| The BenefitsLink Newsletter - Retirement Plans Edition |  |
March 23, 2001
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First Union Settles 401(k) Lawsuits for $26 Million
Excerpt: "Former First Union employees filed suit against the Charlotte, N.C.-based bank in September 1999, alleging it used their pension plans to boost profits. First Union also faced a related class action suit from former employees of Signet Banking Corp., who alleged their retirement plans were mishandled after First Union acquired Signet in 1997. Under the settlement ... First Union would pay $10 million in the Signet case and $16 million in its own 401k case." (Reuters via Yahoo! News)
Important Renewal of Enrollment Notice to Enrolled Actuaries (PDF)
Excerpt: "Enrolled actuaries are required by 20 CFR 901.11(d) to renew their enrollment by March 1, 2002, in order to maintain enrollment to perform actuarial services under ERISA. Beginning in October 2001, the JBEA will be mailing out applications for renewal of enrollment. If your mailing address has changed within the past three years, please provide the JBEA with your updated address so that you will receive the application." (Internal Revenue Service)
More Comments Sought on Proposed Pension Standard
Excerpt: "Last June, the Actuarial Standards Board (ASB) proposed an innovative new actuarial standard of practice, Projected Benefit Illustrations in Connection with Retirement Plan Amendments.... [including an] 'actuarial opinion of compliance' [which would] be a certification from an actuary indicating that a benefit illustration had been prepared based on generally accepted actuarial principles and that the illustration contained information that was comprehensive and fair." (Bruce Gaffney, published by American Academy of Actuaries)
Untangling Proposed Regulations for New Comparability Plans
Excerpt: "Unless the proposed regulation is modified, there may be many floor offset plans like this that will no longer comply. While the intent of the proposed regulation is to assure a reasonable relationship between contribution rates for NHCEs and HCEs in new comparability plans, the inclusion of special rules for combination plans creates the potential for significant unintended problems on plans that weren't the original target of the regulation." (James Turpin, published by American Academy of Actuaries)
Late Baby Boomers - Retirement Issues
Excerpt: "Baby Boomers born between 1955 and 1964 are the last of the Baby Boomer generation, a generation of some 80 million Americans born between 1946 and 1964. Because they are reaching middle age, Late Boomers are at a critical financial crossroads. There's still time to save and plan for a comfortable retirement although those who've waited until now to start may find themselves working longer than they planned to." (Greg Hanna's Retirement Planning site on About.com)
PGA Pension Really Benefits Golfers
Excerpt: "The $9.1 million Tiger Woods earned last year on the PGA Tour in his record-setting season could turn into an additional payoff of nearly $13 million when he turns 60 under the PGA Tour's retirement plan. In a comprehensive study of the PGA Tour's pension plan, Golfweek Magazine also projected Woods' total deferred compensation package from the tour at about $200 million, and as much as $300 million if he were to become fully vested." (Associated Press)
Spouse Wins Annuity When Plan Failed to Tell Participant of Need to Make an Election
Wood v. Office of Personnel Management (Ct. App. Fed. Cir. 2001). Excerpt: "[Plaintiff] applied for a former spouse survivor annuity under the Civil Service Retirement System ... on the ground that it had been elected by ... her deceased former spouse ... or, if not formally elected, that the government's failure to give the required notice excused Mr. Wood's failure to make a formal election.... We hold that Mrs. Wood is entitled to receive the former spouse survivor annuity ..." (FindLaw.com)
In Chicago: Board Strips Ex-Alderman of Pension
Excerpt: "Nearly 17 months after his release from federal prison, former Ald. Lawrence Bloom (5th) on Tuesday lost his bid to secure his family's financial future when a pension board voted to strip him of his city pension.... At issue is whether Bloom forfeited his right to a city pension when he admitted in a rare attachment to his plea agreement that he accepted $14,000 from Christopher. He never pleaded guilty to bribery, only to tax evasion." (Chicago Sun-Times)
Ad Hoc Survey On SIMPLE IRAs as of December 31, 2000
Excerpt: "The [Investment Company] Institute recently surveyed certain of its members in a continuing effort to track developments in the SIMPLE IRA market. (An earlier survey covered the first six months of 2000). The Institute's survey requested SIMPLE IRA data on the number of plans, number of plan participants, and value of the assets as of June 30, 2000 and December 31, 2000." (Investment Company Institute)
The Impact of Spousal Employment and Disability on Retirement Decisions
Working paper published by the Center for Retirement Research at Boston College. Excerpt: "This paper examines the retirement decisions of husbands and wives and how they interact with spousal health and employment ... The results indicate that both men and women are more likely to retire if their spouses have already retired than if they are still working. However, they are less likely to retire if their spouses appear to have left the labor force because of health problems ..." (Richard W. Johnson and Melissa Favreault )
Stock Market Drop for Some Means Early Retirement is 401K-O'd
Excerpt: "It's likely millions more people are reconfiguring their long-term financial goals after the stock plunge on Wall Street on Thursday, when the Dow Jones industrial average headed into bear market territory. More Americans than ever have their futures tied tightly to the fortunes of the stock exchange, often through 401(k) plans." (The [Bergen County NJ] Record)
401(k) Trends
Excerpt: "Despite a volatile and declining stock market over the past two years, millions of Americans participating in 401(k)s and other defined contribution retirement plans continued to make significant progress in saving for their life-after-work goals, according to a new report, 'Building Futures: Opportunities and Challenges for Workplace Savings in America,' from Fidelity Investments." (Internet.com)
Supreme Court: Employers Can Force Arbitration In Disputes
Excerpt: "Employers can force workers to take job-related disputes to arbitration rather than to court, the U.S. Supreme Court ruled Wednesday in a decision that will have broad effects on American workplaces." (CNN.com)
Graef Crystal: For Compaq's Capellas, Rewards Have Little Risk
Excerpt: "Michael Capellas's pay package for being chief executive of Compaq Computer Corp. is a sign of just how far the high-tech industry has traveled toward old-line America. The terms also show that Capellas has little faith in his ability to get his company's stock price back up to its record close of $49.25 a share, reached on Jan. 26, 1999." (Graef Crystal, on Bloomberg.com)
ERISA Advisory Council Schedules Working Group Meetings
Excerpt: "Persons wishing to appear before any of the working groups or wishing to submit written statements on these topics, may contact Executive Secretary Sharon Morrissey in Room N-5656, Pension and Welfare Benefits Administration, Department of Labor, 200 Constitution Ave. NW, Washington, DC 20210. If written statements are to be provided, 20 copies must be sent to Ms. Morrissey before April 1." (U.S. Department of Labor press release)
IRS Page Provides Handy Links to Employee Benefits-Related Guidance
Links to PDF versions of recent revenue rulings, revenue procedures, notices, announcements and regulations. (Internal Revenue Service)
Rise of Options Triggers Dilution Worries
Excerpt: "Many companies have reacted [to the stock market slump] by issuing new options at lower prices, or even repricing existing options. Companies argue that they have to do so as a retention tool, but it has raised investors' ire and caught regulators' attention - and brought complaints about excessive dilution created when the issuance of additional shares drives down the value of existing ones." (Financial Executives International)
Newly Posted or Renewed Job Openings (Post Yours!)
| Pension Director | for Florida Pensions, LLC in FL |
| Director Compensation and Benefits | for International Service Organization in IL |
| Qualified Retirement Plan Specialist/Consultant | for National Pension Information Network Services, Inc. in NY |
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