| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 22, 2001
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Exchange-traded Funds Seek to Gain Part of U.S. Retirement Business
Excerpt: "Exchange-traded funds, one of the fastest-growing investment products, allow investors to buy a basket of securities in one transaction. Unlike traditional open-end mutual funds, which are bought and sold based on the closing prices of the securities, they trade continuously throughout the day like stocks." (Reuters via Excite News)
Drop in Projected Retirements Puts Bush Management Cuts At Risk
Excerpt: "At a campaign stop in Philadelphia in June, Bush promised that, under his administration, 40,000 of the 80,000 mid- and senior-level federal managers who were expected to retire in the next eight years would not be replaced.... But fewer supervisors and managers will retire over the next eight years than the Bush team had estimated, according to Office of Personnel Management projections." (GovExec.com)
Another Question is Answered in the Who's the Employer Q&A Column
What action should be taken when it is discovered that participants are in a plan due to supplying false information supplied by illegal aliens to the employer (fake social security numbers)? These individuals participated in the plan and received contributions. For plan purposes, should they be considered employees and participants, even though they were not legally employed? Should this be treated as an operational error and corrected under SCP? (BenefitsLink.com)
The Impact of Account Aggregation: Customer Loyalty and Asset Retention
Excerpt: "Picture a scenario in which your 401(k) customer has a brokerage account at one of the many brokerages/banks that has implemented an account aggregation service offering. The 401(k) account is the largest asset for the household, but the account aggregation service makes the brokerage site the primary online access point." (401kWire.com)
Family Court's Jurisdiction At Issue In Benefits Dispute
Excerpt: "Does a Family Court judge have the right to change the designated beneficiary of survivor pension benefits if the plan does not allow it? Janis Kester says no, and hopes a federal judge will agree. The Henderson woman last week filed suit in U.S. District Court against Family Court Judge Bob Gaston and others. She contends the judge had no jurisdiction to remove her as the beneficiary of her deceased ex-husband's survivor benefits." (Las Vegas Sun)
Supreme Court: Social Security Not Mandatory for Federal Judges Who Took Office Before 1983
U.S. v. Hatter (S. Ct. 2001) Excerpt: "In 1983, Congress required all newly hired federal employees to participate in Social Security and permitted, without requiring, about 96% of the then-currently employed federal employees to participate in that program. The remaining 4% including all federal judges] were required to participate, except that those who contributed to a 'covered' retirement program could modify their participation ..." (Legal Information Institute of the Cornell Law School)
Supreme Court Rules Judges Don't Have To Pay Social Security
Excerpt: "Federal judges appointed before 1983 don't have to pay Social Security taxes, the Supreme Court ruled Monday." (GovExec.com)
House Committee Hears Testimony Involving Use of Social Security Numbers as Identifiers
Excerpt: "Witnesses will include the Social Security Administration's (SSA's) Office of the Inspector General, victims of SSN misuse and representatives from consumer groups, businesses, and State and local government." (U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Social Security)
A Full Plate for Your Retirement Banquet If Tax Bill Goes Through
Financial columnist Neil Downing takes questions from readers. Excerpt: "I'm interested in understanding the rule changes that may be coming up in terms of 401(k) maximum contributions." (Neil Downing in the Providence Journal)
Senate Nears Vote on $1.35 Trillion Tax Cut
Excerpt: "The Senate plans to resume votes Tuesday on amendments to an 11-year, $1.35 trillion tax-cut bill, with final passage possible later in the day." (CNN.com)
Senate Deflects Numerous Efforts to Alter Tax Bill
Excerpt: "With Republicans united, the Senate [on Monday night] rejected one attempt after another to change a bill that would give President Bush his top legislative priority, the first big tax cut in 20 years. The solid Republican support seemed to assure the bill's approval, but at midnight, the Senate still faced votes on dozens of possible amendments, and further votes were put off until Tuesday." (New York Times; free registration required)
The 401(k) Derby: In This Race, the Winning Horses Always Change
Excerpt: "Of the 20 funds leading the 3 year 401k Accumulation Race at the end of December, only 3 were still in the running at the end of March ... In case you've forgotten how this slightly odd race is run, we take a list of the 209 funds with the most 401(k) plan assets, invest $100 in each for each of 36 months, and see how they run. Each month we run the race again, dropping the oldest month and adding the most recent month." (Scott Burns)
Welcome to new BenefitsLink advertiser whereiwork
'As the self-service solution for small to mid-sized employers, whereiwork offers online employee benefits enrollment and communications. With relationships with over 40 regional and national benefits carriers and TPAs, we've built a streamlined, secure approach to enrollment that increases efficiencies and decreases headaches. Call us at 1.877.771.1388 to set up a live demo of the whereiwork HRStudio, CommunicationStudio, and BenefitStudio."
Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
In regard to section 83(b) elections to accelerate taxation, is there a specific form or format to follow in the election itself? (BenefitsLink.com)
Members Selected for New IRS Tax Exempt Advisory Committee (PDF)
Excerpt: "The Internal Revenue Service today announced the selection of the 18 members of the first Tax Exempt/Government Entities Advisory Committee (TEAC).' Employee Plans members are Brian L. Anderson of Madison, WI; Mary Beth Braitman of Indianapolis, IN; Jonathan Barry Forman of Norman, OK; Craig Hoffman of Jacksonville, FL; John W. Schroeder of Santa Clara, CA; Donald J. Segal of New York, NY. (Internal Revenue Service)
Court Approves Settlement of Microsoft Perma-Temp Case
Excerpt: "Under the Microsoft settlement agreement, a former temporary worker is required to have worked for Microsoft for at least nine months and worked at least 750 hours in six-month offering periods between January 1, 1987 and June 30, 2000 in order to be eligible for a portion of the $97 million settlement fund." (EBIA Weekly)
Nonqualified Deferred Compensation: Filling the Gaps
Excerpt: "Highly compensated executives know that limits on qualified benefit plans mean they're going to end up with proportionally less retirement savings than other employees, particularly in the area of 401(k) plans. So if your organization doesn't take steps to restore that equity-- with nonqualified deferred compensation plans-- it can cost you key talent." (Aon)
"Options Only" Stock Plans: Apparently Still Viable
Excerpt: "[W]e have just examined the spring 2001 proxy statements of over 40 large cap companies that reported making stock options grants-- but no other types of long-term incentive awards-- a year ago. We have been searching for specific proposals to their shareholders that would lessen the employee retention damage of underwater options, whether now or in the future. This article reports our preliminary findings." (Aon)
Spencer Survey of Benefits Managers Continues
Charles D. Spencer & Associates, Inc., continues to collect information for its 2001 Spencer survey of benefits managers and employee benefits departments. More than 300,000 employees already have been counted, with the average benefit managers' salary topping $78,000. The deadline for completing the survey is June 8. (SpencerNet)
Newly Posted or Renewed Job Openings (Post Yours!)
| Retirement Sales District Manager | for ADP, Inc. in MI |
| Summary Plan Description Writers--Freelance | for In Plain English, Employee Benefits Communication Consultants in ALL STATES |
| Client Relationship Manager (401k) | for Financial Services Organization in WI |
| Relationship Manager | for Reliance Trust Company in GA |
| Risk Management Analyst | for Grainger in IL |
| DC Pension Administrator | for Pension & Financial Services, Inc. in PA |
| Benefits Manager, Human Resources | for The Vanguard Group in PA |
Newly Posted Press Releases
| Rivio™, Inc. Closes $12 Million in Funding (Rivio, Inc.) |
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