| The BenefitsLink Newsletter - Retirement Plans Edition |  |
May 30, 2001
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Overview of Title VI of HR 1836, As Passed by Congress
Excerpt: "This Compliance Alert summarizes the provisions in H.R. 1836 that are most likely to be of interest to sponsors of employer-funded retirement plans. (The provisions are marked to indicate the types of plan sponsors for which they are most likely to be of interest: C for corporate, PS for public sector and M for multiemployer.)" (The Segal Company)
ASPA Publishes Chart Comparing Principal Final Tax Bill Retirement Provisions to Current Law
Nicely done, in HTML (browsable) format. Excerpt: "EGTRA refers to H.R. 1836 the 'Economic Growth and Tax Reconciliation Act of 2001' which passed the Congress on May 26, 2001, and is expected to be signed into law by the President the week of June 4, 2001. Provisions are generally effective for years beginning in 2002, except as otherwise indicated." (American Society of Pension Actuaries)
Chart Comparing Final Bill Provisions to Current Law, Published Online by American Benefits Council (PDF)
7 pages. Covers principal retirement savings provisions only. Prepared for the American Benefits Council by Randy Hardock and John O'Neill of Davis & Harman LLP. (American Benefits Council)
Another Question is Answered in the 401(k) Plans Q&A Column
A start-up company incorporates on 1/1/2000 and decides to establish a 401(k) plan effective 12/1/2000 with a 12/31 plan year end. Assume there are no 5% owners. Will there be any highly compensated employees for the first short plan year if there are employees who have earned compensation in excess of $80,000 in the 12-month period preceding 12/1/2000, or do you look back to 1999 where there can be no highly compensated employees because the employer did not exist? (BenefitsLink.com)
New Tax Bill Changes ESOP and 401(k) Rules
NCEO executive director Corey Rosen discusses the changes in ESOP and 401(k) rules contained in the new tax bill, ranging from severe limits on S corporation ESOP abuses to increases in 401(k) deferral limits. (The National Center for Employee Ownership)
Another Question is Answered in the Who's the Employer Q&A Column
A medical doctor practices two separate specialities (general surgery and family practice). He is a 50% partner in a two-person PLLC (which only performs general surgery). He also practices family medicine as a sole proprietor one day at week in the same town. The PLLC and the sole proprietorship are not related in any way (regarding patients, services, billing, shared expenses/employees or location, etc.). Is this an affiliated service group? (BenefitsLink.com)
Beneficiary Card Controls: Former Spouse Gets Benefits Allegedly Waived in Divorce Decree
Heggy v. Am. Trading Employee Retirement Acc't Plan, 2001 Tex. App. LEXIS 3172 (Tex. Ct. App. 2001). Excerpt: "... assuming that a divorce decree includes sufficient language to remove an ex-spouse as beneficiary, several federal circuit courts would hold that the decree operates as a waiver of the ex-spouse's beneficiary rights. Such courts apply 'federal common law' to effectively alter the beneficiary designation in favor of others ..." (EBIA Weekly)
Participant Must Repay Erroneous Distribution and Pay Plan's and Trustee's Attorneys' Fees
AmSouth Bank v. Carr (S.D. Ala. 2001). Excerpt: "Due to a clerical error, the trustee mistakenly transferred approximately $34,000 twice. The trustee of the former employer's plan reimbursed such plan for the erroneous distribution. However, the participant refused to repay the overpayment to the trustee." (EBIA Weekly)
Minnesota Appeals Court Upholds Decision In Teachers' Retirement Case
Excerpt: "The state Court of Appeals on Tuesday upheld a Ramsey County judge' s dismissal of a lawsuit filed by 11 active and retired teachers against the Teachers Retirement Association over their pension plans. The three-judge appeals panel agreed with Judge John Van de North, who ruled in November that the statute of limitations had expired and dismissed the lawsuit challenging the constitutionality of changes to teacher pension law." (StarTribune.com)
