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The BenefitsLink Newsletter -
Retirement Plans Edition

September 15 - 18, 2000

Comparison of House and Senate Pension Relief Provisions (PDF)
Published September 14; discussion does not include section 403, 457, or government plans; describes Act Retirement Security and Savings Act of 2000 as reported by Senate Finance Committee on 9/13/00. (Profit Sharing/401(k) Council of America)

Senate Finance Committee Bill Text and Report - Retirement Security and Savings Act of 2000
The Senate Finance Committee has now released the text, report, and revenue estimate for HR 1102, the Retirement Security and Savings Act of 2000, as passed by the Committee on September 7, 2000. (Calhoun Law Group, P.C.)

PBGC Takes Over Underfunded Smith Corona Pension Plan
(Pension Benefit Guaranty Corporation)

2d Cir.: Cash Balance Plan Violated ERISA and Tax Code in Calculating Lump-Sum Benefit Payment
Esden v. Bank of Boston. Excerpt: "In particular, as an issue of first impression in the Courts of Appeals ... we must decide whether when a cash balance plan guarantees that interest will be credited to a participant's hypothetical account at a minimum rate, it violates ERISA to assume a lower rate when projecting that account's value out to normal retirement age for the purposes of calculating the lump-sum equivalent of a terminating vested participant's accrued benefit. We hold that it does." (United States Court of Appeals for the Second Circuit)

Hooker Furniture ESOP Becomes 31% Shareholder in 2,000-Employee Company
(Furniture Today)

5500 Required If New Profit Sharing Plan Is Not Funded After All?

Lower-Risk Jobs Get High Government Pensions
Excerpt: "Senior school security officers are certified to make arrests, but unwritten policy stops them from doing so. Some say being qualified justifies higher benefits." (St. Petersburg Times)

IRS Sides With Employer That Excluded Contract Workers From Its Qualified Retirement Plans
Excerpt: "The [April 2000 Technical Advice Memorandum] addresses a relatively common type of plan eligibility provision, which includes in the plan only 'employees on the payroll records' of the employer company.... The T.A.M.'s employer had further ... specified [in the plan document] that workers would not be retroactively admitted to the plan, 'even if a court or administrative agency determines that such individuals are common law employees and not independent contractors.'" (FindLaw.com)

New Rules for Mergers and Acquisitions
Excerpt: "For defined contribution retirement plans, the mergers and acquisitions strategy may become a little sweeter. The Internal Revenue Service recently released new proposed regulations under 411(d)(6) of the tax code that should eventually loosen the 'protected benefit' rules, which have long been a headache for sponsors of merged 401(k) plans." (401kWire.com)

GUST Update Frequently Asked Questions: Volume Submitter Plans Can Be Restated Now

Trouble in 401(k): Participants Complacent About Risk
Excerpt: "Something is not right in the 401(k) world. Participants in the programs are not properly matching their self-directed investment portfolio with their risk tolerance. Due to a generous bull market and low market volatility, investors may be overstepping their ability to handle a market reversal. An overly-aggressive asset mix could lead to disaster for some participants and employers during the next bear market." (indexfunds.com)

Hearing Testimony: "How to Improve Pension Coverage for American Workers"
Held September 14, 2000. (House Committee on Education and the Workforce, Subcommittee on Employer-Employee Relations)

Opinion: Working To Make Retirement Plans Better For The Poor
Excerpt: "[The Comprehensive Retirement Security and Pension Reform Act and its counterpart in the U.S. Senate represent] a second-rate solution to a first-order problem -- an out of touch and outmoded private pension system that leaves millions of Americans without adequate retirement incomes." (Pamela Perun, Urban Institute)

Characteristics of Individuals with Integrated Pensions (PDF)
Excerpt: "This article uses data from the Health and Retirement Survey to examine the characteristics of individuals who are covered under integrated pension plans by comparing them with people covered by non-integrated plans and those with no pension plan." (Office of Policy, Social Security Administration)

Initial Results of the 2000 NCEO Broad-Based Stock Option Survey
The NCEO has just completed the largest study ever on broad-based stock option plan design. This article highlights some of the initial findings. This collaborative research with the American Electronics Association, Certified Equity Professional Institute, and 13 compensation and plan design consulting firms was a follow-up to our studies conducted in 1997, 1998, and 1999. (National Center for Employee Ownership)

