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The BenefitsLink Newsletter -
Retirement Plans Edition
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February 20, 2002 - 12,350 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)

American Benefits Council Offers Update on State Income Tax Conformity with EGTRRA
Excerpt: "Serious problems confront taxpayers in many states that have not yet modified their tax law to correspond to retirement provisions of federal tax law that were changed last year. While some states have begun to respond to this problem, others have not." (American Benefits Council)

Gannett Co. Lifts Sales Restrictions on Matching Company Stock in 401(k) Plan
Excerpt: "Participants in Gannett Co.'s 401(k) plan can now sell any of their plan assets without restriction, the media company announced." (PLANSPONSOR.com; free registration required)

Investments in Employer Stock: the Enron Legacy
Excerpt: "For individual account plans, which include profit-sharing and 401(k) plans, there is generally no overall limit on the amount of qualifying employer securities that may be owned by the plan. However, an individual account plan must explicitly authorize investments in qualified employer securities." (Law.com)

Pros and Cons of Retirement Reform
Excerpt: "In the wake of the Enron implosion, Congress is suddenly buzzing with ideas about how to fix your retirement account -- though you may not have thought it was broken. In the end, a lot of the debate in Washington boils down to this question: Do average investors need to be protected from themselves?" (TheStreet.com via International Foundation of Employee Benefit Plans)

Opinion: Employer Stock in 401(k) Plans Can Be Great Mystery Carnival
Excerpt: "[U]nless you are vested in a good defined benefit pension that will provide a substantial portion of your retirement income, having company stock dominate your 401(k) plan reduces it from a savings program to a carnival game." (Scott Burns of The Dallas Morning News)

In England, KPMG Warns of Shift to Defined Contribution Plans
Excerpt: "The closure of final salary pension schemes in Britain could mean workers get much lower pensions when they retire, according to research published by consultant KPMG. Pensioners could receive benefits up to 30 percent lower because contributions by employers to final salary schemes tend to be higher than to alternative scheme types, KPMG said." (Reuters.co.uk)

Overview: Social Security Commission Makes Three Proposals
Excerpt: "Whatever the three proposals' prospects for success, they have added some important new wrinkles to the debate over Social Security and its relationship to private retirement plans. For one thing, the proposals would require workers to take at least a portion of their accumulated savings as an annuity or as gradual withdrawals." (PLANSPONSOR.com; free registration required)

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

More Proposed Regulations Issued on Golden Parachute Payments
Excerpt: "These proposed regulations are proposed to apply to any payments that are contingent on a change in ownership or control occurring on or after January 1, 2004. Taxpayers may rely on these proposed regulations until the effective date of the final regulations. Alternatively, taxpayers may rely on the 1989 regulations for any payment contingent on a change in ownership or control that occurs prior to January 1, 2004." (Internal Revenue Service)

Guidance Provided Relating to Golden Parachute Payments Contingent on Change in Ownership or Control
Excerpt: "The IRS has issued proposed regulations relating to golden parachute payments to provide guidance to taxpayers who must comply with Code Sec. 280G. The proposals would apply to any payments that are contingent on a change in ownership or control occurring on or after January 1, 2004 ... Rev. Proc. 2002-13 ... provides guidance for valuing stock options, including a safe harbor for valuing compensatory stock options for purposes of Code Secs. 280G and 4999." (CCH)

Tech Firms Fight Shift In Rules On Options
Excerpt: "The bill could reduce the earnings that many companies report by millions of dollars, in some cases meaning the difference between showing a profit and posting a loss. At issue is whether stock options, which are offered to managers and employees as compensation, must be listed as an operating expense." (Washington Post)

Do Stock Options Buy Silence?
Excerpt: "It's also true that when a company's stock is performing monstrously well, few people want to rock the boat, even if they know that shortcuts may have been taken. That leads us to the subject of stock options. There is a growing trend among companies to issue such options to rank-and-file employees, not just those in the executive suite." (New York Times; free registration required)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefits Control Manager for Wachovia Corporation
Manager, Safety and Disability Benefits for Wachovia Corporation
Reporting Specialist for Fidelity Investments
Employee Benefits Attorney for Leading Bay Area Law Firm

Newly Posted Conferences (Post Yours!)
Basics of Employee Health and Welfare Benefitsin MA on April 11, 2002
presented by New England Employee Benefits Council
Basics of Employee Retirement Plansin MA on October 17, 2002
presented by New England Employee Benefits Council
2002 Consumer Driven Health Benefits Seminarsin NY on April 10, 2002
presented by Employee Benefit News
2002 Consumer Driven Health Benefits Seminarsin TX on April 25, 2002
presented by Employee Benefit News
2002 Consumer Driven Health Benefits Seminarsin IL on May 7, 2002
presented by Employee Benefit News

Newly Posted Press Releases
SunGard Introduces HIPAA & ERISA Consulting (SunGard Corbel)
Mellon And Vinings Management Announce Strategic Alliance (Mellon Financial Corporation)

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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.