| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 14, 2001
Today's sponsor: The Plan Sales System (click)
The Plan Sales System is a comprehensive, 16-step system for growing a retirement plan sales practice. It provides detailed resources, contact names and numbers, checklists, charts, handouts, letters, extensive prospecting techniques, descriptions of current market opportunities, and tools for planning and monitoring sales activity. Click to order!
Mixed Results in Legal Challenges to "In-House" Funds
Excerpt: "We report on two recent judicial developments in this 'hot' area for class action lawsuits. A settlement was recently reached in two class action suits brought against First Union ... Key issues left open in the First Union litigation were addressed and favorably resolved ... in Mehling v. New York Life Insurance Company ... [in which pension participants alleged] that assets of the plans were used to seed, sustain and grow the insurer's new line of institutional mutual funds." (Groom Law Group)
Private Pension Plan Bulletin: Abstract of 1997 Form 5500 Annual Reports
Excerpt: "This is the tenth edition of the Private Pension Plan Bulletin. The tabulations presented in this report contain data based on 1997 Form 5500 filings.... The number of private pension plans increased 3% in 1997 to 720,000, the largest percentage increase since 1986. The growth in plans resulted from a 15% increase in 401(k) type plans to 265,300." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Twenty Years On, U.S. Workers Face 401(k) Plan Challenges
Excerpt: "Despite evidence that privately managed retirement accounts encourage savings among those that are eligible, several recent studies show not enough workers take part in the plans, many are not saving enough and those that do don't know how to manage the accumulated assets." (Reuters via Yahoo! News)
A Comparative Analysis of the UK Pension System Including the Views of Ten Pension Experts (PDF)
44 pages. Excerpt: "Over the next 30 years or so the UK population will grow by 1 million to 60 million, whereas the population over 60 years old will grow from around 12 to 18 million. Arising from these demographic changes are several key implications for the UK pension system and wider economy." (Les Mayhew, published at http://www.pensions-research.org/papers)
American Academy of Actuaries Urges Treasury to Use New RP-2000 Mortality Table for Pension Calcs (PDF)
7 pages. In its April 27 letter, the Academy's Pension Committee recommends that the tables' base rates be adopted as the basis that pension plans use to determine current mortality liability. But the committee also suggests that the base tables be adjusted first to reflect the higher blue-collar mortality rates. Excerpt: "Below is a description of the study's background and pertinent findings and our recommendation for the mortality table(s) to be used for current liability determinations." (American Academy of Actuaries)
Coorstek Freezes DB Plan, Boosts 401(k) Plan
Press release. Excerpt: "These changes offer CoorsTek employees three important advantages: the revised plan is competitive with other technology company benefit plans, allows employees access to and control over the invested funds, and provides portability should the employee move to a different company. In comparison with the Company's former plans, these features better suit the needs of CoorsTek's current workforce." (PR Newswire, via Yahoo! Finance)
SSA Publishes Online Benefit Eligibility Screening Tool
Excerpt: "Social Security administers several different benefit programs. BEST is a screening tool designed to help you identify all the benefits you may be eligible for from those programs. For most people, it should not take more than 5 to 10 minutes to use this tool." (Social Security Administration)
Two Circuits Consider Fiduciary Duties in Spinoffs
Excerpt: "The First and Second Circuits recently decided cases dealing with the duties of plan sponsors and fiduciaries in spinoffs of plan assets and liabilities. The decisions should provide some comfort to plan sponsors, and to fiduciaries charged with implementing plan sponsor decisions, in spin-off situations." (Groom Law Group)
Senate To Combine Pension, Tax Reform Issues
Excerpt: "Looks like pension reform will hitch a ride with the compromise tax bill introduced in the Senate on Friday - but the Senate version contains a number of pension provisions previously rejected by the House in its deliberations as too costly." (PLANSPONSOR.com; free registration required)
Opinion: Retirement Security Comes Easier Now - For a Select Few
Excerpt: "It is awfully hard, even these days, to sell legislation that amounts to a windfall for those already blessed with the wind at their backs. It is necessary instead to dress up this type of thing and pass it off as something more respectable. The costume draped upon this latest monstrosity is that the [Portman-Cardin pension] measure makes retirement savings easier and old age more secure." (Milwaukee Journal Sentinel)
Senate Compromise Bill Cuts Top Tax, Includes Pension Provisions
Excerpt: "The Senate's top Republican and Democratic tax writers offered a compromise tax cut package Friday ... The measure includes a proposed credit for lower-income people who want to save up to $2,000 a year for retirement using an IRA, 401(k) or other qualified plan and credits would be available for small businesses to start a pension plan." (Associated Press, via Yahoo! News)
