| The BenefitsLink Newsletter - Retirement Plans Edition |  |
June 5, 2001
Today's sponsor: DATAIR (click)
PC-based BENEFIT ADMINISTRATION SOFTWARE for Pensions, Profit-Sharing, 401(k), and Cafeteria plans used by TPAs and Plan Sponsors for proposals, enrollment, documents, administration, trust accounting, voice response, task management, government and participant reporting. Modules operate independently or fully integrated for data sharing, speed, accuracy, efficiency & savings. Visit www.datair.com
Economic Growth and Tax Relief Reconciliation Act of 2001 Affects 401(k) Plans
Excerpt: "The Act contains numerous provisions affecting 401(k) plans, summarized below. All provisions are effective for years beginning after December 31, 2001, unless stated otherwise." (EBIA Weekly)
"Asset Transfer Under 414(l)" -- Applying and Using Section 414(l) in Mergers and Acquisitions
Excerpt: "As applied to defined benefit plans, section 414(l) serves two purposes: it (1) prevents manipulation of funding that could result from moving plan assets among plans within a controlled group and (2) it prevents dilution of benefits funded within the termination priority categories under section 4044 of ERISA.... This outline reviews PBGC's and other federal agencies' interpretations of section 414(l) ... as well as uses of section 414(l) in corporate transactions." (Groom Law Group)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
I'm about to decide where to move to. Can you tell me which states exempt Railroad Retirement payments from income taxes? (BenefitsLink.com)
Summary: Pension Reforms Enacted (PDF)
2 pages. Excerpt: "Later this week President Bush is expected to sign the Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which contains dozens of provisions affecting employment-based retirement plans. The only retirement provision in the EGTRRA effective immediately is a requirement that plan sponsors notify participants of any amendment that substantially reduces normal or early retirement benefits." (Milliman USA)
New Contribution Limits Make Roth IRAs More Effective and Attractive for Over-50 Savers
Excerpt: "If you're 50 or older starting next year, here's the maximum amount you'll be able to save in a Roth IRA, according to figures published in a report issued by Congress: ..." (Neil Downing in the Providence Journal)
House Bill Would Exempt Multiemployer Plans From Income-Based Sec. 415 Limit
Rep. Jerry Weller (Ill.) has introduced H.R. 1603, which would exempt multiemployer pension plans from the compensation-based benefit limitations under IRC Sec. 415(b). Specifically, the bill would amend Sec. 415(b)(11) to extend the special limitation that currently applies to governmental plans to multiemployer plans, as well. (SpencerNet)
PBGC Takes Over Underfunded Pension Plan of Bankrupt Department Store Chain
The Pension Benefit Guaranty Corporation has announced that it is assuming trusteeship of the underfunded pension plan of bankrupt Bradlees Stores, Inc. The plan, which covers more than 8,000 workers and retirees, is underfunded by about $12 million, with assets of approximately $83 million to cover benefit liabilities totaling about $95 million. (SpencerNet)
Another Question is Answered in the Who's the Employer Q&A Column
A deceased former owner of a company established family and marital trusts that owned a majority of the company. Both trusts list his spouse as the sole beneficiary. Hence she is considered as owning the company stock due to attribution. Does this attribution pass down to her son (whose father was the deceased owner) for purposes of determining whether he is a shareholder-employee? (BenefitsLink.com)
New from EBRI: EBRI 2001 Retirement Surveys
The executive summary of the June 2001 EBRI Issue Brief titled: 'EBRI 2001 Retirement Surveys: Retirement Confidence Survey (RCS), Minority RCS, and Small Employer Retirement Survey (SERS) is available at EBRI Online. (Employee Benefit Research Institute)
Pension funds bail out of private equity
Excerpt: "During the superheated 1990s, institutional investors committed vast sums of money to private equity, tying up money for 10 years or more. Now a growing number want out of those obligations, fueling the growth in a new 'secondary' market." (Reuters Securities via Yahoo! Finance)
Organization Publishes Online Guide to "Socially Responsible" Investment and Int'l Development
