BenefitsLink Retirement Plans Newsletter for August 16, 2001

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The BenefitsLink Newsletter -
Retirement Plans Edition

August 16, 2001 - 12,875 subscribers

Today's sponsor: The Profit Sharing/401(k) Council of America (PSCA) (click)

   PSCA thanks the sponsors of 401(k) Day 2001: ADP Retirement
Services; American Express; Aon Consulting; BISYS Plan
Services; Dreyfus Retirement; Fidelity; Hewitt Services;
Manulife Financial; MassMutual Retirement Services;
Massachusetts Financial Services; Metlife Retirement &
Savings; Morningstar; Neuberger & Berman Management;
Northern Trust Company; Oppenheimer & Co.; Putnam;
SunTrust Bank; T. Rowe Price Associates; Trustmark;
Vanguard; William M. Mercer; and  DailyAccess.com for
creative contributions to 401(k) Day 2001!

Analysis: IRS Finalizes New Comparability Regulations
Excerpt: "The final regulations are essentially identical to last year's proposed regulations, with one exception: the addition of a cap on the potential contribution required to test a defined benefit plan aggregated with a defined contribution plan on the basis of plan benefits." (Watson Wyatt)

The New Pension Environment: Now That the Glass Is Half Full, Why Does It Feel Half Empty?
Excerpt: "While the employer community certainly welcomes and appreciates the pockets of relief [EGTRRA] provides, we are discouraged by the continuing lack of regulatory support for defined benefit plans. Most of the new regulatory relief is targeted to defined contribution plans. If the employer community is to play a major role in financing the retirement of the fast-growing number of retirees, this disparate treatment must cease." (Watson Wyatt)

Another Question is Answered in the Who's the Employer Q&A Column
Individual A is the income beneficiary of a trust ('Trust') and his adult daughters ('B', 'C' and 'D') are the remainder beneficiaries. Each has established a wholly-owned corporation; these corporations are the trust's trustees. The trust has employees. Are the trust and the corporations an affiliated service group? (BenefitsLink.com)

IRS Identifies Common Defects In Determination Letter Requests
The Internal Revenue Service's Employee Plans Division has released a list of the common errors that it is encountering in its processing of determination letter requests. The requests involve determinations that qualified retirement plans satisfy the requirements of the Tax Code as amended by the Retirement Protection Act of 1994, the Uniformed Services Employment and Reemployment Rights Act of 1994, the Taxpayer Relief Act of 1997, and the IRS Restructuring and Reform Act of 1998. (Spencernet)

EGTRRA: the Plan Amendment Process
Excerpt: "The basic principle behind the detailed guidance in IRS Notice 2001-42 is that plan terms must reflect the plan's actual operation for this round of legislative changes, and plan sponsors must make good-faith efforts to amend their plans accordingly. This article provides answers to commonly asked questions about the EGTRRA plan amendment process." (Watson Wyatt)

Eight Filters for Mutual Fund Analysis and Selection
Excerpt: "In Part 1 we looked at three filters that planners can use to guide in the mutual fund selection process: availability of funds, asset class, and performance. In Part 2, we discuss the remaining five filters: expenses, MPT ratio analysis, ratings, manager longevity, and tax efficiency." (Practitioners Publishing Company)

Trend: the Evolution of Asset Allocations Funds for Plan Participants
Excerpt: "Over the past two years, the major developments in the asset allocation market have been the introduction of a wider range of approaches, the development of distinct approaches to presenting asset allocation products to plan members and a reduction in fees. Earlier generations of asset allocation products comprised investor profile questionnaires which guided plan members into one of several balanced funds ... Today, these products encompass four main approaches: ..." (Benefits Canada)

(Following items also appear in Welfare Plans Edition)

American Express May Pay $15 Million to Settle Independent Contractor Suit
Excerpt: "American Express Co. has signed an agreement under which it will pay $15 million to settle a lawsuit brought by employees who had been classified as independent contractors.... The class members alleged that they were misclassified as independent contractors and sought retroactive coverage in all employee health, welfare, retirement and compensation plans, and payment of certain taxes." (StarTribune.com)

House Bill Would Exclude Incentive Stock Options From Taxable Income
Rep. Amo Houghton (N.Y.) has introduced H.R. 2695, which would amend the Internal Revenue Code to exclude from taxable income incentive stock options and gain realized from the disposition of stock under employee stock purchase plans. (Spencernet)

IASB Announces Project to Change Accounting Standards for Stock Options (PDF)
Excerpt: "The International Accounting Standards Board announced its agenda of nine technical projects on August 2. Included in its 'leadership' projects is a review of stock option and other equity grant accounting, which it calls 'Accounting for Share-Based Payments' ... The IASB decided to go ahead with this stock option project despite the advice of some members of its Advisory Council, notably the U.S.-based Financial Executives Institute ..." (Frederic W. Cook & Co., Inc.)

Newly Posted or Renewed Job Openings (Post Yours!)

HR Consultant - LT-010813-002

for Hewitt Associates LLC
in IL

Pension Administrative Consultant

for PenSys, Inc.
in CA

Administrative assistant

for The K Corporation
in TX

Pension Technical Research Consultant

for Diversified Investment Advisors
in NY

Defined Benefit Administration Specialist

for Consulting Actuaries Incorporated
in NJ

Director of Benefits

for VoiceStream Wireless
in WA

Daily Account Administration/Pension Analyst

for M.L. Kerns & Associates, Inc.
in TX

Newly Posted Webcasts (Post Yours!)

Deferred Compensation and the Current Market

on August 22, 2001
presented by Brokerville.com

Equity Compensation in Turbulent Times

on August 23, 2001
presented by Clark/Bardes Consulting - Compensation Resource Group

Newly Posted Conferences (Post Yours!)

Introduction to Employee Ownership Plans

in MI on October 11, 2001
presented by National Center for Employee Ownership