| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 7, 2001
Today's sponsor: Employee Benefits Webcast (click)
Webcast coming up May 30! FMLA: The Family and Medical Leave Act -- "It's Not Getting Any Easier." Instructor: Christine E. Howard, Esq. and Jennifer B. Sandberg, Esq., Fisher & Phillips LLP. Presented by Human Resource Consultants. Click to register and purchase this webcast through BenefitsLink!
Pension Law Changes on the Move Again
Good overview of principal provisions. Excerpt: "The following major provisions are contained in H.R. 10 ..." (Deloitte & Touche)
Text of House Ways and Means Committee Report on H.R. 10 (PDF)
242 pages (3.1 MB file, PDF format). See Part II, 'EXPLANATION OF THE BILL,' starting at page 56, for section-by-section discussions of current law, reasons for change, and explanations of provisions. (U.S. House of Representatives Committee on Ways and Means)
Text of Engrossed Version of H.R. 10, Passed by House of Representatives
Click on the link you'll see to 'Comprehensive Retirement Security and Pension Reform Act of 2001 (Engrossed in House) [H.R.10.EH]" (U.S. House of Representatives)
Few Reach 401(k) Limit on Contributions
Excerpt: "The House of Representatives passed a bill this week that would boost the level of tax-deferred retirement contributions allowed annually per person. The truth is, though, that the majority of IRA and 401(k) savers are courting retirement troubles by not saving as much as the caps allow now. Oddly enough, the culprit may be the stock market itself. The strong markets of recent years have conditioned people to expect returns that can turn puny contributions into sizable nest eggs." (Knight Ridder/Tribune)
Court Approves $26 Million Settlement In Class Action Suits Over First Union 401(k) Plan
The U.S. District Court for the Eastern District of Virginia has granted preliminary approval to a $26 million settlement of two class action lawsuits filed by current and former employees of First Union Corporation alleging that the company used its Sec. 401(k) plan to increase its corporate profits at the expense of plan participants. The settlement came in Franklin v. First Union Corp. (SpencerNet)
Heavy 401(k) Equity Investment at All Ages and the Down Market
Excerpt: "While 401(k) plan participants in previous downturns in 1997 and 1992 and even back to 1987 tended to stay the course and not panic, popular polls show the market now has many Americans increasingly worried about their retirement security. A look at 401(k) asset mixes shows why they may be worried--and why some worries may be justified." (Deloitte & Touche)
Bankruptcy Reform Bills Would Shield Retirement Plan Savings
Excerpt: "Bankruptcy reform legislation that has been approved by the House of Representatives and the Senate would preserve retirement savings by excluding a debtor's retirement assets from the bankruptcy estate and preventing the discharge of plan loans in bankruptcy." (CCH)
Employee Ownership Update for May 4, 2001
NCEO executive director Corey Rosen discusses a case in which an ex-employee of DoubleClick claimed he had been defrauded and deprived of options he should have received, plus the latest news on the New York Stock Exchange's rules for shareholder approval of employee stock option plans. (National Center for Employee Ownership)
Largest Study Yet Shows ESOPs Improve Performance and Employee Benefits
In the largest and most significant study to date of the performance of ESOPs in closely held companies, Douglas Kruse and Joseph Blasi of Rutgers have found that ESOPs appear to increase sales, employment, and sales/employee by about 2.3% to 2.4% per year over what would have been expected absent an ESOP. ESOP companies are also more likely than comparable non-ESOP companies to still be in business several years later and to have other retirement-oriented benefit plans. (The National Center for Employee Ownership)
Use of Vacation Pay Boosts Retirement Checks
Excerpt: "Top-level managers in Ventura County government can pad their retirement pay an average of $6,000 a year because of a generous financial perk that allows them to tack on up to seven extra weeks of unused vacation time, an analysis by The Times shows. Some long-serving bureaucrats will receive more than $14,000 in additional pay due to the lucrative practice known as 'salary-spiking.'" (Los Angeles Times)
Early Retirement Can Be Challenge
Excerpt: "... the earlier your retirement age, the trickier it gets. More years in retirement mean more opportunities for plans to go awry." (St. Petersburg Times)
Prudential Launches "Get Out the Vote" Operation on Demutualization Proposal
Excerpt: "The Prudential Insurance Company of America today began sending important information about the company's plan to demutualize to 11 million policyholders. One in 10 American households will receive a Policyholder Information Package, via priority mail, over the next several weeks along with instructions on how to vote on the plan." (Business Wire via Yahoo! Finance)
Study Shows Workers Would Opt Out of Social Security
DALBAR press release. Excerpt: "In a national survey of 1300 consumers over the age of 30, DALBAR found that more than half (55%) of employed workers would reduce their own social security benefits if they could direct a portion of their social security taxes into a private retirement plan. Private retirement plans include 401(k), IRA, 403(b), and other defined contribution plans." (Business Wire via Excite News)
Opinion: What Stocks Do and What Retirees Need Are Often Very Different Things
Excerpt: "The panel named by President Bush last week to study Social Security is almost certain to recommend that workers be allowed to divert some of their Social Security contributions into stocks and private investment accounts. But there is a profound problem with that approach: the fundamental mismatch between what stocks do and what retirees need." (Washington Post)
New Social Security Commission Will Examine Old Ground
On May 2, President Bush announced the establishment of a bipartisan, 16-member Commission 'to study and report specific recommendations to preserve Social Security for seniors while building wealth for younger Americans.' The last major changes made to the Social Security system took place more than 18 years ago, when the Social Security retirement age was raised prospectively from 65 to 67, and the Social Security payroll tax was increased to its present 7.65%. (SpencerNet)
Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
Is it advisable to make an "early purchase"? Does the government impose any deadline upon such an early purchase, such as 180 days after starting work? (BenefitsLink.com)
2001 ERISA Calendar Online from Watson Wyatt
Excerpt: "The Year 2001 ERISA Reporting Calendars are now available... online! Plan administrators of single and multiemployer pension and welfare benefits plans can access concise information on when, and how to file annual reports with the DOL, IRS and PBGC. Information on how and when to disclose tax and benefit information to U.S. plan participants, beneficiaries and alternate payees is also available." (Watson Wyatt)
Towers Perrin U.S. Legislative Tracking Charts
Grouped by topic: Retirement, Human Resources, Health and Welfare (Towers Perrin)
Employee Benefits Regulations
Carol Calhoun's employee benefits site has now added links to the online versions of both ERISA and tax regulations, organized by the Internal Revenue Code or ERISA section they implement. The links lead to the relevant regulations on e-CFR, which is updated daily. (Calhoun Law Group, P.C.)
Newly Posted or Renewed Job Openings (Post Yours!)
| Benefits Consultant | for Clark Bardes Consulting/ Compensation Resource Group in NJ |
| Human Resources Manager | for The American Funds Group in TX |
| Benefits Paralegal | for LeBoeuf, Lamb, Greene & MacRae, L.L.P. in FL |
| Employee Benefits Tax Consultant | for Deloitte & Touche in FL, GA, NC |
| Pension Account Executive | for Diversified Investment Advisors in NY |
| QA Testing Specialist | for Emplanet in MA, NH |
Newly Posted Press Releases
| LIMRA Taps 401kExchange's Barstein to Speak at Brazil 401(k) Conference (401kExchange.com) |
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