| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 10, 2001
Today's sponsor: Employee Benefits Webcast (click)
Determination of Required Minimum Retirement and Death Distributions from Qualified Plans, IRAs, 457(b) Plans and 403(b) Plans Presented LIVE on Monday May 14th at 1 p.m. EST. Instructor: Larry Grudzien of Buck Consultants
Senate Eyes Pension Reform
Excerpt: "Senate leaders appear likely to include a proposal that would increase tax benefits for pension savings, such as IRA and 401(k) plans, in the $1.35 trillion tax cut package that they hope to pass this month. Sen. Max Baucus of Montana, the senior Democrat on the tax-writing Finance Committee, said it is 'very possible' that the tax package will include a pension savings measure similar to one the House passed overwhelmingly last week." (Baltimore Sun)
EBRI's President Talks About the Evolution of the Sponsor's Role
Excerpt: "In the second part of [PLANSPONSOR.com's] interview, Dallas Salisbury, President of the Employee Benefit Research Institute, speaks to retirements that outlive pensions and the impact on the plan sponsor's role." (PLANSPONSOR.com)
EBRI's President Talks About the Effects of the Slide in Defined Benefit Plan Coverage
Excerpt: "Last week, the Employee Benefit Research Institute (EBRI) released a survey about the implications of the shift away from defined benefit plans to defined contribution plans. Starting today and continuing for the rest of the week, EBRI president Dallas Salisbury addresses the key findings and how they might affect plan sponsors." (PLANSPONSOR.com)
Opinion: Delay the Golden Years
Excerpt: "Americans should work more. That is the conclusion of one of the most creative thinkers on the political left, William Drayton.... Some things have already been moving in Drayton's direction. The Republican Congress succeeded in cutting the tax on earnings of retirees 65 to 69 years old-- an incentive to work. Though many don't realize it, the Social Security retirement age is scheduled to rise ..." (Michael Barone in U.S. News)
Retirement Plan Assets Allocated to Wrong Company Must Be Returned
State St. Bank & Tr. Co. v. Denman Tire Corp. (1st Cir. 2001). Excerpt: "The First Circuit Court of Appeals has ruled that pension plan assets that were mistakenly allocated to a company's pension plan, instead of to a pension plan of the company's former affiliate, must be returned to the affiliate." (Taxline)
Past Performance of Federal Thrift Savings Plan Investment Options
Excerpt: "This month you have a special opportunity to review your investments in the 401k-style Thrift Savings Plan. Until recently, TSP participants had only three choices for paycheck contributions. But as of May 1, you now have five choices.... But before you start shifting your money around, take some time to get to know the I and S Funds and reacquaint yourself with the C, F and G Funds." (GovExec.com)
Opinion: Proposed Retirement Benefits Bolster Wall Street, Exclude Main Street
Excerpt: "At first the proposal seems benign: Let's allow taxpayers to place more money in tax-deferred retirement accounts. What could possibly be wrong with that? Well, actually, a bunch of things.... First, retirement plan contributions are not a sure thing. Second, new and higher limits, if enacted, will impact only a small financial aristocracy. Third, the money is going in the wrong place." (Realty Times)
Opinion: Retirement Reform Bill Should Boost Savings
Excerpt: "The U.S. House did working families a favor a few days ago, approving a measure that would cut their taxes and boost their savings accounts by increasing the amount of money they can sock away in IRA and 401(k) plans. The bottom line: People will get to keep more of what they make and build a more secure future. Let's hope the Senate follows suit shortly." (Greensboro [N.C.] News and Record)
Contribution of Stock That Reduced Employer's Obligation to Plan Is a Prohibited Transaction
Excerpt: "The IRS's Chief Counsel's Office has issued an advice memorandum that adopts the Department of Labor's position that the contribution of unencumbered property that reduces an employer's cash obligation to a defined contribution plan is a prohibited transaction." (KPMG)
Pension Legislation Update
Excerpt: "A second important development this week is the bipartisan consensus on a budget resolution that calls for a $1.35 trillion tax cut package.... Our side-by-side comparison of the principal provisions of the House-passed bill and the Senate proposal [appears in this linked article]. We will keep you informed of significant developments." (Groom Law Group)
Pension Benefits Guaranty Corporation ("PBGC") Regulations
Links to PBGC regulations, updated daily and organized by the ERISA section they implement, have now been added to Carol Calhoun's employee benefits site. The employee benefits regulations section of the site now permits combined full-text searching of all IRS, Department of Labor, and PBGC regulations, obtaining regulations of all three agencies by number, and browsing through regulations organized by the ERISA or Internal Revenue Code section they implement. (Calhoun Law Group, P.C.)
