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The BenefitsLink Newsletter -
Retirement Plans Edition

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May 19, 2000

401(k) Plan Design with Automatic Enrollment and Safe Harbors
Excerpt: "Boosting 401(k) enrollment and meeting nondiscrimination rules got a little easier thanks to two recent IRS pronouncements. First, the IRS has blessed automatically enrolling current employees in the plan ... [and] the IRS has made the so called 'nondiscrimination safe harbor designs' more flexible and easier to use." (Deloitte & Touche)

Improved ADP and ACP Safe Harbor Plan Designs
Excerpt: "In late 1998, and early 2000, the IRS provided guidance for designing plans to meet the [ADP and ACP 401(k)] safe harbor requirements. This issue of CIGNA's Pension Analyst summarizes these requirements." (CIGNA's Pension Analyst)

Pension Income: Here Today, Here Tomorrow
Excerpt: "Many plans are so well funded that even after accounting for each year's benefits for active employees and paying pensions to retirees, the FAS 87 rules leave enough left over to provide a significant contribution to corporate net income." (Watson Wyatt)

Retiree Medical Accounts: New Interest in an Old Idea
Excerpt: "Retiree medical accounts are attracting considerable interest these days. The interest stems from companies approaching their retiree medical premium caps, companies examining their total retirement programs and the implications of a maturing workforce. Although the account approach has been around since the 1980s, relatively few employers have adopted it." (Watson Wyatt)

Voluntary Fiduciary Correction Program Offered by the Department of Labor
Excerpt: "ERISA plan sponsors and other plan officials now have a way to correct certain fiduciary breaches and prohibited transactions on a voluntary basis, without waiting for the Department of Labor (DOL) to 'catch' the problems and fine the fiduciaries." (Deloitte & Touche)

New Issue Online of the Pension & Benefits Update Email Newsletter by Tax Analysts: May 16, 2000
May 16, 2000 issue; includes info on the recent IRS same-desk ruling, various significant private letter rulings (Tax Analysts)

Private Pensions Are At Risk
Excerpt: "Unfortunately, fewer and fewer workers can count on a pension benefit at work to achieve their retirement goals. The biggest problem is coverage: At any given time only about 45% of U.S. workers are earning a pension benefit at work." (IntellectualCapital.com)

2000 Retirement Confidence Survey
Excerpt: "The [survey] shows an upward trend in the proportion of workers who feel very confident about having enough money to live comfortably throughout their retirement years ... almost 26 percent of Americans are very confident of having enough money to live comfortably throughout their retirement years ... This year's [survey] also finds that many American workers have become more proactive in their retirement planning." (Employee Benefit Research Institute)

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