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April 24, 2000

Vote May Force Changes to IBM's Pension Plan
Excerpt: "International Business Machines Corp. on Tuesday will disclose results of a vote that could repeal changes to its pension plan." (Los Angeles Times)

Protecting Qualification of Recipient Plan of an Invalid Rollover; Analysis of Final Reg
Excerpt: "The regulation provides four examples of what kinds of information a recipient plan might use to reasonably conclude the distributing plan is qualified, depending on whether the rollover is a direct rollover or a rollover contributed by the participant." (TRI Pension Services)

Employee Ownership Update for April 21, 2000
News on the phaseout of United Airlines' ESOP, the growth of Southwest Airlines' profit sharing plan (72% of which is in company stock), the bill to amend the Fair Labor Standards Act to clarify that option awards are not compensation for overtime purposes, and the completion of an ESOP buyout at Environmental Sciences Associates. (The National Center for Employee Ownership)

A Conceptual Guide to Employee Ownership for Very Small Businesses
This is an extended discussion in 6 parts of the alternatives available to very small businesses who are interested in employee ownership but for whom an ESOP or other benefit plan commonly used by larger companies may be unsuitable. (National Center for Employee Ownership)

Small Plans Must Issue SARs Every Year Now
Excerpt: "Since the revised forms eliminate Form 5500-C/R, this alternative method for complying with the SAR requirement no longer applies to reports filed for the 1999 plan year and subsequent plan years. Thus, small-plan filers now have an annual requirement to prepare a separate SAR and to furnish the SAR to the participants and beneficiaries." (TRI Pension Services)

Some Notes on 'Subrogation'
Excerpt: "Many HMO contracts have clauses which say that if you have an accident, and they pay for your medical care, and you sue the person who caused the accident, and you get money from him, the HMO can take from that judgment or settlement, whatever they paid for your care, and they can place a lien on the money you got." (Health Administration Responsibility Project)

Medical Savings Accounts May Help the Healthy
Excerpt: "Medical savings accounts are tax shelters for the wealthy or a panacea for uninsured Americans, depending on who you talk to. With a government test of the accounts set to end this year, Congress must decide which description fits and whether to extend the plan to more Americans." (Associated Press)

Virginia Justices Strike Down Alexandria's Benefits For Domestic Partners
Excerpt: "A unanimous Virginia Supreme Court struck down an Arlington County law [on Friday] that conferred health insurance benefits on the unmarried domestic partners of local government employees. The county said it plans no appeal." (Washington Post)

Retired, Rehired: Dutch Fill Crucial Work Force Gap
Excerpt: "Recruiting the elderly -- men and women who want to occupy their day, battle loneliness or top up their pension -- has become a Dutch growth industry. While unemployment hovers around 10 percent in other parts of Europe, the Dutch now have the opposite problem: with only 2.7 percent jobless, the country is seriously short of workers." (New York Times; free registration required)

Tax Externalities of Equity Mutual Funds
Excerpt: "... new investors convey a positive externality upon existing investors by diluting the unrealized capital gain position of the fund. This paper's simulations show that these externalities are important determinants of the after-tax performance of equity mutual funds." (National Bureau of Economic Research Working Paper)

Taking a Pay Cut: Workers With Options Watch as Income Erodes
Excerpt: "This month's steep decline is a sobering lesson in market physics, especially for tech workers who settle for lower salaries in exchange for a passel of stock options, which give them the right to buy a specific number of shares in the future at a price set low enough to reward them with windfall profits." (ABCNews.go.com)

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