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The BenefitsLink Newsletter -
Retirement Plans Edition
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February 26, 2002 - 12,334 subscribers
Today's sponsor: Actuarial Systems Corporation

(Click on company name or banner to learn more.)

   For over 20 years ASC has provided complete automation for the
   pension office, including DC/401(k) and DB administration and
   valuation systems, as well as sophisticated Compliance Testing
   and DV Direct, a revolutionary solution for daily valuation
   functions.  All ASC Technical Support Members had experience as
   practicing Pension Administrators or Actuaries before joining
   ASC-- and most have been with ASC for over 10 years.

(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)

New Year Brings New Audit Rules for Small Plans (PDF)
Excerpt: "[F]or plan years beginning after April 17, 2001, new Department of Labor (DOL) regulations add special rules that small plans must now meet to continue to be exempt from the annual audit requirement. These rules require anyone who handles 'non-qualifying plan assets' to be bonded and require the plan sponsor to include additional information on the plan's summary annual report (SAR)." (CIGNA's Pension Analyst)

Deducting IRA Losses
Excerpt: "The easy answer is that since the gains aren't taxable, the losses aren't deductible. That may be the easy answer, but it's not necessarily the correct answer. In limited and unusual circumstances, losses from an IRA can be treated as a deductible loss." (The Motley Fool)

Push for Pension Reform Laws Puts Business on Defensive
Excerpt: "Business lobbyists are scrambling to head off a broad array of Enron-inspired legislation that would expand federal regulation of everything from corporate pension plans to accounting standards to stock options. The push for tighter federal laws has come as a rude shock to the corporate community, which had not expected to be fighting a rear guard battle under a Republican administration." (Boston Globe via Society for Human Resource Management)

Joint Committee on Taxation Prepares Overview of Defined Contribution Plans and Their Investments (PDF)
JCX-9-02 (February 25, 2002); 41 pages. Excerpt: "This document ... provides a description of present law relating to employer-sponsored retirement plans (including defined contribution plans) and individual retirement arrangements, a discussion of issues relating to legislative proposals regarding investment of defined contribution plan assets, and background data on qualified retirement plans." (Joint Committee on Taxation)

401(k) Investments Emergency: Let's Fix It
Excerpt: "With the S&P 500 in the red over the past three years and trailing humdrum bonds over that stretch, our former blind faith in stocks seems just that.... Let's look at four ways you can put it back on track without too much effort or homework. 1. Balance Out Your Portfolio ... 2. Raise Your Savings -- and Lower Your Expectations ... 3. Have Index Funds? Use Them! ... 4. Don't Give Up on Growth Funds ... 5. Use Bond Funds Wisely." (TheStreet.com)

Senator Questions Purchases of Enron Stock by Florida Fund's Investment Manager
Excerpt: "A Wall Street money-management firm was busy buying millions in plummeting Enron stock on behalf of Florida's pension fund last year at about the same time it was advising the state of New York to sell its shares." (Orlando Sentinel)

Things to Tell Your Employees About 401(k)s
Excerpt: "Your 401(k) participants should consider this adage when investing, 'Success comes from time in the market, not timing the market.' ... 401(k) participants need to recognize that missing out on just a few days in the market could cost them." (Workforce.com)

The Benefits of Rebalancing an Investment Portfolio
Excerpt: "[E]ven a carefully crafted, balanced portfolio of diversified investments can drift away from the desired asset allocation mix over time. Many investors may not realize that it is possible to improve investment returns and reduce portfolio risk by adjusting the asset allocation back to the target -- an investment discipline known as rebalancing." (mPower Cafe)

Time for Companies to Step Up to the Plate: 401(k) Participants Need Investment Advice
Excerpt: "Most corporations think that your 401(k) is entirely your problem. If you make mistakes-- well, better luck in the next life. But this life is not a dress rehearsal. Most top executives get company-paid advice to help them manage their multimillions. Why shouldn't the grunts with just 401(k)s get a few suggestions, too?" (Jane Bryant Quinn in Newsweek via MSNBC.com)

White Paper: Investing Plan Assets In Employer Securities (PDF)
15 pages. Excerpt: "Here is a series of questions and answers about the investment of employee benefit plan assets in the securities of the employer whose employees are participants in the plan.... Plan assets can be invested in employer securities, but the investment must comply with strict statutory limitations." (Wiley Rein & Fielding LLP)

Don't Let Enron Debacle Sour You On Power of Employee Ownership Plans
Excerpt: "There are four predominant types of benefits that utilize employee ownership. They are: employee stock-ownership plans, stock-option plans, employee stock-purchase plans and 401(k) plans.... When used as a component of a larger investment strategy, investing in employer securities can be extremely rewarding. Furthermore, investing in employer securities is one of the few investments employees can make in which they have the potential to affect the outcome of their investments." (The [Kansas City] Business Journal)

Notes from SunGard Corbel's Advanced Pension Conference
Excerpt: "Here is the first installment of my notes from the conference, which may be of interest to pension practitioners. These are only highlights of the extensive oral and written material provided to attendees, but they are points that seem especially interesting or useful." (BenefitsLink)

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

IRS Publishes List of Approved Non-Bank Trustees and Custodians; Announcement 2002-12 (PDF)
At page 553. Excerpt: "Archer medical savings accounts ... custodial accounts of a pension plan ... custodial accounts described in § 403(b)(7), trust or custodial accounts of individual retirement accounts ... and custodial accounts of eligible deferred compensations plans described in § 457(b) will not be tax exempt if the trustee or custodian of such accounts is not a bank ... or an approved nonbank trustee or custodian." (Internal Revenue Service)

Opinion: What's Best When It Comes to Options Accounting
Excerpt: "Senator Carl Levin has taken aim once again at the forces of evil-- namely, the chief executive officers and their lobbyists who devoutly believe Moses brought down an 11th commandment from Mount Sinai: 'Thou shalt not charge thine earnings for the cost of stock options.'" (Graef Crystal, on Bloomberg.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Pension Plan Administrator for Baltimore-based pension and profit sharing plan consulting firm
Actuarial Consultant, Retirement - AF-020221-007 for Hewitt Associates LLC
Pension Plan Administrator - AF-020220-003 for Hewitt Associates LLC
Health Management Consultant - AF-020222-004 for Hewitt Associates LLC
Institutional Trust Relationship Manager for U.S. Bank N.A.
PLAN SPECIALIST - Plan Sponsor Desk (Los Angeles) for Transamerica
Benefits Analyst III for Raley's
Senior Writer (Contract position only) for Transamerica
Pension Supervisor for Deloitte & Touche USA LLP
Employee Benefit Manager - TEMPORARY for The Ross Companies
SBO Marketing Project Manager for American Express Financial Advisors
IRA Marketing/Training Project Manager for American Express Financial Advisors
Pension Administration - Team Leader for Mktng/ Sales Firm Working with 401k's, P/S, MPP and Prevailing Wage Plans
Account Coordinator for CBIZ Benefits & Insurance Services of Ohio, Inc.

Newly Posted Conferences (Post Yours!)
6th Annual Compensation & Benefits Forumin Dubai on April 28, 2002
presented by the Institute for International Research
Defined Contribution/Consumer Driven Health Carein NY on March 12, 2002
presented by New York Metropolitan Area Chapter - ISCEBS
Defined Contribution/Consumer Driven Health Carein NY on March 21, 2002
presented by New York Metropolitan Area Chapter - ISCEBS

Newly Posted Press Releases
Senior HRIS Specialist Joins NuView as Project Manager (NuView Systems, Inc.)

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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.