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The BenefitsLink Newsletter -
Retirement Plans Edition

October 13, 2000

401(k) Fiduciary Responsibilities (PDF)
Outline of presentation to be made by Fred Reish, Esq. at the October 2000 ASPA national conference. (Reish & Luftman)

ERIC: GAO Report Underscores Need to Bring Pension Rules Into Step With Today's Workplace Realities
Excerpt: "The General Accounting Office's (GAO) recent reports on cash balance plans support employers' contentions that there is a 'growing mismatch between the continuing innovation in pension plan design and a regulatory framework that is much slower to adapt to these new designs.' The reports call on federal regulators to do what employers have been asking to do for several years: develop rules that treat hybrid pension plans as distinct from traditional final average pay plans." (ERISA Industry Committee)

Private Pensions: Implications Of Conversions To Cash Balance Plans (PDF)
Excerpt: "[T]he number of firms sponsoring cash balance plans has increased within the past few years ... increasing to about 19 percent of all Fortune 1000 firms this year.... This report includes matters for consideration by the Congress related to improving disclosure to participants about plan changes and preventing situations in which some participants do not accrue new pension benefits for a period of time after conversion to a cash balance plan." (General Accounting Office)

New Distribution and Transfer Rules for Defined Contribution Plans
Excerpt: "The IRS has issued final regulations permitting the elimination of periodic payment options, such as an annuity or installment payments ... [Employers now can] eliminate excessive and overly complex optional forms of distribution ... from their non-pension plans such as profit sharing, 401(k) and stock bonus plans. The regulations have also relaxed the elective transfer rules and provide more flexibility in changing investment options for plans that offer in-kind distributions." (W. E. Stanley & Company, Inc.)

457 Plan Consultant By Day, Popular Denver Comedian By Night
Excerpt: "Darryl Collier is talking about 457 plans, pensions and something called RFPs (requests for proposals), and the truth grows indisputable: This stuff just isn't funny. Not even in a dry, Steven Wright kind of way.... Which is what makes him one of Colorado's most intriguing comedians." (RockyMountainNews.com)

Allegheny County (Penn.) Retirement Funds Invested With Campaign Contributors
Excerpt: "One group of political contributors won a contract at yesterday's Allegheny County Retirement Board meeting, but another group came away a loser. The board controls the county government's $760 million pension fund. Board member Jim Roddey, the county's chief executive, won approval for a proposal to invest $50 million with Pittsburgh-based Federated Investors, a firm whose executives contributed a total of $12,500 to his campaign last year." (Post-Gazette.com)

Philadelphia City Councilman Aims To Close Loophole With Police Pensions
Excerpt: "It allows nonuniformed city workers to collect police benefits without working on the force. James F. Kenney introduced the bill yesterday." (Philly.com)

It Pays To Stay In Congress: Vet Pols Enjoy Sweet Retirement Package
Excerpt: "As politicians fight about the best way to repair Social Security, few members of Congress are looking to change their own retirement system. Members of Congress enjoy a generous two-pronged retirement system that combines Social Security with another, corporate-style benefit. All told, pensions for senior lawmakers can easily reach six figures." (Philly.com)

Young Savers Learn Valuable Money Lessons with Roth IRAs

Social Security Adds Info On Retirement Planning
Excerpt: "When the Social Security Administration begins its second annual mailing of Social Security statements this month, workers age 55 and older for the first time will get a special insert about retirement planning." (USA Today)

Testimony at Yesterday's Hearing on Employee Stock Options
Frederic W. Cook, Chairman, Frederic W. Cook & Co., New York, NY; Christopher Capuano, Senior Vice President, Proxicom, Inc., Reston, VA; Wilma Schopp, Human Resource Leader, Monsanto Company, St. Louis, Missouri, on behalf of the American Benefits Council; Sandra L. Sussman, Executive Director, National Association of Stock Plan Professionals, Silver Spring, MD; Michael J. Butler, Principal, and Practice Leader, Hewitt Associates, Rowayton, CT, on behalf of the U.S. Chamber of Commerce. (House Ways and Means Committee, Subcommittee on Oversight)

(Following also appears in Welfare Plans Edition)

Subs Can Avoid Tax on Parent Stock That Funds Rabbi Trust for Sub's Employees
Regarding IRS Notice 2000-56. Excerpt: "IRS has specified the requirements necessary for a subsidiary to avoid being taxed when a parent's stock is contributed to a rabbi trust and used to provide deferred compensation to the subsidiary's employees and service providers." (RIA Federal Taxes Weekly Alert)

Graef Crystal: Tommy Hilfiger's Pay Style Isn't Ralph Lauren's
Excerpt: "You would think that designer Tommy Hilfiger and Joel Horowitz, chief executive of Tommy Hilfiger Corp., would be galvanized into doing whatever it took to turn around the company's stock. ... Well, they have indeed been galvanized, but not to focus on the stock price. Hilfiger's pay is based solely on the company's revenue." (Graef Crystal, on Bloomberg.com)

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

Director of Client Servicesfor Universal Pensions, Inc.
in MN
Director of Operationsfor Universal Pensions, Inc.
in MN
Defined Contribution Plan Administrator/Compliancefor an investment management company
in NY
in CT, NJ, NY, PA
Pension, Profit Sharing and 401(k) administratorfor EIP, Inc.
in CA
Pension Administratorfor Pension Performance, Inc.
in IL

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