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The BenefitsLink Newsletter -
Retirement Plans Edition February 13, 2001 You may freely distribute this email newsletter in whole This issue is free, thanks to today's sponsor: 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
IRS Okays Huge IRA Tax Savings Excerpt: "Money in IRAs and other retirement plans can be withdrawn much more slowly in most cases, allowing for greater tax-free growth, under new regulations proposed by the IRS. This is an opportunity for tax savings that lawyers will want to tell clients about, as well as take advantage of themselves, experts say." (Lawyers Weekly) Pension Plans With Fewer Than 100 Participants Face New Rules to Avoid Attaching Audits to Form 5500 Excerpt: "Up to now plans with less than 100 participants ('small plans') were automatically exempt from this audit requirement. Under final regulations issued last year by the Department of Labor, such plans may still be exempt from having the accountant's audit done. However, to have this requirement waived, small plans will now have to take some additional steps. This newsletter will examine the new small plan audit rules and explain how plan sponsors can continue to be exempt." (W. E. Stanley & Company, Inc.) Another Question is Answered in the Who's the Employer Q&A Column If 100% of a company's sales are to one unrelated company, are there any issues as to who is the employer? (BenefitsLink.com) Another Question is Answered in the Who's the Employer Q&A Column We have Corporation AB, which is owned 50% by individual A and 50% by individual B, who are unrelated. Corporation AB maintains a profit sharing plan. A and B wish to form Corporation ABC, which will be owned 40% by A, 39% by B and 21% by individual C (who is unrelated to A and B). Must Corporation ABC's employees be covered by Corporation AB's profit sharing plan? (BenefitsLink.com) Philadelphia Iron Workers' Annuity Fund and Trustees To Repay Plan $456,655 To Resolve DOL Suit Excerpt: "They allegedly paid a salary to the plan's administrator, who already was a full-time employee of the union, and imprudently administered a participant loan program." (U.S. Department of Labor press release) Summary: IRS Simplifies Minimum Distribution Rules Excerpt: "The changes in the required minimum distribution rules obviously may affect estate planning by your participants. If your plan allows installment distributions, you may wish to advise participants who are receiving, or who will soon receive, minimum distributions from your plan of these changes and suggest that they discuss them with their estate planners." (Faegre & Benson LLP) IRS Issues Significant Determinations on Options and ESOPs NCEO executive director Corey Rosen discusses important news from the IRS affecting employee stock ownership plans (ESOPs) and stock options: ESOP distributions to ex-participants are not deductible dividends, corporate deductions for exercising nonqualified options are not subject to AMT, the moratorium on withholding on options, proposed regulations on notice to interested parties of requests for letters of determination, and changes to the Employer Plan Compliance Resolution System. (The National Center for Employee Ownership) PSCA Urges Adoption of Portman-Cardin Pension Legislation Excerpt: "The Portman/Cardin pension reform package will increase retirement security for working Americans and lower their taxes. The package is especially crafted to allow baby boomers to makeup for their early working years when they were unable to save for retirement. Current Sections 404 and 415 limits reduce the amounts that those making less than $85,000 can contribute to their 401(k)." (Profit Sharing/401k Council of America; free registration required) Mutual Fund Trade Association Urges Passage of Portman-Cardin Bill Excerpt: "In a statement submitted to the House Committee on Ways and Means during a hearing today on the President’s tax relief proposals, the Institute urged Congress to support proposals included in the bipartisan legislation (the 'Comprehensive Retirement Security and Pension Reform Act') introduced by Representatives Rob Portman (R-OH) and Ben Cardin (D-MD) and passed by the House of Representatives last year." (Investment Company Institute) ERIC Urges Rapid Enactment of Pension Law Amendments Excerpt: "Provisions in the Portman-Cardin legislation turn this tide at a critical time. If we wait until the baby boom cohort has begun to retire, many employers will not have cash available to pay for rapid increases in pension liabilities, and employees will not have time to accumulate sufficient savings. We must act now." (ERISA Industry Committee) Timing of the Section 415 Limit Increase for Defined Contribution Plans Excerpt: "One of the 2001 cost of living adjustments affected the Section 415 limit on contributions to qualified defined contribution plans (profit sharing, money purchase, 401(k), etc.). For 2001, that limit has increased from $30,000 to $35,000. This is the first adjustment of this limit in over a decade." (Faegre & Benson LLP) Subtle Changes Reported In DC Plan Asset Allocation Excerpt: "Reports of an ebbing of participant demand for the addition of more aggressive funds and a slight move away from growth toward value have not generally altered participants' basic investment strategies." (IOMA's DC Plan Investing) Call Off The Crisis? Social Security Solvency Grows Excerpt: "In their annual report last spring, the Social Security trustees calculated that the system's trust fund would run out of money in 2037. After that, the system would only be able to pay about 70 percent of benefits from payroll tax receipts. Two news items suggest the trustees could push off the crunch further in their next annual report." (Christian Science Monitor) New Fact Sheet From DOL: Your Employer's Bankruptcy-- How Will It Affect Your Employee Benefits? Excerpt: "When your employer files for bankruptcy you should contact the administrator of each plan or your union representative (if you are represented by a union) to request an explanation of the status of your plan or benefits.... Questions that you might want to ask include..." (U.S. Department of Labor) Outside Board Members Earnings Record Sums Excerpt: "The average total compensation for outside board members of S&P 500 companies has set a record high, increasing to an average of $100,807 in 2000, according to a recent study by New York-based global management consulting firm, Towers Perrin." (CFO.com) Newly Posted or Renewed Job Openings (Post Yours!)
Subscribe to the Welfare Plans Edition, too (click) Copyright 2001 BenefitsLink.com, Inc. Feel free to forward this email to friends, colleagues or clients, if no fee is paid to you and the email is forwarded in its entirety. Thanks! BenefitsLink is a trademark of BenefitsLink.com, Inc., published by Dave Baker with much help from Mary Hall and lots of friends. To subscribe (free): visit https://benefitslink.com/newsletter - or the person desiring to subscribe can send an email to BLretirement@add.mb00.net We have an online archive of prior issues at https://benefitslink.com/newsletters/ |
