Retirement Plans Edition
This issue is sponsored by Lawson & Fields P.C.
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June 13, 2000
Deadline Extended to Amend Plans for New Law Changes
Excerpt: "Effective June 26, 2000, Rev. Proc. 2000-27 now provides that a determination letter can be issued covering all of the changes required by GUST. The deadline for amending plans is now the last day of the first plan year beginning on or after January 1, 2001 (resulting in a December 31, 2001 deadline for calendar year plans)." (Powell, Goldstein, Frazer & Murphy, LLP)
IRS Rev Proc 2000-27 Opens Determination Letter Process for Individually Designed Pension Plans
Excerpt: the new procedure will "allow sponsors of qualified plans to obtain determination letters that take into account all the changes in the qualification requirements made by 'GUST', including those changes made by [SBJBA] that are first effective in plan years beginning after December 31, 1998. This procedure also extends until the last day of the first plan year beginning on or after January 1, 2001, the remedial amendment period ..." (Internal Revenue Service)
GM Contributes $6.5 Billion in Subsidiary's Shares to GM Hourly Workers' Pension and Welfare Funds
Excerpt: "GM said the contributions will reduce its annual pension expense and other post-retirement employee-benefit expenses, improve operating earnings, and strengthen its overall financial position." (Reuters via news.excite.com)
Don't Miss the Forest for the Trees: Cash Balance Controversy Masks Underlying Pension Policy Issues
Excerpt: "With so much media and political attention focused on recent cash balance conversions, the debate is missing the much bigger picture—the dramatic, 20-plus-year decline in our nation's defined benefit retirement system." (Watson Wyatt)
After the Social Security Earnings Test Repeal--Should Workers Take Benefits Now or Later?
Excerpt: "The new law may encourage older workers to apply for Social Security benefits as soon as they reach SSNRA, but workers who defer receipt of Social Security benefits after their SSNRA will receive a delayed retirement credit, up to age 70, thus increasing their benefit when they do retire. The amount of annual credit for each year deferred is based on the person's year of birth." (Watson Wyatt)
Brazil Grants Pensions to Domestic Partners
Excerpt: "Same-gender couples in Brazil will have the same rights as married couples to inherit each other's public pension and social security benefits, under new regulations announced June 8." (Yahoo News!)
Hungary Turns Its Pension System From Loser Into Winner
Excerpt: "A delegation from Ukraine, where state pensions are $10 to $15 a month, wanted to know how Hungary turned its pension system from a loser into a winner. 'Reforming our system is not optional,' Igor Korniichuck, a member of parliament on Ukraine's pension reform team, said during a recent visit to Budapest. 'We have no choice.'" (Reuters via Yahoo! Finance)
The Consequences of Corporate America's Growing Addiction to Stock Options
Excerpt: "Microsoft and Cisco Systems, two of the nation's most profitable companies, are well on their way to owing nothing in federal income taxes on the money they have made so far this year. How can powerful companies like these, reporting billions in income to shareholders, owe nothing in taxes? It is all thanks to the wonder of employee stock options." (New York Times; free registration required)
BenefitsLink Named One of 'Best 100 Web Sites for HR Professionals' in New Book
Excerpt: "Here's the book that cuts through the hype in identifying today’s best online HR resources. Analyzing 100 major sites, as well as identifying more than 700 additional sites by major categories, this unique guide helps users quickly find clear, precise, and up-to-date answers to their HR questions." (Impact Publications)
Chartered Planes, Interest-Free Loans Lavished on California Executives
Excerpt: "The three basic components of executive pay don't change much from one Orange County [Calif.] company to the next. But when it comes to extra-special perquisites, local companies fall into two separate camps: those like Santa Ana-based Amplicon Inc. that offer top execs matching 401-k contributions and little else, and those like Aliso Viejo-based Fluor Corp. that really roll out the perk barrel." (Knight-Ridder / Tribune Business News)
Boards Often Reward Ceos Despite Companies' Poor Stock Performance
Excerpt: "Boards of directors tend to react slowly to faltering chief executives. Then they fire them as quietly as possible, when they fire them at all, said Kevin Murphy, a business economics professor at the University of Southern California who is an expert in executive compensation." (Knight-Ridder / Tribune Business News)
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