BenefitsLink Retirement Plans Newsletter for April 9, 2001

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The BenefitsLink Newsletter -
Retirement Plans Edition

April 9, 2001

Today's sponsor: The Insider's Guide to DOL Plan Audits (click)

   From two former DOL investigators, this must-have book
gives you an in-depth look at the Department of
Labor-Pension and Welfare Benefits Administration and
its operations.  Offers insider's tips and guidance on
DOL enforcement projects and objectives, and walks the
reader through DOL single plan and service-provider
audits.

Got a Question About Your 401(k) Plan Administration? Read the Plan Document
Excerpt: "Many plan sponsors come to advisers with questions about their plans that could easily be answered by reading the plan document. Given the length and density of most plan documents, the caller can be forgiven for his or her resistance to read it, but would be well repaid by doing so. And now is a perfect time to read this document, for at least three reasons...." (Thompson Publishing Group)

Class Action Against PBGC Expanded to Include Former National Airline Employees, as Well as Pan Am
Excerpt: "We are used to being misinformed, lied to, and denied the rights that any other retiree is granted under ERISA law. We knew instinctively that the hundreds of former NAL employees who did not work for Pan Am, who contacted us for help, were being deceived by the PBGC. Till recently, we just could not get the agency to admit that they in fact were administering former National pension plans." (Association of Former Pan Am Employees press release on Yahoo! Finance)

Preparing to Manage the Federal Government's Retirement Problem
Excerpt: "Will the government navigate its way through the wave of retirements projected over the next five years? It's too early to know, of course, but a new analysis provides a glimpse of the coming splash." (Washington Post)

Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
I want to retire from the railroad at 55. I'll have 29 years of credits. When can I start getting Railroad Retirement? If I go to work for a nonrailroad company between ages 55 and 62, will my benefits be reduced? What about my "current connection"? (BenefitsLink.com)

Retirement Perk Irks County Supervisor
Excerpt: "A retirement perk for elected department heads that will cost Ventura County government nearly $1 million over the next 10 years is being challenged by Supervisor Steve Bennett. Elected on a reform platform last fall, Bennett said he plans to bring a letter before the board next month asking members to reconsider the benefit, which he likened to a retirement giveaway that past review committees have openly condemned." (Los Angeles Times)

Pension for a Spy?
Excerpt: "Even though he may be convicted as a spy, Robert Hanssen's family may not be left out in the cold. Under an obscure law aimed at helping prosecutors to get spouses of federal agents facing charges to cooperate, Hanssen's wife and six children could receive pension and health benefits worth about $36,000 a year, according to a story in The Seattle Times." (CFO.com)

Top Ten Roth IRA Tax Questions
Excerpt: "Because of the popularity -- and general confusion -- regarding the Roth IRA, Fools Dave Braze and Roy Lewis prepared these answers to questions they're often asked about it." (The Motley Fool, via MSNBC.com)

Link to All Testimony at April 5, 2001 Hearing on Pension Reform Bill
Includes testimony by the Honorable Rob Portman; the Honorable Benjamin Cardin; Ms. Nanci S. Palmintere for the American Benefits Council; Mr. Richard A. Turner for the American Council of Life Insurers; Ms. Judith F. Mazo for the Building and Construction Trades Department, AFL-CIO and the National Coordinating Committee for Multiemployer Plans; and Ms. Karen W. Ferguson of the Pension Rights Center. (Subcommittee on Employer-Employee Relations, U.S. House of Representatives Committee on Education and the Workforce)

Sen. Grassley Press Release on Pension Reform Bill, With Summary of Bill's Provisions
Excerpt: "The Retirement Security and Savings Act advances six goals to help jump start personal savings rates and participation in retirement income plans: increased opportunities to save with individual retirement accounts; expanded pension coverage for small business employees and the self-employed; enhanced fairness for women and families; increased pension portability; strengthened pension security and enforcement; and reduced regulatory burdens." (Office of U.S. Senator Chuck Grassley (R-Iowa))

Getting Back on Track: How to Salvage Your Plans for Retirement
Excerpt: "So much for retiring early. David Bakeman, 61, had planned to begin a leisurely retirement at the end of the year. But a few months back, he invested a significant portion of his cash reserves in the stock market--just in time to participate in the biggest market meltdown in more than a decade." (Los Angeles Times)

