BenefitsLink Retirement Plans Newsletter for January 15, 2002

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The BenefitsLink Newsletter -
Retirement Plans Edition

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January 15, 2002 - 12,869 subscribers

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The Apparent Rush to Indict and Limit Employee Ownership Through 401(k) Plans and ESOPs
In the wake of the Enron collapse, attorney David Johanson argues that there is nothing inherently wrong with employee ownership, and restrictions on how much company stock a company plan may hold are not needed. (National Center for Employee Ownership)

Bridging the Cultural Divide: Speaking on the Same Wavelength at Plummer Inc.
Cathy Ivancic discusses how a company dealt with communicating its ESOP when managers spoke English and many workers spoke Spanish. (National Center for Employee Ownership)

Qualified Plan Limits Effective January 1, 2002
This table sets forth the qualified plan limits effective January 1, 2002, including changes from Economic Growth and Tax Relief Reconciliation Act of 2001 and IRS News Release IR-2001-115 (Dec. 11, 2001). It includes limits applicable to employer-provided qualified transportation fringe benefits. (Sanders, Schnabel & Brandenburg, P.C.)

Milwaukee Pension Enhancement Was Approved With Few Questions
Continuing news of a plan amendment that has generated controversy in Milwaukee. Excerpt: "A transcript of the Pension Study Commission meeting from Oct. 27, 2000, shows scant mention of any details of the pension upgrades - now known to give County Executive F. Thomas Ament a potential lump-sum payout of more than $2 million and other top officials $1 million or more." (WTMJ via MSNBC.com)

Opinion: Boehner and Bingaman Investment Advice Bills Offer Plan Sponsors Little to Cheer About
Excerpt: "Clearly, participants need investment advice. But, plan sponsors, worried they will run afoul of ERISA by offering a helping hand, continue to fret. And sponsors that are waiting for Congress to pass legislation that will assuage those concerns will probably keep on waiting." (PLANSPONSOR.com; free registration required)

Californians Face Savings Tax Problem
Excerpt: "Millions of California workers -- and more outside the state's borders -- risk tax penalties if they take advantage of the biggest upgrades for retirement savings plans in nearly two decades. The reason: The state has yet to adopt federal tax cuts on retirement plans made last year." (The Mercury News)

Overview: IRS Issues Proposed Regulations on the Taxation of Employee Stock Purchase Plans and ISOs (PDF)
Excerpt: "In summary, the regulations provide for the imposition of FICA and FUTA taxes on gains from the exercise of options granted under tax-qualified employee stock purchase plans and from incentive stock options." (Frederic W. Cook & Co., Inc.)

3d Circuit Finds Plan Could Deny Early Retirement Benefits to Group of Terminated Employees
Excerpt: "It is undisputed that at the time of the Derry plant closure in 1995, each appellant was more than 50 years old and had 25 years of service with Westinghouse/Ceramics. Accordingly, appellants met the age and years of service requirements for the Plan's 'Special Retirement Provisions' benefits ('50/25 benefits'). As discussed below, however, there is a significant dispute over whether appellants met the additional requirement of being terminated by an 'Employer.'" (U.S. Court of Appeals for the Third Circuit, via FindLaw.com)

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

Andersen's Alert: U.S. Compensation and Benefits News Briefs, January 7 Edition
10 pages; includes articles on user fee waiver for retirement plans of small employers, updated 402(f) notices, DOL advisory opinion on investment advice, 404(k) dividend elections, more. (Andersen)

Analysis: SEC Adopts New Disclosure Rules for Equity Incentive Plans (PDF)
Excerpt: "These amendments enhance disclosure of the number of shares to be issued upon exercise of outstanding options, warrants and rights granted to participants in equity incentive plans, as well as the number of securities that remain available for future issuance under these plans, including plans which have not been approved by shareholders. Companies must be in compliance with the new disclosure rules for their Form 10-K filed for fiscal years ending on or after March 15, 2002 ..." (Frederic W. Cook & Co., Inc.)

Kodak Proposes "Value Neutral" Stock Option Repricing
Excerpt: "Kodak tells shareholders in the filings that while their approval 'is not required by law, by any regulations or by the terms of our stock option plans, we believe that sound corporate governance dictates that the program not be implemented unless it is approved by you.'" (Graef Crystal, on Bloomberg.com)

Newly Posted or Renewed Job Openings -

Consulting - Pension Actuary & Administrators

for Louis Kravitz & Associates, Inc.
in CA

401(k) and Defined Contribution Analyst

for Small Regional Actuarial/TPA Firm - Dallas
in TX

Senior Technical Specialist/Team Leader - 419325

for PNC Advisors
in PA

Retirement Benefits Manager

for Guthrie Health
in PA

ERISA/Benefits Attorney Needed In DC!!!

for TEN - The Employment Network, Inc.
in DC

Pension Administration Consultant /Manager

for Financial Services Firm
in NJ

Newly Posted Conferences (Post Yours!)

Tool Kit For Stock Professionals

in CA on May 7, 2002
presented by AllCompensation.com, LLC

29th Annual Pension and 401(k) Consultants' Conference

in FL on April 29, 2002
presented by Charles D. Spencer & Associates, Inc.

"Best Practices" Conference

in MA on December 5, 2002
presented by New England Employee Benefits Council

"How To" Workshop: Consumer Driven Health Care

in MA on February 13, 2002
presented by New England Employee Benefits Council

"How To" Program: Form 5500

in MA on May 8, 2002
presented by New England Employee Benefits Council

"How To" Program: COBRA/HIPAA

in MA on August 15, 2002
presented by New England Employee Benefits Council

"How To" Program: FMLA and Integrated Disability

in MA on September 18, 2002
presented by New England Employee Benefits Council

"How To" Program: Paid Time Off

in MA on October 2, 2002
presented by New England Employee Benefits Council

"Connection" Series: Section 529 Plans

in MA on March 22, 2002
presented by New England Employee Benefits Council

"Connection" Series: Outsourcing vs. Insourcing: A Second Look At Benefits Delivery

in MA on April 26, 2002
presented by New England Employee Benefits Council

"Connection" Series: Health Care Renewals

in MA on May 17, 2002
presented by New England Employee Benefits Council

"Connection" Series: Recent Trends

in MA on October 25, 2002
presented by New England Employee Benefits Council

Update From Washington

in CA on February 27, 2002
presented by Employers Health Care Coalition of Los Angeles, The Los Angeles Chapter of ISCEBS & The Employee Benefit Planning Assoc. of So. Calif.