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April 3, 2000

IRS Approves Top Hat/401(k) Wrap Arrangement
Excerpt: "The IRS has again approved a top hat/401(k) wrap arrangement whereby a highly compensated employee (HCE) may make salary deferral contributions and receive employer matching contributions to a nonqualified deferred compensation plan (top hat plan) and then transfer all or part of the contributions to a 401(k) plan prior to March 15 of the following year." (EBIA Weekly)

MEWA Maintained by Affiliated Employers is itself an ERISA Plan
Concerning an employee's claim for benefits in Wightman v. Berkley Administrators of Texas, Inc. (N.D. Tex. 2000) (EBIA Weekly)

ERISA Preempts Purported Waiver of Beneficiary Rights in Divorce Decree
Excerpt: "In this case, a participant in an employer-sponsored life insurance plan was survived by his two ex-wives and other contingent beneficiaries, all of whom made claims to benefits under the plan." (EBIA Weekly)

Returns Filed Outside U.S. Considered Timely Based on Foreign Postmark
(EBIA Weekly)

FASB Issues Guidance on Stock Compensation Issues
Excerpt: "The Financial Accounting Standards Board today issued interpretive guidance on several implementation issues related to APB Opinion 25 on accounting for stock issued to employees. A proposal on the subject had been published for public comment early in 1999." (Financial Accounting Standards Board; press release)

Behemoth Public Pension Funds Sway Canadian Economy
Excerpt: "With recent mega-deals in real estate, the oil patch and a nasty power struggle for the Videotron cable company in Quebec, a handful of multibillion-dollar public pension funds have shown they are among the most powerful players in the Canadian economy." (news.excite.ca)

Employee Retirement Income Security Act (ERISA): An Evaluation after 25 Years
Excerpt: "The purpose of this Certified Financial Planner Board of Standards, Inc. white paper is to discuss ERISA and examine whether after twenty-five years since enactment, it still meets its intended purpose of providing 'retirement income security.' This study consists of two parts. Part One addresses the latest research analyzing the impact of employee education on individuals in participant-directed defined contribution plans governed by ERISA §404(c) of ERISA. Part Two examines ERISA reorganization issues." (Certified Financial Planner Board of Standards)

Patients' Rights Debate Ignores Key Issues, Insurance Commissioners Charge
Excerpt: "Amid the tug and tussle of crafting a national patients' bill of rights, lawmakers have glossed over basic questions of how the law would be dovetailed with states' existing managed care regulations, state insurance commissioners charge." (Medscape (free registration required))

Phased Retirement Programs - 4/3/2000 testimony of Wilma K. Schopp on behalf of the Association of Private Pension and Welfare Plans (PDF)
Excerpt: "My testimony will review the interest in and trend towards phased retirement programs, under which older employees who might otherwise completely retire are provided with incentives to remain actively employed. I will then briefly review the reasons behind this trend and why we at APPWP believe that phased retirement ought to be encouraged by public policy. I will also review how employers have tried to implement phased retirement and how the law and regulations governing employee benefit plans might be modified to facilitate phased retirement programs." (APPWP)

A Good Deal Too Much: Conseco's Plan to Align the Interests of Managers and Shareholders Has An Alarming Downside
Excerpt: "In 1996, when Conseco adopted the scheme, borrowing to buy stock seemed like a great idea. Bank of America provided the funds to senior managers and directors; Conseco guaranteed repayment and covered the interest payments with personal loans to executives." (CFO Magazine)

All for One and One for All: Why Stock Ownership for Managers Doesn't Always Have the Intended Effect
Excerpt: "... both consultants and shareholder activists have criticized some plan designs as defeating their stated purpose, in essence creating empty initiatives meant to wow impressionable investors. These plans typically pay only lip service to the idea that management is putting its own money on the line." (CFO Magazine)

Excerpt: "Will computers and Internet access join health plans and 401(k)s as standard employee benefits?" (CFO Magazine)

Defending Your 401(k)
Excerpt: "Your fiduciary obligations to employees outweigh those to shareholders. Here's how to limit your vulnerability to the slings and arrows of a 401(k) lawsuit." (CFO Magazine)

The Dos and Don'ts of IRA Investing
Excerpt: "The decision of how to invest IRA assets is complicated because the law does not allow taxpayers to hold certain investments in an IRA. CPAs will find little formal guidance on IRA investments from the IRS or the Department of Labor." (Journal of Accountancy (AICPA))

