| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 2, 2001
Today's sponsor: Reish Luftman McDaniel & Reicher (click)
Have questions about ... qualification failures, when and how to correct, a plan's right to participate in EPCRS? You'll want The Plan Correction Answer Book. It's a comprehensive guide to the IRS remedial programs, written by attorneys Fred Reish and Bruce Ashton, of Reish Luftman McDaniel & Reicher. Click on the link to order!
Moynihan To Head New Social Security Commission
Excerpt: "Democrats are complaining that President Bush has stacked his new Social Security commission with people who favor partially privatizing the federal retirement plan. Bush was announcing the members of his commission Wednesday. It is to find ways to overhaul Social Security and report back in the fall." (Associated Press, via Yahoo! News)
Bush Social Security Panel Focuses on Private Accounts
Excerpt: "President Bush on Wednesday named a 16-member commission to recommend an overhaul of the Social Security retirement system that would let participants invest in private markets. 'The mandate is clear: Strengthen Social Security and make its promise more certain and valuable for generations to come,' Bush said in announcing the commission ..." (Reuters via Yahoo! News)
Three Plan Sponsors Reveal How and Why They Changed Providers
Excerpt: "Plan sponsors use different approaches when searching for a new provider. Some comb the countryside seeking bids from several providers, while others pinpoint a more selected few to consider. Some use consultants, others take the task on in-house. In almost all instances, however, some key component of their plan, in their view, is flawed and, in most cases, it has to do with insufficient services to participants." (IOMA's Managing 401(k) Plans)
Sponsors and Providers Develop New Strategies To Simplify DC Plan Enrollment
Excerpt: "Quick Enroll is just one product used today in the DC industry to boost participation rates in 401(k) plans. Both sponsors and providers report that companies generally find that a solid chunk of their employee base has resisted enrollment. Reasons frequently cited for the failure to convince these employees to become 401(k) participants include apathy and being overwhelmed by the plethora of financial data and forms they must fill out." (IOMA's DC Plan Investing)
Cincinnati Bell Parent Increases Benefits for 2,500 Retirees
Excerpt: "Mrs. Harpring, who retired in 1987 after 20 years as a telephone operator ... complained at last year's annual meeting that her monthly pension of $437.84 before taxes hadn't changed since she left the company.... 'After careful study, and with the full support of the board, we've elected to increase the monthly allowance creating a minimum benefit of $500 a month for our longtime retirees who retired under our traditional pension plan,' [Broadwing Inc. CEO Rick Ellenberger] said." (The Cincinnati Enquirer)
Another Question is Answered in the Who's the Employer Q&A Column
John recently turned all his staff over to a leasing company. He did this because the leasing company was able to offer him substantial savings on health insurance. Nothing has changed with the staff except who writes their paychecks. John has previously covered the staff under his qualified plan and wants to continue to do so. Are there any problems with him doing so? (BenefitsLink.com)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
I was "down-sized" after 31 years of rail work. I still work for a railroad but only make half of what I used to. I still plan on working for 15 more years. How much will my lower earnings penalize me in terms of my retirement benefits? I feel I've been cheated out of my whole life's work! (BenefitsLink.com)
Another Question is Answered in the Correcting Plan Defects Q&A Column
What is the non-safe harbor correction for the inclusion in a qualified plan of an employee who has not completed the plan's minimum age or service requirements? (BenefitsLink.com)
TRW Settles Retirees' Pension Benefit Lawsuits
Excerpt: " TRW Inc. agreed to pay $48.5 million to settle retirees' lawsuits alleging the second-largest maker of automobile air bags mishandled pension payments to more than 5,500 former employees. Under the agreement, retired TRW workers will drop claims that the industrial parts maker illegally miscalculated lump-sum payments for 10 years starting in 1986." (Bloomberg via Los Angeles Times)
MONY Press Release re Dismissal of Suit Over Demutualization
Excerpt: "'The dismissal of this lawsuit recognizes that we took the appropriate steps to ensure MONY's conversion was fair and equitable to our valued policyholders and complied with the laws governing the demutualization process,' stated Michael I. Roth, chairman and CEO. 'MONY's transition to a publicly-traded stock company has enabled the company to grow, thereby serving the best interests of our policyholders, many of whom became shareholders.'" (Business Wire via Excite News)
Court Dismisses Suit Against Insurer MONY Group Over Demutualization
Excerpt: "MONY Group Inc. said Friday a New York court dismissed a lawsuit against the firm that alleged the life insurer did not compensate policy holders adequately when it became a public company three years ago." (Reuters via Yahoo! News)
