| The BenefitsLink Newsletter - Retirement Plans Edition |  |
July 16, 2001
Today's sponsor: RetireGuard - MassMutual (click)
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Transition to Lower Tax Rates Enhances Deferral Opportunities
Excerpt: "In addition to reducing overall individual and family taxes, the transition to lower rates provides enhanced deferral opportunities, particularly for workers with high incomes. The example below shows the tax advantage of an employee's pretax deferrals under both the old and new tax rates. The worker is in the 39.6 percent tax bracket, defers $10,000 in 2001 and earns annual returns of 8 percent." (Watson Wyatt)
Retirement Plan Provisions: What, When, and How Much? Economic Growth and Tax Relief Act of 2001
28 page book in PDF form. Excerpt: "Key provisions increase benefit and contribution limits for pension plans; allow workers to defer more money to 401(k) plans; provide faster vesting of matching contributions; create 401(k) catch-up contributions for older employees; provide simpler 401(k) nondiscrimination testing rules; authorize Roth 401(k)s; require more disclosure on the impact of plan amendments; [and] provide tax breaks for investment education." (Watson Wyatt)
The New Pension Law and Your Retirement Plans-- Some Initial Observations
Excerpt: "For some workers contemplating retirement, the prospect of making significant catch-up contributions to their retirement plans might tip the scales in favor of remaining on the job a few extra years.... [C]hanges to existing law will give defined benefit plan sponsors greater flexibility to fund their plans when they have the resources to do so, and thereby avoid being forced to make large funding contributions during harder economic times." (Deloitte & Touche)
Web-Based Services Dominate Best 401(k) Cost Control Techniques
Excerpt: "Plan sponsors are now citing the Web as their means to success in controlling 401(k) plan costs. In IOMA's latest Controlling 401(k) Plan Costs and Salary Survey, sponsors cited the Web five times out of the top 10 as their best methods to keep a lid on costs." (IOMA's Report on Managing 401(k) Plans)
DC Plan Sponsors Now Expect More From Their Providers' Participant Rollover Services
Excerpt: "When participants roll over their retirement savings assets from a 401(k) to an IRA, they might be faced with a harsh reality they had not expected--retail rather than institutional pricing on their investments. Some providers and consultants, therefore, recommend a preferential pricing structure, even if it might mean less immediate profits." (IOMA's DC Plans Investing)
$4 Million Believed Missing from Teachers' Pension Fund
Excerpt: "An internal investigation showed that between $4 million and $5 million is missing from a [Jefferson parish school district, Louisiana] pension plan that covers about 1,200 teachers." (WDSU TheNewOrleansChannel.com via Yahoo! News)
Opinion: The Politics of Fraud-- How Pension Politics Enable Money Managers To Commit Fraud
July 2001 issue. Excerpt: "Why would a pension not want to know when one of its managers is involved in fraudulent activity? Because to know, I have been told, is to be put in the uncomfortable position of having to either admit the mistake and take action or not act and risk further adverse developments.... As long as pensions shirk their responsibility to truly scrutinize managers, marginal managers will be able to continue to garner business." (The Benchmark Companies)
Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
Many privately held companies use stock options to attract new hires. What happens to these options when these companies are bought out by another company or go public via a reverse merger? Does the vesting schedule accelerate? Do the options convert to options for the new company's stock? (BenefitsLink.com)
NYSE Window for Stock Option Planning
Excerpt: "This past spring, the SEC issued a release that extended a pilot program under which the New York Stock Exchange (NYSE) exempts certain compensatory stock plans from its shareholder approval requirements. The exemption expires September 30, 2001." (Mark Poerio, Esq. of Paul, Hastings, Janofsky, and Walker LLP)
Senator Lieberman Introduces Bill To Eliminate AMT In Connection With ISOs
Excerpt: "Under a bill introduced by the Connecticut Democrat and former vice presidential candidate, workers who exercise incentive stock options no longer would face the alternative minimum tax. The bill, SB 1142, was introduced June 28." (National Association of Stock Plan Professionals)
Newly Posted or Renewed Job Openings (Post Yours!)
| Managing Director-Executive Benefits-Dallas | for Clark Bardes/ Compensation Resource Group in TX |
| Pension Administrator | for Pension Investors Corporation in FL |
| Benefit Plan Administrator | for Del Monte in CA |
| Benefits Service Specialist | for Largest public transportation agency in the U.S. in NJ, NY |
| Benefits Specialist/Technical Writer (11704) | for CallConnect Communications, Inc. in CO |
| Client Services Consultant | for American United Life Insurance Company in MI, TX |
| Senior Worker's Compensation Claims Specialist | for Administaff in TX |
Newly Posted Conferences (Post Yours!)
| Prototype Plan Workshop--NEW! Only in August at Four Locations | in IL on August 16, 2001 presented by SunGard Corbel |
| Prototype Plan Workshop--NEW! Only in August at Four Locations | in TX on August 22, 2001 presented by SunGard Corbel |
| Prototype Plan Workshop--NEW! Only in August at Four Locations | in CO on August 23, 2001 presented by SunGard Corbel |
| Prototype Plan Workshop--NEW! Only in August at Four Locations | in GA on August 15, 2001 presented by SunGard Corbel |
Newly Posted Press Releases
| IE-Engine COO to speak August 15th at Insurance Technology For Agents & Carriers Conference (IE-Engine Inc.) |
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