| The BenefitsLink Newsletter - Retirement Plans Edition |  |
August 9, 2001 - 13,066 subscribers
Today's sponsor: Glasser LegalWorks (click)
This timely "how to" program will address new DOL claims procedures, the avoidance of fiduciary liability after the Harris Trust decision, identifying conduct that might trigger a DOL investigation under its Strategic Enforcement Plan, and more. Designed for ERISA fiduciaries, investment advisors, and in- house, corporate, tax, labor, and insurance counsel. September 21 in Chicago; October 24 in New York. Click for full details!
IRS Invites Public to Comment on Ways to Improve Retirement Plans Determination Letter System (PDF)
3 pages. Excerpt: "[The Employee Plans division] has undertaken a project to consider the long-term future of the EP determination letter program after GUST. The question EP asks the public to consider with it is whether there might be better alternatives to the present determination letter program.... EP solicits comments on whether EP should also hold a series of nationwide town meetings to permit furtherance of this dialogue ... [and] EP invites interested parties to submit written comments." (Internal Revenue Service)
The Future of the Employee Plans Determination Letter Program: Some Possible Options (PDF)
36-page 'white paper.' Excerpt: "Employee Plans Rulings and Agreements is undertaking a project to consider the long-term future of the EP determination letter program.... The project is a search to determine whether there is a better alternative to the current determination letter program-- an alternative that efficiently promotes compliance, particularly up-front compliance ... Ten options have been identified as alternatives to the present program." (Internal Revenue Service)
100 (or so) Do's and Don'ts When Estate Planning for IRAs, Qualified Plans and Other Benefits
Noel hits the highlights, targets the traps and describes the drop-dead deadlines, all in 10 pages. (Noel C. Ice, Esq. of Cantey & Hanger, L.L.P.)
ASPA Comments on Rev. Proc. 2000-41 Updating Requirements for Change in Funding Method
Excerpt: "One particularly problematic issue remains, however: that the change of a calendar year valuation date due to a change in plan year is a change in funding method which requires IRS approval under Rev. Proc. 2000-41. We submit that this should not be the case." (American Society of Pension Actuaries, Government Affairs Committee)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
Now that H.R. 1140 has passed the House, please assure me that the system is financially solvent. During the debate last week, those who opposed the bill said the system had serious financial problems that would be compounded if the proposed legislation became law. (BenefitsLink.com)
Another Question is Answered in the Who's the Employer Q&A Column
A owns 100% of S-corp 1. A and B each own 50% of S-corp 2. A and B would like to have one qualified plan for the 2 S-corps. Does the fact that the companies are S-corps have any bearing on the controlled group determination? Could they have a multiple-employer plan? Would that be better than being a controlled group? (BenefitsLink.com)
Seventh Circuit Addresses Calculation of Benefits Under Firm's Floor-Offset Plan
An employer properly used 'deferred interest rates' to calculate pension benefits under its floor-offset plan for employees who terminated employment prior to attaining normal retirement age. This was the decision of the Seventh Circuit U.S. Court of Appeals in White, et al. v. Sundstrand Corporation, et al. (Nos. 00-2613, 00-4075, and 01-1126). (Spencernet)
Miami City Manager Fights Pensions for Convicted Ex-officials
Excerpt: "Miami City Manager Carlos Gimenez will address two city pension boards in September to try to persuade them to deny pensions for a pair of publicly disgraced civil servants ... In the past five weeks ... the city's ex-finance director, and ... the former police chief and city manager, were convicted of felonies." (The Miami Herald)
Catch-up Contributions Boost IRA Savings Potential
Excerpt: "Older workers who are behind in their retirement savings will get a chance to make up for lost time when new IRA rules take effect next year. Included in the tax bill signed by President Bush in June were new rules permitting IRA holders who are at least 50 years old to make catch-up contributions in addition to their regular contributions." (mPower Cafe)
Trend: Increasing Number of Women Investors
Press release. Excerpt: "The number of women investors in the United States rose by 85% in the 15 years to 2000, a rise that Merrill Lynch believes is the start of an expanding global trend." (Canada News Wire via Yahoo! Finance)
Trend: Fidelity Reports Considerable Success in Sales of Life-Stage "Funds of Funds"
