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The BenefitsLink Newsletter -
Retirement Plans Edition

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July 12, 2000

IRS Provides Optional Method for Determining Net Income for IRA Refunds or Recharacterizations
Excerpt: "This notice permits a new method to be used for calculating the net income attributable to IRA contributions made after 1999 that are distributed as a returned contribution pursuant to section 408(d)(4) of the Internal Revenue Code ... or recharacterized pursuant to section 408A(d)(6)." (Internal Revenue Service)

No ADEA Violation When 'Wearaways' Used in Cash Balance Conversions, Law Firm Says
Excerpt: "Wearaways resulting from the use of a relatively high rate of interest to establish a relatively low starting balance do not violate ADEA. And such wearaways are more than fair to the older participants (because an older participant always receives a larger benefit than an otherwise identically situated younger participant receives)." (Faegre & Benson, LLP)

Employee Advocates Facilitate 401k Plan Conversion (Free Registration Required)
Excerpt: "Having an advocacy committee represents an important trend in employee involvement with decisions that affect retirement plan participants. A Case Study." (Thanks to Rick Meigs of 401kHelpCenter.com for recommending the link!) (Employee Benefit News)

What Is a Digital Signature?
Excerpt: "But just what is an electronic signature? Despite the image it invokes, it's not merely a computerized picture of your written signature. In most cases it looks nothing like your signature. A digital signature is an electronic means of authenticating an online identity." ([Louisville KY] Courier-Journal)

Minnesota Teachers Sue State Over Decades-Old Pension Issue
Excerpt: "The veteran public school teachers say they've been unfairly treated by the Minnesota Teachers Retirement Association and a state law that changed their retirement plans years ago without asking them. Legislators back then, in an effort to improve pensions for all teachers, discontinued several stock market-based options and moved everyone into a more stable retirement plan." (Star-Tribune Company)

President Clinton Names Leslie Beth Kramerich As Assistant Secretary for PWBA
Excerpt: "Ms. Leslie Beth Kramerich, of Arlington, Virginia, currently serves as both Acting Assistant Secretary of the Pension and Welfare Benefits Administration and Deputy Assistant Secretary for Policy in the Pension Welfare Benefits Administration at the Department of Labor, a position she has held since November, 1998." (President Clinton Names Leslie Beth Kramerich As Assistant Secretary for Pension And Welfare Benefits)

Tom Siebel's Midas Touch Extends to His Options
Excerpt: "There's no doubt that Tom Siebel's fabulous performance makes him worth his weight in gold. But 297 tons of gold, worth $2.7 billion? That's what the chief executive of Siebel Systems Inc. has amassed in paper profits on the options he has received in the four years his company has been public." (Graef Crystal, on Bloomberg.com)

Chubb Executive Risk Providing New Representations and Warranties Policy for Mergers, Acquisitions
Excerpt: "Chubb Executive Risk Inc. announced today that it has created a new Representations and Warranties Liability Insurance policy that offers--on a single form--coverage for either the buying company or the selling company against certain unanticipated liabilities associated with mergers and acquisitions ... there are no exclusions for ... ERISA[.] Premiums are generally two percent to eight percent of the limit purchased." (PR Newswire, via news.excite.com)

Message to Japan: Beware the Defined Contribution Plan
Excerpt: "The Japanese are among the best savers in the world. Do they really need defined contribution retirement plans to encourage more savings? And do they need to take on more investment risk in a profoundly troubled market? Introducing defined contribution plans into the already troubled Japanese economy could be the financial equivalent of kudzu." (Les Lohmann in Contingencies Magazine)

UK Government: New 401(k)-Like 'Individual Pension Accounts' Will Help People Save for The Future
Excerpt: "The advantages of IPAs in pensions saving include a simple charging structure, spread investment risk, security, transparency, and better understanding and confidence in equity investment. The IPA concept was based in part on the popular and successful US 401(k) savings scheme, which has encouraged savings generally, and equity savings in particular." (M2 Communications)

Gilding Employees' Stock Options
Excerpt: "Despite regulatory pressure and wrath from shareholders, companies are still repricing option grants to retain employees." (Treasury & Risk Management)

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