| The BenefitsLink Newsletter - Retirement Plans Edition |  |
September 24, 2001 - 12,175 subscribers
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(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)
Opinion: Record-setting Shift of Assets by 401(k) Participants Last Week Might be Cause for Concern
Excerpt: "In dollar terms, that amount represented about $400 million -- almost all of it fleeing from stocks. In statistical terms, that change in the index was 2 1/2 times the previous record and more than nine times a normal day's activity. It's possible this number can be shrugged off [because] there was a lot of pent-up demand while the markets were shut down four days.... I'm not so sure, though." (San Jose Mercury News)
Five-Step Process for Selecting a 401(k) Vendor
Excerpt: "[W]ith hundreds of [401(k)] vendors to choose from, how do you select the best? Alternatively, how can you be sure that you are getting the most value from your current vendor? To help you answer these questions, this 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)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
I need information about whether and when an ex-spouse can claim a portion of my Tier 2 benefit. We have been divorced for 18 years. She has remarried. (BenefitsLink.com)
Three-Year Statute of Limitations Applies to Claim Alleging "Serious Consideration" of Enhancements
Higgins v. Exxon Co., U.S.A. (D.N.J. 2001). Excerpt: "The former employee-plaintiff in this case alleged that, due to his employer's misrepresentations about whether the employer was considering a program of enhanced retirement incentive benefits, he had been deprived of the ability to receive such benefits because he had retired too early to be eligible for the program." (EBIA Weekly)
Tax Court Upholds Disqualification of ESOP Due to Violation of Section 410 Minimum Coverage Rules
Beals Brothers Management Corp v. Commissioner of Internal Revenue, T.C. Memo. 2001-234 (T.C. 2001). Excerpt: "This case involved a management consulting company that provided its services exclusively to a manufacturing company. In 1987, the management consulting company implemented an employee stock ownership plan (ESOP). All six full-time employees of the management consulting company participated in the ESOP, while the 39 part-time employees did not participate." (EBIA Weekly)
Investment Advisor Not Liable Where Fund Not Harmed, Despite Kickbacks by Selected Broker
Wsol v. Fiduciary Management Associates, Inc. (No. 00-2703, 9/12/01). Excerpt: "East West was the introducing broker that [defendant] FMA used on the trades it made for the plaintiffs' pension fund. FMA paid East West 6 cents per trade and East West turned around and paid the executing broker 2 cents.... It turns out that East West was paying a kickback to one of the fund's trustees (since indicted and convicted), who in turn steered FMA to East West." (United States Court of Appeals for the Seventh Circuit, via FindLaw.com)
Several Ohio Public Pension Funds Buying Stocks
Excerpt: "Ohio's largest public pension funds bucked Wall Street this week and decided the time was right to buy stocks. 'We recognize that the markets are volatile and could go lower, but we believe that equities at these levels are very attractive,'' said Neil Toth, director of investments for the Public Employees Retirement System of Ohio." (The Columbus [Oh.] Dispatch)
"Restorative Payments" Are Not Contributions for Many Code Purposes: Two Rulings Provide Guidance
Priv. Ltr. Rul. 200137065 (June 22, 2001) and Priv. Ltr. Rul. 200137064 (June 22, 2001). Excerpt: "[T]he IRS will not consider a payment to be restorative unless the employer is faced with a real and demonstrated threat of liability for breach of fiduciary duty, not just participant dissatisfaction with an investment (although the IRS does not always require an actual court order or settlement agreement to substantiate the potential liability)." (EBIA Weekly)
Social Security Establishes Procedures In Response To Terrorist Attacks
In response to the September 11 terrorist attacks, The Social Security Administration has initiated a series of actions designed to ensure continuity of its operations and a quick response to those who need Social Security services. (Spencernet)
CFO Group: Stock Option Accounting Project Could Undermine March Toward Global Accounting Standards
Excerpt: "Financial Executives International (FEI) has consistently warned that [adoption of a rule that would require] companies to treat the issuance of employee stock options as an operating cost could ultimately undermine the ... goal of creating a single set of high-quality, understandable and meaningful global accounting standards." (PR Newswire via IFEBP)
Newly Posted or Renewed Job Openings (Post Yours!)
| 401(k) Investment Educator | for ADP, Inc. in CA, GA |
| Vice President - Public Sector Recordkeeping | for CitiStreet - A State Street and Citigroup company in FL |
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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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