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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 20, 2001
Today's sponsor: The Profit Sharing/401(k) Council of America (PSCA) (click)


   The Solution Source for Plan Sponsors!   PSCA, the
   nationally recognized organization that was instrumental
   in bringing you the 401(k) plan, presents its 54th
   National Conference and Exhibition, September 12-14,
   2001 in Scottsdale, AZ.   --Analysis and practical application of pension reform regulations.
   --Presentations, workshops and discussion groups covering every plan aspect.   --Networking with more than 200 plan sponsors facing the same issues.   Go to www.psca.org to register or learn more!


Does Participating in a 401(k) Raise Your Lifetime Taxes? (PDF)
51 pages. Excerpt: "This paper uses ESPlanner, a detailed, life-cycle personal financial planning model, to study the lifetime tax advantage gained by stylized young couples when they participate in a 401(k) plan. Assuming a 6 percent real return on assets, we find that low- and moderate-income households actually raise their lifetime taxes and lower their lifetime expenditures by saving in a 401(k) plan." (Federal Reserve Bank of Cleveland)

Summary of Retirement-Related Provisions of EGTRRA (PDF)
16 pages; nice charts of phased-in limit increases. Excerpt: "Although a number of these less well-publicized provisions of the Act offer significant opportunities to employers to enhance employee participation and retention, maximize deductions and other tax benefits of plan sponsorship and simplify plan administration, many impose potentially substantial and perhaps unexpected burdens on plan sponsors and administrators." (Kilpatrick & Lockhart LLP)

Executives See Pensions Grow While Regular Workers' Benefits Shrink
Excerpt: "... the ever-widening gap in retirement income between regular workers and executives has gone largely unnoticed by regulators, policy makers and investors. That's true even though in the past decade, many big companies have been setting up or improving special retirement packages for their highest-paid employees while freezing or trimming pension, medical and other retirement benefits for millions of lower- and middle-income workers." (Ellen Schultz of the Wall Street Journal, on MSNBC.com)

CalPERS to Press Power Companies
Excerpt: "The California Public Employees' Retirement System moved Monday to protect its half-billion-dollar investment in power industry stocks by appointing a delegation to meet with managers of the companies to discuss the concerns of the nation's largest public pension fund." (Los Angeles Times)

SEC Regs Under Gramm-Leach-Bliley Could Put Small Banks Out of the Retirement Plan Business
Excerpt: "The Gramm-Leach-Bliley Act removed the exemption for banks from broker-dealer regulations under the federal securities law.... [Recent interim SEC regs], if allowed to remain as written, will result in requiring financial institutions to push-out their IRA and 401(k) business. For larger banks, this may only mean 'pushing-out' to an affiliate ... smaller banks and community banks often do not have an affiliated broker-dealer, and would have to leave the retirement plan business." (Lisa J. Bleier for the American Bankers Association)

Fund Managers' Pay Stays in the Bull Market
Excerpt: "While stock prices rise and fall, the paychecks of mutual-fund managers seem to know just one direction -- up. Despite the recent hit that many stock-focused mutual funds have taken, the median total compensation for stock-fund managers is expected to be up 35% this year compared with two years ago, which is the previous time that the pay levels were surveyed." (CareerJournal.com)

CalPERS to Invest $250 Million in Fund Emphasizing Corporate Governance Issues
Excerpt: "The California Public Employees' Retirement System (CalPERS) has approved an additional $250 million investment to San Diego, California-based Relational Investors, a fund that employs corporate governance activism to turn around under-performing U.S. publicly traded companies." (Business Wire via Yahoo! News)

(Following items also appear in Welfare Plans Edition)


Just Published: 2001 Edition of the Guide to the Form 5500 Series (for 2000 Plan Years)
Excerpt: "Featured topics of the Guide include: revamped filing requirements under the ERISA Filing Acceptance System (EFAST) including the form EFAST-1; changes in the form, schedules and instructions for 2000; guidance on how and when to use attachments to the schedules; definition and meaning of 'direct filing entities'; using plan characteristics codes; the list of insurance company codes issued by the National Association of Insurance Commissioners (now required instead of SIC codes) ..." (Thompson Publishing Group)

DOL Sponsors 21st Century Workforce Summit -- Live Webcast Available Today
Excerpt: "Join business, labor, academics, government leaders, and other interested parties from across the country in Washington, D.C. on June 20, 2001 for the first Summit on the 21st Century Workforce. 'The new office's first responsibility will be to hold a Summit on the 21st Century Workforce this spring, where we will call on leaders from business, labor unions, government and elsewhere to address the structural changes that are affecting our workforce and our economy.' - Elaine L. Chao." (U.S. Department of Labor)

Employment Benefits Employment Law and Estate Planning Update For Spring 2001 (PDF)
This issue contains articles on Estate Planning Incentives, IRS Interim guidance on Taxation of Equity Split Dollar Life Insurance, 2001 Guidance, DOL's Pension and Welfare Benefit Administration Guidance on Payment of Employee benefit Plan Expenses, & The Tenth Annual Employee Benefits Conference. (Sanders, Schnabel & Brandenburg, P.C.)

The Inside Scoop on Top Consulting Firms
Companies making the Journal's top 10 list include Hewitt Associates, Deloitte Consulting and Andersen; also praised were Watson Wyatt, RSM McGladrey and Milliman USA. Excerpt: "Employers were scored on 12 attributes, measuring how satisfied their consultants were with: compensation levels, benefits, leadership skills among managers, work/life balance, vacation time, mentoring programs ..." (CareerJournal.com)

IRS Finalizes Section 420 Regulation on DB Plan Transfers to Health Accounts
Excerpt: "Pursuant to section 420(c)(3)(E), these regulations provide that an employer who significantly reduces retiree health coverage during the cost maintenance period does not satisfy the minimum cost requirement of section 420(c)(3). In addition, these regulations clarify the circumstances under which an employer is considered to have significantly reduced retiree health coverage during the cost maintenance period." (Internal Revenue Service)

"Options Only" Stock Plans: What the New Proxy Statements Reveal
Excerpt: "[We have] examined ways that 'options only' companies-- companies which granted stock options but did not award full value grants, principally restricted stock and performance shares, prior to last year-- have revised their long term incentive programs to lessen the negative impact of underwater options. This month, we focus on how companies in our study group are ... authorizing additional shares for new option grants and amending their programs to include full value grants." (Aon)




Newly Posted or Renewed Job Openings (Post Yours!)
Conversion Project Manager for Marshall & Ilsley Corporation
in WI
Pension Department Manager for Taft-Hartley Multi-employer Pension Benefit Fund
in CA
Employer Contribution Accounts Department Manager for Taft-Hartley Multi-employer Pension Benefit Fund
in CA
Mid-Level Actuary for Watson Wyatt Worldwide
in MI
Retirement Plans Coordinator for Independent Benefit Services
in MD
Specialist -Actuarial Services - Pension Plans for American Home Products Corporation
in NJ
Account Manager for CallConnect Communications
in CO
401(k) Pension Administrator for Kibble & Prentice, Inc.
in WA
401(k) Administrator for Redwood Administrators, Inc.
in NJ



Newly Posted Conferences (Post Yours!)
Healthcare Cost Savings: From Rhetoric to Reality in NY on July 19, 2001
presented by New York Metropolitan Area Chapter of ISCEBS



Newly Posted Press Releases
InvestLink Releases Online Retirement Plan Access Software for Plan Sponsors (InvestLink)

Subscribe to the Welfare Plans Edition, too (click)
Copyright 2001 BenefitsLink.com, Inc.

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