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The BenefitsLink Newsletter -
Retirement Plans Edition |
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December 18, 2001 - 12,792 subscribers
Today's sponsor: ASPA
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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 Provides Guidance on EGTRRA Changes to ESOP Dividend Deduction Rules, Allocation of S Corp Stock
IRS Notice 2002-2. Excerpt: "This notice provides guidance in question and answer format regarding the changes made to § 404(k) of the Internal Revenue Code ... by § 662 of [EGTRRA]. This notice also provides guidance on the effective date of § 409(p) of the Code, as added by § 656 of EGTRRA, regarding the allocation of stock in an S corporation held by an employee stock ownership plan." (Internal Revenue Service)
IRS Provides Details on Small Employers Exempt from User Fees on Determination Letter Applications
Excerpt: "[S]ection 620 of EGTRRA provides that the Secretary of the Treasury or his delegate shall not require, for requests made after December 31, 2001, payment of user fees for certain requests to the Service for determination letters with respect to the qualified status of a pension, profit-sharing, stock bonus, annuity, or employee stock ownership plan maintained solely by one or more eligible employers, as defined in Q&A-5 ..." (Internal Revenue Service)
Don't Forget About Some Non-EGTRRA Rules Taking Effect on January 1, 2002
Excerpt: "There are 4 regulations that become effective on January 1, 2002. With the recent emphasis on EGTRRA, and the many changes enacted by that legislation that also are effective on January 1, 2002, these regulations may have gotten lost in the shuffle ... 'Gateway' rules for cross-tested defined contribution plans.... Participant loan regulations.... Minimum distribution regulations.... Audit for small plans." (TRI Pension Services)
IRS Allows Variation on Negative Elections for 401(k) Plan
Priv. Ltr. Rul. 200149036 (July 25, 2001). Excerpt: "In this private letter ruling, the IRS approved an automatic contribution calculated in a different way: a fixed amount equal to the disability fund refund received by each employee. The employer maintained a fund (as required by state law) for the payment of disability claims. State law permitted withdrawal of excess assets from the fund for the purpose of purchasing other employee benefits for employees covered by the fund." (EBIA Weekly)
Embezzling Participant and Spouse Both Lose Benefits Under Plan
Gaudet v. Sheet Metal Workers' National Pension Fund (E.D. La. 2001). Excerpt: "This case pre-dates amendments to ERISA and the Code addressing the issue of whether a plan may offset against a participant's benefits. Those amendments are effective for judgments, orders, or decrees issued, and settlement agreements entered into, on or after August 5, 1997." (EBIA Weekly)
Two More State Courts Consider the Effect of Egelhoff Decision on Beneficiary Designations
Excerpt: "We report here on two state court decisions--one from California's intermediate appellate court and one from Texas's highest court. Each case relies on the U.S. Supreme Court's recent decision in Egelhoff v. Egelhoff ... to find that state laws affecting ERISA beneficiary designations are preempted." (EBIA Weekly)
DOL to Allow Simpler 5500 Reporting of Self-Directed Brokerage Accounts
Excerpt: "John Canary, chief of the Division of Coverage, Reporting & Disclosure in the Pension and Welfare Benefits Administration, said in a December 12 letter that officials would modify their 2001 instructions for Form 5500 to allow brokerage reporting ... collected into a single figure for assets and another for investment income before expenses." (PLANSPONSOR.com; free registration required)
EBRI Fact Sheet: Background on Company Stock in Retirement Plans (PDF)
Excerpts of relevant data from recent EBRI publications. (Employee Benefit Research Institute)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
when signed into law by President Bush, how will the new unreduced 60/30 benefit affect early retirement reductions?(BenefitsLink.com)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
I retired last February 2001. I had 42 years of service and was under the impression that the change to 60/30 retirement (eliminating the age reduction) would be retroactive to January 2001, meaning I would be covered. Now I find out that the version enacted into law has a January 2002 effective date. I really feel cheated. Do I have any recourse? (BenefitsLink.com)
Labor Department Issues Guidance on Benefit Claims Regs Becoming Effective 1/1/2002 for Many Plans
Excerpt: "The claims procedure regulation changes the minimum procedural requirements for the processing of benefit claims for all employee benefit plans covered under ERISA, although the changes are minimal for pension and welfare benefits plans other than those that provide group health and disability benefits." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Opinion: Professional Employer Organizations-- a History of Problems and a Future Without Benefits
Web site of advocacy organization opposed to employee leasing arrangements. Excerpt: "A new report provides evidence that the fastest-growing segment of the staffing industry-- so-called 'professional employer organizations' (PEOs)-- don't provide health and retirement benefits to hundreds of thousands of long-term 'leased' workers across the nation, despite published claims." (Center for a Changing Workforce)
Opinion: Assessing the Cost of Stock Options-- a Different View (PDF)
December 10, 2001. Excerpt: "Stock options undeniably have a cost to shareholders, but what is the best way to assess this cost? In the letter below, we seek an answer to this question.... Our goal is to assign a dollar value to this cost by identifying what portion of a company's market capitalization is represented by employee stock options." (Frederic W. Cook & Co., Inc.)
when Options Are Repriced, Ask For Details
Excerpt: "A Mercury News study shows that one of every 10 public companies in Silicon Valley has offered workers this year a chance to trade in underwater options, then wait at least six months and a day to receive replacement options. The offers can renew a worker's hope for options wealth, but don't blindly accept a '6-and-1 exchange.'" (SiliconValley.com)
Silicon Valley Firms Try New Twist on Stock Options
Excerpt: "A Mercury News study shows that nearly 40 public companies in Silicon Valley -- one of every 10 -- have filed plans to let employees trade in older, worthless options for new ones that could pay off handsomely if their companies revive. Experts predict more companies will follow." (SiliconValley.com)
Newly Posted or Renewed Job Openings -
| Pension Consultants/Administrators; F/T & P/T |
for Northern NJ Mid-Size Pension Consulting Firm
in NJ, NY |
| Account Management Consultant - 403(b)/401(k) Plans |
for Diversified Investment Advisors
in NY |
| Benefits Administrator |
for Access Retirement Services, LLC
in TN |
| Employee Benefits Experienced Attorney |
for Laner, Muchin, Dombrow, Becker, Levin and Tominberg, Ltd.
in IL |
Newly Posted Press Releases ( Post Yours!)
| Nationwide Financial study finds small business owners unsure about retirement plan options (Nationwide Financial) |
Newly Posted Announcements of Promotions and New Personnel ( Post Yours!)
| Deanna R. Jeffrey (Benefit Plan Audit Services, LLC) |
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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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