| The BenefitsLink Newsletter - Retirement Plans Edition |  |
February 27, 2001
Today's sponsor: The International Quality & Productivity Center (click)
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
Stock Market Tumble Produces Unwanted Hit to Corporate Earnings
Excerpt: "Although pension funds generally don't hold all their investments in stock funds, most calendar year pension funds are likely to experience negative or—at best—relatively small positive returns for 2000. Under today's accounting rules and policies, these lower returns will generally translate into higher pension expense (or lower pension income) for 2001." (Watson Wyatt)
Study Fuels Oregon State Pension Plan Feud
Excerpt: "Taxpayers could be on the hook for billions of dollars over the next 40 years to cover shortfalls in Oregon's retirement plan for public employees hired before 1996, according to a new analysis by the pension agency." (The Oregonian)
Public May Have to Save Oregon Public Employees' Pension Plan
Excerpt: "A new analysis shows taxpayers may have to pay billions of dollars over the next 40 years to cover shortages in Oregon's retirement plan for public employees hired before 1996." (Seattle Post-Intelligencer)
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Brother of Former Conn. Treasurer Is Sentenced in Bribery Case Involving Pension Funds
Excerpt: "A brother of the former Connecticut state treasurer was sentenced today to 21 months in prison for his role in a bribery scheme that spawned the largest corruption scandal in the modern history of the state." (New York Times; free registration required)
Analysis: IRS Simplified Required Minimum Distribution Rules (PDF)
Excerpt: "For most taxpayers, the simplified rules substantially reduce minimum required distributions from qualified plans, tax-sheltered annuities, deferred compensation plans of state and local governments, and individual retirement arrangements (IRAs), thereby reducing taxable income. Qualified plans may elect to apply the proposed rules beginning in 2001, but must first adopt a model amendment to do so." (Milliman & Robertson)
For Teachers On Move, Retirement Benefits Prove Troublesome
Excerpt: "[T]eachers' pension plans aren't portable. Even though a teacher makes contributions into a pension plan in one state and gets service credit toward retirement, when the teacher transfers to California, he or she needs to pay hefty upfront costs to get credit for those years of service and to receive a full California pension." (Sacramento Bee)
Analysis: DOL 'Clarifies' Position on Paying Expenses from Plan Assets
Excerpt: "The Department of Labor (DOL) has released new guidance on paying plan expenses from plan assets. Though characterized as a clarification of the DOL's position, the guidance essentially reverses the recent audit standard (see Watson Wyatt Insider, January 2001), and allows plans to pay reasonable fiduciary and plan administrative expenses, including those incurred to maintain the plan's tax-qualified status." (Watson Wyatt)
Florida Government Employees to Have Self-Directed Option Soon
Excerpt: "Florida is in the midst of the biggest public pension system overhaul in the nation's history. What the state does will be closely watched in Washington as the debate over privatizing the U.S. Social Security system gains steam. In all, 650,000 active teachers, bureaucrats, judges and other public sector workers will have the option of controlling their own pension accounts." (Miami Herald)
401(K), IRA Limits In Portman-Cardin May Shrink To Pass Bill
Excerpt: "Enough resistance is generating against putting add-ons to the George W. Bush tax cut legislation that some people are talking about a shrinkage in Portman-Cardin's most attractive provisions, the increase in contribution limits for 401(k) and IRA plans." (Defined Contribution News)
Retirement Saving Takes Backseat, Study Finds
Excerpt: "Most Americans are confident about their financial futures even though they generally lack savings or any real plan of attack, according to a new survey. 'Americans are living in a financial fantasy,' declared study sponsor Northwestern Mutual Monday." (CBS MarketWatch, via Excite! News)
Bush Plans Panel To Study Overhaul Of Social Security
Excerpt: "President Bush has decided to pursue fundamental reforms of the Social Security system by assigning a high-level commission to try to forge consensus for the controversial idea of allowing Americans to invest some of their payroll taxes in private retirement accounts." (Washington Post)
72-Page Outline of Employee Benefits and Executive Compensation Arrangements (PDF) - Corrected URL
This prominent law firm's publication provides a splendid overview of all of the principal kinds of deferred compensation, equity compensation, qualified retirement plans and welfare benefit plans. (Venable, Baetjer, Howard & Civiletti, LLP)
Graef Crystal: 'Fearsome Five' Wall Street CEOs Count Their Millions
Excerpt: "This favorite expression of politicians comes to mind after reviewing the pay of five Wall Street chief executives for fiscal 2000. The 'Fearsome Five' earned a staggering $154 million for their efforts, about 20 percent more than in fiscal 1999. Three surpassed $30 million in pay." (Graef Crystal, on Bloomberg.com)
Many Options Besides Downsizing
Excerpt: "Even though the economy may be slowing and it looks like a quick way to save money, downsizing is not the answer, warns Rick Maurer, an expert in leadership and change and author of two books on the subjects. Maurer advocates alternatives that he says would not have the same deleterious effects on an organization." (Sacramento Bee)
Analysis: IRS Provides Payroll Tax Relief for Stock Plans
Excerpt: "The IRS recently released Notice 2001-14, providing interim guidance relating to FICA, FUTA and income tax withholding on statutory options. Incentive stock option exercises or Section 423 Employee Stock Purchase Plan exercises before January 1, 2003, will not be subject to FICA or FUTA tax, and disposition of the stock will not be subject to income tax withholding. (Watson Wyatt)
Legislative Activity on the Benefits Front: February 2001 (PDF)
Excerpt: "Pension reforms/retirement savings initiatives that almost made it through Congress last year are expected to be revived, with the chief House and Senate sponsors of last year's bill vowing to introduce their popular, bipartisan proposals in February. The bill's provisions will closely resemble those that were approved in the House and Senate Finance Committee in 2000. Whether the measure will be able to move on its own, however, cannot be determined at this time ..." (Milliman & Robertson)
Report on Proposed SEC Disclosure Rules for Equity Compensation Plans
Excerpt: "The SEC is proposing that companies disclose, at least annually, summary information about the total number of securities that have been authorized for issuance, granted and those that remain available for grant under equity compensation plans in effect as of the end of the last completed fiscal year, whether or not approved by shareholders. The disclosure would follow the format below ..." (Frederic W. Cook & Co., Inc.)
Newly Posted or Renewed Job Openings (Post Yours!)
| Employee Benefits Relationship Manager | for SunTrust Bank in TN |
| Client Manager: Retirement Savings Plans | for KeyBank in OR, WA |
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