| The BenefitsLink Newsletter - Retirement Plans Edition |  |
August 22, 2001 - 12,875 subscribers
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The Bear's Lair: How Pensions Threaten Earnings
Excerpt: "Unless ... there is a sharp stock market recovery in the next four months, 2001 will see Old Economy companies' pension funds in general showing losses not gains for the year. Hence these companies will once again have to fund their pension schemes, as they have not had to do in the past few years, thus depressing their earnings.... [T]he effect differs wildly from company to company, so any investor had better do this type of analysis before investing." (United Press International via IFEBP)
Resolving Participant Loan Issues on Audit
Excerpt: "[W]e addressed the IRS's contention that the failure to repay the loan resulted in a failure to operate the plan in accordance with its written terms. We demonstrated that the loan met each of the Plan's written requirements regarding participant loans ... The fact that the Participant subsequently violated the terms of the loan agreement by not properly repaying the loan was irrelevant to the issue of whether the loan, as originated, complied with the Plan's written terms." (Reish Luftman McDaniel & Reicher)
Dealing with a Scrivener's Error During an IRS Audit
Excerpt: "In [Revenue Procedure 2001-17], the IRS states that a plan can be retroactively amended under Audit CAP ... Recently, we were involved in an IRS audit in which we demonstrated by clear and convincing evidence that the plan document contained a scrivener's error; therefore, the plan's failure to operate in accordance with its written terms did not subject it to disqualification [or the need for an Audit CAP sanction]." (Reish Luftman McDaniel & Reicher)
Congressional Research Service Report Says Social Security Benefits May Drop
Excerpt: "Baby boomers retiring in the next two decades could face cuts in Social Security benefits under various plans to allow younger workers to invest some of their payroll taxes in the stock market, a congressional study finds.... People retiring in 2020 could see benefit cuts ranging from 4.7 percent to 10.8 percent if workers are allowed to put a portion of their payroll taxes in personal accounts... said the study by the Congressional Research Service, an arm of the Library of Congress." (Associated Press via Excite News)
Social Security Panel Meets Under Renewed Fire
Excerpt: "A White House commission on Social Security reform reconvenes Wednesday amid fresh criticism of President Bush's plan to create private accounts that would invest in stocks and bonds. At its third meeting, the commission will hear testimony from experts including Roger Mehle, executive director of the Federal Retirement Thrift Investment Board, which oversees the Thrift Savings Plan, a 401(k)-style retirement plan for federal employees." (Reuters via Excite News)
Interim Social Security Commission Report: August 2001 (PDF)
35 pages. Excerpt: "Our job is to bring the system into the 21st century, to make it more responsive to the extraordinary social and economic changes that continue to remake every facet of our lives, and to ensure its fiscal strength and fiduciary soundness. The charge that President Bush gave us is nonpartisan and nonpolitical: The promise of Social Security to current and future generations of Americans must and will be kept." (President's Commission to Strengthen Social Security)
Opinion: Remembering the 1935 Attempt to Add a Private Pension Exception to the Social Security Act
Excerpt: "[Sen. Bennett (Champ) Clark, Missouri Democrat,] proposed an amendment to the first Social Security bill in 1935, which simply said that if an employer provided his employees with a pension at least as good as they would get from Social Security, then that employer and those employees would not have to pay Social Security taxes. To ensure that there was no abuse, the Clark amendment would have stipulated ..." (Washington Times)
Opinion: Fabricating a Social Security Crisis
Excerpt: "Last week the International Monetary Fund, which has no political stake in the debate over Social Security, told the prosaic truth: 'the long-term financing problems of Social Security are not large' and 'could be addressed through relatively small adjustments in the program's parameters.' But the Bush administration's hand-picked commission on Social Security reform ... wants you to believe that we must destroy the program in order to save it." (New York Times; free registration required)
In Sickness and in Health: An Annuity Approach to Financing Long-term Care and Retirement Income
30 pages; click on 'PDF version' button. Excerpt: "[W]e show that combining [an immediate income annuity with long-term care disability coverage at retirement ages] could reduce the cost of both coverages and make them available to more persons by reducing adverse selection in the income annuity and removing the need for medical underwriting for the disability coverage." (TIAA-CREF Institute)
Newly Posted or Renewed Job Openings (Post Yours!)
| Pension Consultant | for Fidelity Investments in MA |
| Compliance Manager | for Fidelity Investments in MA, NH |
| Employee Benefits Consultant | for Fidelity Investments in KY, OH, TX |
| Pension Administrator | for Benefits Resource Group, Inc. in CA |
| 401(k) Administrator | for Fine Host Corporation in CT |
| Pension Administrator/Accountant | for Boulay, Heutmaker, Zibell & Co. P.L.L.P. in MN |
| Actuarial Systems Engineer | for Northern Trust Retirement Consulting, L.L.C. in WA |
| Compensation & HRIS Administrator | for Private Healthcare System in MA |
| Enrolled Actuary | for Small East Coast Pension Consulting Firm in CT, MA, NJ, NY, RI |
Newly Posted Webcasts (Post Yours!)
| Survey on Consumer Experiences with Health Plans | on August 30, 2001 presented by Kaiser Family Foundation |
| Employer Health Benefits Survey Release | on September 6, 2001 presented by Kaiser Family Foundation |
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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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