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The BenefitsLink Newsletter -
Retirement Plans Edition
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January 24, 2002 - 12,921 subscribers
Today's sponsor: In Plain English

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Portman and Cardin to Sponsor Introduce Funding Bill
Press release. Excerpt: "Lawmakers are poised to respond to The ERISA Industry Committee's (ERIC) initiative to correct an anomaly in current law that pegs pension plan funding requirements to the now-defunct 30-year Treasury rate. Wasting no time in tackling a significant problem threatening the retirement security of millions of Americans, pension reform champions Rep. Rob Portman (R-OH) and Ben Cardin (D-MD) will introduce important legislation ..." (ERISA Industry Committee)

PSCA: Enron Bankruptcy Threatens All Defined Contribution Plans
Excerpt: "Genuine concern over the demise of the Enron employee savings plan is resulting in the introduction of premature legislation that threatens the use of company stock in plans. These proposals jeopardize the very survival of small company and privately held ESOPs." (Profit Sharing/401(k) Council of America)

ERIC Asks President To Propose Budgetary Relief From Pension Funding Rules
In a recent letter to President George W. Bush, the ERISA Industry Committee (ERIC) urged the President to include in his February budget proposals to Congress relief from excessive pension funding requirements caused by the discontinuance of and precipitous drop in the rate of 30-year Treasury bonds. The letter was written by ERIC president Mark J. Ugoretz and vice president Janice Gregory. (Spencernet)

ERIC to Congress: Gather Facts Before Acting on Employer Stock in Plans
Excerpt: "Employee stock plans are a critical component of the 21st century corporation as well as a critical component of the equity wealth of our nation. Strong rules already govern employee benefit plans, including plans that contain employer stock. For example, the duties of a pension plan fiduciary are the highest known to the law." (ERISA Industry Committee)

Labor Enron Probe Focuses on Plan Fiduciaries
Excerpt: "'We cannot say at this point whether or not there have been any breaches or any shortcomings. We're pursuing that,' [Ann Combs, assistant labor secretary for health and welfare benefits] said.... A Cabinet task force ... is preparing to recommend to President Bush changes to strengthen pension laws that will address asset diversification, blackout periods and providing advice and information to participants, said Combs, who has been working on the project." (Associated Press via Lycos News)

DOL Following Enron Pension Trail
Excerpt: "While shredded documents and questionable accounting are getting all the headlines, the Labor Department is quietly looking into the $1.3 billion question of what happened to Enron employees' retirement savings. The probe into the management of the bankrupt company's 401(k) and employee stock ownership plans will take some time, said Assistant Labor Secretary Ann Combs." (CBS Marketwatch)

Labor Department Reviews Enron's Blackout Period
Excerpt: "The Labor Department is reviewing whether the Enron Corporation acted properly when it told its employees they could not sell Enron shares in their retirement accounts at a time when the shares' value was evaporating, agency officials said today.... Enron says the change was planned for months and lasted only 10 days, a period in which the stock fell $3.83." (New York Times; free registration required)

Re-Crafting and Communicating Retirement Benefits to Help Create Employee Loyalty
Excerpt: "Now, more than 20 years after the institution of employment-at-will and the 401(k) plan, we see a return to recruiting career employees and a renewed interest in providing employee training and benefits that promote loyalty. More employers are turning to the defined benefit plan.... Extensive benefits communication can turn this new combination of retirement benefits into a vehicle to create loyalty among employees." (Ronald H. Wohl, CMC, on FreeERISA.com)

Enron, Kmart Collapses Causing New York Governmental Plans to Review Index Fund Strategy
Excerpt: "[New York City Comptroller William C.] Thompson said that while index funds charge smaller fees than actively managed funds, and many had done well over time, they lacked 'aggressive, or active managers, who will say, 'Oops, look at this,' and will bail out of a situation if they start looking at it as it deteriorates.'" (New York Times; free registration required)

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

Overview: SEC To Require Increased Disclosure of Options and Other Equity Compensation
Excerpt: "In response to ongoing investor concerns, the Securities and Exchange Commission (SEC) voted unanimously last month to expand the required disclosure of employee stock option plans and other equity compensation arrangements.... Under the new rules, domestic registrants must provide detailed information about their equity compensation plans in new tables in their annual reports on Forms 10-K and 10-KSB." (Pillsbury Winthrop LLP)

IRS Issues Final Intermediate Sanction Rule
Excerpt: "Not-for-profit hospital executives and board members should pay closer attention to Internal Revenue Service regulations ... establishing 'intermediate sanctions' for certain violations of tax-exemption rules. Otherwise, executives and board members may end up reaching into their own pockets to pay excise taxes levied for excessive compensation deals that they approved, tax lawyers and compensation consultants said." (Modern Healthcare)

A Fresh Start for Split Dollar
Excerpt: "In Notice 2002-8, the IRS gives renewed life to split-dollar life insurance, revoking its controversial pronouncement from last year, Notice 2001-10. This alert reviews key features of the new notice and spotlights important opportunities that end on or before January 28, 2002. It closes by noting issues that still are not addressed." (Kilpatrick Stockton LLP)

IRS To Upgrade Split-Dollar Insurance Rules; Policies Before Jan. 28, 2002, Are Grandfathered
The Internal Revenue Service is upgrading its rulemaking on taxation of split-dollar life insurance programs from the form of notices in the Internal Revenue Bulletin to regulations within the Code of Federal Regulations. In Notice 2002-8, I.R.B. 2002-4, the IRS announced that it has revoked Notice 2001-10, I.R.B. 2001-5, 459, and intends to issue proposed regulations on split-dollar life insurance. (Spencernet)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Pension Administrator for PFS
Pension Administrator for The Washington Pension Center
Manager, Health and Welfare Plans for Snap-on Incorporated
Director, Retirement Consulting Practice for Charles W. Cammack Associates, Inc.
SVP, Investment Client Services for CitiStreet - A State Street & Citigroup Company
Business Analyst for CNA TRUST
Benefits Accounting Supervisor for Leprino Foods Company

Newly Posted Conferences (Post Yours!)
2003 Summer Conferencein CA on July 27, 2003
presented by ASPA
2002 Mid-Atlantic Benefits Conferencein MD on May 16, 2002
presented by ASPA

Newly Posted Press Releases
Governmental Plans Answer Book now available (Calhoun Law Group, P.C.)

Subscribe to the Welfare Plans Edition, too (click)

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.