| The BenefitsLink Newsletter - Retirement Plans Edition |  |
November 5, 2001 - 12,418 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)
IRS Publishes List of M&P, Volume Submitter Sponsors Who Met December 31, 2000 Application Deadline
Excerpt: "In general, Rev. Proc. 2000-20, as modified, provides that an employer who adopts, or certifies its intent to adopt, a timely-submitted M&P plan or VS specimen plan by the end of the 2001 plan year (December 31, 2001, for calendar-year plans) will have until the later of December 31, 2002, or 12 months after the date of the last opinion or advisory letter issued to the M&P plan sponsor or VS practitioner to adopt the GUST amended plan." (Internal Revenue Service)
American Benefits Council Advocates Use of Higher Discount Rate in Pension Liability Calculations (PDF)
Excerpt: "Recently, a number of anomalous factors have combined to impose unprecedented and unwarranted pension funding and pension insurance premium obligations on employers that sponsor defined benefit pension plans. Even worse, these unnecessary funding obligations come during an economic downturn, when employers are struggling to maintain payrolls and make the purchases and investments that will return the nation to economic growth." (American Benefits Council)
Overtime for New York Police Officers Raises Incentive to Retire Due to Retirement Plan Formula
Excerpt: "New York City, which already has an acknowledged problem with police retirements, is about to pay many of its veteran officers an average of $50,000 in overtime for the current fiscal year, which ends June 30, 2002. That sum will nearly double their salaries and create a huge incentive to retire while pensions reflect the unusually large earnings." (New York Times; free registration required)
Former Employees Have No Standing to Challenge Favorable IRS Determination Letter
Excerpt: "Appellants sought to use [IRC section] 7476 to challenge the Internal Revenue Service's ... determination that the amended retirement plan of their former employer continued to qualify for favorable tax treatment. The regulations, however, grant standing to use the declaratory judgment remedy only to current employees, not former employees like appellants." (U.S. Court of Appeals for the District of Columbia Circuit)
Inheriting Uncle Henry's IRA: Your Minimum Distribution Requirements
Excerpt: "[W]hat if you inherit your Uncle Henry's IRA, or any IRA that belonged to someone other than your spouse? Well, those rules are different. And it's important to understand them, since if you fail to take minimum withdrawals according to IRS guidelines, you can be socked with a penalty equal to 50% of the shortfall." (SmartMoney.com via Yahoo! Finance)
Overview: Rollover Rules After EGTRRA
Excerpt: "The new tax law greatly expands the rollover opportunities for participants. As a plan sponsor, you should compare the new rules with the rollover provisions of your plan and decide if you want to amend your plan to include the new options." (Reish Luftman McDaniel & Reicher)
EGTRRA: New Limits, New Opportunities
Excerpt: "There are a number of administrative issues raised by [the new catch-up rules], including: Do your participant election forms need to be changed in light of the larger limits and catch ups? Almost certainly, by January 1. Will your payroll system separately account for catch ups so they aren't inadvertently included in the ADP test? Probably not. Check with your payroll department or provider." (Reish Luftman McDaniel & Reicher)
Opinion: the South Bend Lathe Story-- What Can We Learn from an ESOP "Failure"?
Excerpt: "The company was profitable for most of the years following its employee buyout in 1975 when its 500 workers adopted their ESOP and saved their jobs. Arguably, without South Bend Lathe we may never have seen the successful ESOP buyouts at Weirton Steel, Avis Rent-A-Car, and United Airlines. This model, however, also shows what can go wrong as long as management, unions, and workers cling to 'wage-system' thinking." (Center for Economic and Social Justice)
IRS Revises List of Frequently Asked Questions About GUST Amendment and Filing Process
Includes: 'If there are two plans that are being merged together is it necessary to have both plans separately amended for new tax law prior to the plan merger?" (Internal Revenue Service)
Savings Fitness: a Guide to Your Money and Your Financial Future (PDF)
20 pages. Excerpt: "The U.S. Department of Labor and the Certified Financial Planner Board of Standards ... want you to succeed in setting financial and retirement goals. Savings Fitness ... A Guide to Your Money and Your Financial Future starts you on the way to setting goals and putting your retirement high on the list of personal priorities." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Opinion: Pension Consultant Wrongfully Conceals Compensation Received from Money Managers
November, 2001 issue. Excerpt: "We thought we had seen it all. But when the consultant responded to the trustee's request by asserting that disclosure of compensation received from managers would violate the consultant's duty of confidentiality to the managers, we were floored." (The Benchmark Companies)
DOL Announces Time and Date for National Summit on Retirement Savings
Excerpt: "U.S. Secretary of Labor Elaine L. Chao today announced that the second National Summit on Retirement Savings will be held Feb. 27 to March 1, 2002 at the Capital Hilton Hotel in Washington, D.C." (U.S. Department of Labor)
SSA Publishes Web Page for State and Local Government Employers
Excerpt: "This site is for State and local government employers who are responsible for withholding, reporting and paying Social Security and Medicare taxes for public employees. You will find information about how public employees are covered for Social Security and Medicare, frequently asked questions, laws and regulations, publications, who to contact in your State, and related web links ..." (Social Security Administration)
Presumption That Prevailing Benefit Claimant Is Entitled to Attorneys' Fees Award
Martin v. Arkansas Blue Cross-Blue Shield (8th Cir. 2001). Excerpt: "[A]bsent special circumstances making an award unjust, some courts apply a presumption in favor of awarding attorneys' fees to prevailing plan participants. In this decision, the Eighth Circuit affirms the applicability of the presumption (the Eighth Circuit covers Arkansas, Iowa, Minnesota, Missouri, Nebraska and the Dakotas)." (EBIA Weekly)
Newly Posted or Renewed Job Openings (Post Yours!)
| Pension Consultant | for Pentec, Inc. in CT |
| 401(k) Administrator | for Pension Performance, Inc. in IL |
Newly Posted Webcasts (Post Yours!)
| What You Need to Know About Catch-Up Contributions! | on November 7, 2001 presented by ASPA |
| Plan Design After EGTRRA | on November 15, 2001 presented by ASPA |
| Deduction Issues After EGTRRA | on December 5, 2001 presented by ASPA |
| Best of EGTRRA | on October 24, 2001 presented by ASPA |
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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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