| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 16, 2001
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Highlights of Senate Finance Committee-Approved Version of Tax Bill
Excerpt: "Highlights of the 11-year, $1.35 trillion tax relief package approved 14-6 Tuesday by the Senate Finance Committee and sent to the Senate for debate starting Thursday: ..." (Las Vegas Sun)
Policy Group Asks, Who Would Benefit From the Senate Tax Cut Proposal?
Excerpt: "The Chairman's Mark would provide significant new assistance to low- and moderate-income working families with children.... In this area, the proposal is a major improvement over both the House legislation and the Administration's plan. Even so, the biggest winners by far would be very-high-income taxpayers." (Center on Budget and Policy Priorities)
Finance Panel Moves Tax Plan Toward a Senate Vote
Excerpt: "Senator Trent Lott of Mississippi, the Republican leader, said he hoped the Senate would pass the bill this week, work out differences with the House of Representatives next week and have the measure ready for the president's signature before Memorial Day." (New York Times; free registration required)
Layoffs Trigger 401(k) Distribution Options
Excerpt: "The decision on what to do with retirement funds may be one of the biggest you face. Consider the tax implications." (Los Angeles Times)
401(k) Hits the Internet
Excerpt: "It is no secret that most people now treat dotcoms with the indifference, or worse, the slight contempt with which the average ten- year-old contemplates bubble gum on his shoe. But while that view may hold sway in the retail or business-to- consumer sector, that is not the case in the online business-to-business market. Consider, for example, the skyrocketing number of tools and technologies available in the Internet-based 401(k) services market." (Thomson Financial Media)
Stock Market's Decline Reveals Costly Mistakes in 401(K) Investing
Excerpt: "... financial experts are only beginning to understand how badly these investors were mauled in the last year. True, Wall Street's retreat contributed much to the damage to 401(k) portfolios, the experts say. At the same time, it's becoming clear that the bull market masked many investing mistakes. That recognition is renewing the debate over whether most Americans have the time, knowledge or inclination to properly manage their 401(k) plans." (The Dallas Morning News)
Is My 401(k) OK? Investors Seek Answers After the Fall
Originally published 4/17/2001. Excerpt: "Not yet, says Martha Priddy Patterson, director of employee benefits policy analysis at accounting firm Deloitte & Touche." (TheStreet.com)
Wisconsin Transitional Retirement Study (PDF)
Excerpt: "The Department of Employee Trust Funds conducted this study to examine the changing needs of public employees in Wisconsin as they near retirement. Many factors are reshaping the look of retirement, including: An aging workforce ... Increased life expectancy ... Greater need for financial security during retirement ... Shrinking labor supply ... Changing retirement patterns are occurring at the same time employers are experiencing worker shortages." (Department of Employee Trust Funds, State of Wisconsin, republished online by National Council on Teacher Retirement)
Another Question is Answered in the Who's the Employer Q&A Column
John owns 100% of a company. His granddaughter works for the company. John would like her to be a highly compensated employee, but he doesn't want to pay her the $85,000 needed to put her in that category on her own. But is she an HCE due to deemed ownership of her grandfather's stock? (BenefitsLink.com)
New Software Compares Investment Practices, Retirement Goals
Excerpt: "Have you ever used any of those Internet-based financial planners that tell you how woefully unprepared you are for retirement? They scare the devil out of you ... they offer no solutions ... [but] MPower Advisors LLC of San Francisco and Financial Engines Inc. of Palo Alto are offering to employer-sponsored retirement plan participants sophisticated software tools previously available only to pension funds and institutional investors." (Washington Post)
How the Proposed Minimum Distribution Regulations Affect Early Retirement Payment Calculations
Excerpt: "Section 72(t) provides for a 10% penalty on early distributions from an IRA or qualified plan, as well as several exceptions from it. Probably the most-used is the exception for 'substantially equal periodic payments,' commonly referred to as 72(t) payments. If the series of payments meets certain requirements, the 10% penalty will not apply to them." (The National Underwriter Company)
Retiring at 55? Some Pitfalls to Avoid
Excerpt: "You love your job (well, maybe). You enjoy your colleagues. But you're working hard, and you don't know if you can keep up the pace forever-or want to. You're thinking you may want to try for an early retirement, like maybe at 55. But before you take the plunge, there are a number of issues you'll have to carefully consider." (Strategic Finance)
