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The BenefitsLink Newsletter -
Retirement Plans Edition
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December 11, 2001 - 12,750 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)

Investments Called 'Central' to Social Security Health
Excerpt: "Individual retirement accounts are 'central' to repairing the Social Security system, a presidential commission has concluded in a final report, which says that private investments would allow workers to 'build substantial wealth' and gain control over their financial destiny." (Washington Post)

Social Security Panel Presents Options but No Unified Plan
Excerpt: "Bedeviled by the arithmetic and politics of putting the retirement system on a sound footing, President Bush's Social Security commission will take up its final report on Tuesday without having reached a consensus on how to implement the administration's goal of allowing workers to invest part of their payroll taxes on Wall Street." (New York Times; free registration required)

Why Some Company Stock Isn't Such a Bonus After All
Excerpt: "[H]undreds of companies use their own stock in lieu of cash as their matching contributions to employees' retirement-savings accounts. And the majority of those restrict the ability of employees to sell the shares and move the proceeds into mutual funds and other alternatives offered through their 401(k)s." (Ellen E. Schultz and Theo Francis, on CareerJournal.com)

CEO Gets Jail Time for Embezzlement of Pension Funds
U.S. v. McCarthy (2d Cir. 2001). Excerpt: "In total, the wayward CEO used nearly $2 million of plan funds in prohibited transactions. In addition, he created false 401(k) statements for distribution to plan participants. He was convicted of, among other things, embezzlement, money laundering and falsifying ERISA documents. He received a six-year prison sentence ..." (EBIA Weekly)

Phased Retirement: Retaining Valuable Older Employees
Excerpt: "Not all employers need a phased retirement program to hold on to older workers, but retirement consultants say that more companies should consider them." (HR.com via CareerJournal.com)

New: IRS Publication 590, Individual Retirement Arrangements (IRAs), for 2001 Returns (PDF)
90 pages; includes discussion of EGTRRA changes and the new minimum distribution rules. (Internal Revenue Service)

2001 Defined Contribution Survey
Excerpt: "While stopping short of giving their vendors the highest possible service rankings, plan sponsors ranked their plan providers higher this year in categories like Internet service, participant technology, and range of options offered. But, do participants really want-or need-this many bells and whistles?" (PLANSPONSOR.com; free registration required)

ASPA Provides Comments to IRS on Handling Accounts of Missing Participants
Excerpt: "There will be additional questions regarding the handling of missing participants' accounts as we approach the effective date for implementation of EGTRRA Section 657(a), which will require account balances greater than $1,000, but less than $5,000, to be directly rolled over to an IRA." (American Society of Pension Actuaries)

Reinventing Retirement Income in America
Excerpt: "If designed properly, defined contribution retirement plans offer the best hope for a comfortable retirement for most workers. The changes that are needed are both politically and economically achievable. To remedy the flaws, this study proposes that employers be encouraged to offer a new type of plan: the American Freedom 401(k) plan. In exchange, employers would enjoy 'safe harbor' protection from certain kinds of lawsuits." (Brooks Hamilton and Scott Burns, published by the National Center for Policy Analysis)

Opinion: the 401(k) Casino
Excerpt: "Other tables have roulette wheels with other mutual fund names around the wheel and you realize that you are now in the 401(k) section of the Great Investing Casino, the one where people have placed two trillion dollars in bets.... There is evidence that we can do better things with our time than looking for good funds on the roulette wheel." (Scott Burns of The Dallas Morning News)

Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
My husband went to work for a railroad in 1966 when the age for full retirement was 65. When was the age reduced to 60 for people with 30 years of credits, and when it was raised to 62? (BenefitsLink.com)

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


Polaroid Retirees Object To Bonus Pay for Executives
Excerpt: "A group of Polaroid Corp.'s retirees, who saw their benefits slashed before the company sought bankruptcy protection, filed a motion on Monday opposing millions of dollars in bonus pay for the instant film and camera maker's top executives." (Reuters via Yahoo! Finance)

Opinion: Big Steel Is An Invalid That Can Roar
Excerpt: "The steel makers want ... billions of dollars in taxpayer money to help pay health and pension benefits." (New York Times; free registration required)

Ten Ideas For Year-End Stock Option Financial Planning
Excerpt: "You are doing some year-end tax planning with your stock options and company stock. While investment objectives, not tax considerations, should generally drive your decisions, here are ten ideas to review before year-end to make sure you aren't paying more taxes than necessary." (myStockOptions.com; free registration required)




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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.