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The BenefitsLink Newsletter -
Retirement Plans Edition
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January 28, 2002 - 12,487 subscribers
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Benefits Lobbyists Battling Enron Fallout
Excerpt: "Michael Keeling, president of the ESOP Association, which represents companies with employee stock ownership plans, said his worst-case scenario is proposed legislation to let employees diversify investments in an ESOP at age 35 and five years of service." (StarTribune.com)

Kmart Dive Shows Employee Risk
Excerpt: "Employees at Kmart Corp. have about 14 percent of their 401(k) pension money in the company's stock, a smaller chunk than workers at the average company. But the retailer's bankruptcy has cost its 240,000 employees millions of dollars, and may even force some of them to postpone retirement." (Associated Press via Lycos News)

Opinion: 401(k) Plans Need Major Overhaul
Excerpt: "[R]esearch shows that workers take it as a cue that employer stock represents a good investment when the company contributes shares to their plans. Nothing could be further from the truth in far too many cases. Buying employer stock also can become a loyalty test, if workers think that they can impress the boss or somehow avoid trouble by owning a piece of the company." (Los Angeles Times)

Street Talk: Old-Fashioned Pension Plans Looking Pretty Good
Excerpt: "[B]ecause investing can be so risky ... the average worker may be better off not investing in a 401(k) at all. Given the choice, a traditional pension plan with fixed payouts, known as a defined benefit plan, could be the best financial option for many Americans. Read on to learn more." (TheStreet.com)

Court Rejects Fiduciary Breach and Anti-Cutback Claims Related to Switch to Daily Valuation
Balzanto v. Nicholas Cuda, Ltd. Profit Sharing Plan (N.D. Ill. 2002). Excerpt: "[T]he court did not consider Treas. Reg. Sec. 1.411(d)-4, which provides that administrator discretion may not be exercised so as to reduce a benefit in violation of the anti-cutback rule, but which also provides that the timing of plan valuations is not a benefit protected by the anti-cutback rule." (EBIA Weekly)

Another Case Interprets Egelhoff--This Time Spouse Loses Out
Jones v. Jones (Del. Fam. Ct. 2001). Excerpt: "In this Delaware family court case, the participant, after divorce but before the property settlement, changed the beneficiary designation on his 401(k) account to remove his former spouse and add his children. Delaware law prohibited this type of transfer of property during the period before a final property settlement." (EBIA Weekly)

Transferred Employees Not Entitled To Special Pensions Under Predecessor's Plan
Employees who were transferred to a successor company and who subsequently lost their jobs as a result of a plant closure were not entitled to special retirement benefits under the terms of their predecessor employer's pension plan. This was the decision of the Third Circuit U.S. Court of Appeals in Gritzer, et al. v. Westinghouse Pension Plan (No. 01-1979). (Spencernet)

Employee Ownership Update for January 25, 2002
NCEO executive director Corey Rosen discusses the problem of state laws that do not conform to the 2001 tax act; Enron's floor offset plan; and bill to provide Alternative Minimum Tax relief for those who exercised incentive stock options in 2000. (National Center for Employee Ownership)

IRS Updates Procedures For Issuing Determination Letters, Furnishing Technical Advice
In a series of revenue procedures that are updated annually, the Internal Revenue Service provides revised procedures for the issuance of rulings and determination letters, and for furnishing technical advice regarding issues in the employee plans and exempt organizations areas. In addition, the agency has updated guidance on the user fee program. (Spencernet)

Most in Poll Support More Regulation After Enron's Collapse
Excerpt: "Almost three-fourths of respondents to a recent poll think the government should regulate companies' retirement plans more closely to prevent 'future Enron-like debacles,' according to a survey of 886 U.S. adults released Jan. 24." (Society for Human Resource Management)

Many Lost Big As Enron Stock Tanked
Excerpt: "Investments in Enron gone awry cost the Florida State Board of Administration $306 million, more than $280 million of that in money handled by Alliance. Such losses raise the question of whether investment managers should have seen Enron's collapse coming. Some say maybe not." (Associated Press via Yahoo! News)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Sr. Specialist, Benefits & Compensation for Converium Reinsurance (North America) Inc.
Officer Retirement Plans Administration for Security Benefit Group
Retirement Plan Administrator for National benefits consulting firm
401k consultant for Allstate Financial
Team Leader - Recordkeeping for INVESCO Retirement, Inc.

Newly Posted Webcasts (Post Yours!)
Prospects for Long-Term Care Policymaking at State and Federal Levels on January 24, 2002
presented by National Academy of Social Insurance

Newly Posted Conferences (Post Yours!)
Mercer/Foster Higgins National Survey of Employer-Sponsored Health Plansin CA on March 12, 2002
presented by Employee Benefit Planning Association of Southern California
Health Plans, HIPAA, and COBRA Update: Current ERISA, Tax, and Other Issues for Attorneys, Administrators, Insurers, and Consultantsin ALL STATES on March 14, 2002
presented by ALI-ABA (American Law Institute-American Bar Association Committee on Continuing Professional Education)
Annual Conference-NIPA San Francisco Chapterin CA on February 21, 2002
presented by National Institute of Pension Administrators-SF Chapter
2003 Los Angeles Benefits Conferencein CA on January 30, 2003
presented by ASPA

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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.