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The BenefitsLink Newsletter -
Retirement Plans Edition
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March 20, 2002 - 12,334 subscribers
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Press Release: Labor Department Proposes Amendment of Streamlined Exemption Process (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Full Text of Proposed Amendment to PTE 96-62 Expanding Availability of Expedited PT Exemptions
Excerpt: "[I]n order to assist parties who in the future wish to utilize ... PTE 96-62, the Department is proposing to expand [that procedure] to permit parties to either base their submission on substantially similar transactions described in two individual exemptions granted within the past 60-months; or on one individual exemption granted within the past 120-months and one transaction which received final authorization by the Department under PTE 96-62 within the past 60-months." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Analysis: New Law Includes EGTRRA Technical Corrections
Includes description of changes made to EGTRRA provisions on changes to deemed IRA provisions; modification of top-heavy rules; deduction limits; tax credit for elective deferrals and IRA contributions; credit for pension plan startup costs of small employers; catch-up contributions for individuals age 50 or over; rollovers of after-tax contributions; cash-out rule--spousal consent requirements; and electronic provision of information returns to participants. (EBIA Weekly)

House, Senate Offer Pension Reform Bills
Excerpt: "The shape of post-Enron reforms to the nation's 401(k) retirement system should begin to emerge today as two key congressional committees mark up bills designed to strengthen legal protections for workers.... [But] working out a compromise [between the House and Senate versions] is going to be a major challenge for congressional leaders." (Washington Post)

Opinion: the High Cost of Teacher Hand-Holding for 403(b) Annuities
Excerpt: "Unfortunately, leaving the [Texas Teachers Retirement System 403(b) annuity] field open to the highest expense vendors may also work to virtually shut out the lower cost vendors. Worse, higher fees can reduce the amount a teacher can accumulate in a 403(b) plan by hundreds of thousands of dollars." (Scott Burns of The Dallas Morning News)

Results of 2002 Defined Benefit Investments Survey
Excerpt: "Funding levels, meanwhile, clearly have skidded. Our 2001 sample found 57% of plans were overfunded. The latest data show that number dipping to 48%." (PLANSPONSOR.com; free registration required)

Traditional Pensions Are Losing Popularity
Excerpt: "Earnings at companies in the Standard & Poor's 500 were boosted by an average of 5% to 7% during the stock market boom of the late '90s, said Ronald Ryan of pension tracker Ryan Lab Inc.... But two years of poor stock returns have 'ravaged' pension plan finances, which will force companies to pony up more money to keep their pensions fully funded, Ryan said. Ryan, like many other analysts, thinks hefty pension contributions will lead to reduced corporate earnings ..." (Los Angeles Times)

Another Question is Answered in the Who's the Employer Q&A Column
Dr. V owns 100% of a P.A. (VPA) and is its sole employee. All of VPA's services are performed for another medical corporation (SPA). VPA does not have an ownership interest in SPA. If Dr. V personally purchases a 10% interest in SPA, would that create an affiliated service group between VPA and SPA because of attribution from Dr. V to VPA? Would VPA then have to make a SEP contribution for all eligible SPA employees? (BenefitsLink.com)

DOL Advisory Opinion to SunAmerica Does Not Go as Far as Boehner Investment Advice Bill
Excerpt: "[T]he advisory opinion does not end what [Assistant Labor Secretary Ann Combs] sees as the need for the Senate to pass an investment advice bill ... The Boehner bill [passed last year by the House would allow] investment providers like SunAmerica to offer advice directly, without having to bring in an independent third party, as long as they assume liability for their advice and notify participants of potential conflicts of interest." (PLANSPONSOR.com; free registration required)

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

Joint Committee on Taxation Describes Background and Present Law Relating to Tax Shelters (PDF)
53 pages. Includes a discussion of the Winn-Dixie corporate-owned life insurance (COLI) litigation. (Joint Committee on Taxation)

Workforce Shifts to Big Companies
Excerpt: "For the first time, big businesses appear to employ more U.S. workers than small businesses." (USA Today)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) Sales/Client Service Consultant for Pension Specialists, Inc.
in CA
Pension Enrollment Specialist for Diversified Investment Advisors
in NY
Educational Specialist for CIGNA Retirement and Investment Services
in CT
in CA

Newly Posted Press Releases
vSimplify Partners with MKTech As Exclusive Canadian Distributor: Software Firm Leverages vSimplify's Web-Based Worksite Marketing Platform To Cross-Sell Insurance and Financial Services (vSimplify)
NuView's HR Software Selected For New High-Tech Public Library in Salt Lake City (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.