Description of Chairman's Mark of "Restoring Earnings To Lift Individuals and Empower Families Act" (PDF)
143 pages. Scheduled for markup on May 15, the bill includes pension reform provisions. (Joint Committee on Taxation)
Business Seeks Tax Breaks in Wage Bill
Excerpt: "As the Senate Finance Committee begins debate this week on the details of President Bush's tax-cut proposal, leading corporate groups are already working hard to help shape a second major tax bill this year that would include significant breaks for business.... Officials from the insurance and securities industries are looking to attach pension reform to the bill, in addition to tax deductions for long-term health care ..." (Washington Post)
Retirement Planning a New Concept for Many Europeans
Excerpt: "A Dow Jones Newswires informal survey poll of 50 Europeans, aged 25-45, all holding university degrees and in career-track jobs, showed two-thirds of those surveyed didn't feel financially educated. Another three-fourths said they didn't have any specific financial retirement goal. For years, European savers have counted on fat pensions from state-run retirement plans. But now, the aging population threatens to topple the system, in which today's workers fund today's retirees." (Dow Jones News Service via The Salt Lake Tribune)
Schroeder Scores Pensions Coup In Germany But Clouds Gather
Excerpt: "Chancellor Gerhard Schroeder has reason to be smug after he clinched approval this week for an overhaul of the German pension system. But victory in elections next autumn is by no means assured as economic worries mount. On Friday, after months of wrangling, Schroeder pushed his pension plans through the Bundesrat upper house ..." (Reuters via Excite News)
German Parliament OKs Pension Reform
Excerpt: "Parliament approved landmark changes in Germany' s national pension system Friday, allowing the government to sponsor private old-age savings and ending months of uncertainty over a major economic reform project.... The plan encourages workers to invest up to 1 percent of their gross salaries in private pension plans in 2002 and up to 4 percent starting in 2008." (Associated Press via StarTribune.com)
IRS Issues "2001 Priorities for Tax Regulations and Other Administrative Guidance" (PDF)
27 pages. See pages 3 and 4 for 67 employee benefits items on the IRS' business agenda. (Ernst & Young TaxCast)
DOL Updates Form 5500 Troubleshooter's Guide
Excerpt: "A lot of water has flowed under the bridge since 1996, the last year that the DOL issued a practical guide (other than the Form 5500 Instructions) to help plan administrators file their Form 5500s. Administrators who were frustrated with the aging guidance may find some relief in this updated Form 5500 Guide." (EBIA Weekly)
Employees Head To Court In Stock Option Battles
Excerpt: "Employees and employers are suing each other over stock options.... At one end, there are employees alleging that they were fired improperly just before they were to reap big gains on stock options. At the other, there are companies prodding workers who jumped ship to the competition to repay stock-option gains." (CareerJournal.com)
Employee Terminated for Reasons Other Than Deficient Performance Was Terminated "Without Cause" (PDF)
Scribner v. Worldcom, Inc. (9th Cir. 2001). Excerpt: "In this appeal, we must decide what the words 'termination without cause' mean in the context of a stock option contract between an employer and employee. The question is whether the employer, who retains discretion to construe the contract, can define the word 'cause' to mean something other than its ordinary meaning without informing the employee that the ordinary meaning is irrelevant.... [W]e conclude that the answer is no." (FindLaw.com)
IRS Announces Employment Tax Moratorium on Statutory Stock Options
Excerpt: "After 30 years of relative official silence, the IRS is reexamining the employment tax treatment of statutory stock options, i.e., incentive stock options (ISOs) and employee stock purchase plans (ESPPs).... [E]mployers generally have not paid employment taxes on ISO and ESPP income and have not withheld the taxes from workers' paychecks when disqualifying dispositions are made." (Groom Law Group)
Newly Posted or Renewed Job Openings (Post Yours!)
| Pension Administrator/Accountant | for First Mercantile Trust Company in TN |
| 401k Compliance Testing Analyst | for Automatic Data Processing- Retirement Services in NJ |
| Client Service Manager | for ING-Aetna Financial Services in CT |
| 401(k) Plan Administrator | for Stephen H. Rosen & Associates, Inc. in NJ |
| Pension Director | for Florida Pensions, LLC in FL |
| Employee Benefits Attorney | for Morgan, Lewis & Bockius LLP in DC |
| ERISA Case Manager | for CitiStreet in NJ |
| OmniPlus Conversion Project Manager | for CitiStreet in NJ |
| Benefits Manager | for Oxford Health Plans in CT |
| Experienced Recordkeeper | for Leggette Actuaries in TX |
| Accounting and Reconciliation Analyst | for Leggette Actuaries in TX |
| Benefit Plan Administrator | for Del Monte in CA |
Newly Posted Conferences (Post Yours!)
| Advanced Defined Contribution and Form 5500 Workshops | in WA on August 20, 2001 presented by ASPA |
| Advanced Defined Contribution and Form 5500 Workshops | in PA on August 27, 2001 presented by ASPA |
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