Court Appoints Independent Fiduciary To Manage Abandoned Pension Plan
The Department of Labor has obtained a court order that appointed an independent fiduciary to manage and terminate the abandoned pension plan maintained by the International Brotherhood of Law Enforcement and Security Officers, which covered security guards at Howard University in Washington, D.C. (SpencerNet)
Plan Loan That Exceeds Five-Year Term is Taxable to Participant
Campbell v. Commissioner, T.C. Memo. 2001-118 (May 17, 2001). Excerpt: "The case represents a fairly standard application of the rules of the Code to a plan loan that has strayed outside the bounds of non-taxable treatment. It is worth noting that the New York City retirement plan facilitated the 'too-long' loan, and yet the IRS apparently did not assess any adverse consequences to the plan." (EBIA Weekly)
June 2001 "Applicable Federal Rates" Published (PDF)
Rev. Rul. 2001-27. (Internal Revenue Service)
Pending Bankruptcy Bill Makes It Tougher For Creditors To Get Your IRA Money
Excerpt: "If you declare bankruptcy, your IRA money could be seized by your creditors, depending on what state you live in. IRA protection from creditors is currently governed by states, not the federal government, and the state laws are far from uniform. But a bankruptcy bill pending in Congress contains new, strong federal rules that would protect most IRA assets." (mPower Cafe)
More Queries on Insurer's Handling of Its Pensions
Excerpt: "Internal documents from the New York Life Insurance Company raise more questions about how the company handled the nest egg of its employees and whether it used those funds to bolster its mutual fund business." (New York Times; free registration required)
Chart of House, Senate and Final Bill Provisions Published Online by American Benefits Council (PDF)
12 pages. Prepared for the American Benefits Council by Randy Hardock and John O'Neill of Davis & Harman LLP. (American Benefits Council)
ASPA Requests Blanket Extension for Form 5500 Filings
Excerpt: "ASPA is requesting that the Department of Labor provide a blanket extension of time to file the 2000 Form 5500 Series, similar to the transition-year extension granted on March 22, 2000 for the 1999 annual return/report forms. Specifically we ask that the deadline to file any 2000 Form 5500 or 5500-EZ which would normally be due on or before July 31, 2001, be automatically extended to October 15, 2001 ..." (American Society of Pension Actuaries)
Handling the Tax Consequences of Incentive Stock Options (ISOs)
Excerpt: "The AMT aspects of ISOs can be particularly harsh when the value of the stock declines after the ISOs are exercised. If the decline is dramatic, it is possible for the AMT liability associated with the ISO exercise to exceed the value of the stock." (Practitioners Publishing Company)
Newly Posted or Renewed Job Openings (Post Yours!)
| 401(k) Investment Educator | for ADP, Inc. in NC |
| Daily Valuation Administrator | for WESPAC Plan Services, Inc. in CA |
| Employee Benefits Tax Consultant | for Deloitte & Touche, a Professional Services Firm in OH |
| Benefits Manager | for Strong Capital Management, Inc. in WI |
| Sr. Compensation Analyst | for Private Healthcare Systems, Inc in MA |
| Compliance Specialist | for Dreyfus in MA, NY |
| Benefits Administrator | for Gold Kist Inc. in GA |
Newly Posted Conferences (Post Yours!)
| The 2001 Executive Compensation Seminar: Pay at the Top: Executive and Board Compensation | in NY on September 20, 2001 presented by The Conference Board |
Newly Posted Press Releases
| Benefit Software Inc. Launches Fringe Facts® Communicator (Benefit Software Inc.) |
| Subimo and UNICARE Partner to Deliver Health Information to Massachusetts State Employees -- Massachusetts Takes the Lead in Patient Safety for its Employees (Subimo, LLC) |
| Still River Retirement Planning Software, Inc. Releases Software for New Tax Bill (Still River Retirement Planning Software, Inc.) |
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