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The BenefitsLink Newsletter -
Retirement Plans Edition
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January 3, 2002 - 12,730 subscribers
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From Defined Benefit to Defined Contribution and Other Current Trends in Governmental Plans
Discusses various forms of defined contribution and hybrid (defined benefit/defined contribution) plans adopted by states, effect of Uniformed Services Employment and Reemployment Rights Act (USERRA) on state retirement systems, and and the effect of the Vermont Civil Unions statute and other changes regarding domestic partners on state retirement systems. (Calhoun Law Group, P.C.)

Better Benchmark Sought for Pension Funding Requirements (PDF)
Starts at page 6. Excerpt: "With the recent announcement by the Treasury Department that it would suspend issuance of all new 30-year bonds, moves to replace the 30-year Treasury rate as a benchmark for making certain defined benefit pension plan calculations are gaining momentum." (Enrolled Actuaries Report, published by the American Academy of Actuaries)

Technical Difficulties: Correcting the Pension Provisions in EGTRRA (PDF)
Excerpt: "In a letter to William Sweetnam, benefits tax counsel in the Treasury Department, the Academy commented on pension provisions of the law we believe need correcting ... Recent revenue rulings and Treasury regulations have already resolved some of these issues. But others remain." (Enrolled Actuaries Report, published by the American Academy of Actuaries)

Second Circuit Affirms CEO's Conviction For Embezzlement of Pension Funds, Other Crimes
The Second Circuit U.S. Court of Appeals has affirmed the conviction of a company's former chief executive officer for embezzlement of pension plan funds, money laundering, and creating false documents required by ERISA. The case is U.S. v. McCarthy (No. 00-1639). (Spencernet)

Florida State Pension Fund at Forefront in Securities Litigation
Excerpt: "While the California Public Employees Retirement System (CalPERS) has served as the lead plaintiff in two class-action securities lawsuits, and the Wisconsin State Board of Investments has done so in four cases, as of early October, Florida was the lead or co-lead plaintiff in eight cases ..." (PLANSPONSOR.com; free registration required)

Analysis: Explaining Rollover Options to Participants (PDF)
Excerpt: "Qualified plans no longer may use the IRS's previously issued safe harbor notice for distributions on or after January 1, 2002 because the language does not incorporate any references to the changes made by EGTRRA.... Plan administrators would be prudent to add language to the safe harbor (or individually created) notices to inform recipients of the possibility that there may be tax consequences at the state level that are different from the federal rules." (Milliman USA)

Use Moody Aa Corporate Bond Rate For Pension Plan Funding, ERIC Recommends
The ERISA Industry Committee (ERIC) has recommended substituting the Moody's Aa Corporate Bond rate for the 30-year Treasury rate for years before 2004 in calculating the 4-year weighted average that determines minimum funding requirements. ERIC's recommendation comes as part of a push to urge Congress to take immediate action to relieve defined benefit pension plan sponsors from having to make massive and unneeded pension plan contributions at the expense of economic recovery. (Spencernet)

Public Employees' Group Applauds Social Security Commission Report for Omitting Mandatory Coverage
Excerpt: "The President's Commission completed their work on December 11 by unanimously adopting a report recommending changes in Social Security and the establishment of voluntary retirement accounts. However, the commission did not consider or recommend mandatory Social Security coverage as part of any plans to finance future Social Security benefits." (National Conference on Public Employee Retirement Systems)

Must Fees and Subsidies Paid to Administrator by Investment Provider be Disclosed?
Excerpt: "If a TPA receives subtransfer agency fees from a mutual fund company and the employer pays all the plan expenses, including the TPA fees, must the TPA disclose the subtransfer agency fees it receives to the participants as well as the employer, even if the participants are not affected?" (Reish Luftman McDaniel & Reicher)

Many 401(k) Investors Still See Overly Rosy Future
Excerpt: "Two consecutive years of stock market losses have left America's 401(k) retirement savers with muted expectations for 2002, but in many cases their longer-term forecasts remain wildly optimistic, according to a new survey." (Nashua [N.H.] Telegraph via International Foundation of Employee Benefit Plans)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefits Analyst for Centre Insurance Company
Pension Administrator for BMI
Pension Plan Administrator for Baltimore-based pension and profit sharing plan consulting firm

Newly Posted Conferences (Post Yours!)
P&I Defined Contribution/401(k) Conferencein FL on February 24, 2002
presented by International Business Forum
IBF's Employer's Summit On Health Carein VA on March 13, 2002
presented by International Business Forum

Newly Posted Press Releases
New Year Means New Opportunity to Change Commuting Habits (American Public Transportation Assocation)

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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.