| The BenefitsLink Newsletter - Retirement Plans Edition |  |
September 5, 2001 - 12,551 subscribers
Today's sponsor: The Institute of Management & Administration
(Click on company name or banner to learn more.)
Have you ever wished for a research tool that gave you access to the most current thinking in the Benefits and Compensation arena? Well, now you can have it! IOMA's HR, Benefits & Compensation e-Library, a part of its Management Library site, will help you squash the competition, impress your boss, and gain the respect of your peers. Thousands of articles on management techniques for streamlining your HR department. Graphs & Charts. Competi- tive analysis, and more! Load up on the tools for SUCCESS... NOW!
(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)
Taking the Pulse of Your 401(k) Plan
Excerpt: "You must understand the fees your vendor is charging and be able to demonstrate the value you and your participants are receiving in return. However, with hundreds of vendors to choose from, how do you select the best? ... [H]ow can you be sure that you are getting the most value from your current vendor? ... [T]his article outlines a five-step process for conducting a successful vendor evaluation and presents a case study drawn from an Aon Consulting client to illustrate these steps." (Aon Consulting)
National Council on Teacher Retirement Provides Suggestions to IRS on Purchase of Service Credits (PDF)
Excerpt: "[EGTRRA] contained the most significant legislative initiatives in recent history to help state and local government employees secure a financially healthy retirement. One provision, in particular, offers employees the ability to take full advantage of their employer sponsored defined benefit plan by using assets that have accumulated in a governmental Section 457 plan or Section 403(b) plan to purchase permissive service credit for which they are otherwise eligible." (National Council on Teacher Retirement)
Benefits Provisions In EGTRRA of Interest to Sponsors of Multiemployer Plans (PDF)
7 pages. Excerpt: "EGTRRA repeals the 100 percent-of-pay limit for multiemployer defined benefit plans.... [Multiemployer] plans will be able to pay participants their full pensions -- up to the applicable dollar limits -- even if the amount is more than their high three-year average pay.... Notwithstanding other deduction limits, defined benefit plan contributions up to the full amount of current liability [will] be fully deductible, in the case of contributions to multiemployer plans ..." (The Segal Company)
New Book from Pension Research Council: Pensions in the Public Sector
Excerpt: "This volume takes stock of public pensions in the US and Canada, offering lessons and highlighting challenges these financial institutions will face in the coming decades. The first Pension Research Council study of public pensions in a quarter-century tackles these topics with an impressive group of international experts from the actuarial, legal, and economic fields." (Pension Research Council)
PBGC Takes Over Underfunded DB Plan of Chicago-Area Steel Company
Excerpt: "The Pension Benefit Guaranty Corp. said Tuesday it is taking over the underfunded pension plans of Sterling-based bankrupt Northwestern Steel and Wire Co., covering more than 4,600 retirees and former workers--some of whom could see benefit cuts. Northwestern Steel, which filed for bankruptcy in December and shut down operations in May, sponsored [two plans]. The plans, which were terminated last month, were underfunded by about $160 million, PBGC said in a statement." (Chicago Sun-Times)
Another Question is Answered in the Who's the Employer Q&A Column
Because a SEP is not a qualified plan, can two sole proprietors (X and Y) that are members of a controlled group have two separate SEPs and ignore the controlled group rules? (BenefitsLink.com)
Court Issues Restraining Order Blocking Firm From Using Plan Assets To Pay Expenses
The U.S. District Court for the District of Maryland has issued a temporary restraining order in a lawsuit filed by the Department of Labor seeking to prevent a Bethesda, Md.-based engineering firm from taking money out of its pension plan to pay company expenses. The case is Chao v. Malkani (Civil Action No. S-00-3491). (Spencernet)
Trend: Changes in the Economy Bringing a Resurgence in ESOPs
