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The BenefitsLink Newsletter -
Retirement Plans Edition

May 11, 2000

Pension Systems in the Nordic Countries: Older Populations + More Generous Benefits = Trouble? (PDF)
Excerpt: "This paper reviews the pension systems of the Nordic countries (Denmark, Finland, Iceland, Norway, Sweden). Across the Nordic countries, governments have begun reforming their pension systems to meet the coming demographic challenges. Those challenges are significant: In general, Nordic populations are already older, and public pension systems more generous, than many other industrialized economies." (By Tryggvi Thor Herbertsson, J. Michael Orszag and Peter Orszag)

Perspectives in Cash Balance Plans: Do They Discriminate Against Older Workers?
Excerpt: "But is this what's going on? We offer an emphatic no. Real life is often complicated, and that's certainly the case when it comes to understanding how pension plans work, and particularly how benefit calculations are made in plan conversion situations." (Towers Perrin)

Mass.Dept. of Revenue Outlines Rules for State Income Tax Withholding on Nonqualified Plan Payments
Excerpt: "The Federal law (4 USC, Section 114) essentially gives the taxing jurisdiction only to the state in which a participant is a resident when he/she begins receiving payment. However, this rule only applies to a limited group of nonqualified plan types or benefit distribution designs that are outlined in the law." (Magner Financial Network)

Deferred Gain on ESOP Qualified Replacement Property Taxed Upon Contribution to Partnership
Excerpt: "The IRS has ruled in Rev. Rul. 2000-18 that deferred gain on ESOP qualified replacement property will be taxed when the property is contributed by the taxpayer to a partnership in exchange for an interest in the partnership." (Ernst & Young)

Pensions for Part-Time Federal Employees Criticized
Excerpt: "Because of the way the formula works for pre-1986 service, people who worked full-time earlier in their careers and then later switched to part-time work receive the same pension as an employee who worked part-time their entire career." (GovExec.com)

Retirement Planning Shifts Generations
Excerpt: "With more Americans investing than ever before, the financial-services industry is beginning to think about the next generation of investors: Generation X." (Wall Street Journal)

Pension Problem Plagues China
Excerpt: "Although China introduced individual pensions for State workers in 1997, the push to reform its moribund State-owned enterprises has placed enormous pressures on the system." (Australian Financial Review)

Extension Granted on Financial-Data Privacy Law
Excerpt: "Federal bank and securities regulators have extended the deadline--from November 2000 to July 2001--for financial institutions to comply with privacy rules outlined in the Gramm-Leach-Bliley Act passed by Congress last fall. Under this financial-modernization act, regulators have until May 12 to publish the final rules under which companies can give out consumers' financial information to unaffiliated third parties." (The Standard)

IRS, DOL, PBGC Issue Regulatory Agendas
Excerpt: "The Internal Revenue Service, the Department of Labor, and the Pension Benefit Guaranty Corporation have issued their semiannual regulatory agendas. The agendas, all of which appeared in the April 24 Federal Register, set forth when proposed rules are scheduled to be issued and when final action is expected on proposed regulations." (Spencernet)

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