| The BenefitsLink Newsletter - Retirement Plans Edition |   |
December 24 - 26, 2001 - 12,829 subscribers
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New EGTRRA 415 Limits Mean Some DB Plans Might Wish to Enact Amendment Before 2002 (PDF)
Excerpt: "[I]f your defined benefit plan document incorporates the Code section 415(b) provisions by reference, the EGTRRA increase may have already affected your defined benefit plan ... If, however, your defined benefit plan's limitation year is the calendar year, you may choose to prospectively limit the effect of the EGTRRA increase by adopting a plan amendment before January 1, 2002, which limits the effects of the increase in the dollar limit." (Jenkens & Gilchrist)
Determining the True Cost of Retirement Services
25 pages. Excerpt: "The 401(k) movement is critically important to the retirement security of many American workers. Excess fees and mis-allocated costs are a potential threat to the financial security of those workers and to the public's trust in this important retirement funding vehicle. Following are six specific and easy steps that plan sponsors can take to become more knowledgeable and informed about 401(k)pricing and revenue sharing ..." (McHenry Consulting, published by Financial Executives International)
Analysis: New EGTRRA Guidance for 401(k) Plans (PDF)
Excerpt: "The new guidance clarifies and simplifies three problematic situations that were not clear under the law and prior IRS guidance: implementation of the universal availability requirement for catch-up contributions offered to participants aged 50 and older; distributions upon severance of employment (as a result of corporate transactions such as a spin-off); and suspension of participation following a hardship withdrawal." (Milliman USA)
House-Passed Stimulus Bill Included Interest Rate Relief for Defined Benefit Plans
Excerpt: "After debate that lasted until well into the morning of December 20, the House of Representatives approved a revised economic stimulus package (H.R. 3529) by a vote of 224-193.... Since the Senate opted not to take up the House-passed bill, however, and with the supply of other possible vehicles nearly exhausted, enactment of interest rate relief this year appears impossible." (American Benefits Council)
Polaroid Retired Execs Protest Payment by Underfunded Pension Plan of Lump Sums to Other Retirees
Excerpt: "The lump-sum payments threaten to deplete Polaroid's already underfunded pension plan, the executives said. If the pension plan fails and is taken over by a government agency, the former senior officers would see their pensions limited to a government-mandated maximum of about $43,000 a year." (The Boston Globe)
Another Question is Answered in the Correcting Plan Defects Q&A Column
How are earnings calculated when the plan sponsor is required to make corrective contributions? To what extent can losses be taken into account? (BenefitsLink.com)
Employee Ownership Update for December 21, 2001
NCEO executive director Corey Rosen reports on the Pension Protection and Diversification Act of 2001, which would require diversification in 401(k) plans and ESOPs, and also on new stock option disclosure rules issued by the SEC. (National Center for Employee Ownership)
Bush Signs Railroad Pension Legislation
Excerpt: " President Bush on Friday signed legislation permitting $15.3 billion in railroad pension funds to be invested on Wall Street. The move, announced by the White House in a brief statement, allows the federally administered railroad pension system to take the assets out of U.S. Treasury bonds and invest the money in private securities instead." (Reuters via Lycos News)
IRA Losses-- Can You Deduct Them or Not?
Excerpt: "You may not deduct investment losses in your IRA from your taxes.... Still, there are several special circumstances under which IRA losses may be tax-deductible. But, it's likely these will only apply to a small number of IRA and Roth IRA owners -- those who made after-tax contributions to their accounts, and whose balances are smaller than their after-tax contributions." (mPower Cafe)
IRA Rule Changes Make Saving, Withdrawing Easier in 2002
Excerpt: "The government took two major steps in 2001 to make retirement savers' and retirees' lives easier. The tax bill passed by Congress (known by its acronym EGTRRA) raised the annual IRA contribution limits and improved IRA portability, effective in 2002. Separately, the IRS issued new regulations in January 2001 that already make it easier for you and your beneficiaries to calculate IRA withdrawals." (mPower Cafe)
It's Time to Consider Roth IRA Conversion Strategy if Regular IRA Assets Have Dropped in Value
Excerpt: "Do you have stocks tucked away in a traditional individual retirement account that have the potential to be winners but currently are money losers? If so, it may be time to transfer them to a Roth IRA." (Los Angeles Times)
Analysis: IRS Provides Guidance on Elimination of User Fees for Small Employers
Excerpt: "When determining whether an employer has 100 or fewer employees, count all employees in the employer's controlled group with compensation of $5,000 or more, including leased employees and employees who have not met the plan's eligibility requirements." (EBIA Weekly)
Final Report: Strengthening Social Security and Creating Personal Wealth for All Americans (PDF)
December 21, 2001; 141 pages. (President's Commission to Strengthen Social Security)
Newly Posted or Renewed Job Openings -
| Retirement Plans Administrator | for Security Benefit Group of Companies in KS |
| Senior Benefits Administrator | for Universal Studios Corporate in CA |
| 401(k) Administrator | for The Pension Group, Inc. in CA |
| Flexible Spending Account Assistant | for Leggette Actuaries, Inc. in TX |
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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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