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The BenefitsLink Newsletter -
Retirement Plans Edition

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May 24 - 25, 2000

401(K) Market Is Tough Nut to Crack
Excerpt: "Assets in 401(k) plans continue to grow, but a high level of satisfaction among plan participants suggests it would be tough for new firms to gain large clients ... The vast majority of plan participants said they were content with their providers, and only 2% of the employers interviewed said they would definitely switch providers for a 15% reduction in fees, the report said." (American Banker)

Legal Issues in Social Investing
Whether you are interested in exploring social investments, or wish to find out what defenses you might have if you are facing pressure to engage in social investing, this article will provide valuable guidance on the legal standards which apply to governmental, church, other tax-exempt, and for-profit employers' plans. (Calhoun Law Group, P.C.)

55 Percent of United Airlines' Stock is Owned by Its ESOP
Excerpt: "United is the largest ESOP company in the world in terms of number of employee shareholders, among those companies with significant employee ownership." (PR Newswire)

Think Tank Says Estate Tax Repeal Would Be A Windfall For The Wealthiest Americans
Excerpt: "As these statistics make clear, the estates of a tiny fraction of the people who die each year--those with very large amounts of wealth--pay the bulk of all estate taxes." (Center on Budget and Policy Priorities)

Federal Bill Would Provide Tax Breaks for Exercise of Options on Stock of Their Employers
Excerpt: "Ordinary workers would receive tax incentives when they exercise options to buy shares of their companies stock, under legislation moving through the House of Representatives." (Associated Press)

Stock Option Law Clarifies Overtime Pay Issue (PDF)
Excerpt: "President Clinton has signed the 'Worker Economic Opportunity Act' into law (P.L.106-202), which clarifies that amounts earned by certain employees from a range of stock-based programs are not counted as wages in determining their overtime pay." (Milliman & Robertson, Inc.)

Description of "The Death Tax Elimination Act Of 2000" (H.R. 8) (PDF)
Excerpt: "The estate, gift, and generation-skipping transfer taxes would be repealed for estates of decedents dying and gifts and generation-skipping transfers made after December 31, 2009." (Joint Committee on Taxation)

Improving Canadian Tax Treatment for Stock Options to Employees
Excerpt: "The new federal budget loosens tax rules for employee stock options. But it's debatable just how much tax Finance Minister Paul Martin's proposal will actually defer." (Benefits Canada)

Many Workers Face Lean Times in Retirement, Survey Reports
Excerpt: "Almost a quarter of workers have saved less than $10,000 toward retirement, and only 21 percent have saved more than $100,000, according to the survey." (Knight-Ridder / Tribune)

Six Steps to Self-Assessment of Pension Plan Governance
Excerpt: "With the goal of fostering self-regulation in the area of pension plan governance, two leading industry groups, the Association of Canadian Pension Management and the Pension Investment Association of Canada, joined forces with the Office of the Superintendent of Financial Institutions to release the Report of the Joint Task Force on Pension Plan Governance this past January." (Benefits Canada)

Use of Rule 12b-1 Fees by Mutual Funds in 1999 (PDF)
Excerpt: "Since the adoption of the rule in 1980, mutual funds have used 12b-1 fees, often in combination with contingent-deferred sales charges, as an alternative to front-end sales loads for compensating sales professionals for assistance provided to purchasers of fund shares." (Investment Company Institute)

Effective Communication of Investment Results to Defined Benefit Plan Fiduciaries
Excerpt: "To do their jobs properly, [defined benefit pension fund fiduciaries] need clear, focused high-level information. Unfortunately, fiduciaries (like the rest of us) are inundated with flavor-of-the-week mass media investment commentary when long-term perspective and objective-related analysis are needed." (Benefits Canada)

The Top 100 Pension Funds of 2000
Excerpt: "According to the results of BENEFITS CANADA's 21st annual Top 100 Pension Funds survey, equity investments--particularly in Canada and outside North America--rose strongly during the year. In fact, those bets went a long way toward providing the country's largest pension funds with an average double-digit rate of return on investment." (Benefits Canada)

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