The BenefitsLink Newsletter -
Retirement Plans Edition
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September 27, 2000
Hands Off That 401(k) To Pay Credit Cards
Excerpt: "Eager to free themselves from their creditors, many people are glancing furtively at their 401(k) plans or other retirement savings.... Why not withdraw enough from retirement savings to get rid of those interest-heavy debts for good? While that sounds like a clean solution, draining your retirement savings to pay off credit card debt is rarely a good idea. The reasons: ..." (USA Today)
Pension Bill Nears Senate Vote; Critics Say It Hurts Older Workers
Excerpt: "Employee groups and retiree advocates are battling a Senate bill they say would legitimize controversial cash balance pension plans and harm low- and moderate-income workers.... Concerns are gaining urgency as a vote on the bill heads to the Senate, possibly this week. A similar bill passed the House in July, 401-25, without a cash balance provision." (USA Today)
Opinion: Pension Takeaway -- Stop Corporate Schemes To Undermine Pension Benefits
Excerpt: "The most heinous of the pension takeaway schemes include switching to cash balance plans (which deprive workers of expected benefit increases from their final years of company employment), changing pension formulas with obscure 'modifications' that are really cuts, and 'wearaway,' which can force employees to work many additional years to increase pension benefits beyond previously established levels." (Ralph Nader, published by CommonDreams.org)
DOL Advisory Opinion Seems to Say Just About Anything Qualifies as a QDRO
Excerpt: "The Department of Labor recently concluded that every benefit payable from a pension plan, even if it's not a pension benefit and even if the planís terms don't permit its payment to an alternate payee, can be assigned to an alternate payee pursuant to a qualified domestic relations order ('QDRO'). ERISA Op. 2000-09A ..." (Nixon Peabody LLP)
IRS Cuts Back Anti-Cutback Rule
(Nixon Peabody LLP)
SEC Holds Public Hearing on Proposed Independence Rules
Excerpt: "On September 13, 2000, the United States Securities and Exchange Commission (SEC) held a public hearing on proposed new rules affecting auditor independence." (Practitioners Publishing Company)
High-Tech Employers Moving Towards Faster Vesting Schedules in Stock Option Plans
New Book -- The Plan Sales System: A Blueprint for Building Your 401(k) and Retirement Plan Business
Available through BenefitsLink, this new book by marketing expert Catherine N. H. Lewis "provides a comprehensive, step-by-step system for growing a retirement plan sales practice. This manual offers a 16-step system with detailed resources, contact names and numbers, checklists, charts, handouts, letters, extensive prospecting techniques, descriptions of current market opportunities, and tools for planning and monitoring sales activity. [A]ppropriate for all levels of plan sales experience." (Catherine N. H. Lewis)
(Following also appears in Welfare Plans Edition)
How Many Employees Can Be Stuffed under a Top-Hat Plan?
Analysis of Demery v. Extebank Deferred Compensation Plan (2d Cir. 6/15/00) (Nixon Peabody LLP)
6th Cir.: ERISA Preempts State Common Law of 'Undue Influence' on ERISA Plan Participant
Excerpt: "[W]hether Tinsley is entitled to the proceeds from Williams's life insurance plan due to the alleged forgery ... on the beneficiary designation change form or the alleged exercise of undue influence ... is preempted by ERISA and governed by federal law.... Since ERISA does not contain any provisions regulating the problem of beneficiary designations that are forged, the result of undue influence, or otherwise improperly procured, it appears that federal common law must apply..." (United States Court of Appeals for the Sixth Circuit)
DOL Advisory Opinion 2000-11A Released
Excerpt: "This responds to your request for an advisory opinion concerning the status of the Firefighters' Variable Supplements Fund (VS Fund) under Title I of ERISA ... we conclude that the VS Fund is a 'governmental plan' within the meaning of section 3(32) of ERISA ... [Here,] the VS Fund is the product of collective bargaining between the UFA and the City and has limited its coverage to employees of the City." (U.S. Department of Labor)
Domestic Partner Benefits Urged for Employees of Claremont, California
Excerpt: "The city would offer health insurance benefits to unmarried domestic partners of city employees, including same-sex partners, under a recommendation from Mayor Karen Rosenthal and Mayor Pro Tem Paul Held." (Los Angeles Times)
Opinion: Partner Benefits Are Competitively Smart, And Decent Too
Excerpt: "Government is constitutionally obliged to provide equal treatment under the law to all citizens -- none more so than its own employees. By offering benefits to the partners of employees living in one kind of committed relationship but not another, the state is demonstrating a bias that is inconsistent with its bedrock principles." (StarTribune.com)
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