend in a classroom, this “self-directed” learning system available through SHRM may be the answer for you.

The SHRM learning system combines printed workbooks, learning software and an online Resource Center for your convenience. You can try out a FREE demo at www.shrm.org/learning and test yourself with sample questions.

The cost is $595 for SHRM members, $695 for non-members. To order the SHRM Learning System you have the following three options:

Online: www.shrm.org/learning

By fax: (651)905-2669

By Phone: (800)444-5006, option #2

2005 MISHRM State Conference

~Margretha Harden, Past President of HRASM

Opportunities were in abundance for those who were able to attend the MISHRM State Conference in Bay City in September. Registration went smoothly with totes that included a CD of Charting the Depths of Human Resources (the theme for this conference), an umbrella (which we needed on Thursday to go to the Delta College Planetarium), Conference Programs and a large Chocolate Chip Cookie, which was our lunch on Wednesday.

Nancy and I had both chosen to attend a Pre-conference Workshop on Wednesday afternoon. I decided that I wanted to choose sessions that sounded like fun. Therefore, I choose ‘Building Effective Relationships Through Equine Assisted Learning’. What an experience! Working with a large draft horse and a riding horse, I was forced out of my comfort zone by going into a ring and haltering one of them. Each exercise had a time limit. Next, with very little instruction, we were asked to set up an obstacle course for these horses. Tough? Yes! We were not allowed to talk, touch or make offerings (like we had food) inside the ring or suffer a consequence decided by our team of five. Being a member of the second team, we had the opportunity to observe. I was moved from my comfort zone and given new in-site into the meaning of teamwork. WOW!

There was time provided on Wednesday and Thursday to talk with the 80+ vendors and pick up information and freebies. Many of them having drawings on Thursday afternoon. Some of the prizes were flat screen TV’s, Red Wing tickets, weekend ski packages, store gift-certificates, computer data storage thumbs, SHRM Certification fees, paid accommodations to the 2006 Conference in Grand Rapids, etc. Ten chapters brought in baskets for the silent auction. The proceeds of $1500.00 from this auction went to the SHRM Foundation.

Our Schedule started at 7:45 AM with a keynote speaker and breakfast. There were a total of 26 speakers which covered sessions in Business Knowledge, Personal Credibility, Strategic Contributions, HR Delivery, HR Technology, and Legal. Many of these sessions offered credit for re-certification. Each evening, a cocktail party, which was sponsored by a vendor with more give-a-ways. A Planetarium Show and Wine Tasting were optional evening activities as well.

There was opportunity to network with over 430 attendees from all over the state of Michigan. Nancy Lemon, Buffy Day, Angie Atkins and I attended from HRASM. Eric Einhorn, a

former member was in attendance. He works for Spartan Stores. It was nice to get acquainted with him again.

Attending as many sessions as time allotted, I enjoyed each one; taking away new ideas from each. I volunteered to be Host at a couple of sessions. I look forward to attending the 2006 MISHRM Conference in Grand Rapids, September 20 – 22 at the DeVos Place. There are five hotels attached to the conference center. Mark your calendar now for 2006!

Views Differ on Pension Insurance Fund Crisis

~By Bill Leonard (from SHRM white papers)

A recent spate of bankruptcy filings by large corporations, including four U.S.-based airlines, has made the financial health of the Pension Benefit Guaranty Corp. (PBGC) a hot topic of debate on Capitol Hill and among corporate watchdog groups.

One recent report contends that the PBGC, the federal agency that insures pension benefits for individual workers, is teetering on the edge of bankruptcy itself and that a taxpayer bailout of the troubled agency is inevitable, while another report claims that the agency situation may not be as precarious as many believe.

On Nov. 15 the PBGC reported to Congress that it faces a deficit of $22.8 billion. Compared to last year, the insurance agency’s deficit decreased approximately $530 million. PBGC officials stated that the slight improvement was attributable to better performance in the stock markets, which resulted in an increase in the agency’s investment income.

Even with the modest gain from 2004, Bradley D. Belt, executive director of the PBGC, says his agency still faces an uphill battle and that the PBGC’s current exposure to losses from pension plans sponsored by financially troubled businesses rose to $108 billion from $96 billion last year.

