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Retirement Plans Edition


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July 25, 2000

House Overwhelmingly Approves Pension Tax Package
Excerpt: "A comparison of the principal changes the legislation would make in current pension laws is attached." (Groom Law Group)

Federal Legislative Service Alert: Portman-Cardin Bill Passes House (PDF)
Excerpt: The "bill was approved July 13 by the House Ways and Means Committee... the House-passed bill (H.R. 1102) [includes] provisions that would increase the annual dollar IRA contribution limit gradually from the current $2,000 to $5,000 in 2003, with indexing thereafter, and would increase the dollar limit on annual elective deferrals under section 401(k) plans, section 403(b) annuities, and salary reduction SEPs in $1,000 annual increments until the limits reach $15,000 in 2005." (Ernst & Young)

IRS Modifies Same Desk Rule
Excerpt: "The IRS recently announced a change to the 'same desk rule' in Revenue Ruling 2000-27. This change relaxes the requirements for distributing accounts from a 401(k) plan as a result of a sale of less than 85% of the assets of a trade or business to an unrelated employer." (CIGNA's Pension Analyst)

More Green for the Golden Years? Rich Will Benefit Most from Portman-Cardin, Critics Say
Excerpt: "Said Karen Ferguson of the Pension Rights Center: 'The bottom line is [backers] truly are going in exactly the wrong direction and they are ducking the really hard issue, which is how do we get a retirement system on top of Social Security that will assure that people who can't otherwise save adequately for retirement will get the income they need when they are too old to work.'" (Washington Post)

New issue online of the Pension & Benefits Update email newsletter by Tax Analysts: July 24, 2000
July 24, 2000 (Tax Analysts, Inc.--see www.taxbase.org)

403(b)ody Bag: The Defendants Speak
Excerpt: "When last we spoke, we were on location at a brutal crime scene, one that has become all-too-familiar in the 403(b) world: the fleecing of a 403(b) investor. You may recall that the victim was suffering from a severely bruised and battered portfolio with lacerations in and around the nest egg." (403bWise.com)

9th Cir: ERISA Does Not Prevent Enforcement of IRS Tax Levy Against Pension Assets
McIntyre v. United States. Excerpt: "The tax collection provisions of the Code provide that no other federal law (such as ERISA) shall exempt property from the IRS's authority to levy a delinquent taxpayer's property." (EBIA Weekly)

IRS Opens Prototype Determination Letter Program
Excerpt: "Each employer's restated plan must describe how the plan operated during prior years from the effective date of any GUST-required provision through the adoption date of the restatement. CIGNA's restated document will have a separate, free-standing section to accommodate this requirement." (CIGNA's Pension Analyst)

Annuity Margins in the UK (PDF)
Excerpt: "The UK requires individuals with private pensions to annuitize by the age of 75. Using data on annuity rates over time, we calculate the financial cost of annuitization in terms of reduction in yield relative to alternative sources of wealth holding. We find that for a typical 65-year old male, annuitization typically involves a reduction in yield of the order of 1 percent." (Centre for Pensions and Social Insurance, Birkbeck College, University of London)

The REIT Stuff
Excerpt: "In the wake of sharp declines in technology stocks, many investors have re-discovered the beauty of 'fundamentals,' like real assets, real earnings, and seasoned management teams. In that environment, REIT stocks have staged a rebound in 2000, posting sizable gains compared to the overall market." (Faegre & Benson, LLP)

(Following also appears in Welfare Plans Edition)

HR-XML Consortium Works to Standardize Payroll Transactions
Excerpt: "Payroll Providers Invited to Participate in Standardization Effort" (HR-XML.org)


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