Retirement Plans Edition
December 13, 2000
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401(k) Perspective: What Does the Future Hold?
Excerpt: "The following article concludes a three-part series that [401kForum] asked Ted [Benna] to write for us in preparation for the 20th anniversary of the first 401(k) plan on Jan. 1, 2001. In it, Ted shares his views about where he thinks 401(k)s are heading and why." (401Kafe.com)
Diversified Investment Advisors to Offer Bundled 401(k) Through Bank of America
Excerpt: "The plan will be targeted to mid- to large- size plan sponsors throughout the U.S. The 401(k) product will offer a wide range of mutual funds from Diversified and Nations Funds (the Bank of America mutual fund family) as well as funds from other leading mutual fund providers. Each company will offer asset management services in connection with its own funds. Diversified will provide plan administration and participant recordkeeping services." (Press release on PRNewswire, via Yahoo! Finance)
Another Question is Answered in the ERISA Benefit Claims Q&A Column
I am the surviving spouse of a participant in a pension plan. Although we tried to divorce, the divorce was never final and I feel I am entitled to the survivor's benefits under the terms of the plan. The employer is refusing to pay since there are lingering issues regarding whether I am truly the surviving spouse and thus is waiting until the court decides the issue. What should I do? (BenefitsLink.com)
Amendment to Underwriter Exemptions-- Acquisition by Benefit Plans of CMBS in the Secondary Market
Excerpt: "On November 13, 2000, the Department of Labor finalized an amendment to certain individual prohibited transaction exemptions commonly referred to as the 'underwriter exemptions.' The amendment significantly expands the types of issuers and the types of asset-backed and mortgage-backed securities that can be purchased by benefit plan investors." (Sidley & Austin)
For the Thrift Savings Plan's Common Stock Fund, an Atypically Tough Month and Year
Excerpt: "The [federal government employees'] Thrift Savings Plan's common stock fund, long the highflier of the three TSP investment options, appears headed for a rough landing this year." (Washington Post)
$35,000 limit for DC plans takes effect for years ending after December 31, 2000
Excerpt: "The IRS recently announced that the dollar limit under IRC �415(c)(1)(A) is increased from $30,000 to $35,000, effective January 1, 2001. Increases in the �415(c)(1)(A) limit takes effect for limitation years that end after the effective date of the limit.... Thus, a plan with a limitation year ending January 31, will use the $35,000 limit for the year ending January 31, 2001." (TRI Pension Services)
Goodyear Offers Early Retirement
Excerpt: "Goodyear Tire & Rubber Co. is offering early retirement packages to hundreds of workers in an attempt to turn around its falling profits. The Akron-based company is offering early retirement to 650 to 700 salaried employees in North America, or about 8.5 percent of its white-collar work force, spokesman Chris Aked said." (New York Times; free registration required)
Pension Trustees Wary of AT&T Breakup
Excerpt: "AT&T Corp. Chairman C. Michael Armstrong failed to persuade managers of pension funds for New York's public employees and others to endorse the decision to break the company into four parts by 2002." (Bergen [N.J.] Record)
CalPERS Sets Timeline For Emerging Markets Standards
Excerpt: "CalPERS, the nation's largest pension fund, set a timeline Monday for its new plan to apply tough human rights, labor and environmental standards when investing overseas, a policy which could eventually bar investments in some developing countries." (Reuters via Excite! News)
(Following also appears in Welfare Plans Edition)
More 'Personal Portfolio' Internet Sites Coming
Excerpt: "Web sites for creating 'personal portfolios'-- an investment middle ground between stocks and mutual funds-- are starting to proliferate, and one such site hopes to team up with banks, brokerage houses, and 401(k) plans. The services enable individual investors to pick a collection of stocks, customize their allocation, and trade actively for one monthly fee-- all on the Internet." (American Banker)
Microsoft Settles 'Permatemp' Cases
Excerpt: "The cases, one of which is nearly 8 years old, focused a spotlight on the use of workers who have tenures as long as many permanent employees but don't receive the same benefits because they were classified as temporaries, and ostensibly worked as independent contractors or for outside agencies." (Seattle Post-Intelligencer)
Microsoft to Pay Temp Workers $97 Million
Excerpt: "The so-called 'permatemp' case, filed in 1992, involved Microsoft's practice of hiring long-term workers through temp agencies so that it could allegedly avoid paying pensions, health care and stock options." (Reuters via ZDNet Australia)
Microsoft Settles Suit With Temp Workers
Excerpt: "Microsoft reached this settlement, one of the largest ever received by a group of temporary employees, after the workers had sued the company, maintaining that they were actually permanent employees, not temporaries, and therefore deserved the same benefits as regular workers." (New York Times; free registration required)
Microsoft to Settle with Temp Workers
Excerpt: " Microsoft Corp. agreed yesterday to pay $96.9 million to settle a class-action lawsuit brought by long-term temporary workers who claim they were denied benefits they would have received if properly classified as full-time workers, the company and lawyers for the plaintiffs announced yesterday." (Washington Post)
2000 Top 250: Long-Term and Stock-Based Grant Practices for Executives and Directors (PDF)
Excerpt: "This report presents information on long-term incentive and stock-based grant types currently in use for executives and non-employee directors of the 250 largest companies having one or more class of common stock included in the Standard & Poor's 500 Index." (Frederic W. Cook & Co., Inc.)
New Claims Regs Interfere With Pending Legislation, House Committee Told DOL
Link to October 25, 2000 letter to Secretary Alexis Herman. Excerpt: "In communications with the Department, the Committee has expressed concerned that the regulation preempts the work of Congress on similar subject matter." (Committee on Education and the Workforce, U.S. House of Representatives)
GE To Drop Insurance and Pension for New Non-Employee Directors, Union Says
Excerpt: "The Communications Workers of America has scored a victory for shareholders at General Electric Co., with GE agreeing to end a pension and life insurance benefit for new non-employee members of the board of directors." (Press release on PRNewswire, via Yahoo! Finance)
| Defined Contribution/401(k) Administrator | for Merit Benefits Group, Inc. in IL |
| ERISA Attorney | for Riordan & McKinzie in CA |
| Account Service Rep. | for Leading Employee Benefits Consulting Firm in FL |
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