Federal Thrift Board Finalizes Rules On TSP Participation, Choice of Investment Funds
The Federal Retirement Thrift Investment Board has issued separate sets of final regulations regarding employee elections to contribute to the Thrift Savings Plan (TSP) and participants' choices of investment funds under the TSP. (SpencerNet)
Fortune Names Worst-Performing Corporate Boards
Excerpt: "Socially responsible investors should cheer Fortune's creation four years ago of a list of America's poorly performing corporate boards. The nominees this year are mentioned in 'Dirty Half-Dozen: America's Worst Corporate Boards,' which will appear in the May 14 edition of Fortune." (SocialFunds.com)
Book for the "New Global Investors": How Shareholders Can Unlock Sustainable Prosperity Worldwide
Book by corporate governance pioneer Robert A. G. Monks to be published in June. Excerpt: "Monks calls for a new meaning of ownership by the 'new global investors' -- trustees of mutual funds and pension funds who today control roughly half of publicly traded shares of stock." (Business Wire via Yahoo! Finance)
Strategic and Tactical Marketing Plans for Financial Advisory Services - Part I
Excerpt: "Last week we discussed some of the basics in marketing financial advisory services. Now we turn to one of the specifics - developing a marketing plan." (Practitioners Publishing Company)
"Socially Responsible" Funds Getting Noticed
Excerpt: "Whether you want to promote your religious beliefs, environmental protection, feminism or simply good corporate citizenship, there's likely a mutual fund devoted to your cause. Socially responsible funds have been around as a niche category for years, but more recently their profile has risen. They are now even included in 401(k) plans offered by such employers as General Motors Corp. and Ford Motor Co." (Associated Press)
Minority Groups Express Concerns About Saving and Retirement Planning
Excerpt: "... a third or less of nonretired minorities feel very confident about having enough money to take care of basic expenses in retirement (33 percent of African-Americans, 21 percent of Hispanic-Americans, and 36 percent of Asian-Americans). This compares with 37 percent of all nonretired individuals (workers) in the United States." (Employee Benefit Research Institute, American Savings Education Council, Mathew Greenwald & Associates)
Survey: Fewer American Workers Are Saving for Retirement
Press release. Excerpt: "The 2001 RCS shows the percentage of individuals who say they have personally saved for retirement decreased from 75 percent in 2000 to 71 percent in 2001 ..." (Employee Benefit Research Institute, Principal Financial Group)
Shifting U.S. Population Calls for New Approaches to Employee Benefits
Excerpt: "Except for the over-65 segment, each age cohort will have about the same population by the year 2020. For the first time in the history of the United States, because people are now living longer than they used to, 'we will be moving from a population pyramid to a pillar,' said Martha Farnsworth Riche, a fellow of the American Statistical Association and former director of the U.S. Census Bureau." (Knowledge @ Wharton)
Troubleshooter's Guide to Filing the ERISA Annual Report (Form 5500)
53 pages. Excerpt: "In an effort to assist filers in the preparation of the 2000 Form 5500 (including accompanying schedules, statements and attachments), DOL has prepared this publication which focuses on the changes in reporting under EFAST and how to avoid reporting errors most likely to be made by filers. Although EFAST processes the IRS Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan, this guide does not cover the Form 5500-EZ." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Opinion: Colgate's Mark Gets Rich Satisfying Shareholders
Excerpt: "Here is how the system is supposed to work: The chief executive risks his pay betting on his leadership of the company. Then he hits the ball out of the park. Shareholders get great satisfaction -- and he gets seriously rich." (Graef Crystal, on Bloomberg.com)
IRS Offers Free E-Mail News For Pension Plan Practitioners
The Internal Revenue Service has launched a free e-mail news service called the Employee Plans News, which will be issued periodically during the year with retirement plan information. The news service is provided by the IRS's Employee Plans office, an operating unit of the agency's Tax Exempt and Government Entities Division. (SpencerNet)
Newly Posted or Renewed Job Openings (Post Yours!)
| Consulting - Pension Actuary & Administrators | for Louis Kravitz & Associates, Inc. in CA |
| Benefits Attorney | for ERNST & YOUNG LLP in GA, IL, MN, OH, PA, TX |
| Senior Service Consultant | for Transamerica Retirement Services - The Winning Organization in IL |
Newly Posted Conferences (Post Yours!)
| Monthly Lunch Meeting | in CO on May 15, 2001 presented by Denver Chapter of the Western Pension & Benefits Conference |
| An Update from the Department of Labor and Internal Revenue Service | in VA on May 24, 2001 presented by Richmond Chapter - ISCEBS |
Newly Posted Press Releases
| Radical Innovation in 401(k) Advice Business (MUTUALS.com) |
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