| The BenefitsLink Newsletter - Retirement Plans Edition |  |
July 19, 2001 - 13,354 subscribers
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IRS Extends Nondiscrimination Compliance Deadline for Governmental, Church Plans
Notice 2001-46. Excerpt: "[T]his notice extends the effective date of regulations under sections 401(a)(4), 401(a)(5), 401(l), and 414(s) ... for nonelecting church plans until further notice, but in no case earlier than the first plan year beginning on or after January 1, 2003. In addition ... certain governmental plans shall be deemed to satisfy section 401(a)(4), 401(a)(26), 401(k)(3), and 401(m) of the Code until the first day of the first plan year beginning on or after January 1, 2003." (Internal Revenue Service)
Full Text of ACLI Testimony Supporting Boehner Retirement Security Advice Act
Excerpt: "ERISA's prohibited transaction rules-- as interpreted and administered by the Department of Labor ('DOL')-- have discouraged the delivery of individualized investment advice services to plan participants.... [T]he financial services firms that provide investment options and administrative services to employer plans are experienced and willing to provide advice services, but they are effectively barred from providing such services under ERISA's prohibited transaction rules." (American Council of Life Insurers)
Analysis: New Pension Legislation
Excerpt: "The following are the pension provisions of HR 1836. Unless specifically noted, all provisions are effective for taxable years beginning AFTER December 31, 2001. Also, since this is part of the big tax package, the provisions do NOT apply to years beginning AFTER December 31, 2010 (the 'sunset' provision), although no one really believes that will happen!" (Small Business Council of America)
Automatic Enrollment: Benefits and Costs of Adoption (PDF)
12 pages. Excerpt: "Automatic enrollment appears to be an ideal strategy for addressing concerns with low participation in defined contribution plans. By boosting participation, automatic enrollment may ease problems with nondiscrimination testing and encourage new retirement savings. Yet automatic enrollment is not the panacea it appears to be. Concerns include: ..." (The Vanguard Center for Retirement Research)
Excerpts from new edition of book on 401(k) plans and employee ownership
The NCEO has released a new (third) edition of its book 'Section 401(k) Plans and Employee Ownership,' revised to take account of the changes enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001. The book deals both with the 401(k) plan as a company stock vehicle in itself and with combination 401(k)-ESOP plans ('KSOPs'). The NCEO's site presents excerpts from the book as well as a table of contents. (National Center for Employee Ownership (NCEO))
Xerox to Appeal Ruling on Lump Sum Equivalent Distributions
Excerpt: "Xerox Corp. will appeal a judge's order that the company's pension plan was flawed. Judge David R. Herndon of the U.S. District Court for the Southern District of Illinois in East St. Louis, ruled that Xerox incorrectly calculated lump sum retirement payments to departing employees. As a result, the retirees received lower payments than they would have been due under federal pension-benefits rules, he ruled." (Associated Press via Yahoo! News)
Analysis: Tax Law Changes Benefit Government Retirees
Excerpt: "Starting next year, however, the law will allow you to move money from a Section 457 plan to an IRA ... In this way, you'll be able to continue to shelter the money from tax (until you must start making withdrawals from your IRA)." (The Providence Journal)
Plan Design Opportunities for Governmental Plans Expanded Under EGTRRA (PDF)
2 pages. Excerpt: "EGTRRA greatly expands rollover options. Members will be able to roll over eligible distributions and after-tax contributions from and to individual retirement arrangements (IRAs) or to 401(a) qualified plans, 403(b) plans, and 457 plans that accept transfers or rollovers. EGTRRA also increased the maximum accrual of benefits in all plans, as summarized below. Note several limits are to be phased in over several years. However, this new law is not without its pitfalls." (Milliman USA)
Public Pension Systems: Statements of Key Investment Risks and Common Practices to Avoid Those Risks (PDF)
32 pages, published online by the National Council on Teacher Retirement. Excerpt: "[This document] identifies the key investment risks associated with large public pension systems and common practices to address, manage, and, to the extent possible, control those risks.... The primary risk to a defined benefit public pension system is that the assets will not support the liabilities." (Association of Public Pension Fund Auditors)
Critics of Forest Service Say Inexperienced Firefighters in Peril Due to Pension Plan Rules
Four young firefighters died last week. Excerpt: "In the 1970s, federal firefighters and law enforcement officers petitioned Congress to lower their retirement age because of the physical demands of the jobs. Such workers now can retire with full pensions after 20 years of experience, with mandatory retirement at 55.... [The Forest Service then] instituted a rule that says those over 35 are not eligible for new permanent firefighting jobs, even if they have been temporary hires for years." (Associated Press via Yahoo! News)
Limiting Legal Liability through Prudent Investment Advisory Practices
Excerpt: "Choosing the right form of business entity and maintaining sufficient liability insurance with a reputable company can effectively minimize the potential damage done by claims filed against the adviser. However, prudent practices can help prevent claims in the first place, and can minimize the harmful effects of claims that are filed." (Practitioners Publishing Company)
Cross-Country Comparisons of Pensioners' Incomes
Excerpt: "This report surveys a dozen international comparative studies of poverty, income distribution and the elderly in OECD countries.... What level are the incomes of the elderly relative to the population as a whole? How has this changed over the past two decades? How many of the old are poor? How many of the poor are old? Are the oldest of the old poorer than younger pensioners are? How do widows fare? What is the mix between public and private sources of income?" (Department of Social Security (United Kingdom))
Facts from EBRI: Trends in Early Retirement
July 2001. Excerpt: "The median age of retirement declined in the United States during the latter half of the last century. According to the U.S. Bureau of Labor Statistics, in the period 1950-1955, the median age of retirement was 66.9 for men and 67.7 for women. By the period 1990-1995, it was 62.7 for men and 62.6 for women. The median retirement age is projected in to be 61.7 for men and 61.2 for women during 2000-2005." (Employee Benefit Research Institute)
New from EBRI: Executive summary of the July 2001 EBRI Notes articles
The two articles in this issue are (1) Employment-Based Health Promotion and Wellness Programs and (2) Retirement Annuity and Employment-Based Pension Income. (Employee Benefit Research Institute)
Newly Posted or Renewed Job Openings (Post Yours!)
| Consulting - Pension Actuary & Administrators | for Louis Kravitz & Associates, Inc. in CA |
| Pension Consultant/Administrator | for Gorrelick, Tievy & Associates, Inc. in MD (DC Suburbs) in MD |
| Benefits and Compensation Specialist | for Data Systems Analysts in NJ |
| Pension Administrator | for NSA Securities Corporation in IL |
Newly Posted Conferences (Post Yours!)
| Basics of Employee Retirement PLans | in MA on October 18, 2001 presented by New England Employee Benefits Council |
| Annual Benefits Fair and Trade Show | in MA on June 6, 2002 presented by New England Employee Benefits Council |
| ERISA Workshop - All New and Updated for EGTRRA! (1-day program) - 37 Locations | in CA, CO, CT, DC, FL, GA, IA, IL, KS, LA, MA, MI, MN, MO, NC, NE, NJ, NM, NY, OH, OR, PA, TX, WA, WI on September 6, 2001 presented by SunGard Corbel |
| 4th Annual Funds@Work Conference | in CA on October 5, 2001 presented by Center for Working Capital |
| 2001 CCA Annual Meeting | in TX on October 14, 2001 presented by Conference of Consulting Actuaries |
| RetireMint | in NY on October 19, 2001 presented by ASEC ( American Savings Education Council), EBRI (Employee Benefit Research Institute) and RetireMint |
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Copyright 2001 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.
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