(Following also appears in Welfare Plans Edition)

9th Cir.: Plan Administrator May File Interpleader Action in Federal Court Under ERISA
Aetna Life Ins. Co. v. Bayona (9th Cir. 2000). Excerpt: "The question that goes begging here (because it was not raised by the facts) is whether an ERISA plan administrator could choose to bring a state law interpleader action in state court." (EBIA Weekly)

DOL Requests Comments on ERISA Disclosure Requirements
Excerpt: "The DOL has solicited public comments about the disclosure obligations of ERISA benefit plan fiduciaries. Specifically, the DOL wants to hear about the effect on benefit plans and employers of recent court rulings that have added fiduciary disclosure requirements to those already found in ERISA Section 104(b)." (EBIA Weekly)

Graef Crystal: An Odd Time to Attack Tenet Healthcare
Excerpt: "Granted I am my own favorite author, but having taught at the University of California at Berkeley for some 10 years, I still carry the notion that it is not kosher to cite yourself as the confirmation of your own conclusions. So off I went to Tenet [Healthcare Corp.]'s latest proxy ... to get the most recent numbers.... What I found was [CEO Jeffrey C. Barbakow] not the overpaid, underperforming CEO I expected. Rather, I found a CEO who was neither overpaid nor underpaid ..." (Graef Crystal, on Bloomberg.com)

Reminder--Form 5500 Filing Deadline Looms
Excerpt: "... the DOL confirmed that it will not be extending any further the October 16, 2000 Form 5500 filing deadline for 1999 calendar year plans. The deadline for all plans required to file on or before July 31, 2000 (which includes 1999 calendar-year plans) was previously extended to October 16, 2000 to allow time to implement the new electronic filing requirements." (EBIA Weekly)

Leslie Kramerich Talks to ASPA Conference About Investment Advice for Plan Participants
(U.S. Department of Labor)

PLR: Construction Company's Sale of Assets Was a 401(k) Distributable Event
Priv. Ltr. Rul. 200036048 (June 12, 2000). Excerpt: "Because a 'trade or business' finding by the IRS is highly dependent on the facts of a particular situation, conservative 401(k) plan sponsors often seek a ruling from the IRS before authorizing distributions to affected participants and risking the qualified status of the plan." (EBIA Weekly)

Enrollment Gifts and Giveaways/Prizes - Prohibited Transactions?

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

Non-Qualified Benefit Consultantfor Compensation Resource Group, Inc
in Location Other Than U.S., ALL STATES
Benefits Consultant- Non-Qualified Plansfor Compensation Resource Group, Inc
in Location Other Than U.S., ALL STATES
Defined Benefit Plan Consultantfor CitiStreet - A State Street and Citigroup company
in MA
Account Managerfor Leading Employee Benefit Consulting Firm
in FL
401(k) Plan Administratorfor Pension Design Services, Inc.
in NH
Sr. Benefits Specialistfor Private Healthcare System, Inc.
in MA
Employee Benefits Specialistfor Employee Benefit Solutions
in VA, WV
401(K) Product Directorfor Transamerica
in CA
Pension Consultantfor Polycomp Administrative Services, Inc.
in CA
Employee Benefits Paralegalfor Georgia Municipal Association
in GA
PENSION POSITIONSfor National Automobile Dealers Association
in DC, MD, VA
Retirement Plans Client Service Representativefor Armstrong/Robitaille Business and Insurance Services
in CA
Benefits Administratorfor Altera Corporation
in CA
Qualified Plan Conversion Specialistfor Pen-Cal
in CA
401(k)/DC Plan Administratorfor Pension Benefits, Inc.
in PA
Extended Benefits Specialistfor Fortune 1000 company - Position located in Florham Park
in NJ
in CA
Assistant Manager of Daily Processingfor DailyAccess.com
in AL
DB Pension Representativefor Third-Party Administrator
in WA
Pension Plan Administratorfor Leading Third Party Administration Firm in San Diego County,
in CA
Defined Contribution - OmniPlan Power Userfor The Ross Companies
in NY
Benefits Coordinatorfor The Macerich Company
in CA

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