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The BenefitsLink Newsletter -
Retirement Plans Edition

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May 23, 2000

Most People Don't Understand the ABCs of 401(k)s
Excerpt: "[O]nly one out of four respondents to a recent 401(k) quiz sponsored by J.P. Morgan/American Century Retirement Plan Services was able to answer seven out of ten questions correctly. Only 2 percent of the 750 respondents--all self-described retirement investors--received a perfect score." (Business Wire)

Paycheckcity.com Adds New Paycheck Calculators and Features
Excerpt: "New calculators include the Hourly Calculator, the Bonus Calculator, the Tip Calculator, and the Stock Option Calculator." (InternetWire.com)

Company Stock in a 401(k) Can Offer Tax Advantages, More Flexibility
Excerpt: "Obscure law allows distribution of shares, instead of cash, and sets their value according to the investor's initial cost, not current market price." (Los Angeles Times)

The Voluntary Fiduciary Correction Program
Excerpt: "On March 14, 2000, the Pension and Welfare Benefits Administration of the U.S. Department of Labor issued the Voluntary Fiduciary Correction program. Similar to the IRS's remedial correction programs for qualification failures, VFC will permit plan sponsors, fiduciaries and parties-in-interest to voluntarily correct thirteen specified violations of the Employee Retirement Income Security Act (ERISA)." (RIA Pension & Benefits Week)

Mega-Stock Option Grants Aren't Mega Motivators
Excerpt: "The $300 billion Teachers Insurance and Annuity Association-College Retirement Equities Fund has criticized mega-grants of stock options to chief executives. My research shows the fund is right to do so." (Graef Crystal, on Bloomberg.com)

Questions and Answers: EFAST - The ERISA Filing Acceptance System
Online booklet from DOL, revised May 2000. (U.S. Department of Labor)

Massachusetts Teacher Bill under Fire: Governor Blasts Early Retirement Plan
Excerpt: "Gov. Paul Cellucci has mobilized an army of state agency heads and staff members to fight a controversial early retirement bill for teachers. Cellucci's Cabinet secretaries and dozens of other top administration officials will launch the lobbying blitz today..." (Boston Herald)

Protect Your Pension: A Quick Reference Guide
Includes sections on How To Find Out If Investments Are Diversified; Tips On Tracking Your Contributions; How To Find Out About Your Plan's Expenses. (U.S. Department of Labor)

The ABCs of Annuities
Excerpt: "Annuities are money contracts between you and an insurance company. You contribute a sum of money to your contract, and the insurance company provides income payments according to the type of annuity you purchase. This security comes at a price, however." (401Kafe.com)

Successful Mutual Funds Having Harder Time Staying That Way
Excerpt: "Over time, the dispersion of performance in actively managed funds, above and below relevant market benchmarks, has created a stream of material for the financial press. Yesterday's hero is today's bum, and so on." (Chicago Tribune)

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