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The BenefitsLink Newsletter -
Retirement Plans Edition

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August 25 - 28, 2000

Evolving Economy Sparks Growth, Change in 401(k)s
Excerpt: "As 401(k) plans approach their 20th birthday, the popular retirement savings plans are growing up. Across the USA, companies are giving employees earlier access to 401(k) plans, more choices and greater control of investments. Many companies are even starting to automatically enroll employees." (USA Today)

Another Question is Answered in Our 401(k) Plans Q&A Column
My company is a Professional Employer Organization and we offer a "MEWA 401(k)" to clients who are frequently coming off a SAR-SEP. What are the advantages/disadvantages to the client of going from a SAR-SEP to a 401(k) plan, especially taxes? (BenefitsLink.com)

Caution Needed in Tax Sheltered Annuity Administration (PDF)
Excerpt: "Recently a school district in Texas has been sued, as has their business manager personally, by a teacher because of her investment in a tax sheltered annuity (TSA). The case focuses on a recommendation by the business manager, who also sold the annuity product to the teacher, to invest in a particular investment." (Davis & Kuelthau, s.c.)

PBGC Technical Update 00-4 Explains Full Funding Limit Exemption From The Variable Rate Premium
Excerpt: "... explains how the PBGC full funding limit exemption from the variable rate premium works in light of the changes the Retirement Protection Act of 1994 made to the full funding limitation under section 412(c)(7).... The RPA added a '90% override' to the full funding limitation. The 90% override provides that the full funding limitation is not less than the excess, if any, of 90% of the plan's current liability over the actuarial value of the plan's assets." (Pension Benefit Guaranty Corporation)

Another Question is Answered in Our Prototype Plans Q&A Column
Can a prototype plan be used for a plan with a "new comparability" type of allocation formula? (BenefitsLink.com)

Another Question is Answered in Our Professional Liability Insurance Q&A Column
Is there any varying degree of difference as to the types of claims made against pension plan service-providers, and if so, are they considered differently by an insurer during review? (BenefitsLink.com)

Requirement of 'Satisfactory Proof' Was Not Enough to Grant Administrator Discretionary Authority
Sandy v. Reliance Standard Life Insurance Co. (9th Cir. 2000). Excerpt: "In this [case about a claim for disability benefits], the court articulates the Ninth Circuit's position regarding what language is required for a plan administrator to have the requisite discretionary authority. This opinion is also helpful because it summarizes how the other federal circuit courts approach the standard of review issue." (EBIA Weekly)

Couching Claim for Benefits As 510 Claim Does Not Eliminate Need to Exhaust Administrative Remedies
Excerpt: "The plaintiffs in this case were nurses hired by the railroads as independent contractors. After the Railroad Retirement Board determined that they were actually common-law employees of the railroads, the nurses brought suit under ERISA, claiming wrongful denial of participation in employee welfare benefit plans." (EBIA Weekly)

Tax Court: Retirees Were Not Entitled To Challenge Qualified Status Of Pension Plan
Excerpt: "The U.S. Tax Court has ruled that two retirees were not 'interested parties' and therefore were not entitled to seek a declaratory judgment with respect to the qualified status of a pension plan. The ruling came in Flynn and Thomas v. Commissioner." (Spencernet)

Partners Can Help Banks Sell Small-Biz Retirement Plans
Excerpt: "Banks have a great opportunity to add assets under management and build their fee income by serving the fast-growing small-businesses retirement market. There are 7.3 million small businesses, 70% of which don't have a retirement plan." (American Banker)

GAO Describes Characteristics Of Working People Without Pension Coverage (PDF)
HEHS-00-131. 23 pp. plus 3 appendices (13 pp.) August 22, 2000. (Government Accounting Office)

Sock It Away, Somehow
Excerpt: "... many families may figure that unless they can pick the next Dell Computer or Cisco Systems, there isn't much hope of achieving such goals as a comfortable retirement. But a recently published study of the lifetime earnings and current wealth of a large number of American 50-somethings concludes that neither of these views is correct. Saving does work, and it doesn't take Warren Buffett-style stock picking to accumulate wealth, the study found." (Washington Post)

Soldiers for the Shareholder
Excerpt: "Despite the public's seemingly insatiable interest in the stock market, they say, investors--especially the largest ones--are not necessarily asking corporate executives the hard questions. As a result of the corporate governance movement over the past 15 years, companies have become more responsive to investors, activists say." (Washington Post)

Principal Financial Group to Develop Plan of Demutualization
(PR Newswire, via news.excite.com)

Japan's Health And Welfare Minister to Delay Start of Corporate 401(k)-Type Program
Excerpt: "The launch date for implementing 401(k)-style corporate defined-contribution retirement plans in Japan has been delayed from the original January 2001 target to March, said the Ministry of Health and Welfare." (Asia Pulse)

(Following also appears in Welfare Plans Edition)

Welcome to new BenefitsLink advertiser Workscape, Inc.
Workscape, Inc. is a leading Internet provider of Web-enabled HR Self Service solutions dedicated to transforming the business of Human Resources through technology. The company develops flexible, HR Self Service solutions that free HR departments from transaction-oriented activities and allow managers to focus on recruitment, employee development and other strategic issues. Workscape systems have been deployed at more than 265 major corporations.

FreeERISA.com Now Includes Top-Hat Plan Filings Online
Excerpt: "Top Hat plans are exempt from ERISA rules regarding funding, participation, vesting, and fiduciary duties. Top Hat plans are unfunded plans maintained by employers primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.... The items listed below are the filings that declared the existence of the plan to the government." (FreeERISA.com)

New Jersey’s Public Employees Seek Improved Benefits
Excerpt: "A year after the state granted police and firefighters a boost in their pensions, hundreds of thousands of other state and local government employees are making a pitch for similar increases. Even as the state capital dozes during the Legislature's summer recess, union leaders are moving quietly behind the scenes on proposals to improve retirement benefits for teachers and other public employees and to muster the legislative support that would make them a reality." (Knight-Ridder / Tribune)

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

in CA, GA, IL, TX
Communications Associatefor Fidelity Investments
in MA
Actuarial Operations Project Leaderfor Towers Perrin
in PA
Account Managerfor Melita-McDonald Insurance Services, Inc.
in CA
Senior Specialist, Benefits Compliancefor National Rural Electric Cooperative Association
in VA
Defined Contribution/401(k) Administratorfor Merit Benefits Group, Inc.
in IL

Subscribe to the Welfare Plans Edition, too (click)
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