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Retirement Plans Edition

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June 27, 2000

Layperson's Summary of 401(k) Plan Distribution Rules
Excerpt: "The IRS imposes limitations because money is contributed before it is taxed and the earnings compound on a tax-free basis. To receive a distribution from a 401(k) plan, a condition known as a distributable event must have taken place." (Albuquerque Journal)

DOL Focusing on Time for Employers to Invest Employees' Contributions to 401(k) Trust Funds
Excerpt: "There are significant penalties for employers who do not deposit employee 401(k) contributions in accordance with current regulations." (Thanks to Tim Younkin for recommending the link!) (Capital District Business Review)

Add Employee Benefits Topical Headlines to Your Company's Web Site, Free
Would your company like to include employee benefits headlines on its Web site, gathered every day for you by BenefitsLink at no charge? Using a simple coding process called "frames," you can add a free page of linked headlines to your site about any one or more of the topics covered by BenefitsLink. (BenefitsLink)

Pension Plan Investors Warned About Holding Variable Annuities
Excerpt: "There is no viable argument for having a variable annuity in a qualified plan. There is no tax justification," said Mark Gutrich ..." (Thanks to Tim Younkin for recommending the link!) (Denver Business Journal)

Employers Often Don't Save Money Converting to Cash Balance Plans
Excerpt: "[A Watson Wyatt] study found average employer cost savings of just 1.4 percent during hybrid plan conversions, after factoring in enhancements that employers often make simultaneously to their 401(k) plans." (Thanks to Tim Younkin for recommending the link!) (Houston Business Journal)

Getting a Distribution from Your Employer's Plan? Stay In Your Tax-Protected Shell
Excerpt: "You're changing jobs and you've got several thousand dollars in your former employer's 401(k) plan. What to do?" (401Kafe.com)

6/22/2000 Legislative Update on Benefits for Federal Employees
Excerpt: "Here's a look at pending bills that affect federal pay and benefits." (GovExec.com)

DOL Issues Final 'Plan Asset' Regulations
Excerpt: "The Department of Labor recently issued final regulations describing when an insurance company's general account assets may be considered plan assets for purposes of [ERISA]. The new regulations impact insurance companies, ERISA-covered plans that hold insurance policies supported by general account assets, and employers who sponsor such plans." (McGuire Woods Battle & Boothe LLP)

Allocating Payroll Tax Revenue to Personal Retirement Accounts to Maintain Social Security Benefits
Link to a Working Paper available for downloading from the National Bureau of Economic Research; excerpt: "We now specify that the funds deposited in the Personal Retirement Accounts come from allocating 2 percent of the 12.4 percent payroll tax instead of being additional funds provided from outside the system." (Martin Feldstein, Andrew Samwick; National Bureau of Economic Research Working Paper)

Quantitative Measures for Evaluating Social Security Reform Proposals (PDF)
Excerpt: "In this issue brief, the American Academy of Actuaries describes a number of measures that can provide useful quantitative analysis of reform proposals. The issue brief explains how these measures can be used together to obtain a clearer picture of the relative advantages and disadvantages of the various proposals for bringing long-term financial soundness to Social Security." (American Academy of Actuaries)

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