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The BenefitsLink Newsletter -
Retirement Plans Edition
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October 1, 2001 - 12,199 subscribers
Today's sponsor: RetireGuard - MassMutual

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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)

News Analysis: Settlement Reached in Cash Balance Plan Case
Excerpt: "Onan's settlement would not only compensate the plaintiff class for what they had lost on conversion to a cash balance plan, but also would make all of them better off than they would be had they remained in the original, unconverted floor-offset arrangement. Onan only has 3,500 plan participants, but this settlement is so generous that it could end up costing the company as much as $10,000 per participant." (Tax Analysts)

In Defense of 403(b) Hold Harmless Agreements
Excerpt: "Many employers are requiring hold harmless agreements from any investment vendor providing mutual funds or annuity contracts within their 403(b) retirement plan. Is this a fair requirement or an artifice created by insurance companies to protect a traditional insurance market?" (403bWise.com)

Proper Beneficiary Designations Under the New Required Minimum Distribution Regulations (PDF)
Excerpt: "This article is targeted towards benefits professionals who advise plan administrators ... rather than towards estate planners who advise their clients on how to use plan assets for wealth distribution upon death. This article can help such benefits professionals understand the importance of proper beneficiary designations and explain how the new proposed regulations offer comprehensive guidance to help plan administrators identify beneficiaries properly." (Barry Kozak)

Employee Ownership Update for September 28, 2001
NCEO executive director Corey Rosen reports on the International Accounting Standards Board's proposal to use 'fair value' to report the cost of stock options and other equity plans; proposed changes in S corporation law, including ESOP law; an IRS ruling in which the IRC Section 4978 excise tax did not apply in a liquidation; and a Massachusetts state court ruling that unvested options can be divided in divorce. (The National Center for Employee Ownership (NCEO))

Market Lapses Foil Retirement Plans for Many
Excerpt: "Throughout the 1990s, inflated stock prices bred dreams of early retirement. When DiscoverBrokerage.com ran a tongue-in-cheek TV ad about a young tow-truck driver who had grown rich enough to buy his own country, the farce almost seemed possible." (St. Petersburg Times)

Looking Over the Hedge: Pension Fund Investors Eye Hedge Funds
Excerpt: "U.S. corporate pension plans invest most of their money in stocks and bonds, typically in a 60/40 proportion. That strategy served them very well between 1995 and 1999 ... [but] the bear market in stocks has pension managers rethinking their asset-allocation strategies and looking farther afield for alternative investments." (CFO.com)

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


DOL Proposes Allowing Employers to Make Interest-Free Loans to Plans Affected by September 11 Events
Excerpt: "The [proposal would] amend PTE 80-26 ... to expand its interest free loan exemption to address potential liquidity problems faced by many employee benefit plans ... [The loan could be] used only for a purpose incidental to the ordinary operation of the plan which arises in connection with difficulties encountered by the plan in liquidating, or otherwise accessing its assets, or accessing its data in a timely manner as a direct or indirect result of the September 11, 2001 disruption." (U.S. Department of Labor)

Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
I have non-qualified stock options in a private company. After I leave the company, I want to exercise and sell the vested portion of my options on the same day, but the company is not required to buy back the shares on the same day. Is there a way for me to delay income tax withholding until the company buys back the shares? (BenefitsLink.com)

Reservists' Jobs Safe as Duty Calls
Excerpt: "To ensure this protection, Secretary of Labor Elaine L. Chao announced last week that the Department of Labor will begin an education campaign for employers as well as National Guard and Reserve units." (Chicago Tribune)

New EBRI Fact Sheet: Compensation Costs in State and Local Governments
Excerpt: "The cost of employee benefits increased at an average annual rate of 2.5 percent from March 1991 to March 2001. In March 1991, benefit costs were $6.79 per hour worked, or 30.4 percent of total compensation. In March of 2001, benefit costs were $8.73, or 29.0 percent of total compensation." (Employee Benefit Research Institute)

What Employers Need To Know About the Benefits of Reservists Called to Active Duty (PDF)
6 pages; originally published May, 1999. Excerpt: "Under USERRA, all public and private employers, no matter how small, must be ready to: (1) offer the option to purchase extended health insurance coverage; (2) provide those who leave for the military with the same benefits that employees on other types of leave receive; and (3) reemploy reservists returning from active duty in their former jobs or equivalent positions, if at all feasible." (The Segal Company)

Impact of Reserve Call-Ups on Multiemployer Plans (PDF)
6 pages; originally published May, 1999. Excerpt: "USERRA confirms that discrimination in any aspect of employment, reemployment or any benefits of employment on the basis of an individual's participation in the uniformed services is prohibited. This Bulletin focuses on the key provisions for sponsors of benefit plans in general. It also addresses some issues of interest to sponsors of multiemployer plans in particular." (The Segal Company)




Newly Posted or Renewed Job Openings (Post Yours!)
ACTUARY for Lurie Besikof Lapidus & Company, LLP
in MN



Newly Posted Conferences (Post Yours!)
COBRA Update - Qualifying Events, the Initial Notice, Identifying a Qualified Beneficiary and More in MD on October 18, 2001
presented by Baltimore Chapter of ISCEBS
The Cerulli Strategy Forum: Trends in Financial Product Distribution in MA on October 24, 2001
presented by Cerulli Associates, Inc.
Schwab Retirement Technologies Conference 2001 in GA on December 3, 2001
presented by Schwab Retirement Technologies

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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.