BenefitsLink Retirement Plans Newsletter for January 23, 2002

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The BenefitsLink Newsletter -
Retirement Plans Edition

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January 23, 2002 - 12,921 subscribers

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For Most 401(k) Plans It Was a Bum Year, But Not a Disaster
Excerpt: "We are regaled daily with ongoing stories of total losses in 401(k) plans, such as Enron. We also read accounts of losses that are merely devastating, like Lucent. Most 401(k) participants, however, had an 'off' year. They didn't have a disaster." (Scott Burns of The Dallas Morning News)

Cheaper Than a Studebaker: Enron "Retirement Planning" Coffee Cups for Sale on eBay
Created by Enron for distribution to employees in the mid-90s. One side says "Who decides where to invest your money? Only You." The other side says "Enron Retirement Planning. Tools and information for your future." (eBay)

Cost of Retirement Blitz Is Big Unknown
An Internal Revenue Service ruling allows Milwaukee employees' sick leave remaining at retirement to be paid through lump sum distributions from its pension plan, provided that an enabling statute is appropriately amended. But some parties worry that this may make the sick leave benefit harder to eliminate in the future, due to Wisconsin constitutional and statutory law. (Milwaukee Journal-Sentinel)

Responding to Questions About Possible Early-Retirement Incentives: No Good Deed Goes Unpunished
Excerpt: "An early-retirement package does not have to be under serious consideration for employers to be compelled to answer participants' questions about it fully. So said the U.S. 2nd Circuit Court of Appeals in Caputo v. Pfizer, Inc., in discussing its reasons for determining that a longer statute of limitations applied to the case." (PLANSPONSOR.com; free registration required)

Employment Benefits and Divorce
Excerpt: "For many couples, the money they have in employee benefit plans represents the most valuable asset accumulated during their marriage. Dividing these funds in the event of a divorce is a complex process fraught with serious tax implications CPAs need to be aware of to counsel divorcing clients." (Journal of Accountancy)

Top 100 Defined Contribution Plans Ranked by Rate of Employee Contributions
Excerpt: "Most (55%) say their secret for high participation is a rich company match-- a point well worth noting at a time when some sponsors have begun reevaluating their contribution strategies." (PLANSPONSOR.com; free registration required)

In 401(k) Plans, a New Rush to Diversify
Excerpt: "Across the country, from the docks of [Baltimore], to Detroit, Chicago, Denver and Silicon Alley, people who once boasted of 20 percent year-by-year increases in their 401(k) retirement plans are on the move. They are making appointments with brokers and their human resources offices, reworking their portfolios and shifting money from the market's fallen stars." (New York Times; free registration required)

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

2001 Form 5500 and Schedules Posted on IRS Site
Available in PDF format (requires the free Adobe Acrobat viewer to view or print). Posted January 23, 2002. (Internal Revenue Service)

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