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The BenefitsLink Newsletter -
Retirement Plans Edition

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June 20, 2000

Supreme Court to Hear Case on ERISA Preemption of State Law Regulating Beneficiary Designations
Excerpt: "The court said it will hear a Washington state woman's argument that she is entitled to the life insurance and pension benefits of her ex-husband, who died in an accident shortly after they were divorced. His children from a previous marriage say they should receive the benefits." (New York Times; free registration required)

IRS Notice 2000-30 Provides Rules for Reporting IRA Recharacterizations, Reconversions After 2000
Excerpt: "This notice specifies a new method to be used by IRA trustees, issuers and custodians ... for reporting IRA recharacterizations and reconversions occurring after 2000. The new method is similar to current reporting practices and is designed to ensure consistent reporting among trustees. This notice does not otherwise affect the reporting rules governing conversions, contributions to or distributions from IRAs." (Internal Revenue Service)

New Reporting Method For IRA Recharacterizations, Reconversions After 2000
Excerpt: "In Notice 2000-30, the Internal Revenue Service specifies a new method to be used by trustees and custodians of individual retirement accounts for reporting IRA recharacterizations and reconversions occurring after 2000. According to the IRS, 'The new method is similar to current reporting practices and is designed to ensure consistent reporting among trustees.'" (Spencernet)

Second Annual Recordkeeper Survey
Excerpt: "In the past 24 months, the business of recordkeeping has moved from merely providing daily access to participant accounts to estimating what that balance will look like in 30 years--and perhaps evaluating the adequacy of that sum in retirement ... Currently only about 60% of this group is offering financial advice to participants, either directly or through a partner." (PlanSponsor.com; free registration required)

Increase Seen in New Cases Challenging Plan Investments
Excerpt: "Retirement plan participants are growing more aware of their plan investments, and some investment changes by plan administrators are drawing lawsuits." (Thompson Publishing Group)

IRS Examination Guidelines have a new URL
The Audit Guidelines on BenefitsLink have now been updated to reflect a reorganization of the IRS Web site. (Calhoun Law Group, P.C.)

What Do E-Signatures Mean For You?
Excerpt: "But what exactly will your digital signature look like? While most folks might imagine scribbling with little electronic pens on an interactive notepad, digital signatures will, for the foreseeable future, remain far more arcane -- and not entirely intuitive." (Business Week)

United Electrical, Radio and Machine Workers of America Presents: The Amazing Disappearing Pension
Excerpt: "Companies are cashing in on a perfectly legal means of pocketing millions of dollars in pension funds. Called cash balance this latest corporate scheme is costing thousands of long-service workers as much as half the value of their expected pensions." (United Electrical, Radio and Machine Workers of America (UE))

Change in Federal Pension Plan's Formula Produces Rude Awakening for Some Retirees
Excerpt: "[the controversy involves] a little-known provision of a 1986 budget law that rewrote the retirement formula for part-time employees. The law was intended to prevent part-time employees from gaming the system by working full time in their last years before retirement to receive a higher benefit." (Washington Post)

Chorus of Unhappy Protests on Federal Thrift Savings Plan Delay in Implementing Daily Valuations
Excerpt: "Many federal employees were disappointed, to say the least, by the Thrift Savings Plan board's announcement that numerous software defects would once again delay the start of a new record-keeping system and the launch of two stock investment programs." (Washington Post)

Has the IRA Overtaken the 401(k)?
Excerpt: "For years, cumulative 401(k)-account balances have outpaced total IRA balances. Now, IRAs are king of the hill. But, this new trend seems to indicate that those who have been saving are doing better than ever, instead of showing that more folks are saving." (401Kafe.com)

Preparing for Life Without the Estate Tax
Excerpt: "What are the various ways in which the estate tax could be repealed or reformed? Based on what's happened in the past, four possibilities rise to the top: ... To illustrate the impact each of the possible legislative outcomes could have on the wealth transfer market, I thought it would be helpful to crunch some numbers." (National Underwriter Company)

CLU: Critics Are Wrong About Variable Annuities
Excerpt: "... secondary guarantees such as death benefit guarantees and living income benefit guarantees provide these conservative [self-directed 401(k) plan] investors with a safety net for their investment portfolios." (National Underwriter Company)

Gore Adds 'Retirement Savings Plus'
Excerpt: "... with Bush's lead approaching double digits in recent [polls], Gore has taken the dramatic step of offering his own retirement security plan that has some similarities to Bush's including government-encouraged private investment of retirement funds ..." (Policy.com)

Pension Time-Bomb Ticks for Japan's Politicians
Excerpt: "Many are fretting about where the money is going to come from to fund an ever-growing number of pensions from an ever-shrinking working population." (Agence France-Presse)

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