Pension and IRA Coverage Among Boomer, Pre-Boomer, and Older Workers (Executive Summary)
Excerpt: "This Issue Paper looks at the retirement plan coverage of boomer, pre-boomer and older workers. In addition to assessing coverage on different jobs, this paper also examines the type of plan in which a worker participates. Examining the pension and retirement plan coverage of older groups of workers may tell us something about the future level and type of coverage, and maybe even about the level of benefits and income, of younger ones. In addition, the special circumstances affecting the retirement prospects of vulnerable populations, such as women, minorities, and low-income groups, are briefly discussed." (AARP Issue Paper)

1999 Investment Company Institute State Survey Of IRA Protection In Bankruptcy
The treatment of individual retirement accounts -including Roth, SEP, SIMPLE, and Education IRAs - in bankruptcy under state law is summarized in a table published online by the ICI. (Investment Company Institute)

When Good Jobs Go Bad: Young Adults And Temporary Work In The New Economy (PDF, Full Report)
Excerpt: "Who is the largest private employer in the United States? It is not General Motors, Wal-Mart, or AT&T. The largest private employer is Manpower Inc. But Manpower Inc. does not produce 'widgets' or anything else that it sells to consumers. Rather, it is in the business of selling labor services to other companies. It is a temp agency, the help supply industry's largest." (2030 Center)

When Good Jobs Go Bad: Young Adults And Temporary Work In The New Economy (PDF, Executive Summary)
Excerpt: "The 2030 Center project on the Jobs of the Future is a new effort to focus attention on young adults' labor market circumstances." (2030 Center)

H.R. 4109, to amend the Fair Labor Standards Act of 1938 to clarify the treatment of stock options under the Act
Link to text of bill and other information, provided by the House of Representatives' Thomas web site. (As Introduced in the House March 29, 2000)

March 2000 issue (Towers Perrin)

Plan Fiduciary: The Supreme Court's Dicta in Mertens on Nonfiduciary Liability Continues to Create Split Circuit Decisions
Excerpt: "Is there nonfiduciary liability under ERISA? The circuit courts are divided on important issues related to this question, especially as brought out by Mertens v. Hewitt Assoc. This column discusses fundamentals relating to nonfiduciary liability under pre- and post-ERISA law, Mertens' dicta leading to conflicting court interpretations, and the current status of case law regarding nonfiduciary liability under ERISA." (Kilpatrick Stockton LLP)

Arizona consumers to HMOs: See you in court
Excerpt: "Beginning Jan. 1, 2001, residents of Arizona can sue their HMOs for damages, making it the fifth state in the country to enact such a law." (insure.com)

Major Employers Call For PBGC Reforms In Wake Of $7 Billion Surplus
Excerpt: "The announcement underscores the need to adopt ERIC's proposals to Congress that will 1) reduce the exorbitantly high premium-taxes imposed on defined benefit pension plans by the agency to support its single-employer plan termination insurance program and 2) limit and regulate the agency's interference in business transactions." (ERISA Industry Committee)

Treasury proposes to expand the circumstances under which certain optional forms of benefit may be eliminated and to relax elective transfer rules
Analysis, from Sal Tripodi. "The Treasury has published proposed amendments to Treas. Reg. §1.411(d)-4 that would relax some of the requirements under IRC §411(d)(6) to protect optional forms of benefit." (cybERISA.com [TRI Pension Services])

Hospitals speak ill of HMO ad campaign - TV spots are called insulting, deceptive
Hospital leaders angrily took issue Tuesday with an ad campaign by managed-care insurers. They say the spots insult medical workers and are an attempt to divert Congress' attention from patients-rights legislation. (USA Today)

AAHP, HMOs diverting patient care dollars on propaganda to derail patients' bill of rights
"Patients, physicians and lawmakers have worked for more than half a decade on a patients' rights bill to hold HMOs and other insurers accountable. HMOs have fought back every step of the way. As the only entity in society immune from accountability for the harm they do, HMOs will do anything to preserve their special status." (American Medical Association)

IRS Issues Proposed Regulations on Qualified Transportation Benefits
Recently, the IRS issued Proposed Regulations which make it easier for an employer to offer qualified transportation benefits (QTBs) to its employees on a pre-tax basis through salary reduction. (Kilpatrick Stockton LLP)

Workers Encouraged To Nap on Job
(Associated Press)

Unusual Perks Give Workers More Free Time -- Housekeeping, Pet Care Are Among the Services Managed by Dot-Coms to Keep Workers Happy
(CMP Media)

Health Insurance Purchasing Cooperatives Less Successful Than Expected
Once touted as a way for small employers to exercise their buying clout, health insurance purchasing cooperatives (HPCs) have largely failed to catch on, a new study shows. (Medscape (free registration required))

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