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The BenefitsLink Newsletter -
Retirement Plans Edition
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February 13, 2002 - 12,556 subscribers
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Labor Secretary Chao Announces Agreement To Replace Enron Pension Plan Officials
Excerpt: "Secretary of Labor Elaine L. Chao today announced that an independent fiduciary will be appointed to replace Enron Corporation's Administrative Committees, whose members currently serve as fiduciary of the company's three retirement plans.... The agreement, signed today by the Labor Department and Enron Corp., requires Enron to pay the independent fiduciary's fees for three years, up to a maximum of $1.5 million per year, plus associated expenses." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Lawsuits Put Pressure On Companies To Change 401(k) Plan Rules
Excerpt: "Although there have been very few lawsuits won against employers who sponsor 401(k) plans, some experts say the mere threat of litigation may cause some firms to loosen restrictions on company stock.... Providian changed the terms of its 401(k) plan on Jan. 1, just a few days after it was named in a 401(k) lawsuit. Previously, employees could not sell company stock they acquired through a company match until they left Providian. Now, they can sell the stock as soon as it has vested." (San Francisco Chronicle)

The 401(k) Plan's Failings
Excerpt: "With roughly $1.8 trillion in assets, 401(k)s will soon surpass the $2.1 trillion in traditional pension plans ... Yet these retirement plans are fraught with systematic problems, from low participation rates and minimal balances among millions of contributors to limited investment options, high costs and little oversight." (CBS Marketwatch)

Three More Bills Introduced To Protect 401(k) Plan Assets
Rep. Bill Pascrell Jr. (N.J.) has introduced the Pension Protection and Diversification Act of 2002 (H.R. 3640), which would amend ERISA and the Internal Revenue Code to limit the amount of employer stock that could be held by a participant in an individual account plan. The bill is a companion to S. 1838, which was introduced earlier this year by Sen. Barbara Boxer (Cal.). (Spencernet)

Another Question is Answered in the Correcting Plan Defects Q&A Column
Once a compliance statement has been issued, can the terms be changed? (BenefitsLink.com)

Participation by Foreign Subsidiary and Its Employees Did Not Disqualify ESOP
Priv. Ltr. Rul. 200205050 (Nov. 8, 2001). Excerpt: "After analyzing the import of the foreign corporation in the controlled group, the IRS ruled that the foreign corporation was indeed part of the U.S. corporation's controlled group. Therefore, the mere participation in the ESOP by the foreign corporation and its employees did not adversely affect the qualified status of the ESOP and its trust." (EBIA Weekly)

Investors, Brace Yourself for the Pension Bomb
Excerpt: "There's another big earnings booby trap lurking out there. Like other recent market stunners, companies set this one for themselves during the late 1990s when their traditional pension plan investments were earning outsize returns.... Now, of course, most pension-plan returns stink. And the effect on corporate profits will be anything but wonderful. Stock prices are already signalling the message: Poor pension-plan returns will depress earnings for years." (Business Week)

Personal Accounts and Social Security Reform (PDF)
Excerpt: "The main appeal of personal accounts is not that they would 'solve' Social Security's financing problems. Rather, they provide workers with ownership of wealth, they allow people to invest according to their own risk preferences, and they are available in the event of divorce or premature death.... Yet irrespective of whether personal accounts are adopted, Social Security reforms are needed that reduce system debt ..." (Olivia S. Mitchell published by University of Michigan Retirement Research Center)

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


Enron Paid Deferred Compensation to Some, Not All, Executives
Excerpt: "In the weeks before it filed for Chapter 11 bankruptcy protection, Enron allowed a small group of executives to withdraw their money from a deferred compensation program, giving them preferential treatment over some former managers who had also requested early withdrawal, according to former and current executives at the company." (New York Times; free registration required)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Qualified Plan Administrator for Campbells Administration Inc.
in
CA
Conversion Consultant for CNA Trust
in
CA
Employee Benefits Associates for The Nation's Most Preimenent Employee Benefits Practice
in
CA, DC
Defined Benefit Plan Administrator for AAS Pension Services, a division of American Express
in
AZ
Retirement Plan Administrator for Ceridian
in
CO
Client Relationship Consultant for Ceridian
in
CO



Newly Posted Conferences (Post Yours!)
The Ultimate Conference on Tax Planning with Retirement Assetsin CT on June 13, 2002
presented by Professional Education Systems Institute, LLC (PESI)
First Annual Conference of the Captive Insurance Council of the District of Columbia, Inc.in DC on March 6, 2002
presented by Captive Insurance Council of the District of Columbia, Inc.
Quarterly Update eSeminar, Winter 2002in ALL STATES on February 25, 2002
presented by McKay Hochman



Newly Posted Press Releases (Post Yours!)
EDUCATORSMONEY LAUNCHES 403(b)/457 ONLINE RETIREMENT SERVICE FOR EDUCATION MARKETPLACE (BenefitsCorp, Inc.)
OWEN J. ROBERTS SCHOOL DISTRICT TAKES 403(b) AND 457 RETIREMENT PLANNING ONLINE WITH EDUCATORSMONEY (BenefitsCorp, Inc.)
BARBARA HEALY AND JACKIE FABITORE MATHENY JOIN BENEFITSCORP, Inc., A GREAT-WEST COMPANY, TO LAUNCH EDUCATORSMONEY (BenefitsCorp, Inc.)
Labor Secretary Chao Announces Agreement To Replace Enron Pension Plan Officials (U.S. Department of Labor, Pension and Welfare Benefits Administration)

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Copyright 2002 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.