| The BenefitsLink Newsletter - Retirement Plans Edition |  |
November 21, 2001 - 12,541 subscribers
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Hagens Berman Announces Class Action Lawsuit Against Enron
Press release. Excerpt: "In a class-action lawsuit ... employees of Enron Corp. claim the company recklessly endangered their retirement funds, causing some employees to lose hundreds of thousands of dollars almost overnight. The suit also claims that after a surprising third quarter loss announcement, Enron illegally locked down employee retirement plans, making it impossible for employees to protect their already damaged retirement funds from a 70 percent drop in Enron stock price." (Business Wire via Excite News)
Employer Stock Fall Sends Enron Participants to Court
Excerpt: "In what appears to be an emerging trend, employees of embattled energy trading giant Enron sued their employer for endangering their retirement funds-- causing some to lose hundreds of thousands of dollars overnight, according to the suit." (PLANSPONSOR.com; free registration required)
Opposition Continues for Mandatory Social Security Coverage for State and Local Government Employees
Excerpt: "As you and the other Commission members prepare to issue your final report in December recommending alternatives to strengthening Social Security, we would like to once again bring to your attention the concerns of millions of constituents with proposals requiring the mandatory participation of state and local employees in the Social Security system ..." (National Conference on Public Employee Retirement Systems)
Three Firms Recommended for Lucrative New DC Plan for Florida State Employees
Excerpt: "In yet another battle for the lucrative investment plans for the revamped Florida Retirement System, the staff of the agency that administers the system made its final recommendation Tuesday for bundled services, selecting Prudential Financial, Fidelity Investments and Nationwide Financial." (The Miami Herald)
2000 Comparative Study of Major Public Employee Retirement Systems (PDF)
27 pages; includes 85 public pension plans, including one or more public plans from each state. (State of Wisconsin, Retirement Research Committee)
PBGC Issues December 2001 Interest Rates For Valuing Terminating Pension Plans
For single-employer pension plans terminating in December 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 6.50% rate that applied in November. The interest rate for calculating immediate lump sums is 4.50%, down from the 4.75% rate that applied in November. (Spencernet)
DB Plans Embrace Bundled Packages: Study
Excerpt: "Defined-benefit pension plans are rapidly embracing 'bundled' provider offerings, according to a new study by financial services consultant Chatham Partners." (PLANSPONSOR.com; free registration required)
Opinion: Variable Annuities Are Still a "Sold" Product
Excerpt: "While the average variable annuity investment carried a total cost burden of 2.08 percent in 1999, the cost is now 1.95 percent. So how are they doing versus simple, cheap, and passive? Surprisingly, things haven't improved. The case for variable annuities remains weak." (Scott Burns of The Dallas Morning News)
Senator Backs Negro League Pensions
Excerpt: "U.S. Sen. Bill Nelson promised players from the old Negro Leagues on Tuesday that he will help them in their fight for expanded pension benefits from major league baseball." (Associated Press via Excite News)
7th Circuit Decides to Count Only Non-vested Participants in Judging Partial Termination
Excerpt: "The Court believed that fully vested participants should not be taken into account because the employer's actions did not affect them, i.e., they were fully vested no matter what, and none of their benefits would, under any circumstances, be forfeited to the employer." (Nixon Peabody LLP)
Second Circuit Follows Own Path to Evaluate Fiduciary Duties Under Early Retirement Plans
Excerpt: "In virtually every other jurisdiction, the plaintiffs' case would have gone nowhere because courts have said that the fiduciary duty does not arise unless serious consideration has been given to an incentive program, i.e., a specific plan has been authorized by executives in the company who have the authority to do so.... The lesson of the case is that HR personnel have to be told to say absolutely no more than that they know nothing (assuming this is true)." (Nixon Peabody LLP)
Analysis: New Rules for IRA Distributions
Excerpt: "A plan participant or IRA owner should be vigilant in designating his or her beneficiary before death. But the executor or estate needs to make a final determination of the designated beneficiary only by the end of the calendar year following the year of the participant's death." (Journal of Accountancy)
DOL Schedules National Summit On Retirement Savings For Feb. 27 Through March 1, 2002
Secretary of Labor Elaine L. Chao has 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. Ms. Chao is planning the summit in consultation with other federal departments, agencies, and private sector businesses and associations. (Spencernet)
401kWire Rolls Out Online TPA Directory
Excerpt: "TPAs [third party administrators] are defined for the purposes of this directory as firms which will provide retirement plan administration only services without necessarily managing plan assets." (401kWire.com)
Overview: FICA/FUTA Taxes for ISOs and ESPP Options
Excerpt: "In February 2001, the IRS announced that it intended to treat the exercise of incentive stock options (ISOs) and stock options under IRC Section 423 employee stock purchase plans (ESPP Options) as producing wages subject to FICA/FUTA taxes by both the employee and employer. Now, the IRS has issued notice of proposed regulations for this. Previously, employers and employees believed that exercise of an ISO or ESPP Option triggered no tax and no tax withholding." (Kilpatrick Stockton LLP)
Overview: IRS Proposes Revised Employment Tax Rules for Stock Options (PDF)
Excerpt: "Last week, the IRS issued proposed regulations and two notices addressing the employment tax, federal income tax withholding, and Federal income tax reporting consequences of the purchase of stock pursuant to the exercise of 'statutory' stock options ... and of certain dispositions of stock acquired with these options." (Sutherland Asbill & Brennan LLP)
Newly Posted or Renewed Job Openings (Post Yours!)
| 401(k) Daily Valuation Administrator | for Ingham Group in Miami, Fl in FL |
| Part-time Employee Benefits Recordkeeper | for Berry, Dunn, McNeil & Parker in ME |
| Qualified Plan Administrator | for Lane Gorman Trubitt, L.L.P. in TX |
| 401(k) Plan Administrator | for Strategic Retirement Solutions, L.C. in VA |
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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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