Market Ups & Downs: What Do They Mean For Your Employees and Their Retirement?
Excerpt: "Financial education can equip them with the knowledge to recognize the effects of a wavering market as it applies to their retirement funds, as well as the insight to systematically and periodically review their investments to determine if a response to these fluctuations is necessary." (The EDSA Group)

Be Pension Wise: Pension Funds Costs Haunt Companies' Bottom Lines
Excerpt: "If you're flinching at the recent losses in your brokerage and 401(k) accounts, imagine how the managers of America's huge pension funds feel. The top 100 U.S. pension funds boasted a gargantuan $3.5 trillion in combined assets last September. Now, despite having fortified their reserves with huge stock-market gains in recent years, public and private pension funds are facing steep declines." (Time.com)

A Plan for Growth and Income
Excerpt: "How should new retirees invest their savings so they get the income they need to help support them during a 15- or 20-year retirement? The short answer: They should invest a large chunk of their money in stocks. That advice may sound a bit crazy, given the huge losses that so many stocks, including mine, have suffered during the past 12 months." (Washington Post)

Slump Makes the Case for Diversification
Excerpt: "Wake up and smell the steam. Utilities can be Wild West, with performance stretching from bankruptcy in California to go-go growth in natural gas and wholesale power generation. In other words, you can't be just a utilities investor. You have to know which kinds of utilities a fund manager buys and form an opinion. That means research." (Jane Bryant Quinn, in The Washington Post)

Valuation Ratios and the Long-Run Stock Market Outlook: An Update
Working paper, available to download for $5 from the National Bureau of Economic Research. Excerpt: "Various simple efficient-markets models of financial markets imply that these ratios should be useful in forecasting future dividend growth, future earnings growth, or future productivity growth. We conclude that, overall, the ratios do poorly in forecasting any of these." (John Y. Campbell, Robert J. Shiller)

Oak Ridge Tenn. Retirees Fear New Effort To Tap Pension Fund Surplus
Originally published March 17, 2001. Excerpt: "An Oak Ridge retiree group expressed concern this week that federal contractors may again try to tap into the employee pension fund's surplus to help ease tight budgets." (KnoxNews.com, via MSNBC.com)

Pensions Increased for Oak Ridge Tenn. Retirees
Originally published March 29, 2001. Excerpt: "Thousands of retired Oak Ridge employees will receive a pension increase -- ranging from 4 to 23 percent, depending on when they retired -- under a plan announced Wednesday [March 28, 2001]." (KnoxNews.com, via MSNBC.com)

Retirement and Wealth
Link to a working paper, available for $5 downloading. Excerpt: "This paper estimates reduced form retirement and wealth equations, and analyzes the relationship between them. Data are from the first four waves of the longitudinal Health and Retirement Study, individuals born from 1931 to 1941." (Alan L. Gustman, Thomas L. Steinmeier, published by National Bureau of Economic Research)

(Following items also appear in Welfare Plans Edition)

Ex-Spouse But Not Ex-Beneficiary
Excerpt: "Now the Supreme Court, in a ruling that employers applaud but that could have considerable impact among divorced people, has ruled that when employee benefits are concerned, these state laws are preempted by federal law.... Thus, the beneficiary specified by the employee still gets the benefits even though the couple had divorced." (Washington Post)

Graef Crystal: Steinway's Performance Isn't Graphed in Dollars
Excerpt: "My most treasured possession is a nine-foot Steinway concert grand ... The other day, my interest was piqued when I saw that Steinway Musical Instruments Inc. had just released its proxy statement. Naturally, I wanted to see how the company had performed and how much the CEO had been paid.... If the company hasn't done very well financially, its CEO, Dana Messina, has at least had the grace not to take out very much money.'" (Graef Crystal, on Bloomberg.com)

Newly Posted or Renewed Job Openings (Post Yours!)

Managing Actuary

for New York Life Benefit Services LLC
in MA

Benefits Specialist

for Administaff
in TX

Leave/Disability/Life Supervisor

for Administaff
in TX

Retirement Plan Specialist

for Administaff
in TX

Benefits Specialist

for Charles W. Cammack Associates, Inc.
in NY

Pension Service Specialist

for Principal Financial Group
in TX

Benefits Specialist

for CSI Employer Services, Inc.
in TX

Benefits Specialist

for Gulf States Paper Corporation
in AL

Newly Posted Conferences (Post Yours!)

Continuing Education Day

in CA on April 17, 2001
presented by the Employee Benefit Planning Association of Southern California