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The BenefitsLink Newsletter -
Retirement Plans Edition


February 12, 2001
You may freely distribute this email newsletter in whole

Today's sponsor is The International Quality & Productivity Center (click on banner for more information)
Benefits 2001 Congress: How to Increase Customer Satisfaction & Leverage Your Benefits Dollars -- March 26-27, 2001 -- Scottsdale, AZ
For more information call: 1-800-882-8684 or visit: http://www.iqpc.com/b156benefits2001
(Would your company like to sponsor an issue?)

Eenie, Meenie, Meiny, Moe; Catch a Vendor By the Toe ...
Excerpt: "What if there were a way for 401(k) plan sponsors to eliminate any fiduciary liability for how they administer participants' accounts, while affording better management, lower cost, more choice, and a shot at better returns? Ted Benna has been busy talking the idea up the past few months ..." (Plan Sponsor magazine; free registration required)

HR Meets the 401(k) Participation Challenge
Excerpt: "Persuading younger, less affluent employees to take advantage of 401(k) plans constantly challenges human resource managers." (Austin Business Journal)

Jane Bryant Quinn: Keep 401(k) Rollover Pitches in Perspective
Excerpt: "[Y]our 401(k) account [at your former employer is] invested in mutual funds run by independent managers and perhaps in the company's own stock. There are pros and cons to leaving the money in your old company's 401(k). First, the advantages ..." (Jane Bryant Quinn, in the Washington Post)

Retirees Ready To Rumble Over Corporate Pension Plans
Excerpt: "Charging that they're being shortchanged in their pension benefits, angry retirees are ganging up on their former employers. The activist pensioners have floated a set of shareholder proposals at several blue-chip companies, seeking to tie their pension-related grievances to executive pay packages." (Detroit News)

Fixing Plan Documents that Do Not Conform to the Plan Sponsor's Intent
Excerpt: "The traditional fix-- to retroactively comply with the terms of the plan-- would be an unfortunate and unsatisfactory result in this case, since the company never intended for the plan to work that way. Fortunately, the Walk-in Closing Agreement Program (Walk-in CAP) had been expanded to include what we have come to call 'Reformation CAP.'" (Reish & Luftman's ERISA Audit Report for January 2001)

What to Do When the DOL Investigates Your Client's 401(k) Plan
Excerpt: "The Pension Welfare and Benefits Administration (PWBA) of the U.S. Department of Labor (DOL) has been and will continue to target the failure to timely remit employee elective deferrals to 401(k) plans. This means that third party administrators (TPAs) need to be aware of the proper way to handle such investigations on behalf of their clients, including the role of ERISA counsel in achieving a successful outcome." (Reish & Luftman's ERISA Audit Report for January 2001)

Congressman Hinchey Still Fighting For Pension-Reform Legislation
Excerpt: "In vigorously fighting a change in their pension distribution formula, IBM Corp. workers may have unknowingly helped save the pension benefits of thousands of other workers across the country. That's the estimation of U.S. Rep. Maurice D. Hinchey, D-N.Y..." (Binghamton [NY] Press and Sun-Bulletin)

Your Savings May Plump Up If Congress Has Its Way
Excerpt: "In its 26-year life, the individual retirement account has become a godsend to savers trying to preserve some hard-earned wages for their later years. Americans have $2.5 trillion invested in tax-deferred IRAs. Yet only 7 percent of those eligible to contribute to a tax-deductible IRA do so, and only 4 percent sock away the maximum annual $2,000 allowed." (USNews.com)

Pension Reform 2001: 4th Time's The Charm?
Excerpt: "For the fourth time, Representatives Rob Portman (R-Ohio) and Ben Cardin, (D-Md.) are cosponsoring a pension reform bill in the House of Representatives. This year's bill, officially dubbed the 'Comprehensive Retirement Security and Pension Reform Act,' will be strikingly similar to H.R. 1102, which overwhelmingly passed the House twice in 2000." (Greg Hanna, on About.com)

Analysis: PBGC Issues Final Rules on Premiums and Participants
Excerpt: "The new rules, final and effective as of January 1, 2001, offer certain premium reductions by: (1) permitting plans to prorate premiums for short plan years, (2) excluding from the participant count individuals for whom the plan has no benefit liabilities, and (3) exempting fully insured plans from the variable rate premium if they meet the exemption on the premium snapshot date." (Deloitte & Touche)