Press release. Excerpt: "The Fidelity Freedom Funds are 'funds of funds,' which invest in a variety of Fidelity mutual funds, making investment diversification easier for retirement savers. Five funds are managed to specific target dates -- 2000, 2010, 2020, 2030 and 2040 -- allowing investors to simply choose the year closest to their planned retirement." (Business Wire via Excite News)
Trend: U.S. "Social Fund" Assets Seen Tripling By 2011
Excerpt: "Assets in U.S. socially responsible mutual funds could rise to $278 billion in 10 years from $103 billion currently, assuming the growth rate of the last 30 years continues, officials of the Pax World Funds group said on Wednesday." (Reuters via Yahoo! Finance)
Opinion: Social Security Trust Fund Not Worthless Just Because It's Invested in U.S. Gov't Bonds
Excerpt: "But now the administration's political strategy is clear. It is not interested in a realistic proposal for privatizing Social Security; it intends to sell private accounts with false advertising, with the promise of something for nothing ... [W]ith the help of the commission the administration will try to convince people that the huge surpluses of today's Social Security system somehow make no contribution to the system's future solvency." (Paul Krugman in the New York Times; free registration required)
Use the Audit Engagement Letter to Limit Liability
Excerpt: "[E]ngagement letters are a good business practice and a business device for the auditor's protection. Auditors can include clauses relating to the following matters in the engagement letter to limit their liability ..." (Practitioners Publishing Company)
Trend: Interactive Participant Administration Sites in Spanish-- Ingham Group Says It's First
Press release. Excerpt: "In response to the growing number of Hispanics in the U.S., Ingham Group, one of the Southeast's largest employee benefits consulting and administration firms, has recently added fully interactive Spanish-language capabilities to its website ... 'Based on our research, Ingham Group becomes the first financial company in the nation to offer 24-hour Internet access to retirement account information and electronic trading in Spanish,' said [its president]." (Business Wire via Yahoo! News)
Legislative Activity on the Benefits Front (PDF)
August 2001 issue. Includes a summary of the status of the mental health parity bill and the patients' rights bill. Valuable 'Upcoming Key Dates' section is included. (Milliman USA)
Correction: That's Billion, Not Million
Thanks to Milliman USA Research Actuary Mark Beilke for pointing out that the Joint Committee on Taxation's estimate of the total cost of EGTRRA is $112 billion, not $112 million (we left off three zeros!), in the link to the JCT web site provided to readers by BenefitsLink a few days ago. (EGTRRA has many provisions in addition to its changes to employee benefit plan rules, of course.) (BenefitsLink)
Newly Posted or Renewed Job Openings (Post Yours!)
| Senior Project Analyst | for ICMA Retirement Corporation in DC |
| Business Development Position | for Retirement Alliance Inc. in GA |
| Employee Benefits Associate | for Wyatt, Tarrant & Combs, LLP in KY |
| Health and Welfare Consultants - Staff/Senior | for Ernst & Young LLP in NY |
Newly Posted Conferences (Post Yours!)
| Retirement, Deferred Compensation, and Welfare Plans of Tax-Exempt and Governmental Employers | in DC on September 13, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Emerging Issues in Employment Law and Litigation: Review of the Supreme Court Term | in ALL STATES on September 25, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Annual Fall Employee Benefits Law and Practice Update (Course # VPC1101) | in ALL STATES on November 1, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Americans with Disabilities Act: Current Employment Issues (Course # VPC1108) | in ALL STATES on November 8, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Pension, Profit-Sharing, Welfare, and Other Compensation Plans | in DC on October 11, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Life Insurance Company Products: Featuring Current Securities, Tax, ERISA, Offshore, and State Regulatory Issues | in DC on October 25, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Qualified Plans, Welfare Benefits, and Tax Planning | in AZ on February 14, 2002 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Pension, Profit-Sharing, Welfare, and Other Compensation Plans | in CA on March 20, 2001 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
| Pension, Profit-Sharing, Welfare, and Other Compensation Plans | in DC on October 10, 2002 presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education) |
Newly Posted Press Releases
| AHI RELEASES FREE REPORT: "Your Blueprint For Avoiding Discipline Disasters" (Alexander Hamilton Institute) |
| U.S. Economic Slowdown Having No Effect on Salary Increases (WorldatWork) |
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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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