Voluntary Buyout, Early Retirement Offers Present Tough Choices to Employees
Excerpt: "With the current economic slowdown, companies as diverse as Lucent, Unisys, Ford, Whirlpool, and The New York Times Co. (parent of The Boston Globe) are offering early retirement and voluntary buyouts to longtime employees. For some, the offers are a no-brainer, representing an easy ticket to retirement or to a long-envisioned new career. For others, the packages recently landing in their mailboxes raise a host of agonizing personal finance and life issues." (The Boston Globe)
Alabama Bill Provides Matching Contributions to Government Employees, Including Legislators
Excerpt: "Lawmakers passed a bill Thursday to create a savings plan similar to a 401k that they could join, and it would allow them to use taxpayer dollars to match their contributions to the plan. Many said they didn't know they were voting for a bill that would provide them a personal benefit.... The state Constitution prohibits legislators from receiving a pension, but does not refer to a tax-deferred savings plan." (The [Montgomery, Ala.] Advertiser)
Social Security Administration Opens Web Site "For Women"
Provides a set of links to information directed to women or particularly useful for women. Excerpt: "Choose the category that best fits your stage in life (more than one may apply to you): Working woman; Beneficiary; Bride; New mother; Divorced spouse; caregiver; Widow ... [Click for more information on] what every woman should know about: Social Security; Retirement; Survivors; Disability; Supplemental Security Income; Medicare" (Social Security Administration)
401(k) Plans Lost $72 Billion in Assets in 2000
Excerpt: "Assets invested in 401(k) retirement plans declined for the first time in 2000, losing $72 billion to close out the year at $1.766 trillion, according to a report by Cerulli Associates Inc., a Boston research firm. The average 401(k) balance fell to $41,919 in 2000 from $46,740 in 1999, the study said." (CFO.com)
Florida Rethinks Earlier Decision To Divest Tobacco Stocks
Excerpt: "Florida sold its tobacco stocks four years ago after a push by then-Gov. Lawton Chiles, who said the state shouldn't profit from cigarettemakers at a time when it was suing the industry. Now, with tobacco lawsuits settled around the country and tobacco stocks soaring, top state officials are rethinking the decision to divest and are open to including tobacco stocks in Florida's investment portfolio again." (St. Petersburg Times)
Striking Transformations for Nation's Families and Seniors As Population Ages
Excerpt: "Perceptions aside, the 2000 population profile released today by the U.S. Census Bureau [shows the] fastest-growing age group in the last decade was Americans 45 to 54; their numbers increased to 37.7 million, a jump of 49.4 percent. Right behind were those 85 and over. This category, one of 13 age groups tracked by the census, included more than 4.2 million Americans in 2000, an increase of 37.6 percent from the 3 million counted in 1990." (The [Bergen County, N.J.] Record)
Investors Questioning Executive Pay
Excerpt: "With stocks still struggling to recover from last year' s slide and business profits in the doldrums, unhappy shareholders at many corporations are taking a closer look at how much executives are pocketing in salary, stock options and other compensation. They don't like what they' re seeing." (Associated Press via StarTribune.com)
Opinion: Siebel Systems Pays a Lot, Discloses a Little
Excerpt: "Siebel Systems Inc.'s chief executive, Thomas Siebel, appears bent on besmirching a platinum performance record with pay excess and tawdry proxy disclosure practices. The San Mateo, California-based maker of software for managing customer service has been an absolutely mouthwatering investment, despite the trip through Death Valley for many technology stocks." (Graef Crystal, on Bloomberg.com)
Options Table: the Exchange Gang
Excerpt: "In the latest attempt to retain talent and avoid compensation charges, more companies are offering employees the chance to exchange stock options for a new grant six months and one day later.... The following chart includes some companies that have recently adopted the '6&1' trend as well as those that are using other methods for tackling underwater options." (CFO.com)
Newly Posted or Renewed Job Openings (Post Yours!)
| DB/DC Plan Administrator | for Federation Pension Bureau, Inc. in NY |
| Retirement Plan Administration Specialist | for Lauren Davis & Company Retirement Services, Inc. in IN |
| Client Manager | for Benefit Services Corporation, a subsidiary of METLIFE in GA |
| DC/401(k) Administrator | for dpb&z, inc. in PA |
Newly Posted Press Releases
| PSCA Signature Awards honors excellence in plan communication and education (Profit Sharing/401(k) Council of America) |
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