Retirement Plans Edition
January 11, 2001
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IRS Announcement 2001-6 Provides Guidance on Use of M&P, Volume Submitter Docs for GUST Restatements
Excerpt: "Provides a general summary of the rules for determining the GUST remedial amendment period for employers who use master and prototype (M&P) plans or volume submitter specimen plans... Describes circumstances under which the [IRS] will waive the requirement that employers certify their intent to adopt a sponsor or practitioner’s M&P or volume submitter specimen plan. In some situations, such a certification is required as a condition for extending the GUST remedial amendment period." (Internal Revenue Service)
Employees Want More Investment Paths to Follow to 401(K) Riches
Excerpt: "... on the eve of the program's 20th anniversary (the IRS gave the 401(k) provisional approval in January 1981), a growing and outspoken minority is pushing for more: the ability to customize their plans. Some want the freedom to invest in any financial instrument they choose -- the whole universe, please. Others want some personalized advice for how to proceed, and they want it cheap." (Chicago Tribune)
Father of 401(k) Recalls Inspiration
Excerpt: "Ted Benna's child turns 20 today, and he's a proud papa. His kid, the 401(k) employee retirement savings account, has become the linchpin of retirement planning for millions of American workers. But the story of how Benna conceived it isn't your traditional business tale." (Dallas Morning News)
Workers' Day Saved by the 401(k)
Excerpt: "Benefits specialist R. Theodore Benna recalls spending a quiet Saturday in his office in 1980 trying to redesign a company's pension. Benna said he found an answer in the tax code's Section 401(k), which was added under the Tax Reform Act of 1978 to clarify the law on certain retirement plans. The plan he came up with would allow workers to contribute a portion of their paychecks on a pretax basis to a retirement account." (Modesto Bee)
401(k)s and Homebuying
Excerpt: "One reason folks sign up for a 401(k) is because they can take the money out early if they need it. A little more than 82 percent of 401(k) plans offer loans and nearly 89 percent of plans offer hardship withdrawals, says the Profit Sharing/401(k) Council of America ..." (401Kafe.com)
Another Question is Answered in the Domestic Relations Orders Q&A Column
My divorce decree, which was entered 6 years ago, provides that I am entitled to a portion of my husband's retirement plan to be assigned pursuant to QDRO. My husband just retired and is receiving his pension. Is there a time limit for obtaining a QDRO? (BenefitsLink.com)
Presidential Lifetime Pensions: How Other Presidents Fared
Excerpt: "Comparison of President Clinton's estimated lifetime pension with that of his living predecessors and President-elect Bush, according to the National Taxpayers Union: ..." (New York Times; free registration required)
Clinton Pension Worth $7.2 Million, Group Says
Excerpt: "Because he's only in his 50s, President Bill Clinton could receive the biggest federal pension in history-- an estimated $7.2 million during his lifetime, according to a tax policy group that believes presidents get too sweet a deal after they leave office." (Associated Press)
Nationwide Financial Buys Pension Administrator, Strengthens Customer Service Capabilities
Excerpt: "Nationwide Financial has purchased Diversified Pension Services, a large pension plan administration company based in Miami, Fla." (PRNewswire, via Yahoo! Finance)
'Winding-Down' System for Teachers
Excerpt: "Burnt-out teachers throughout Scotland are set to be offered the chance to scale down their workload until retirement. Under the plan, which replaces early retirement proposals by the independent inquiry into pay and conditions, teachers over 55 could work half the hours for half the pay until retirement and still receive their full pension rights." (Press Association )
Choosing the Right Annuity at Retirement
Excerpt: "Annuities are very popular retirement vehicles, yet many retirees don't choose the right type of annuity because they don't fully understand the different types and their features." (New York Times; free registration required)
The Tech Wreck: Those Nearing Retirement Have Little Time To Recoup Losses, Say Advisers