Hands-On CFOs: Getting Involved With Corporate Pension Plans
Excerpt: "All across corporate America, top financial executives, driven by the surging importance of the pension function, are rolling up their sleeves and getting involved with their plans in ways unimagined in the past." (Plan Sponsor magazine; free registration required)

Crossing the Line, As Safely As Possible, From Investment Education To Investment Advice
Excerpt: "DC plan members need more than education to manage their retirement investments. Employers can offer access to financial advice, taking appropriate measures to ensure their interests and employees' assets are protected." (Benefits Canada)

Educating Employees About Investment Risk
Excerpt: "Employees have to weigh the risk of insufficient retirement income against market volatility when devising an investment strategy for their DC plan. Plan sponsors can help them understand the value of equities as a long-term investment vehicle." (Benefits Canada)

Small Plans: Section 415(e)'s Repeal Means New Penchant For Pensions
Excerpt: "Thanks to the Internal Revenue Service, which has lifted its Section 415(e) ceiling on the maximum allowable contributions permitted across defined contribution and defined benefit plans, small employers with highly compensated partners or shareholders are now able to increase their pretax contributions substantially." (Plan Sponsor magazine; free registration required)

Mutual Fund Directors: The Dog that Didn't Bark
Excerpt: "The Investment Company Act of 1940 specifically states that the interests of fund shareholders must be placed ahead of the interests of fund managers and distributors. The Act places this responsibility in the hands of fund directors, a majority of whom must be independent of the fund manager. But the master of the funds turns out to be the fund manager, and the watchdog-- a word almost universally used to describe the role of the independent director-- simply doesn't bark." (John Bogle)

(Following items also appear in Welfare Plans Edition)


Not Providing Arbitration Notice Beyond SPD Content May Be a Breach of Fiduciary Duty, Court Notes
Excerpt: "The 9th U.S. Circuit Court of Appeals ruled that a plan administrator may have breached its fiduciary duty by not discussing a plan participant's right to arbitration in an claims appeals denial letter, even though those rights were explained in the plan's summary plan description." (Thompson Publishing Group)

Rewarding Employees North of the Border
Excerpt: "Salaries and rewards are two of the most important tools for organizations to use in the competition for employees. A recent report on reward practices in North America sheds some light on the different practices between domestic employers and those south of the border." (Benefits Canada)

The Canadian Tire Way: The Benefits Program at Canada's Best Company to Work For
Excerpt: "The company agreed to take part in a Best Companies to Work For in Canada survey being conducted by Toronto-based Hewitt Associates and Report on Business magazine ... After a rigorous competition with 61 other major corporations across [Canada], Canadian Tire ranked No. 1, beating out companies like Nortel Networks Corp. and Alberta Energy Co. Ltd." (Benefits Canada)

Plan Sponsors Stand Out By Offering Housing Assistance Benefits to Employees
Excerpt: "Since the mid-'90s, in fact, the Xerox Corporation, with 50,000-plus employees, has offered its first-time home buyers with at least five years of service a maximum $2,000 benefit, or 2% of the price of a home, whichever is less." (Plan Sponsor magazine; free registration required)

How Much Should Shareholders Know About Employee Stock Option Plans?
Excerpt: "A proposal involving the Securities and Exchange Commission (SEC) and the major stock exchanges could tie compensation professionals' hands when it comes to extending stock options to key talent. At the same time, however, it could result in shareholders having better information about dilution of shares outstanding resulting from broad-based employee stock programs." (Salary.com)




Newly Posted or Renewed Job Openings (Post Yours!)
Payroll Project Manager for Fidelity Investments
in TX
Tax Specialist 5500 for Fidelity Investments
in TX
Managing Pension Account Executive for Diversified Investment Advisors
in CA
Employee Benefits Tax Consultant / Detroit for Deloitte & Touche, Leading Professional Services Firm
in MI
Interim Benefits Supervisor for Major Manufacturer & Distributor of Gas
in NJ



Newly Posted Press Releases
Benefit Software Inc. Announces Expanded Online Employee Benefits Enrollment and Communication Service (Benefit Software Inc.)

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