| The BenefitsLink Newsletter - Retirement Plans Edition |  |
March 21, 2001
Today's sponsor: Employee Benefits Business for Sale (click)
View our online listing of Employee Benefits Businesses For Sale! No charge to access any of the information. For just $200, you can list your business and all the particulars, using our page to reach prospective buyers for your business nationwide. (Over 7,000 people use this site per day; over 71,000 different people per month!) And you know why they're here: for employee benefits compliance information and tools. There's no better place to advertise your Employee Benefits Business For Sale.
Analysis: IRS Issues New Minimum Required Distribution Regulations (PDF)
March 2001 issue. Excerpt: "Plan sponsors may use the new rules for calendar year 2001. However, if you want to apply the proposed rules for 2001, it is important to note that there may be some distributions in 2001 that use the old rules (for calendar year 2000 MRDs paid in 2001, or 2001 MRDs paid before the adoption of the model amendment) and some that use the new rules (for calendar year 2001 MRDs paid in 2001 after the adoption of the model amendment)." (CIGNA's Pension Analysts)
Plan Incurs Double Liability After Sending Participant's Distribution Check to Estranged Spouse
Gatlin v. National Healthcare Corporation (6th Cir. 2001). Excerpt: "After receiving the properly completed distribution form, the employer (as the plan administrator) received a telephone call asking that the employer change the employee's Alabama address to an address in Tennessee. The employer's notes did not indicate the identity of the caller, but nevertheless it changed the address in conformity with the caller's direction ..." (Employee Benefit Institute of America)
Side-by-Side Comparison of House and Senate Pension Reform Bills
Excerpt: "ASPA is actively encouraging comprehensive pension reform legislation in Congress. In the House, the Comprehensive Retirement Security and Pension Reform Act, H.R. 10, was introduced by Representatives Portman (R-OH) and Cardin (D-MD). Comparable legislation in the Senate, the Retirement Security Act, will be introduced by Senators Grassley (R-IA), Baucus (D-MT), Jeffords (R-VT) and Graham (D-FL)." (American Society of Pension Actuaries)
When Do You Retire? Here Are 6 Answers
Excerpt: "Rarely simple, the decision to retire is often a tangle of conflicting emotion infused with urgency. Money, obviously, is a big concern. But so are intangibles like geography -- do you want to move closer to your children and grandchildren? -- and time." (New York Times; free registration required)
Impatient Investors Deride Limited Choices in Federal Government's Thrift Savings Plan
Excerpt: "There's little doubt that substantial numbers of federal employees are frustrated by delays in developing a new record-keeping system for the Thrift Savings Plan. Yesterday, several of them pointed out in e-mails that employees within five to 10 years of retirement could face financial consequences because of TSP's limited investment choices." (Washington Post)
Scott Burns: Are Variable Annuities With Expenses Under 2.0 Percent OK?
Excerpt: "... I was not saying that anything under 2.0 percent was OK. I was demonstrating, once again, that 2.0 percent a year is too much to pay for the benefits of investment management--- with or without tax deferral. High expenses, whatever their source, are a major barrier to good long-term returns." (Scott Burns)
Some Advice on Getting Financial Advice
Excerpt: "For most people, the surest path to an enjoyable retirement is to plan for it. For many, that means seeking advice from someone with the knowledge to analyze a portfolio, figure out how much income you are likely to need each month and explain how to minimize taxes and avoid penalties when you withdraw money from an I.R.A. or a 401(k)." (New York Times; free registration required)
Was Your Nest Egg Scrambled? Time to Diversify Your Omelet
Excerpt: "The great American nest egg is getting scrambled. A year ago, when the Nasdaq index started tumbling, it looked as if individual investors would lose nothing more than the pile of fun money they had built up in technology stocks. By now, of course, it has become clear that real money is at stake: recent 401(k) statements have been the worst crop in years. How bad is the damage to Americans' retirement savings, and what are they to do about it?" (New York Times; free registration required)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
My husband retired on disability at 47. He becomes 62 later this year (2001). He would like to work part-time. How much can he now earn without losing any of his Railroad Retirement annuity? Should he wait until 62 to start working? (BenefitsLink.com)
Another Question is Answered in the Who's the Employer Q&A Column
In Q&A-87, you referenced the proposed regulations under 414(m), dealing with affiliated service groups. Weren't those regulations withdrawn? (BenefitsLink.com)
Another Question is Answered in the Who's the Employer Q&A Column
My client "leases" all his staff from a PEO. I know from your other Q&As that they would likely be regarded as his employees, but how do I report them on the Form 5500? Incidentally, the plan has a two year eligibility requirement; whether these workers are leased employees or common law employees, none of them would qualify this year. The only participants are the owner and his wife. The plan has $125,000 in assets. (BenefitsLink.com)
S. Ct.: ERISA Trumps State Law Attempting to Void at Divorce a Spouse's Designation as Beneficiary
Excerpt: "The justices ruled 7-2 in the Washington state case of a man who died without removing his ex-wife as the beneficiary of his employer-provided insurance and pension. His children from a previous marriage sued, saying they were entitled to the benefits, but the justices decided for the ex-wife. A Washington state law says getting a divorce automatically revokes a spouse's designation as beneficiary." (Associated Press, via Yahoo! News)
Full Text of Egelhoff v. Egelhoff Opinion from U.S. Supreme Court, re ERISA Preemption of State Laws
Excerpt: "... the statute at issue here directly conflicts with ERISA's requirements that plans be administered, and benefits be paid, in accordance with plan documents. We conclude that the Washington statute has a 'connection with' ERISA plans and is therefore pre-empted." (Legal Information Institute, Cornell Law School)
New Correction Program for Prohibited Transactions Expected
Excerpt: "The excise taxes and civil penalties imposed on correcting prohibited transactions have become a disincentive to employer correction, according to Internal Revenue Service (IRS) and Department of Labor (DOL) officials speaking at a recent American Bar Association (ABA) conference. Now both agencies are working together to create a new system to encourage early detection and correction of prohibited transactions by employers, with little or no penalties involved." (Thompson Publishing Group)
Forget Brass Rings -- Execs Grab for Gold
Excerpt: "There's gold in them thar employment contracts. Gold. As in golden handcuffs, the ample retention packages designed to keep executives from job hopping. Gold. As in golden parachutes, the payouts to CEOs whose companies are bought out. Gold. As in golden worlds, the incentive-laden pay packages that attract executives." (USA Today)
Newly Posted or Renewed Job Openings (Post Yours!)
| Asset Unitization Manager | for Reliance Trust Company in GA |
| Manager, Benefits, Payroll & HRIS | for St. Jude Medical, World Leader In Cardiac Medical Devices in CA |
| Business Analyst | for The 401(k) Company in TX |
| ERISA Attorney | for Kalish & Ward in FL |
| 401(k) Conversion Specialist | for Louis Kravitz & Associates, Inc. in CA |
| 401(k) Plan Analyst | for Stephen H. Rosen & Associates, Inc. in NJ |
| Tax Manager - Benefits/Compensation | for PricewaterhouseCoopers in CA, CO, DC, NY, PA |
| Implementation Project Manager | for Fidelity Investments in UT |
Newly Posted Conferences (Post Yours!)
| Retirement Technology Conference | in CA on May 31, 2001 presented by Profit Sharing/401(k) Council of America |
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