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The BenefitsLink Newsletter -
Retirement Plans Edition

November 6, 2000

Today's sponsor is EmployeeBenefitsJobs.com (click on banner for more information)
(Would your company like to sponsor an issue?)

Participants Don't Understand Lifestyle Funds
Excerpt: "While lifestyle funds were introduced to the 401(k) plan asset mix to provide a no-hassle approach that allows less sophisticated investors to build tailored investment portfolios, new research from Hewitt Associates reveals that many participants are utilizing these funds in ways that defeat their intended purpose." (Employee Benefit News)

CalPERS Joins Old Mutual plc To Offer First-Of-A-Kind Internet Auction System For Securities
(California Public Employees Retirement System)

Chicago Sets Mandatory Retirement For Police Officers And Firefighters
(Cypen & Cypen)

IRS Issues Private Letter Ruling for DROP
Excerpt: "Basically, a [deferred retirement option plan, or 'DROP'] allows an employee who reaches retirement age to be treated as retired for certain purposes, while delaying actual termination of employment for a specified period." (Cypen & Cypen)

Pension Provisions as Incorporated In Conference Agreement For HR 2614 on 10/26/2000 (PDF)
Tabular summary of principal provision. (Profit Sharing/401(k) Council of America)

Asset Location for Retirement Savers
Link to a Working Paper available for downloading from the National Bureau of Economic Research. Excerpt: "This paper uses data on actual returns on taxable bonds, tax-exempt bonds, and a small sample of equity mutual funds over the 1962-1998 period to compare two asset location strategies for retirement savers." (James M. Poterba, John B. Shoven, Clemens Sialm )

A Guide To Understanding Mutual Funds
Updated November 2000. (Investment Company Institute)

New Bureau of Labor Statistics Data on Employee Stock Options
New data from the Bureau of Labor Statistics indicate that 1.7% of the country's 110 million nonfarm, private sector employees got a stock option grant in 1999. However, the same report finds that 5.3% of employees in public companies got options that year. These companies employ about 60% of the work force, which would mean that 3.99 million employees in listed companies alone got options in 1999, or about 3.7% of the total work force. The inconsistency of the data has no obvious explanation. (National Center for Employee Ownership)

Another Question is Answered in the Correcting Plan Defects Q&A Column
A 401(k) plan document requires an employee to complete two years of service in order to participate in elective deferrals and employer contributions. How should this be corrected? (Assume that the plan does not have a current favorable determination letter ruling and thus is not entitled to relief under Internal Revenue Code section 7805.) (BenefitsLink.com)

(Following also appears in Welfare Plans Edition)

Florida Appellate Court Upholds Broward County Domestic Partnership Law
Excerpt: "Finally, the court certified to the Florida Supreme Court the following question of great public importance: Does the Broward County Domestic Partnership Act contravene [the Florida Constitution]?" (Cypen & Cypen)

Job Openings Newly Posted or Reposted on EmployeeBenefitsJobs.com

401(k)/DC Administratorfor Southern California Administrator
in CA
Pension Plan Administratorfor Benefit Associates, Inc.
in CA
Director/Manager, Defined Contribution Departmentfor The Angell Pension Group, Inc.
in RI
Benefits Administration Managerfor Schwarz
in IL
Benefits Managerfor Major National Law Firm in San Francisco
in CA
Pension Consultantfor MetLife
in CO
Health Plan Audit Consultants, San Francisco and Los Angeles Officesfor William M. Mercer, Incorporated
in CA
Pension Consultants/Administratorsfor Northern NJ Mid-Size Pension Consulting Firm
in NJ

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