Retirement Plans Edition
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July 20, 2000
House Passes Portman-Cardin Bill Raising IRA, 401(k) Contribution Limits
Excerpt: "The House voted 401-25 to send the measure to the Senate, with 182 Democrats joining nearly all Republicans in favor. Senate supporters say they will push for action in early September." (Associated Press)
Lobbyists Target Clinton On Raising IRA Maximum
Excerpt: "The financial services industry is gearing up to lobby President Clinton to sign legislation overwhelmingly approved by the House Wednesday that would more than double the permissible annual contribution to individual retirement accounts." (American Banker)
A Summary of the Comprehensive Retirement Security and Pension Reform Act
The House voted 401-25 on July 19, 2000, to send the H.R. 1102 (Comprehensive Retirement Security and Pension Reform Act) to the Senate, with 182 Democrats joining nearly all Republicans in favor. This item is a summary of the bill. (401kHelpCenter.Com)
'Same Desk' Rule is Dying a Slow Death
Excerpt: "In essence, Rev. Rul. 2000-27 permits distributions for transactions that are not covered by the "same desk" exceptions in Code section 401(k)(10), simplifying plan administration considerably. Our analysis and observations on this helpful ruling follow." (Groom Law Group)
APPWP Publishes List of Organizations Supporting the Portman-Cardin Bill
White House says it opposes the bill but will not veto it. (Association of Private Pension and Welfare Plans)
Automatic and Asleep: Default 401(k) Deferrals Often Passively Invested by Participants
Excerpt: "'It's clear that automatic enrollment positively impacts overall participation rates," says Lori Lucas, defined contribution consultant for Hewitt [Associates, who sponsored the survey]. 'But our research indicates that participants have a strong tendency to remain at the company's default elections.'" (401kWire.com; free registration required)
IRS Extends Plan Amendment Deadlines Again
Excerpt: "The extension of the deadline from the end of the 2000 plan year to the end of the 2001 plan year was made official ... Also, beginning June 26, 2000, plan sponsors will be able to obtain updated IRS determination letters covering all plan amendments, not just those that first took effect before the 1999 plan year. These developments are further described below." (Groom Law Group)
Joint Committee Description of Chairman Archer's Substitute Railroad Retirement Bill (PDF)
Excerpt: "Chairman Archer's amendment in the nature of a substitute to the 'Railroad Retirement and Survivors' Improvement Act of 2000' [H.R. 4844] would include the provisions of the bill, with various technical and clerical changes, and the following modifications ..." (Joint Committee on Taxation)
New from EBRI: Executive Summary of Issue Brief no. 223, Personal Account Retirement Plans: An Analysis of the Survey of Consumer Finances (July 2000) (Employee Benefit Research Institute)
University of California Unions Fear Pensions Are At Risk
Excerpt: "Leaders of three UC labor unions have criticized the Board of Regents for ordering an overhaul of UC's investment strategies, saying they fear the move might put workers' pensions at risk. But a university spokesman countered that UC pensions are safe and said the labor leaders were overreacting to what he termed a prudent plan to hire a consulting firm to oversee the fund." (SF Gate)
(Following also appears in Welfare Plans Edition)
Electronic Signature Legislation Becomes Law
Excerpt: "The new law (Pub. L. No. 106-229) will significantly impact the way many transactions, including the administration of employee benefit plans, are conducted in the future." (Groom Law Group)
Non-Fiduciaries Face ERISA Liability for Knowing Participation in Prohibited Transactions
Excerpt: "The U.S. Supreme Court unanimously ruled ... that a party in interest may be liable for its involvement in an ERISA prohibited transaction with a pension trust – even though it is not an ERISA fiduciary. [The case is] Harris Trust and Savings Bank v. Salomon Brothers Inc ... The decision ... creates the potential for significantly more claims against a host of parties who deal with ERISA plans." (Groom Law Group)
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