New Research Measures Positive Impact of ESOPs in Private Companies
Excerpt: "Professors Joseph Blasi and Douglas Kruse of Rutgers University ... recently completed a new study of the long-term performance of closely-held companies that implemented ESOPs.... ESOP companies had better long-term survival rates than comparable non-ESOP firms; had higher employment growth and higher growth in annual sales per employee; and that the introduction of the ESOP resulted in a relative improvement of corporate productivity compared to the non-ESOP firms." (Foundation for Enterprise Development)
Federal Thrift Savings Board Explains Rules For Military Personnel
Excerpt: "Thrift Savings Plan accounts for military personnel will operate under different rules than federal civilians' accounts, the TSP board said on Tuesday. The board proposed rules for military participation in the TSP, which begins this winter. Military personnel will be able to sign up for the TSP beginning Oct. 9 and start contributing to their accounts in January." (GovExec.com)
Houston Fire Department Veteran Loses Job, Pension Over Boy's Death; Two Weeks Shy of Vesting
Excerpt: "A 20-year veteran of the Houston Fire Department has been fired and denied his pension amid complaints that he failed to provide medical services to a 12-year-old boy who later died." (Houston Chronicle via CNN.com)
Grassley to Try to Hike IRA and 401(k) Ceilings, But Seems Cautious
Excerpt: "Senate Finance Committee Chairman Charles E. Grassley said Monday that he hopes to move legislation this spring to encourage Americans to save more for retirement, but he cautioned that it will be an uphill battle. 'There's a possibility it can be part of the ... tax bill' being pushed by President Bush to reduce individual income tax rates, the Iowa Republican said in a speech to the U.S. Chamber of Commerce." (American Banker)
House Expected to Vote on Portman-Cardin Bill on Wednesday, May 2
Excerpt: "The U.S. House of Representatives on Wednesday is expected to approve legislation that would raise limits on contributions to tax-favored retirement savings accounts. The bill was overwhelmingly approved by the House Ways and Means committee and is expected to pass the full House by a sizable majority." (Reuters via Excite News)
Are You Planning for Retirement? Many Are Not
Excerpt: "86% of workers at companies with more than 1000 employees are covered by an employer-sponsored retirement program. That number drops drastically at smaller companies.... It's no surprise, then, that 85% of workers in growing American businesses are 'very concerned' about their financial futures, according to a 2001 poll commissioned by the Principal Financial Group." (Greg Hanna's Retirement Planning site on About.com)
Searching for the Best in Balanced Funds
Excerpt: "Tired of guessing the next great market move? Weary of endless surprises? Want to 'let George do it'? Then think about a quaint, unfashionable fund category. Balanced funds." (Scott Burns)
Shareholder Democracy Issues Gain
Excerpt: "After years of rejection, those basic shareholder democracy issues began to win over institutional support in the 1990s and continue to grow in popularity. 'Over the past five years the support levels of these proposals has steadily increased,' said Ann Yerger, director of research services at the Council of Institutional Investors, which represents pension funds investing $1.5 trillion." (Boston Globe)
Prudential Demutualization: What Employers Need to Know
Press release from William M. Mercer, Incorporated. Excerpt: "Following the release of the Prudential Life Insurance Company's draft demutualization plan on March 14, much was written in the press about its anticipated impact on capital markets and individual policyholders. What has drawn little attention is the significant potential impact the demutualization may have on employers that offer Prudential employee benefit plans." (Business Wire via Yahoo! Finance)
Many Execs Pocket Perks Aplenty
Excerpt: "... based on a USA TODAY database analysis of corporate statements filed with the Securities and Exchange Commission, executive perks are more pervasive, costlier and weirder than ever." (USA Today)
Reductions in Force: Doing the RIF Right
Excerpt: "The executives of a company considering a broad-based reduction in force (RIF) should begin by identifying the business objectives that the RIF is designed to accomplish. They must decide issues such as ..." (Mark Poerio of Paul, Hastings, Janofsky & Walker LLP)
Newly Posted or Renewed Job Openings (Post Yours!)
| Operations Manager | for Invesmart in TX |
| Benefits Administrator | for Ogilvy & Mather in NY |
Newly Posted Conferences (Post Yours!)
| Web-Based Employee Benefits Administration | in MA on June 5, 2001 presented by Greater Boston Chapter of ISCEBS |
Newly Posted Press Releases
| iTango Builds Momentum with Newest Vertical Channel Partner (iTango Software, Inc.) |
| Benefit Software Announces New Statistical Reporting Capability in Fringe Facts Online Benefits Enrollment and Communication Service (Benefit Software Inc.) |
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