| The BenefitsLink Newsletter - Retirement Plans Edition |  |
November 16, 2001 - 12,441 subscribers
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IRS Publishes List of Frequently Asked Questions About Remedial Amendment Period Extension
Excerpt: "To be eligible for the extension under section 19 of Rev. Proc. 2000-20, as modified, an employer must either adopt a pre-approved plan or complete a certification of intent to adopt such a plan by the end of the GUST remedial amendment period, that is, by the end of the first plan year beginning on or after January 1, 2001. Is this deadline also being extended? [Answer: yes, but only the February 28, 2002 extension.]" (Internal Revenue Service)
House Passes Investment Advice Bill
Excerpt: "A bill making it easier for employers to provide investment advice to workers participating in 401(k) and similar retirement plans cleared the House on Thursday. The vote was 280-144 for the Retirement Security Advice Act, which is supported by the Bush administration." (Associated Press via Excite News)
Labor Secretary Applauds Passage of Boehner Investment Advice Bill by House
Press release. Excerpt: "This bill would dramatically increase the number of financial advisers employers can contract with to provide investment advice. It will also require employers who offer their employees investment advice to act as fiduciaries, and work in the best interests of plan participants." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
House of Representatives Passes Boehner Investment Advice Bill
Excerpt: "The House of Representatives yesterday passed the Retirement Security Advice Act (H.R. 2269) by a vote of 280 to 144, with 64 Democrats supporting the legislation." (PLANSPONSOR.com; free registration required)
IRS Publishes Special Edition of Employee Plans News (PDF)
5 pages, entitled 'Employee Plans Response to the 9/11/2001 Terrorist Attack.' Includes listing of IRS documents issued to date authorizing various filing extensions, and reprints the full text of Rev. Proc. 2001-55 extending the remedial amendment period. (Internal Revenue Service)
M&A Implications of EGTRRA
Excerpt: "These changes include: new rules for ERISA Section 204(h) notices of reductions in future benefits; elimination of the 'same desk rule' for 401(k) plans, which simplifies distributions for employees transferred in a corporate transaction; expansion of the circumstances in which optional forms of benefits may be eliminated; a special M&A rule for catch-up contributions; and new compensation limits under Code Sections 415 and 401(a)(17) that may increase future costs." (Thompson Publishing Group)
Overview: IRS Issues Catch-Up Contribution Guidance
Excerpt: "Employers are not required to accept catch-up contributions, but if one plan allows catch-up contributions, all plans sponsored by the employer and any related employers that accept pretax employee contributions (including 401(k) and 403(b) tax-sheltered annuity plans) must accept catch-up contributions." (Watson Wyatt)
Massachusetts Cities Debate the Wisdom of Issuing Pension Bonds
Excerpt: "In total, $651 million over three decades [in pension funding is needed by Worcester, Mass. to fund its pension obligations]. That's a frightening number for a midsize city. So Worcester officials found another way to meet the pension obligations. They traded one debt for another, with a pension obligation bond." (Providence Journal via IFEBP)
Another Question is Answered in the Correcting Plan Defects Q&A Column
How is a qualification failure corrected when the plan sponsor is no longer in existence or when the plan assets have all been distributed and there is no longer a trust? (BenefitsLink.com)
Employee Ownership Update for November 15, 2001
NCEO executive director Corey Rosen discusses the IRS proposal on FICA and FUTA withholding on employee stock purchase plans (ESPPs) and incentive stock options (ISOs). Income tax withholding would not be required, but the IRS proposal would still impose a heavy burden on companies, and proposed legislation would block it. Also in this update: one large ESOP begins and another closes, and international standards for stock options. (National Center for Employee Ownership)
New Florida State Employees DC Plan May Include Brokerage Window; One of 50 Investment Options
Excerpt: "Public employees may get the option to buy and sell stocks with their pension account as part of next year's revamp of the Florida Retirement System, state leaders decided Wednesday. A 'self-directed brokerage account' proposed by SAFECO Corp., if eventually adopted, would be one of up to 50 investment options state and local government employees could chose from when the state rolls out a new 401(k)-style retirement plan option next year." (The Miami Herald)
The Investment Implications of Lower Stock Return Prospects
(Look for 'PDF version' button after you follow this link.) Excerpt: "In the past two years, several academic and professional scholars have concluded that long-run real stock returns will be below historical levels and that the equity risk premium-- the additional return on stocks compared to Treasury bonds-- will be either well below historical levels or negative." (TIAA-CREF Institute)
Year-End Checkup for Benefit Plans
Excerpt: "This Alert will help identify year-end administrative and planning issues that could lead to compliance or employee relations problems if not addressed before or fairly early in 2002. In addition, we have included reminders about recent developments affecting benefit plans or participants." (Aon Consulting)
Newly Posted or Renewed Job Openings (Post Yours!)
| Benefits Manager | for Intelsat in DC |
| Pension Plan Administrator | for Benefit Associates, Inc. - Orange, CA in CA |
Newly Posted Conferences (Post Yours!)
| Retirement Plan Fundamentals and EGTRRA Update | in NY on December 4, 2001 presented by New York Metro Area Chapter - ISCEBS |
| Trustees and Administrators Institutes | in FL on February 24, 2002 presented by International Foundation of Employee Benefit Plans |
| Trustees and Administrators Institutes | in NV on June 9, 2002 presented by International Foundation of Employee Benefit Plans |
| Trustees Institute for Jointly Managed Training and Education Funds | in FL on January 14, 2002 presented by International Foundation of Employee Benefit Plans |
| Trustees Masters Program (TMP) | in Canada on September 21, 2002 presented by International Foundation of Employee Benefit Plans |
| Benefits Conference for Public Employees | in CA on August 5, 2002 presented by International Foundation of Employee Benefit Plans |
| Essentials of Public Sector Benefits Administration | in WI on September 30, 2002 presented by International Foundation of Employee Benefit Plans |
Newly Posted Press Releases
| HOUSE PASSES INVESTMENT ADVISER LEGISLATION (American Council of Life Insurers) |
| Labor Secretary Elaine L. Chao: First Step Complete On Improving Retirement Security; Encourages Increased Freedom To Manage Savings (U.S. Department of Labor, Pension and Welfare Benefits Administration) |
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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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