Retirement Plans Edition
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October 2, 2000
A Case Sounds a Warning About Pension Safety
Excerpt: "Workers who think that their pensions are secure because the government guarantees , and that their 401(k) money is safe once it goes to an investment house, may want to follow closely a case in Portland, Ore., that has cost 100,000 people some major chunks of their retirement income." (New York Times; free registration required)
Is Style Drift Plaguing Your 401(k) Funds?
Excerpt: "Is your plan's large cap value fund acting more like a large cap growth fund? It may be good for participants, but it also makes 401(k) plan fund selections more difficult and risky in terms of fiduciary liability. This has occurred most recently with many fund managers delving into high-tech segments so they can report a better rate-of-return." (Managing 401(k) Plans, published by IOMA)
Employee Costs and Risks in 401(k) Plans
Excerpt: "The rapid growth of employer-sponsored 401(k) plans has been facilitated, in part, by the many advantages offered to participants. However, employees also may encounter many costs and risks in attempting to maximize their account balances over the course of participating in a plan." (Bureau of Labor Statistics, U.S. Department of Labor)
Another Question is Answered in the 401(k) Plans Q&A Column
Our 401(k) plan ends each March 31. We always fail top-heavy testing. When do we have to deposit 3% of non-key employees’ compensation into their accounts? (BenefitsLink.com)
IRS Issues Revenue Procedure 2000-40 on Changes in Funding Methods for DB Plans (PDF)
Excerpt: "This revenue procedure provides approval to change the funding method used to determine the minimum funding standard ... Section 3 provides approval to change the funding method of the plan to one of seventeen methods, including a change in the asset valuation method to one of six asset valuation methods, a change in the valuation date to the first day of the plan year, and a change in the method for valuing ancillary benefits to the method used to value retirement benefits." (Internal Revenue Service)
Onan Corporation Succeeds in Dismissal of Claim for Cash Balance Plan Age Discrimination (PDF)
Eaton v. Onan Corporation. Excerpt: "[T]he court finds that the cash balance plan at issue here does not violate those prohibitions on age discrimination in terms of the rate of benefit accrual." (United States District Court for the Southern District of Indiana)
Cash Balance Plans: The New Wave
Excerpt: "A number of larger employers have recently restructured their defined benefit pension plan offerings by switching from a typical pension plan based on terminal earnings formulas to a cash balance plan based on average career earnings. Many questions as to who benefits from such transitions, as well as to how such transitions should be governed, remain unanswered." (Bureau of Labor Statistics, U.S. Department of Labor)
Guidance on New Comparability Plans Coming Very Soon, IRS Official Says
(CCH)
David Johanson's ESOP Forum for October 2000
Excerpt: "In Becker v. Midwest Stamping & Manufacturing Company Profit Sharing Plan and Trust Administrative Committee, the Sixth Circuit Court of Appeals [held] that the district court properly applied an arbitrary and capricious standard of review to an administrative committee's decision to deny a claim for benefits under ERISA and that the administrative committee's interpretation of the plan for purposes of the claim was not arbitrary and capricious." (National Center for Employee Ownership)
Pension Sharing to Give Fairer Deal to Divorced Women in Britain
Excerpt: "The new regulations, known as pension sharing, will mean that at the time of divorce the retirement pot will be divided, giving both partners freedom to invest in their own pension plans. Although the move will also apply to men, women are expected to be the main beneficiaries." (Knight-Ridder / Tribune)
Hot Topics in IRA and QP Distributions 2000
Excerpt: "This is a [collection of frequently asked questions, with answers,] which attempts to answers roughly 50 cutting edge questions, including a number of questions involving trusts as beneficiaries of IRAs and [qualified plans]." (Noel AC. Ice, Esq.)
Sample Language for Use In a Living Trust, About IRA and Qualified Plan Benefits, With Annotations
Excerpt: "This form attempts to deal with the thorny and complex issues that arise when a trust is designated as the beneficiary of an IRA or qualified retirement plan." (Noel AC. Ice, Esq.)
Sample IRA Form, With Annotations: Designation of Beneficiary and Election of Form of Benefits
Excerpt: "This is a sample annotated IRA Beneficiary Designation, where benefits are to go to a spouse, or to a disclaimer trust." (Noel Ice, Esq.)
Survey: Public Retirement Plan Investments Are Doing Well
Excerpt: "In short, state and local retirement plans have prospered during the 1990s' bull market and remain in strong financial health." (Cypen & Cypen, P.A.)
Thanks, Big Spender -- Financial Services Funds Bloom on Buying, Saving
(USA Today)
Money Keeps Flowing Into Mutual Funds -- 401(K) Plans and Options Help Keep Markets Flush
(USA Today)
Young Americans and Social Security: Key Findings from Hart Research Poll
Excerpt: "young people's commitment to Social Security runs a lot deeper than their supposed belief in UFOs. Strengthening and protecting Social Security is a key priority for young Americans. 81% of young Americans support the Social Security system, including 39% who strongly support it. Young adults, in fact, think Congress should give priority to preserving and strengthening Social Security (63%) over preserving the world's rain forests (20%)." (2030.org)
(Following also appears in Welfare Plans Edition)
Welcome to new BenefitsLink advertiser Shared Equity Strategies, Inc.
