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The BenefitsLink Newsletter -
Retirement Plans Edition
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March 18, 2002 - 12,334 subscribers
Today's sponsor: Spencer's 29th Annual Pension & 401(k) Consultants Conference

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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)

Global Crossing Accused of 401K Mismanagement
Excerpt: "The suit alleges the defendants used false and deceptive accounting practices that inflated the company's true worth. As a result, plan participants and beneficiaries were encouraged to continue to invest in company stock and the retirement plan the complaint states. The suit seeks restitution for all individual 401(k) retirement savings lost in the company's collapse ..." (KNBC via MSNBC.com)

Now Available: PBGC Premium Package for 2002 Plan Year
Excerpt: "This year, we have revised the premium instruction booklet to make it easier to use. For example, we have consolidated our definitions and also consolidated our instructions on how to compute the variable rate premium." (Pension Benefit Guaranty Corporation)

Analysis: House Ways and Means Committee Passes Retirement Bill; Includes Stock Option/ESPP Surprise
In his Employee Ownership Update for March 15, 2002, NCEO executive director Corey Rosen discusses the (post-Enron) retirement reform bill approved by the House Ways and Means Committee. Among other things, it contains a surprise: in response to requests from employer groups, the bill includes a provision that would prohibit the IRS from implementing its planned withholding requirements for ISOs and ESPPs that would become effective in 2003. (National Center for Employee Ownership)

PSCA Invites Profit-Sharing, 401(k) Plan Sponsor to Participate in Annual Survey
Excerpt: "Companies who participate in the survey will receive a free copy of the report, which is scheduled for publication in September, 2002. The cost of the survey to non-participants is $295." (Profit Sharing/401(k) Council of America)

Second Court Upholds Post-Death QDRO
Patton v. Denver Post Corp. (D. Colo. 2002). Excerpt: "The ruling [by the federal district court in Colorado] is the second in the last year rejecting the decision of the 3rd U.S. Circuit Court of Appeals in Samaroo v. Samaroo ... that post-death QDROs violate ERISA ..." (Thompson Publishing Group)

Donors' Business With Pension Fund May Be Issue in New York Governor's Race
Excerpt: "In the last three years, [New York Comptroller H. Carl] McCall has received at least $800,000 from equity managers, lawyers and real estate companies doing business with the pension fund, campaign records show." (New York Times; free registration required)

Another Question is Answered in the Who's the Employer Q&A Column
Mr. X owns 50% of each of two partnerships. The other 50% of partnership 1 is owned by Ms. Y, while Mr. Z owns the other 50% of partnership 2. Are the partnerships under common control? If not, and both companies have a profit sharing plan, does Mr. X have a separate annual addition limit in each plan? Or are the plans aggregated relative to annual additions under the "owner-employee" rules? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
A large medical clinic has been billing the hospital for services of 8 of its physicians. Now the hospital wishes to lease these physicians from the clinic. These physicians will be working full time at the hospital. The clinic will pay the doctors' salaries and benefits. Is there any problem for the clinic if it continues to cover the physicians in the clinic's 401(k) plan? (BenefitsLink.com)

The Role of Gender and Marriage in the Retirement Process (PDF)
6 pages; Excerpt: "Retirement is no longer a male-dominated, one-way, one-time irreversible event.... Today, late midlife couples not only are confronting two retirements, but are also working out strategies as to when to retire and whether to take up paid work following retirement.... The Cornell study investigates whether, and how, couples' employment/retirement circumstances predict retirement satisfaction and marital quality for both men and women, using a life course framework." (The Edward R. Roybal Centers for Research on Applied Gerontology, Cornell Gerontology Research Institute)

A Parting of the Ways: Changing Investment Managers
Originally published February 2001. Excerpt: "Plan sponsors replace funds in their portfolio for three main reasons: a change in the manager or organization, a change in the manager's investment style or approach toward investing, and underperformance." (BusinessFinanceMag.com)

Know If Your Provider Discloses Fee Rebates
Fee rebates between mutual-fund companies and 401(k)-plan providers are a common business arrangement that some investigators label the 'big secret' of the retirement-plan industry.... If the fee rebate is disclosed to the plan sponsor and used to provide plan services, there's no problem. When the fees aren't disclosed, plan sponsors may be in violation of their fiduciary duties ..." (Employee Benefit News via CareerJournal.com)

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


Battle Lines Drawn on Stock Options Accounting
Excerpt: "The collapse of Enron and Global Crossing-- companies that generously handed out options to top executives, some of whom sold large amounts of stock before the businesses failed-- has reignited a debate about options. And those events have given life to a seemingly defeated effort to rewrite accounting rules and force companies to deduct from their profits the estimated cost of the options they give to employees." (New York Times; free registration required)

GAO Says Opportunities Exist for Improving Management of the DOL PWBA Enforcement Program
57 pages; GAO 02-232, March 2002. Excerpt: "PWBA has not gathered and analyzed information on the nature and extent of noncompliance. Lack of such data could undermine its enforcement strategy and operations. Although PWBA has taken steps to modernize its technology, most investigative staff still do not have sufficient and timely access to automated information for researching and selecting plans for investigation. Furthermore, PWBA lacks a centrally coordinated quality review process ..." (U.S. General Accounting Office)

DOL Secretary Elaine L. Chao Announces New Members of ERISA Advisory Council
Excerpt: "The new members are David L. Wray of Illinois, John J. Szczur of Maryland, Michele M. Weldon of Massachusetts, Judy E. Weiss of New York, and Dana M. Muir of Michigan." (U.S. Department of Labor, Pension and Welfare Benefits Administration)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Director, Ongoing Trust Officers for American Express Financial Advisors
in MN
Senior Defined Benefits Analyst for Towers Perrin
in NJ
Director Defined Benefit Plan Services for Retained Search for Large Financial Services Firm
in OH
Pension Administrator for Third Party Pension Administration / Trust Firm
in KY
Qualified Plan Administrator for South Jersey TPA Firm
in NJ
Prototype Services Specialist for Fidelity Investments
in MA



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



Newly Posted Conferences (Post Yours!)
International Forum on Disability Managementin Canada on May 27, 2002
presented by National Institute of Disability Management and Research
Fundamentals of Stock Plan Administrationin MA on April 25, 2002
presented by National Association of Stock Plan Professionals, co-sponsored by Charles Schwab



Newly Posted Press Releases (Post Yours!)
Secretary Elaine L. Chao Announces New Members of ERISA Advisory Council (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Subscribe to the Welfare Plans Edition, too (click)


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.