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The BenefitsLink Newsletter -
Retirement Plans Edition
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January 14, 2002 - 12,869 subscribers
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Pension Catch-Up Provision Carries Big Catch
Excerpt: "In a survey expected to be released at the end of the month, Lincolnshire-based benefits consulting firm Hewitt Associates reports that while most employers plan to offer the higher savings amounts, nearly 40 percent will wait until the second half of the year--or later--to implement them." (Chicago Tribune; free registration required)

Beta Version of Minimum Required Distributions Spreadsheet in Excel Format
Excerpt: "These materials are being offered for free, and although I hope they will be useful to you, they are not to be relied upon. If you want specific legal advice, you should consult, and pay, a lawyer." (Noel C. Ice, Esq. of Cantey & Hanger L.L.P.)

Defined Benefit vs. 401(k) Returns: the Surprising Results
Excerpt: "Up through 1995, defined benefit plans tended to realize higher returns than 401(k) plans. After 1995, the trend was in the opposite direction, with rates of return for 401(k) plans overtaking those for defined benefit plans in 1997 and 1998." (Watson Wyatt)

Agencies Revisit Pension Regulations in Light of Enron
Excerpt: "Under pressure from President Bush to keep future corporate bankruptcies from wiping out the retirement savings of thousands of employees, as in the recent collapse of Enron Corp., members of the administration's economic team said last week that they intend to do just that." (Washington Post)

Sen. Boxer: Our Bill Protects Plan Participants
Excerpt: "The collapse of Enron, and the impact it had on its employees' savings, clearly shows that pension reform is past due. The Boxer-Corzine bill would help protect investors by requiring diversification of retirement plans and ensuring that employers give workers the power to diversify." (USA Today)

Opinion: 401(k)s and the Enron Mess
Excerpt: "Now is the time for congress to clean up the mess in 401(k)s. I'm speaking specifically of the plans that offer you company stock." (Jane Bryant Quinn in Newsweek, via MSNBC.com)

Florida State Pension Fund Loses $300 Million on Enron
Excerpt: "Florida's $94 billion state pension fund lost more than $300 million after being forced to dump 7.5 million Enron shares." (The Miami Herald)

Enron Touted Stock to Employees Shortly Before Price Fell
Excerpt: "'Our performance has never been stronger; our business model has never been more robust. ... We have the finest organization in American business today,' Ken Lay said in an Aug. 14 e-mail just two months before Enron's long-hidden financial problems surfaced." (Washington Post)

Ex-Enron Employees Upset at Treatment
Excerpt: "Enron says its stock price, which stood at about $80 a year ago, already was down to $13.88 when a coincidental 10-day freeze on 401(k) transactions was implemented because the plan changed administrators. By the time transactions could resume, the price was $9.98. When trading on the New York Stock Exchange concluded Friday, the company's shares were selling for 67 cents a piece." (Associated Press via Lycos News)

Not All Deposits in Banks Are Insured
Excerpt: "In the last three years, investors have lost $114 million to bank failures because they exceeded the $100,000-per-depositor insurance limit imposed by the Federal Deposit Insurance Corp.... Pension and profit-sharing plans get so-called pass-through coverage. That means a plan with 10 equal beneficiaries could have up to $1 million deposited in one bank and be fully covered." (Los Angeles Times)

Retroactive 10% Tax for Nonqualified Withdrawal from Converted Roth IRA Held Constitutional
Excerpt: "The Court of Federal Claims properly concluded that the retroactive imposition of a 10% additional tax for married taxpayers' nonqualified withdrawal from the husband's Roth IRA did not offend the constitutional provisions of either the Fifth or the Eighth Amendments." (CCH)

IRS Publishes 2002 Version of Form W-4P, Withholding Certificate for Pension or Annuity Payments (PDF)
4 pages (including instructions). (Internal Revenue Service)

(Following items are in both editions of the BenefitsLink Newsletter)

Polaroid Executive Compensation Plan Withdrawn After Criticism From Retirees and Workers
Excerpt: "The original package could have provided more than $5 million to top executives. Now, Polaroid says the plan won't even be discussed at a hearing Tuesday in U.S. Bankruptcy Court in Wilmington, Del." (Associated Press via Lycos News)

Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
When a company reprices stock options for current employees, what is the current practice or law regarding how to handle unexercised stock options for retirees of that company? (BenefitsLink.com)

Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
Can I use funds in my traditional or Roth IRA to purchase stock options? (BenefitsLink.com)

EITF Continues Accounting Assault on Stock Compensation Accounting
Excerpt: "It is expected that most companies will continue repricing by using options outside the six-month window and replacing with restricted stock. But as a result of these accounting changes, it is also likely that more repricings using the restricted stock approach will be limited to those options that are severely underwater." (Watson Wyatt)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Employee Benefits Attorney for Thompson Hine LLP
Pension Administrator/Accountant for First Mercantile Trust Company
Defined Benefit Plan Actuarial Analyst for George Beram & Company, Inc.
401(k) Administrator/Account Manager for Pension Specialists, Inc.
Defined Contribution Plan Administrator for The Preston Group, LLC
Senior Account Manager, Retirement Plans for Charles W. Cammack Associates, Inc - NYC Benefits Consulting firm
Employee Benefits Consultant/Administrator for Oxford Associates, LLP, a member of the BST Advisory Network

Newly Posted Benefits Businesses for Sale (Post Yours!)
The "Holy Grail" of Employee Benefit Business Domain Names For Sale: ERISA.com

Newly Posted Conferences (Post Yours!)
401(k) Plansin GA on April 16, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Cafeteria Plansin GA on April 17, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
ERISA Compliance for Health & Welfare Plansin GA on April 18, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
HIPAA & Other Federal Mandates for Group Health Plansin GA on April 18, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
COBRA Compliance for Group Health Plansin GA on April 19, 2002
presented by Employee Benefits Institute of America LLC (EBIA)
Long Term Carein NY on January 30, 2002
presented by New York Metropolitan Area Chapter - ISCEBS
Healthcare Subrogation After Great-West Life v. Knudson: Advanced Strategies for the Futurein AZ on May 16, 2002
presented by Benefit Recovery, Inc. and Lawrence & Russell, LLP
2002 Los Angeles Benefits Conferencein CA on January 31, 2002
presented by ASPA
Profit Sharing/401(k) Council of America's Midwest Regional Conferencein IL on March 13, 2002
presented by Profit Sharing/401(k) Council of America
Profit Sharing/401(k) Council of America Washington, DC Public Policy Fly-Inin DC on March 20, 2002
presented by Profit Sharing/401(k) Council of America
PSCA Retirement Technology Conferencein MA on April 25, 2002
presented by Profit Sharing/401(k) Council of America
The Future of Social Securityin PA on March 5, 2002
presented by ASPA Benefits Council of The Delaware Valley
2002 Great Lakes Area IRS/ASPA Benefits Conferencein IL on May 2, 2002
presented by IRS and ASPA

Newly Posted Press Releases
Funds to accelerate deployment of Insurance-Engine(tm), e-procurement platform for health care and employee benefits supply chains (IE-Engine Inc.)
Health Care and Employee Benefits e-Procurement Firm IE-Engine Names Former Ariba Executive as President (IE-Engine Inc.)
MyCafeteriaPlan.com Launches Easy-to-use Internet Educational Presentation! (BusinessPlans, Incorporated)

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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.