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The BenefitsLink Newsletter -
Retirement Plans Edition |
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December 17, 2001 - 12,792 subscribers
Today's sponsor: Actuarial Systems Corporation
(Click on company name or banner to learn more.)
For the past 20 years ASC has provided complete automation for the pension office, including state of the art DC/401(k) and DB administration and valuation systems, as well as sophisticated compliance testing and DV Direct, a revolutionary solution for daily valuation functions. For a free demo disk and more information click here: http://www.asc-net.com/contact.html
(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)
Company: Enron Participants Only Blacked Out for 10 Days
Excerpt: "Except for 10 days when it was switching 401(k) recordkeepers, retirement plan participants could transfer their contributions from Enron's company stock into 19 other investment options, officials said Friday." (PLANSPONSOR.com; free registration required)
After Enron, a 401(k) Post-Mortem
Excerpt: "Enron had a number of retirement plans, some inherited from companies it acquired, including a traditional pension that is insured by the government and that is still operating." (Washington Post)
Too Many Company Eggs In 401(k) Basket Can Crack Retirement Income
Excerpt: "It's hard to determine who was hurt most by the collapse of Enron, but a good case can be made for employees of the failed Houston-based energy trader. Many of them lost 70 to 90 percent of their retirement money as the company's stock, a substantial component of their 401(k) plans, went from about $80 last Christmas to its close Friday at 63 cents." (The [Pittsburgh] Post-Gazette)
Opinion: Limit Company Stock in 401(k) Plans
Excerpt: "It's not often that we face a big problem with a simple solution. The problem is that employees hold too much of their employers' stock in their 401(k) plans. The solution is to extend to 401(k) plans the provision that limits employer stock to 10 percent of the portfolio in conventional defined-benefit pension plans." (Alicia Munnell in the Christian Science Monitor)
What Top Managers Can Do About Their 401(k) Plans
Excerpt: "The subsequent drop in 401(k) values now presents a public policy problem, as well as an individual problem: How will the coming generation of retirees survive financially? ... What fiduciary responsibility, if any, do executives have?" (StarTribune.com)
GM Cuts 401(k) Matching Contribution Rate
Excerpt: "Beginning Jan. 1, GM will cut its matching contribution to 20 cents on the dollar from 60 cents, company spokesman Tom Wickham said Friday." (USA Today)
Falling Interest Rates Put Pensions In Peril
Excerpt: "Congress and American corporations are only just coming to grips with the problem, which is caused by a government regulation that ties the annual pension contributions a business must make to the interest rate of 30-year Treasury bonds. when the rates on these bonds drop, employers must contribute more money to pension plans to guarantee the same level of benefits." (The Boston Globe)
Creating a "Sinking Fund" in an ESOP to Fund Repurchase Obligations
Excerpt: "The advantage of this approach is that, with proper planning, it can make the repurchase obligation expense one that is more level and predictable than it would be if it were funded on a 'pay-as-you-go' basis." (National Council on Employee Ownership)
Overtime Pay for Police and Fire Chiefs Stirs Fears in New York
Excerpt: "The overtime payments, which could be as high as $15,000 for some police supervisors, may entice additional retirements because captains and chiefs would qualify for larger pensions based on the higher salaries this year." (New York Times; free registration required)
Pennsylvania School Pensions to Cost Ten Times More Than Expected Due to Poor Investment Returns
Excerpt: "A hefty pension increase for public school employees approved under Gov. Tom Ridge in May will cost the state and school districts $465 million next year, in part because of poorly performing retirement fund investments." (Allentown Morning Call via Yahoo! News)
City of Baltimore Pension Fund Trustees Agree to Try to Invest Locally
Excerpt: "Pension officials are considering investing significantly with local money managers-- interviews began recently-- and possibly infusing some pension fund dollars, at least indirectly, into local companies and projects." (The Baltimore Sun via Yahoo! News)
American Benefits Council Urges California to Conform State Income Tax Rules to EGTRRA Changes
Excerpt: "California is among approximately 15 to 20 states that have state income tax codes that are inconsistent with current federal tax law, including the retirement savings provisions of [EGTRRA]. This nonconformity creates confusion for workers who want to take advantage of these savings opportunities and limits the tax incentives to save." (American Benefits Council)
Temporary Tax Credit Is a Gift for Savers
Excerpt: "It's never easy for lower-income Americans to save for retirement, but Uncle Sam is offering tax breaks that may make it worthwhile to forgo some holiday spending in favor of building a nest egg." (Los Angeles Times)
Opinion: the Shape of Things to Come for Pension Investments
Excerpt: "Many of the nation's largest defined benefit pensions are heavily weighted in equities and alternative investments such as venture capital, reflecting highly aggressive asset allocation strategies. 70% in equities and 25% in alternatives is not unheard of ... A pension's goal is not to maximize return but to provide security. Many pensions seem to have forgotten this. Today modern portfolio theory is used to justify the inclusion of even the riskiest assets in significant percentages." (The Benchmark Companies)
Newly Posted or Renewed Job Openings -
| ERISA Attorney |
for Edward Jones
in MO |
| 401(k) / DC Administrator |
for Sentinel Benefits Group
in MA |
| Pension Specialist |
for Northern Trust Retirement Consulting, L.L.C.
in GA |
| Consultant |
for Associated Pension Consultants
in WA |
| Executive Director |
for TN Independent Colleges and Universities Association Benefit Consortium
in TN |
| Pensions/401(k) ERISA Compliance Specialist |
for Pensioncareers Ltd.
in NJ, NY |
Newly Posted Webcasts ( Post Yours!)
| Protecting Against Genetic Discrimination: The Limits of Existing Laws |
on December 18, 2001
presented by Senate Health, Education, Labor and Pensions Committee |
Newly Posted Announcements of Promotions and New Personnel ( Post Yours!)
| Jim Albrecht (Guardian Life Insurance Company) |
| Tuyen (Twin) Pham (Guardian Life Insurance Company) |
| Arthur Stern (Guardian Life Insurance Company) |
| V. Joseph Stefano (Guardian Life Insurance Company) |
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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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