March 19, 2001
Today's sponsor: The Plan Sales System (click)
The Plan Sales System is a comprehensive, 16-step system for growing a retirement plan sales practice. It provides detailed resources, contact names and numbers, checklists, charts, handouts, letters, extensive prospecting techniques, descriptions of current market opportunities, and tools for planning and monitoring sales activity.
A Virtual Plan for Retirement
Excerpt: "If you're navigating your retirement ship on your own, plenty of Internet sites clamor for your attention. But you don't need to dock at every port of call. Instead, go directly to the 401(k) Advisor at Quicken.com.... [T]his comprehensive retirement-planning site covers more than just 401(k) plans. Its retirement calculator is designed to take all your retirement assets into account and tell you the odds that you'll reach your retirement goal ..." (Kiplinger.com)
Grab 401(k)? Think Again, Idled Workers
Excerpt: "DaimlerChrysler Corp. employees -- and others facing painful layoffs -- will want to resist every urge to view their 401(k) money as a lucky lottery ticket. This is not money in your pocket. This is money in your future. And you shouldn't plan to just grab the cash and run." (Susan Tompor, Auto.com)
401k Plans: More Choices, More Risks
Excerpt: "In what may turn out to be a masterpiece of bad timing, much of corporate America is now yielding to the entreaties of workers and opening their 401(k) plans to self-directed brokerage accounts," (Washington Post)
403(b) Website Publisher Fights for Better Vendor Choices Even in Own Back Yard
Excerpt: "But I have a confession to make. I've never personally needed to fight for better choices. Like many of you, my southern California school district is plagued by horrible choices. But unlike many of you, my district offered Vanguard, a leader in low-fee, no-load mutual funds. [Now Vanguard is being eliminated because the school district says it won't sign a 'hold harmless' agreement.]" (403bWise.com)
National Council on Teacher Retirement's Resource Book on the Preservation of Defined Benefit Plans (PDF)
57 pages; includes 2000 supplement: 'Summary of Activity on DB/DC Issue in 1998-1999 and Review of Florida Legislation Passed in 2000." (National Council on Teacher Retirement)
A Summary of ESOP Legal Developments During 2000
Attorney David Johanson provides a summary of legal developments affecting employee stock ownership plans (ESOPs) and related plans during the year 2000. (The National Center for Employee Ownership)
Bank One Axes Senior Exec Retirement Plan
Excerpt: "On Friday Bank One Corp. disclosed that it has discontinued its retirement plan for senior executives, a move that representatives of the Chicago company called a bid for fairness. Also last week First Union Corp. of Charlotte, N.C., said it had ended an executive retirement plan and would tie future bonuses more closely to the company's performance." (American Banker)
Principal's Pension Plans to Get Stock-Trading Option
Excerpt: "Principal Financial Group's retirement plan customers will be able to invest their money in individual stocks, under a plan with online broker Ameritrade. Des Moines-based Principal, with 44,000 employer pension customers, said Tuesday that it was partnering with Ameritrade Holding Corp. of Omaha to offer self-directed brokerage account services. Investment options will include stocks traded on the major exchanges, mutual funds, treasuries and bonds." (Des Moines Register)
Life-Cycle Saving, Limits on Contributions to DC Pension Plans, and Lifetime Tax Benefits
Link to a Working Paper available for downloading from the National Bureau of Economic Research. Excerpt: "This paper addresses ... whether statutory limits on tax-deductible contributions to defined contribution (DC) plans are likely to be binding, focusing on households in various economic situations ... how large is the tax benefit from participating in defined contribution plans ... how does the defined contribution tax benefit depend on the level of lifetime income." (Jagadeesh Gokhale, Laurence J. Kotlikoff, Mark J. Warshawsky )
Look Out! Here Come the Day Traders
Excerpt: "Employers will soon be able offer more and more 401(k) participants the ability to trade in individual stocks online. But liabilities loom for plan sponsors as they welcome the onslaught of the new day traders." (CFO.com)
Reinforce Retirement Plan Now
Excerpt: "If the stock market's stumble caught you napping, now is the time to take a close look at your investments, especially if you are on the verge of retirement or already retired." (St. Petersburg Times)
Pension Plans Globally: 2000 Is Worst Performance in a Decade
Excerpt: "Poor performance of capital markets, worldwide in 2000, had a negative impact on pension plan financial performance, and also reduced plan funded levels by 10% to 15% in a number of major countries, according to a new report from Towers Perrin ... The impact ... was twofold: directly on fund assets and indirectly on liabilities from required changes in economic assumptions to meet accounting requirements." (Internet.com )
Survey of Retirement Fund Investors Shows Market Decline Hasn't Caused Panic
Excerpt: "Investors aren't panicking with their retirement money even as stock markets plunge, financial experts said Wednesday. A survey of 401(k) participants showed 'nearly zero' activity in transferring money from one type of investment to another after Monday's 436.4-point fall in the Dow Jones industrial average, said Jennifer Frighetto, a spokeswoman for Hewitt Associates, a financial administration firm. Most transfers went to fixed income." (Knight Ridder/Tribune)
Market Clouds Retirement Hopes
Excerpt: "In the past two decades, close to 50 million Americans have invested more than $1.5 trillion in employer-sponsored retirement plans, most with exposure to the stock markets. The latest market gyrations are hurting those planning retirement and those already retired." (Associated Press)
Now Might Be Time To Revisit 401(k) Investment Choices
Excerpt: "While experts say retirement funds should be invested for the long term, that doesn't mean you should put your 401(k) investments on autopilot. Too often, experts say, investors simply divide contributions equally among several investment options and never make a change. That's a mistake." (USA Today)
Link to a Working Paper available for downloading from the National Bureau of Economic Research. Excerpt: "Generational policy is a fundamental aspect of a nation's fiscal affairs. The policy involves redistributing resources across generations and allocating to particular generations the burden of paying the government's bills. This chapter ... shows how generational policy works, how it's measured, and how much it matters to virtual as well as real economies." (Laurence J. Kotlikoff )
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Employee Stock Options Are Here to Stay
The market downturn has led some to question whether broad-based employee stock options will go away. This article discusses why they won't. (National Center for Employee Ownership)
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