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The BenefitsLink Newsletter -
Retirement Plans Edition
Still flying!

September 19, 2001 - 12,361 subscribers
Today's sponsor: The Institute of Management & Administration

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Enrolled Actuaries Report, Fall 2001 Edition (PDF)
Includes: 'Treasury Ponders Disclosure Regulations; Pension Professionalism; Interest Rates Defined; Cash Balance Practice Note in the Works." (American Academy of Actuaries)

No Delay in Pension Minimum Funding Requirements for Companies Affected by Terrorist Attacks
September 19, 2001 issue. Excerpt: "For example, calendar-year plans have an initial 5500 filing deadline of July 31. Many of them take an extension to October 15. If their sponsors or administrators are located in the disaster areas, those plans will now have an extra 120 days within which to complete and file their Forms 5500 for the 2000 plan year. There is no delay in the deadlines for other ERISA filings, or for contributions required by the ERISA minimum funding rules." (The Segal Company)

Do Actuaries Need a Standard for Illustrating Retirement Benefits? (PDF)
Excerpt: "In June 2000, the Actuarial Standards Board (ASB) proposed a controversial new actuarial standard of practice ... intended to provide direction for actuaries who are preparing, reviewing, or advising on the preparation of benefit illustrations used to communicate a retirement plan change to participants.... Unfortunately, there has been little or no consensus on the provisions of the standard." (Contingencies magazine, American Academy of Actuaries)

Another Question is Answered in the Who's the Employer Q&A Column
Two people own all of a mortgage company (my client) and more than 50%, but less than 80%, of a title company. The title company performs most its work for the mortgage company. Another entity owns the balance of the title company and provides a 401(k) for itself and the title company. Is the mortgage company part of an affiliated service group? (BenefitsLink.com)

Federal District Judges Grants Class Status to Plaintiffs in Cash Balance Lawsuit Against IBM
Excerpt: "The question presented in this case is whether Defendants' pension plan violates ERISA. If each pension participant filed a separate lawsuit to challenge the Plan, inconsistent and varying adjudications of the legality of the Plan are inevitable. Moreover, an adjudication with respect to individual members of the class would substantially impair or impede the ability of other members to protect their interests." (CashPensions.com)

Sungard Corbel Publishes Sample Pamphlet Explaining USERRA (PDF)
Excerpt: "USERRA extends reemployment rights to persons absent from work because of 'service in the uniformed services.' The uniform services include the following military branches: Active Duty Army, Navy, Marine Corps, Air Force or Coast Guard; Army, Navy, Marine Corps, Air Force or Coast Guard Reserves; Army National Guard or Air National Guard; [and] Commissioned Corps of the Public Health Service." (Sungard Corbel)

PBGC Issues October 2001 Interest Rates For Valuing Terminating Pension Plans
For single-employer pension plans terminating in October 2001, and for multiemployer plans undergoing a mass withdrawal, the interest rate established by the Pension Benefit Guaranty Corporation for calculating immediate annuities is 6.10%, down from the 6.30% rate that applied in September. (Spencernet)

Analysis: Employer Contributions to Restore Surrender Charges Treated as Contributions
Published September 17, 2001. Excerpt: "In PLR 200137064 ... [the] employer wanted to make good on the surrender charges and proposed to contribute an amount sufficient to restore each affected participant's account to the value it would have if there were no surrender charges. However, the IRS did not rule favorably for the employer under these circumstances." (TRI Pension Services, Inc.)