Shared Equity Strategies, Inc. provides legal, financial and administrative expertise around employee ownership, ESOPs and other equity tools, business succession and capital strategies issues. We use our legal oversight to ensure that our clients are kept up-to-date, and our client-oriented approach to make it easy!
Readers Now Can Add Comments, Discuss Items As They Appear on Our Benefits Buzz Page
The Benefits Buzz page on BenefitsLink -- where new items are spotlighted, including links to new articles, rulings, news and other benefits information -- now lets readers "sound off" by adding online comments that become attached to particular Benefits Buzz items. The idea is to provide a handy way for practitioners to "annotate" these items by adding their own perspectives, experiences, or even hypertext links to similar web pages. Look for the "Post a Comment" tag under each new item! (BenefitsLink)
E-Signatures Become Valid
Excerpt: "A bill signed by President Clinton on June 30 that granted e-signatures the same legal standing as traditional 'wet' ones went into effect yesterday. The effect, businesses pledge, is a new world of e-commerce that is faster, cheaper and less vulnerable to fraud." (New York Times; free registration required)
Data Aggregation: Settling All Accounts in One Place
Excerpt: "Over the past six months, a proliferation of financial institutions' websites, as well as Internet portals have begun to offer account aggregation: One-stop viewing of all financial information the customer asks the aggregator to collect. At certain time intervals, the account aggregation site sweeps the servers of registered users' financial institutions updating information -- a process known as screen scraping." (Upside Today)
Survey Finds That Web-Based HR Services Are On The Rise
Excerpt: "Employers are moving away from paper-based to Web-based systems for human resource transactions, including annual benefit enrollment, personal data changes, Sec. 401(k) plan election changes, and family status changes, according to a survey recently conducted by Towers Perrin." (Spencernet)
Data Aggregation: Bigger Than Daily Valuation?
Excerpt: "What's clear is that mutual funds, investment advisors and retirement services firms simply cannot wait to see how it shakes out. You -- we -- don't have the time or the luxury.... Think about the change brought by Schwab's introduction of the mutual fund marketplace. It is the same disruptive model backed by technology in the hands of your customers, clients and participants." (401kWire.com)
Dutch Prostitutes Gain Employee Benefits
Excerpt: "Prostitution itself was already legal in the Netherlands, but the new law transforms the sex establishments into legal businesses with working guidelines and employment benefits. Prostitutes and brothel owners alike will be obliged to pay taxes." (New York Times; free registration required)
Overview: Employee Benefits Survey for 1998 (PDF)
Excerpt: "The Employee Benefits Survey (EBS) of the Bureau of Labor Statistics (BLS) covers the incidence and characteristics of employee benefit plans, and is conducted jointly with the Bureau’s Employment Cost Index Survey. The two surveys cover all private sector establishments (except farms and private households) and State and local governments." (Bureau of Labor Statistics, U.S. Department of Labor)
| Experienced Defined Contribution Consultants | for Ceridian Retirement Plan Services in CA, CO, FL, VA, WI |
| Retirement Services Implementation Project Manager | for Transamerica Retirement Services in CA |
| Manager, Campaign Services | for New York Life Benefit Services LLC in MA |
| 401(k) Investment Educator, Boston Area, Denver, Seattle, Chicago | for ADP, Inc. in CO, IL, MA, WA |
| Consultant - Executive Benefits | for Clark Bardes Consulting/Compensation Resource Group, Inc. in AZ, CA, GA, IL, NY, OH, TX |
| Pension Consultant | for Fidelity Investments in MA |
| Defined Benefit Conversion Consultant | for American Century Investments in MO |
| Defined Benefit Conversion Specialist | for American Century Investments in MO |
| HRIS MANAGER | for RIGGS BANK N.A. in DC |
| Actuarial Analyst | for Aon Consulting, Inc. in MD, PA |
| Senior Actuary | for Aon Consulting, Inc. in DC, MD |
| Claims Auditor/Consultant | for Aon Consulting, Inc. in MD |
| Sr. Actuarial Analyst | for Aon Consulting, Inc. in PA |
| Writer - HR Generalist | for Firstdoor.com in GA |
| RETIREMENT PLAN ADMINISTRATOR | for Scudder Kemper Investments Inc. in NH |
| 401(k) Compliance/Client Relations Coordinator | for ASR in TX |
| Pension Benefits Specialist | for The Boeing Company, Company Offices Benefits Department in WA |
| Customer Support - DC Plans / Flexible Benefits Administrators | for DATAIR Employee Benefit Systems, Inc. in IL |
| Pension Enrollment Specialist | for Diversified Investment Advisors in IA |
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