“Unfortunately, the financial health of the PBGC is not improving,” Belt told reporters. “The money available to pay benefits will eventually run out unless Congress enacts comprehensive pension reform to get plans better funded and provide the insurance program with additional resources.”

A report released in early November by Rochdale Research in New York City concluded that a taxpayer bailout of the PBGC is inevitable. The report states that the large corporate bankruptcies of four major airlines (United, U.S. Airways, Delta and Northwest) plus the recent bankruptcy filing by auto parts manufacturer Delphi Corp. have further compounded an already rocky financial position for the PBGC.

“The PBGC is effectively bankrupt itself with the recent airline failures. While the state of Delphi’s pension fund is still under negotiation, we think it unlikely the United Auto Workers will accede to the wage reduction necessary to save corporate sponsorship of the pension fund,” the report states. “Moreover, recent proposals in Congress to increase premium payments to the PBGC are simply not enough to close the funding gap.”

Pension reform legislation proposed in both houses of Congress would raise the employer-paid annual fee from $19 to $30 per plan participant. If enacted it would be the first rate increase for the PBGC fees since 1991. The Senate passed its version of the reform bill (S. 1783) on Nov. 16. The House version of the reform bill (H.R. 2830) has cleared a key committee and will be considered on the floor when Congress returns from its Thanksgiving recess.

Other legislation could change the PBGC premium as well. A budget reconciliation proposal (S. 1932), passed by the Senate in early November, would raise the fee even higher, to $46.75 per participant.

Passage of a pension reform bill would supersede any of the rate increases proposed in budget bills. Sources familiar with the issue say that if any of these proposals are enacted into law, a new employer fee is certain to take effect but will most likely remain at the $30 level.

However, the increased funds that the PBGC would collect under the congressional proposals would do little to offset the nearly $80 billion in liabilities the agency now faces, according to the researchers for Rochdale. The PBGC financial report states that the agency’s current assets are slightly higher than $57 billion, which accounts for the approximately $23 billion deficit.

“By our estimates the PBGC will need to be bailed out by U.S. taxpayers within the next five years,” the report states.

However, another report, Promises to Keep: The True Nature of the Risks to the Defined Benefit Pension System, commissioned by the American Benefits Council (ABC) in Washington, D.C., paints a somewhat brighter picture. The report states that the PBGC deficit could be reduced by nearly $8 billion if the agency used a different rate of return on investment income to estimate its assets and if the agency changed what the report termed its “overly conservative” investment strategy. In another scenario using a higher rate of return and a stronger performing investment portfolio, the ABC report estimates that the PBGC deficit could be as low as $4.6 billion.

“The PBGC’s strategy for investing its assets is flawed by being overly conservative. It is far more conservative than the prudent and diversified investment practices of most private plans that are adequately funded,” the report states. “Our own calculations suggest that the use of a more generally accepted interest rate—for example, the rate on investment-grade corporate bonds—would reduce the PBGC’s current deficit to $14.3 billion.”

Although the exact nature of the PBGC’s financial situation is unclear, Congress appears intent on attempting to pass some form of legislation that will raise employer payments to the PBGC. But James Klein, president of the ABC, says that the debate over pension reform should not focus solely on the PBGC’s financial woes.

“There’s no more reason to panic and enact sweeping changes that eventually do more harm to the pension system than help it,” Klein said. “Even though the PBGC has reported a $23 billion deficit for the second straight year, this issue should not drive the debate. Congress needs to find ways to provide stability and predictability to retirement benefits and ensure that complying with the new rules and regulations is not too costly for the plan sponsors who voluntarily support the system.”

Bill Leonard is senior writer for HR News.

HRASM Welcomes New Director for

2006 - Connie Riley-Evans, PHR

Connie is a Human Resource Generalist with the Adrian Dominican Sisters in Adrian, MI. Her responsibilities as a Board Member for HRASM will include the role of Diversity Chairperson, bringing her wealth of knowledge to our membership in this area.

If you are interested in contributing an article to this quarterly newsletter or would like to see a specific topic covered in an upcoming issue, please contact Amy Bergman at abergman@bankoflenawee.com or 517-266-5098.