Market Reopening Sparks High Transfer Activity by 401(k) Participants
Press relese. Excerpt: "Participants in 401(k) plans reacted to Monday's (September 17) market reopening with the highest investment transfer activity ever recorded by the Hewitt 401(k) Index(TM) since its inception in August 1997.... Money primarily flowed out of large U.S. equity on Monday, and into the most conservative asset class generally available to 401(k) participants-- GIC/Stable Value." (Business Wire via Excite News)

Japan Public Pension Plan Could Backfire
Excerpt: "A Japanese plan to invest part of the national pension fund in high-risk assets such as stocks and foreign assets has sent alarm bells ringing among analysts who say it risks huge losses and smacks of government intervention. Over the next seven years, control of Japan's entire 150 trillion yen ($1.28 trillion) in public pension reserves is being gradually shifted to a semi-governmental agency whose stated aim is to achieve annual returns of 4.5 percent." (Reuters Health via Excite News)

Private Pensions: Issues of Coverage and Increasing Contributions Limits for Defined Contrib. Plans
Excerpt: "[W]hen we examined the percentages of workers at different earnings levels ... we found that workers with low or moderate earnings were less likely than higher earners to participate in a pension plan.... About 8 percent of all DC participants ... were likely direct beneficiaries of an increase in all the statutory contribution limits we analyzed. Higher earners were more likely than low and moderate earners, and men were more likely than women, to benefit directly ..." (U.S. General Accounting Office)

(Following items are in both editions of the BenefitsLink Newsletter)


Comment Letter to FASB on Accounting for Reload Stock Options (PDF)
Excerpt: "As advisors to managements and boards of directors on matters of stock compensation, we are knowledgeable about the design of reload stock options and familiar with the accounting guidance (and underlying rationale) prescribed in Issue 90-7, FAS 123, and FIN 44. We are writing to respectfully request that the EITF not overturn the fixed award accounting treatment for the limited fact pattern in Issue 90-7 for the reasons set forth below." (Frederic W. Cook & Co., Inc.)

Welcome to new BenefitsLink advertiser the Benefit Services Group, Inc.
Excerpt: "The Benefit Services Group, Inc. (BSG®) stands out among brokers because of its commitment to technology, which includes full self-service capabilities and a comprehensive suite of plan management and data analysis tools. Through a Web site, call centers and interactive phone services, BSG® enables employees to have access to accurate, consistent and up-to-date information about their specific benefits plan with the option to change or update benefit information as needed."

Reporting and Disclosure Guide for Retirement and Welfare Plans (PDF)
Issued August, 2001. Excerpt: "This Reference Guideis designed to help plan administrators meet the requirements discussed by the appropriate deadlines. The charts on pages 2 through 6 cover rules for retirement plans, welfare benefit plans and specified fringe benefit plans. Employers that do not meet these requirements are subject to penalties, which have become more severe in recent years. Pages 1, 7 and 8 of this Reference Guide list major penalties for noncompliance." (Hay Group)

Analysis: Various Deadlines Extended Due to Terrorist Attack
Published September 17, 2001. Excerpt: "The Treasury and DOL have quickly issued guidance regarding the extension of various deadlines due to the terrorist attack on September 11, 2001. The following have been issued: 1) Notice 2001-61 (extension of various tax code deadlines), 2) Notice 2001-63 (blanket short-term extension for all taxpayers with respect to certain tax code deadlines), and 3) PWBA News Release 01-36 (extension of Form 5500 deadlines)." (TRI Pension Services, Inc.)

Separate Reporting of Nonstatutory Stock Option Income on Form W-2 is Optional for 2002, IRS Says
IRS Announcement 2001-92. Excerpt: "This announcement extends through year 2002, the relief from mandatory reporting of compensation resulting from employer- provided nonstatutory stock options in box 12 of the Form W-2, using Code V. In particular, this announcement provides that, with respect to Forms W-2 issued for the year 2002, the use of Code V is optional." (Internal Revenue Service)




Newly Posted or Renewed Job Openings (Post Yours!)
401(k) Senior Administrator for Brewster & Brewster, Inc.
in OH
Plan Administrator (Small Plans) for Jay C. Kaufman, P.C.
in IL



Newly Posted Conferences (Post Yours!)
Advanced Pension Conference in IL on November 28, 2001
presented by SunGard Corbel



Newly Posted Press Releases
SunGard Corbel Reduces Document Preparation Time with Relius(tm) Documents Internet System (SunGard Corbel)
SunGard Corbel Wins Volume Submitter and Prototype Approval (SunGard Corbel)

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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.