Excerpt: "At the Foundation for Enterprise Development, we have recently been seeing a marked increase in interest in Employee Stock Ownership Plans (ESOPs). ESOPs were first authorized by law in 1975, and their use has grown steadily in the years since ... Starting in the late 1990s and running through the middle of last year, however, the great focus of employee ownership activity, as we experienced it here at the Foundation, was on stock option plans." (Foundation for Enterprise Development)
HTML version of IRS Notice 2001-57
Excerpt: "This notice provides sample plan amendments for the changes to the plan qualification requirements under §401(a) of the Internal Revenue Code that were made by [EGTRRA].... In some cases, plan sponsors may be able to adopt the sample amendments verbatim. In other cases, plan sponsors may have to modify the sample amendments to make the amendments appropriate for adoption in their plans." (Internal Revenue Service)
HTML version of IRS Notice 2001-56
Excerpt: "This notice provides guidance relating to the effective dates for §§611(c), 613, and 636(a) of [EGTRRA]. Section 611(c) of EGTRRA increases the compensation limit of §401(a)(17) of the Internal Revenue Code (Code) and related sections. Section 613 of EGTRRA modifies the rules in §416 of the Code regarding determination of top-heavy status. Section 636(a) of EGTRRA directs the Secretary to revise the regulations relating to hardship distributions under §401(k)(2)(B)(i)(IV) of the Code." (Internal Revenue Service)
Analysis: IRS Provides Model Language for EGTRRA Amendments (PDF)
3 pages. Excerpt: "Plan sponsors must adopt both optional and required amendments prior to the end of the year that the amendments become effective. Most provisions of the new law are effective in the plan year beginning in 2002. Note that some amendments must be adopted prior to the beginning of the year to avoid any problems with the tax code's anti-cutback requirements." (Milliman USA)
Bush and Daschle Agree Not to Tap Social Security
Excerpt: "The White House and the Senate Democratic leader said [September 4] that they had agreed not to tap the Social Security program to pay the government's other bills, an agreement that economists insist is almost certain to be broken this year." (New York Times; free registration required)
DOL Issues Two Advisory Opinions on the ERISA Exemption for Governmental Plans
DOL Advisory Opinions 2001-07A (July 2, 2001) and 2001-08A (Aug. 7, 2001). Excerpt: "EBIA Comment: of the governmental plan exemption can be complicated, given the multiplicity of state and local laws under which such entities that claim to be governmental entities operate. And it is important to remember that even though such plans are exempt from ERISA's Title I requirements, they may nevertheless have certain obligations under the Internal Revenue Code and the Public Health Service Act." (EBIA Weekly)
The Question for Executives: To ISO or Not to ISO?
Excerpt: "Like Shakespeare's Hamlet, many executives face a difficult question whether or not to exercise their incentive stock options (ISOs). This article summarizes some of the key tax considerations and assumes that the reader has some general familiarity with the taxation rules that apply to ISOs and to non-qualified stock options (NSOs)." (Foundation for Enterprise Development)
Newly Posted or Renewed Job Openings (Post Yours!)
| Senior Compliance Specialist | for Putnam Investments in MA |
| Executive Compensation Consultant | for National Leader in Executive Compensation in CA |
| Pension Administrator/Manager | for Everest Pension Services LLC, an affiliate of Dorfman-Robbie CPAs in NY |
| Manager of U.S. Benefits | for Barclays Global Investors in CA |
| Tax/Benefits Attorney | for Marathon Oil in TX |
Newly Posted Conferences (Post Yours!)
| Employee Satisfaction Forum | in MA on September 10, 2001 presented by Sentinel Benefits |
| The Role and Impact of Gifts and Estates | in VT on October 21, 2001 presented by The Center for Retirement Research at Boston College |
| Retirement Plan Designs for Closely Held Businesses Under the New Tax Law | in ALL STATES on September 25, 2001 presented by The American Bar Association, Under the Auspices of the Joint Committee on Employee Benefits in Cooperation with the Small Business Council of America |
Subscribe to the Welfare Plans Edition, too (click)
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.
- How to Sponsor an Issue: reach 12,551 benefits professionals!
- How to Subscribe
- Privacy Policy
- Archive of Prior Issues