If this message looks garbled to you or if the headlines in this message don't connect you to Web pages when you click on , please request the "plain text" version of this newsletter ("Retirement Plans Edition") by emailing your request to publisher Dave Baker at davebaker@benefitslink.com
The BenefitsLink Newsletter -
Retirement Plans Edition

Today's sponsor is Search401k.com
(click on banner for more information)

(Would your company like to sponsor an issue?)

October 10, 2000

Update of IRS Procedures for Automatic Approvals in Funding Method Changes
Excerpt: "The IRS has published Revenue Procedure 2000-40, which updates its procedures for automatic approvals of certain changes in funding methods under defined benefit plans.... The purpose of procedures like Revenue Procedure 2000-40 is to grant approval for certain changes that eliminate the need to apply to the IRS for permission." (TRI Pension Services)

Revenue Procedure Provides Approval For Changes In Funding Method By Defined Benefit Plans
Excerpt: "In Rev. Proc. 2000-40, the Internal Revenue Service provides approval for defined benefit plans to change the funding method used to determine the minimum funding standards. The revenue procedure supersedes Rev. Proc. 95-51." (Spencernet)

Boomers Reconsider Early Retirement
Excerpt: "A new Rutgers University survey found that 76 percent of those born between 1946 and 1964 hope to retire by age 60 but don't want the same work-free retirement their parents had." (Scripps Howard News Service)

Cash Balance Plan Created Illegal Forfeiture Using Lower Interest Rate In Making Cash Distributions
Excerpt: "Esden v. Bank of Boston, No. 99-7210 (2nd Cir. September 12, 2000)... The court in this case upholds the IRS' interpretation of how IRC section 417(e) applies to cash balance plans, as set forth in Notice 96-8." (TRI Pension Services)

New Comparability Plans Survive, but New Proposed Regs Narrow Maximum Disparity Allowed
Excerpt: "[If the January 1, 2002] effective date sticks in the final regulations (which it likely will), nothing changes in the way new comparability plans show they are nondiscriminatory for the 2000 and 2001 plan years.... What do the regulations do? [First, they] establish a 'gateway' rule for defined contribution (DC) plans to prove allocations are nondiscriminatory on the basis of benefits." (TRI Pension Services)

Cash Balance Plans: Implications for Retirement Income (PDF)
Excerpt: "[C]ash balance plan participants have a particular need for clear and timely information about their plans. We found a wide variation in the quality of information that firms provided to participants in cash balance plans. However, most plans provided insufficient information to allow a participant to make informed career-and retirement-related decisions." (General Accounting Office)

7th Cir.: Partial Termination Counts Vested Participants, Over Multiple Plan Years
Excerpt: "Matz v. Household International Tax Reduction Investment Plan... This case addresses two important questions with respect to whether a partial termination has occurred under a plan. (1) Are both vested and non-vested participants taken into account to determine if a significant percentage of participants have been eliminated from the plan? (2) Can a single partial termination transaction occur over more than one plan year? The court answers yes to both questions." (TRI Pension Services)

Court Order Assigning Survivor Benefit To Former Spouse May Constitute A QDRO: PWBA
Regarding Advisory Opinion 2000-09A. Excerpt: "The advisory opinion addressed whether a court order requiring the company-paid survivor benefit to be paid to the participant's former spouse, who had been named by the participant as the designated beneficiary under the plan prior to his divorce and as of the date of his retirement, could constitute a QDRO within the meaning of ERISA Sec. 206(d)(3)." (Spencernet)

Dream of ERISA Reform on Mortgate-Related Securities Is Closer to Having Real Life Implications
Excerpt: "Many in the residential and commercial mortgage-backed securities market, as well as the home equity sector, have looked at the proposed changes with high hopes. Visions of increased buying in all of these sectors have been enticing to them. But the improvement appears unlikely to occur overnight or as dramatically as some might expect." (Thomson Financial Media)

Doing the Math on Retirement Needs
Excerpt: "This year, 53 percent of American workers said they tried to figure out how much money they will need for retirement, compared with 35 percent in 1993, according to a survey by the Employee Benefit Research Institute in Washington." (Baltimore Sun)

(Following also appears in Welfare Plans Edition)

IRS Field Service Advice 200040001 Addresses Split-Dollar Life Insurance Arrangement
Excerpt: "Issue: Whether the portion of the total purchase price allocated to the customer-based intangible/goodwill can be used to structure a split-dollar life insurance arrangement whereby avoiding taxation of the gain realized." (Internal Revenue Service, Via Tax Analysts (Temporary Link))

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

Actuarial Analystfor William M. Mercer
in MA
Plan Consultantfor American Century Investments
in MO
Pension Systems Supervisor - Palm Beach Gardens, Floridafor Philips Electronics - Personal Access Center for Employees (PACE)
in FL
Senior 401(K) Operations Managersfor A Prestigious Financial Services Provider -
in CO, MA
Defined Contribution/401(k) Administratorfor Merit Benefits Group, Inc.
in IL
Defined Benefit Business Analystfor Hewitt Associates
in TX
Benefits Managerfor Growing New York City Organization
in NY
401(k)/ DC Plan Administratorfor The Stoller Company
in CA
Director, International Compensationfor E*TRADE Securities, Inc.
in CA, GA
in NJ
Retirement Member Services Managerfor San Diego County Employees Retirement Association
in CA
Benefits Managerfor The Owens Group, Inc.
in NC
DBA Business Analyst - The Woodlands, TX (Near Houston)for Hewitt Associates LLC
in TX

Subscribe to the Welfare Plans Edition, too (click)
Copyright 2000 BenefitsLink.com, Inc.

Feel free to forward this email to friends, colleagues or clients, if no fee is paid to you and the email is forwarded in its entirety. Thanks!

BenefitsLink is a trademark of BenefitsLink.com, Inc., published by Dave Baker with much help from Mary Hall and lots of friends.

To subscribe (free): visit https://benefitslink.com/newsletter - or the person desiring to subscribe can send an email to listmanager@postmastergeneral.com, with this as the subject of the email: subscribe BLretirement

We have an online archive of prior issues at
BenefitsLink logo
Looking for a speaker for your benefits group? Want to throw your hat into the ring? Free.

Need personnel? It's like fishing in a barrel here.

Need a benefits job? Sort the openings by their distance away from you.

Exchange questions and tips with colleagues. Co-sponsored by us and several employee benefits organizations.

Promotions and new personnel in the employee benefits community.

Experts field questions online, submitted by readers via email.

View by location, by sponsoring organization, or by date.

Largest listing of benefits software on the net: descriptions, downloads.

Ads are our sole source of support. No subscription fees!


Copyright 2000 BenefitsLink.com, Inc. All rights reserved. BenefitsLink is a trademark of BenefitsLink.com, Inc.