Excerpt: "For those workers poised on the cusp of retirement, the stock market's recent gyrations raise a potentially life-changing question: What should you do with your 401(k) investment allocation? A lot depends on whether you have other sources of retirement income stashed away besides your 401(k) employee savings plan, financial advisers said. That will play a big part in whether you can afford to wait out the tech wreck." (Dallas Morning News)
Costly Move By Pension Funds? CALSTRS, CalPERS Voted To Leave Booming Tobacco Stocks
Excerpt: "But the state's top pension funds, the California State Teachers' Retirement System and the California Public Employees' Retirement System, both elected to shed their tobacco holdings last year and both may pay, in varying degrees, for those decisions. CalSTRS, in fact, lost out on making nearly $110 million by divesting itself of tobacco." (Sacramento Bee)
Report on Mutual Fund Fees and Expenses
Excerpt: "This Report of the Division of Investment Management on Mutual Fund Fees and Expenses ... presents our study of trends in mutual fund fees and expenses experienced over the past twenty years [and] illustrates the extraordinary growth in fund assets during the period covered by the study ... [which] also discusses the major changes in the manner that funds are organized and distributed and the rapid expansion in the variety of services that is commonly available to fund shareholders." (U.S. Securities and Exchange Commission)
Retirement Policy Recommendations to the 107th Congress (PDF)
Excerpt: "The Council urges all members of the House and Senate to cosponsor the reintroduced retirement savings legislation and to work for early consideration of the legislation by the full House and Senate." (American Benefits Council)
(Following also appears in Welfare Plans Edition)
IRS Notice Provides Interim Guidance, 'Clarification' of Split-Dollar Arrangement Tax Treatment
Excerpt: "The Treasury Department and Internal Revenue Service (IRS) are reviewing the Federal income tax treatment of so-called 'split-dollar' arrangements for the purchase of life insurance contracts. This notice clarifies prior rulings ... provides taxpayers with interim guidance on the tax treatment of split-dollar arrangements pending publication of further guidance, and requests taxpayer comments on the interim guidance and a number of unresolved issues." (Internal Revenue Service)
Proposed Regs Cover Transfer Of Surplus Pension Assets For Retiree Medical Expenses
Excerpt: "Under IRC Secs. 401(h) and 420, it is permissible to transfer surplus assets from a defined benefit pension plan to provide current retiree medical coverage. As amended by the Tax Relief Extension Act of 1999... Sec. 420(c)(3) requires that such a transfer satisfy a minimum cost requirement.' This provision is aimed at preventing an employer making a transfer of surplus pension assets from subsequently significantly reducing the number of retirees covered or the cost of such coverage." (Spencernet)
Employers, Workers Clash Over Benefits Concerns
Excerpt: "Although rising healthcare costs is the top benefits priority for employers, rank-and-file workers are more concerned with retirement issues, a recent survey has found." (National Underwriter Company)
American Benefits Council Presents Recommendations to the 107th Congress
Press release. Excerpt: "— Today, the American Benefits Council submitted a policy paper to the Bush transition team outlining policy recommendations on a range of employee benefits issues. “Key benefits issues – from managed care reform to pension coverage to prescription drugs -- will be among the most pressing matters facing our new president." (American Benefits Council)
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| Recordkeeping Administrator #121056 | for Stratevest Group in ME |
| Marketing Consultant (Conversion & Case Management) | for WESPAC Plan Services, Inc. in CA |
| Pension Technician | for Midwest Pension & Profit Sharing Services in MN |
| Client Manager | for Benefit Services Corporation, a subsidiary of METLIFE in GA |
| Legal Assistant | for McCready and Keene, Inc., Pension Consulting Firm in IN |
| Benefits Specialist | for Manley Associates Inc. in NY |
| Plan Services Associate | for The Todd Organization of Washington, D.C. in DC, MD |
| Everything You Need to Know About HIPAA, COBRA and the New DOL Claims and SPD Regs But Are Afraid to Ask | in DC on February 7, 2001 presented by Capital Chapter ISCEBS |
| Does Privatizing Really "Fix" Social Security? | in DC on March 22, 2001 presented by Capital Chapter ISCEBS |
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