| The BenefitsLink Newsletter - Retirement Plans Edition |   |
December 21, 2001 - 12,792 subscribers
Today's sponsor: Glasser LegalWorks
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You are invited to attend the nation's leading seminar on how recent cases affect claims, plan design and operations. Highlights of this year's program include: -Health Care Plan Litigation -Fiduciary Litigation -Preemption after Egelhoff -Aftermath of Pegram -Managed Care Litigation More details are available now in an online brochure: http://www.legalwks.com/conferences/erisa_lit/home.htm
(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)
Notice 2002-4 Clarifies Severance from Employment Rule, Adoption of Catch-Up Contribution Amendments
Excerpt: "A plan may be amended to provide for distributions on severance from employment ... on or after January 1, 2002, regardless of whether the severance from employment occurred before, on, or after January 1, 2002.... A plan will not be treated as failing to satisfy the requirements of § 414(v)(4) for 2002 solely because different plans maintained by the same employer ... adopt catch-up contributions beginning on different dates during 2002 ..." (Internal Revenue Service)
Corrected Version of Rev. Rul. 2001-62 from IRS: Mortality Table for Plan Benefits and Limitations
The revised version of Revenue Ruling 2001-62 contains the correct tables. The version published here previously had incorrect values in the lx column, according to the IRS. (Internal Revenue Service)
IRS Publishes Fall 2001 Issue of Employee Plans News (PDF)
Included articles: Determination Letter Applications for Merged Plans; Volume Submitter Plans and Announcement 2001-77 - When is an Employer's Plan 'Identical' to a Volume Submitter Specimen Plan?; Individualized Amendment of an M&P or Volume Submitter Plan Will Not Make the Plan Ineligible for the Extended GUST Remedial Amendment Period; 2001-2002 Calendar of EP Benefits Conferences; more. (Internal Revenue Service)
For Better or For Worse: Default Effects and 401(k) Savings Behavior
Excerpt: "Using several years of administrative data from three large firms, we analyze the impact of automatic enrollment on 401(k) participation rates, savings behavior, and asset accumulation. We find that although employees can opt out of the 401(k) plan, few choose to do so.... 401(k) participation rates at all three firms exceed 85%, but participants tend to anchor at a low default savings rate and in a conservative default investment vehicle." (National Bureau of Economic Research)
Defined Contribution Pensions: Plan Rules, Participant Decisions, and the Path of Least Resistance
Excerpt: "We assess the impact on savings behavior of several different 401(k) plan features, including automatic enrollment, automatic cash distributions, employer matching provisions, eligibility requirements, investment options, and financial education. We also present new survey evidence on individual savings adequacy." (National Bureau of Economic Research)
Survey on Employee Savings Plans 2000-2001
Excerpt: "This report examines how defined contribution plans are structured and administered, and the investment decisions that employers and employees make. It is based on a survey of 252 large US employers. If you are a Finance or Human Resource executive who sponsors 401(k) plans, then you will be especially interested in the results of this survey." (William M. Mercer; free registration required)
Another Question is Answered in the Who's the Employer Q&A Column
This is a follow up to the attribution rules discussed in Q&A 133. Suppose Doctors W X Y and Z each own 25% of C, a C Corporation medical practice. Doctors W, X, Y and Z also each own 25% of Partnership P1. Partnership P1 owns 50% of Partnership P2, a clinic. (The other 50% of P2 is owned by an unrelated entity.) After applying the IRC section 318 attribution rules, which of these businesses is deemed to be a partner or shareholder in the others? (BenefitsLink.com)
Courts Focus on DC Plan Investments in Employer Stock
Excerpt: "This year, a large number of new employer stock cases have been filed by classes of plaintiffs and the DOL. These cases present a variety of relatively novel theories of liability and damages that, if successful, could prove troublesome for plan sponsors and service providers." (Groom Law Group)
New York Pension Fund Joins Civil Suit vs. Enron
Excerpt: "Aides to [State Comptroller H. Carl] McCall, sole trustee of the state's major public employee pension fund, said the collapse of Enron had cost the fund about $58 million. The New York pension fund is valued at more than $112 billion." (Associated Press via Yahoo! News)
Senate OKs Reduced Securities Fees
Excerpt: "The Senate voted Thursday to reduce fees that investors and companies pay the government, a change that supporters have called a $14 billion tax cut over 10 years, sending the legislation to President Bush... Assessed on stock transactions, registration of securities and other actions, the individual fees are small but take a major bite out of corporate and investor profits over time, supporters of the legislation say." (Associated Press via Yahoo! News)
ASPA Publishes Online Survey, Seeking Topics of Interest to You for Business Leadership Conference
Excerpt: "As always, the success of the 2002 Business Leadership Conference will be a direct result of your participation. We want to offer topics that are of interest to you. Please help us by selecting the topics that you think will benefit next year's attendees. Complete the survey by clicking on the link below to let us know what topics interest you most." (American Society of Pension Actuaries)
Assessing Retirement Preparedness With Planning Software: 1998 Update
(Look for 'PDF Version' button on target web page.) Excerpt: "This paper presents updated estimates of Americans' financial preparedness for retirement, based on a planning software simulation algorithm and data from the 1998 Survey of Consumer Finances." (TIAA-CREF Institute)
For Too Many, Social Security Is Main Retirement Plan
Excerpt: "Regardless of one's views about the wisdom of private investment accounts, it is important to recognize that nothing prevents people from saving more than their Social Security contributions now.... [A] remarkably large component of the population saves almost nothing for retirement, making them highly dependent on Social Security benefits. Why are personal savings so low?" (New York Times; free registration required)
Executive Compensation in America: Optimal Contracting or Extraction of Rents?
Excerpt: "Under the alternative rent extraction view that we examine, the board does not operate at arm's length; rather, executives have power to influence their own compensation, and they use their power to extract rents. As a result, executives are paid more than is optimal for shareholders and, to camouflage the extraction of rents, executive compensation might be structured sub-optimally." (National Bureau of Economic Research)
SEC Vote On Options Favors Investors
Excerpt: "The Securities and Exchange Commission voted unanimously to require companies to disclose more clearly a number of details that will help investors keep tabs on how stock options are doled out and how those options could affect earnings." (SiliconValley.com)
Newly Posted or Renewed Job Openings -
| QUALIFIED RETIREMENT PLANS COMPLIANCE/CONSULTING ACTUARY | for MBM Advisors
Inc. in TX |
| Communication Consultant | for Fidelity Investments in UT |
| ERISA Case Manager | for CitiStreet in NJ |
| Manager, Welfare Plan Administration | for Ralcorp Holdings, Inc. in MO |
| Client Service Analyst | for Northern Trust Retirement Consulting in GA |
| Senior Operations Specialist - Trustmark | for Ceridian in FL |
Newly Posted Press Releases (Post Yours!)
| Long Beach Unified School District, One of the Nation's Largest Public Schools, Adopts 457 Deferred Compensation Plan (Public Agency Retirement Planning, Inc.) |
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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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