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The BenefitsLink Newsletter -
Retirement Plans Edition
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March 15, 2002 - 12,334 subscribers
Today's sponsor: Actuarial Systems Corporation

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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)

House Ways and Means Committee Approves Pension Reform Bill
Excerpt: "The bill passed 36-2 by the House Ways and Means Committee adopts several principles outlined by President Bush, such as requiring notice of 30 days to participants in 401(k) plans to temporarily suspend account activity and mandating that participants get quarterly account statements instead of yearly.... The pension bill probably will be merged with other proposals awaiting action in other House committees, and the House could consider a final version next month." (AP via Lycos)

Joint Committee on Taxation Explains Provisions of Ways and Means Committee Chairman's Bill (PDF)
40 pages; entitled Description of Chairman's Amendment in the Nature of the Substitute to H.R. 3669, The 'Employee Retirement Savings Bill Of Rights,' prepared March 13, 2002. Includes a provision exempting Incentive Stock Options and Employee Stock Purchase Plan stock options from 'wages' for Social Security tax purposes. (Joint Committee on Taxation)

Text of Ways and Means Committee Chairman's Substitute Pension Reform Bill (PDF)
57 pages. Excerpt: "This Act may be cited as the 'Employee Retirement Savings Bill of Rights.'" (U.S. House of Representatives, Committee on Ways and Means)

Analysis: Stimulus Bill Allows Plans to Eliminate Benefit 'Pop Up' But Action Required by June 30 (PDF)
Excerpt: "EGTRRA increased the dollar ceiling ... under a defined benefit plan to $160,000 ... Many retirement plans have incorporated these limitations by reference to the tax code sections that prescribe the rules.... [Such a] plan may be amended to reduce benefits to the levels that would have been in effect without taking EGTRRA into account ... [without violating Code section 411(d)(6), but] the plan amendment must be adopted no later than June 30, 2002." (Milliman USA)

Another Question is Answered in the Who's the Employer Q&A Column
A medical partnership exists for emergency room physicians and has no employees. The doctors may perform services at various hospitals. Each doctor/partner gets income from this medical partnership. Can any of the doctors form a corporation and use the income from the medical partnership to fund the corporation? Could each of these corporations have its own defined contribution plan? (BenefitsLink.com)

Labor Department Sues California Company, Asserts Stock Was Overvalued
Excerpt: "The U.S. Labor Department has filed a lawsuit against Earle M. Jorgensen Co., asserting that the Brea, California-based metal distributor contributed overvalued company stock to its [ESOP]." (AP via Lycos)

2001 Survey of State and Local Government Employee Retirement Systems
(Public Pension Coordinating Council)

2 More Big Retirement Funds Oppose Hewlett-Compaq Deal
Excerpt: "Pension funds for California teachers and Ohio public workers said today that they planned to vote against the Hewlett-Packard Company's proposal to buy Compaq Computer, saying it threatens profitability." (New York Times; free registration required)

State Street to Take Over Enron Funds
Excerpt: "Assistant Labor Secretary Ann Combs said that State Street has been selected to act as a 'special independent fiduciary,' responsible for investing the assets of a trio of Enron retirement plans and representing the shareholders in Bankruptcy Court." (Boston Globe)

NFL Retirees to Receive Hefty Pension Increase
Excerpt: "The pensions of more than 2,000 retired pro football players will be raised as much as 100% beginning in April under terms of a deal being heralded by pension rights advocates as without precedent in American industry." (USA Today via Yahoo! News)

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

SEC Goes After Stock Options
Excerpt: "In the first case of its kind since the Securities and Exchange Commission pledged last month to get tougher on corporate executives who manipulate earnings, the agency is trying to force a former New Jersey pharmaceutical executive to return an unspecified amount of stock options allegedly tied to fraudulent earnings growth." (Washington Post)

Stock Option Absurdity: Hoping for Lower Prices
Excerpt: "If companies simply repriced options immediately, then the accounting rules would force the companies to reduce their profits if the value of the options rose over time. But the delay keeps such reality out of earnings statements.... More than 100 companies have used the strategy since it was pioneered by Sprint in 2000." (New York Times; free registration required)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Employee Benefits Attorneys Needed for Warner Norcross & Judd LLP
in MI
Employee Benefits Attorney for Thompson Hine LLP
in OH
Client Services Director for PFPC
in MD
Client Consultant for CIGNA Corporation
in IA, IL, WI
401(k) Plan Administrator for PFPC
in MN
Compliance Analyst for PFPC
in MN
Sales Representative for Ceridian
in CA
ACTUARY, GS-1510-15 for U.S. Department of Labor, Pension and Welfare Benefits Administration
in DC
Compliance Analyst for New York Life Benefit Services, LLC
in MA
Employee Benefits Administrator for The Restaurant Company - Operator of 500 Perkins Restaurant and Bakeries
in TN
in NY
Client Relationship Manager for Pension Third Party Administrator
in MI

Newly Posted Benefits Businesses for Sale (Post Yours!)
50% of Benefits Administration Firm in Salt Lake CityFacilities in UT

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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.