Excerpt: "This booklet forms part of a two year project funded by The Community Fund and managed by Traidcraft Exchange and War on Want. Both of these non-governmental organizations (NGOs) have decades of experience working with poor communities around the world. ... [This booklet includes a section entitled, Is it Legal?] Trustees concerned that adopting SRI policies may be in breach of their fiduciary duty should read this section." (JustPensions.org)
Opinion: Anatomy of (Yet Another) Hedge Fund Fraud
Excerpt: "As the media churns out fanciful stories about wildly successful hedge fund managers that take huge risks and produce spectacular returns, investor demand grows and the number of hedge fund operators mushrooms.... Hedge funds are perhaps the least understood of investments. The vast amount of misinformation that circulates about these funds is truly daunting." (Edward A.H. Siedle, Esq. of The Benchmark Companies)
Social Security Privatization: 44% of Investors Are For It, 35% Are Against It, 22% Are Not Sure
Excerpt: "Less than half of U.S. investors support the partial privatization of Social Security, the main U.S. welfare program, according to a survey by a leading mutual fund company released on Monday." (Reuters via Yahoo! News)
More Older Workers on the Job
Excerpt: "More older Americans are staying in the work force longer, reversing the decades-long trend toward early retirement. Last year, 12.8 percent of people age 65 and older were in the work force - the most since 1979, according to the Labor Department. The percentage has been increasing since the mid-1990s after decades of declines." (Associated Press via Excite News)
Opinion: Ex-CFO Hopkins' Unlucky Hop to Lucent Has Solace
Excerpt: "Deborah Hopkins ... in 1995 hopped from Unisys Corp. to General Motors Corp., then left in three years for Boeing Co. before jumping to Lucent Technologies ... [where she] stayed a scant year at the No. 1 U.S. telephone equipment maker.... [I]t's worth looking at Lucent's pay extravagance in luring Hopkins from her West Coast perks at Boeing, considering the Murray Hill, New Jersey, company now says it needs to slash costs by $2 billion and to cut 16,000 jobs." (Graef Crystal, on Bloomberg.com)
Bills Would Establish Safe Harbor For Determining Independent Contractor Status
Sen. Christopher Bond (Mo.) has introduced the Independent Contractor Determination Act of 2001 (S. 837), which would amend the Internal Revenue Code to establish a safe harbor for distinguishing between independent contractors and employees. Rep. Donald A. Manzullo (Ill.) introduced a companion bill (H.R. 1783) in the House. (SpencerNet)
Tax Provisions Turn Back Into a Pumpkin At 12/31/10?
Excerpt: "The tax cuts that Congress sent to the White House on Monday carry an expiration date of December 2010, setting the stage for political fights on Capitol Hill and during the 2008 presidential campaign about whether to make them permanent." (Associated Press via Excite News)
Accounting for Stock Options: the Controversy Continues
Excerpt: "Instead of replacing APB 25's intrinsic value based method of accounting for stock-based employee compensation plans, SFAS 123 allows a choice between the intrinsic value method and the fair value method. The intrinsic value method, however, triggers footnote disclosure of the effect on earnings ... [hence] the grant of options does not dilute reported earnings. Thus, stock options continue to be 'stealth compensation' ..." (CPA Journal)
Newly Posted or Renewed Job Openings (Post Yours!)
| Associate Pension Consultant | for Pentec, Inc. in CT |
| Manager, Employee Benefits Tax Consulting | for Deloitte & Touche, LLP in NC |
| 401(k) Administrator | for R-Tech Consultants, Inc. in CA |
| Senior Investment Advisor Representative | for Ceridian in VA |
| Defined Benefit Administrator | for MGKS, Inc. in AZ |
| Senior Plan Compliance Coordinator | for Ceridian in FL |
| Pensions/401(k) ERISA Compliance Specialist | for Pensioncareers Ltd. in NJ, NY |
| Manager of Retirement Plan Services/Operations (JO#240) | for An Accounting Firm in WI |
| Business Systems Support Analyst | for American Century Investments in MO |
| Client Management Administrator | for Ceridian in FL |
| Regional Manager (Midwest) | for Transamerica in IL, OH |
| Enrolled Actuary | for Pension Administration Firm in Southfield Area in MI |
| Pension Researcher | for LIMRA International in CT |
| Retirement Plans Administrator | for The Benefit National Companies in TX |
| Employee Benefits Specialist | for Cherry, Bekaert & Holland, LLP in VA |
| Benefits Analyst | for Universal Studios, Inc. in CA |
Newly Posted Press Releases
| New "Sales Drivers" plan marketing letters (Benefit Services) |
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