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The BenefitsLink Newsletter -
Retirement Plans Edition

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June 7, 2000

GUST Extension to Apply to All Types of Plans
Excerpt: "The ASPA Government Affairs Committee ... had a conference call Tuesday with IRS officials to clarify what was expected to be in the Revenue Procedure due out in two weeks ... [T]he forthcoming extension of the remedial amendment period for GUST will apply across the board to all types of qualified retirement plans, including plans drafted using prototypes or volume submitter documents." (American Society of Pension Actuaries)

8th Cir: Pension Benefits Includible In Debtor's Disposable Income In Bankruptcy
Excerpt: "The Eighth Circuit U.S. Court of Appeals has ruled that a debtor's pension benefits from a qualified retirement plan were includible in the calculation of the debtor's disposable income. The ruling came in In re Taylor." (Spencernet)

How Much Do TPAs Need To Do When the Trustee is A Crook?
Excerpt: "The United States Ninth Circuit Court of Appeals has clarified ERISA's rules in a way that is beneficial for third party administrators (TPAs). The case is CSA 401(k) Plan v. Pension Professionals, Inc., 195 F.3d 1135 (9th Cir. 1999). The case is important because it draws a bright line between plan fiduciaries and service providers." (Reish & Luftman)

Gambling With Your Retirement Plan
Excerpt: "Are you in a 401(k) plan that invests heavily in your own company's stock? You, and your company, ought to take another look. You're gambling with your future, at doubtful odds." (Jane Bryant Quinn, in the Washington Post)

Fiduciary Responsibilities in Selecting Investment Advisors
Excerpt: "[T]he decision to offer investment advice is a fiduciary act, as is the selection and retention of a specific investment advisor ... the decision to use the investment advisor must be made by the responsible plan fiduciaries—that is, by the corporate officers who serve on the plan committee and who oversee the operation of the plan ... they are responsible under ERISA to act 'prudently.' That raises the obvious question: What must the officers do to be prudent?" (Reish & Luftman)

New issue online of the Pension & Benefits Update email newsletter by Tax Analysts
June 6, 2000 issue (Tax Analysts)

Can a Member of an LLC Get a Participant Loan from a 401(k) plan?
What do you think? Add your perspective to this thread on our message boards. (BenefitsBoards.net)

Japanese Agency to Set Up Panel to Consider a Pension System for Women
Excerpt: "The Health and Welfare Ministry is planning to set up a panel to consider a new pension system for women, including whether to collect premiums from full-time housewives, ministry sources said Wednesday." (Kyodo News)

Why Aren't Mandatory State Income Tax Withholding Requirements Preempted by ERISA?
Interesting discussion on our message boards regarding trustees' duties to comply with state laws pertaining to distributions from retirement and other plans regulated by ERISA. (BenefitsBoards.net)

The Three Pillars of a Pension System (PDF)
Excerpt: "The author ... argues that with a universal Pillar 1 (a flat, subsistence pension) there is no need for Pillar 2 (earnings-related pensions). Pillar 3 (voluntary retirement savings) should not receive tax subsidies, which are regressive and in any case have not been shown to have any significant effect on private saving. Such a pension scheme may appear utopian, but it is in effect in New Zealand." (Economist Larry Willmore)

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