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The BenefitsLink Newsletter -
Retirement Plans Edition
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February 7, 2002 - 12,556 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

Lieberman Says 401(k) Reform Must Address Overconcentration, Lockdown
Excerpt: "Lieberman said the president's plan, while focusing on the lockdown period, ignores the issue of overconcentration. Lieberman said he intended his proposal to 'close loopholes but do no damage.'" (Society for Human Resource Management)

Battle Lines Drawn On U.S. Pension Law Reform
Excerpt: "[Representative George Miller of California] said the Bush proposal to allow employees to sell their company-contributed stock after participating in their 401(k) plans for three years was inadequate in view of the stock market slump of the last two years that also depressed the stock prices of well-run companies from 1998 through 2002." (Reuters via Yahoo! Finance)

House Committee to Focus on Administration of Enron 401(k) Plan
Excerpt: "Enron employees held approximately 54% to 60% of their 401(k) plan assets in company stock. However, according to a background memo from the Workforce Committee, Congressional Research Service (CRS) reports that 89% of this Enron stock was purchased voluntarily by Enron employees, not through the company match." (PLANSPONSOR.com; free registration required)

White House Opposes Stock Cap in 401(k) Plans
Excerpt: "Labor Secretary Elaine L. Chao signaled yesterday that the Bush administration does not see anything fundamentally wrong with the nation's private retirement system and believes that caps on the amount of employer stock an employee may have in a 401(k) retirement account would be unduly restrictive." (Washington Post)

Labor Secretary Defends Proposed Change in Pension Plans
Excerpt: "Ms. Chao warned today that Democratic proposals to restrict the amount of company stock held in 401(k) retirement plans would limit workers' freedom to invest their pension funds. She also defended the administration's plan to allow corporations to require that workers retain company stock in their retirement accounts for as long as three years." (New York Times; free registration required)

New Jersey Tax Authorities: EGTRRA's Increase in Deferrals OK for 401(k)s But Not Other Plans
Excerpt: "[A] taxpayer may have an increased amount of income that can be deferred from taxation in New Jersey as a result of the increase in the amount individuals can contribute to their 401(k) plans under the new provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001. Concerning plans other than a 401(k), since only contributions made to 401(k) deferred compensation plans are specifically excluded from gross income under New Jersey law ..." (New Jersey Division of Taxation)

Another Question is Answered in the Distributions: Taxation and Planning Q&A Column
Do the provisions of the Soldiers' and Sailors' Civil Relief Act (SSCRA) apply to participant loans from qualified plans? (BenefitsLink.com)

Labor Secretary Testifies in Enron Case
Excerpt: "Chao disclosed Wednesday that Enron stock apparently was trading around $14 a share when the lockout began last fall and dropped to about $10 at the end of it." (AP via Netscape.com)

American Savings Education Council President Testifies on Financial Literacy Education in U.S.
Excerpt: "[T]he United States has the lowest national savings rate in the industrialized world and ... many Americans are not saving adequately for their retirement, let alone be fully prepared for unexpected life events such as medical emergencies. With increasing concern over public programs such as Social Security and Medicare, there is a need, more than ever, for individuals to take responsibility in planning and saving for their long-term personal financial independence." (American Savings Education Council)

Pensions Top Federal "Tax Expenditures" List (PDF)
Excerpt: "In its annual report to congressional tax committees, the Joint Tax Committee projects that the net exclusion of pension contributions and earnings, at $445 billion, will continue to be the largest federal tax 'expenditure' over the next five years." (Milliman USA)

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

Taxability of Employee Benefits in California (PDF)
4-page chart summarizing taxability of various employee benefit programs under California for Unemployment Insurance, Employment Training Tax, State Disability Insurance, and Personal Income Tax purposes. (State of California, Economic Development Department)

New Delaware Law Permits Delegation of Authority To Officers To Grant Stock Options and Stock Rights
Excerpt: "Delaware amended its General Corporation Law, effective July 1, 2001, to permit Delaware corporations to delegate to an officer the authority to grant stock options and stock rights under a stock plan, subject to certain conditions." (Pillsbury Winthrop LLP)

Multinationals Still Opting for Stock Options
Excerpt: "As U.S. businesses have expanded their option plans overseas, they have increased the pressure on local competitors and foreign companies to match their offerings." (CFO.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Section 125 Administrator for Consulting Firm in the Lehigh Valley
Benefit Administrator for Independent Benefit Services
Retirement Administrator for Delaware Investments
Pension Plan Administrator for Benefit Associates, Inc. - Orange, CA

Newly Posted Press Releases
Still River Retirement Planning Software, Inc. Releases New RetirementWorks for the Web (Still River Retirement Planning Software, Inc.)
New 401(k) Calculator useful as Plan Recruiting Tool (Benefit Software Inc.)

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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.