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The BenefitsLink Newsletter -
Retirement Plans Edition
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March 22, 2002 - 12,334 subscribers
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Senate Panel Approves Pension Bill
Excerpt: "If both [House and Senate pension reform bills] are passed by their respective chambers in their current forms, the stage will be set for a tough ideological conflict when a conference committee seeks to meld them, because they differ in several respects." (Washington Post)

Divided Senate Panel Backs Pension Revisions
Excerpt: "The comprehensive Democratic bill, which was roundly criticized by Republicans and business groups, also would let workers sell company-contributed stock sooner, sue executives who mislead them and elect representatives to boards that oversee their 401(k) retirement accounts." (Reuters via Lycos)

Democrats, Republicans Differ on Pension Reform Approaches
Excerpt: "[A] Senate bill narrowly approved Thursday by the Health, Education, Labor and Pensions Committee does limit the stock by requiring a choice: An employer that offers a 401(k) plan could make matching contributions in company stock or offer the stock as an investment option, but not both." (AP via Yahoo! News)

AFL-CIO Applauds Clearance of Pension Reform Bill by Senate Committee
Excerpt: "S. 1992, the Protecting America's Pensions Act, enhances retirement security by recognizing that if a company does not provide a real pension (a defined benefit plan that is guaranteed by the federal government), then the company must be more prudent in designing the 401(k) plan offered to its workers. The bill combines a new right for workers to sell company stock in a 401(k) plan with important reforms to counterbalance employer pressures ..." (AFL-CIO)

ASPA Comments on Latest House and Senate Pension Reform Bills
Excerpt: "[The Boehner bill] will be combined with the House Ways and Means Committee bill that was reported out by the committee last week. The combined House bill is presently scheduled for full House consideration on April 11. ASPA continues to be actively engaged in addressing a number of technical problems with the House bill." (American Society of Pension Actuaries)

Text of Boehner Substitute Bill and Amendments Approved by House Committee on March 20
Excerpt: "Boehner's 'Chairman's substitute' makes a number of important changes to H.R. 3762 as introduced, including an employer option to institute a rolling three-year diversification approach in which each new grant of stock would have to be held for three years before it could be diversified. Boehner's substitute also included a provision on defined benefit plan funding and variable premium relief, as well as a number of ERISA pension reforms that were dropped from the 2001 tax act ..." (American Benefits Council)

Analysis: Employers Get Break on Pension Funding
Excerpt: "On March 9, President Bush signed the Job Creation and Worker Assistance Act. Among many things, it permits employers to use higher interest rate assumptions when putting away money for defined benefit plans." (SignOnSanDiego.com)

Another Question is Answered in the Who's the Employer Q&A Column
A owns 100% of a building contractor corp, 50% of a painting corp and 50% of a bricklaying LLC. The other half of the painting corp and the other half of the bricklaying LLC are owned by two people unrelated to A. The building contractor corp performs all administrative functions (payroll, hiring, and billing as well as actual day to day management) for all three companies. Can I call these entities a single employer for purposes of sponsoring a 401(k) plan? (BenefitsLink.com)

Retirees Who Cash Out Could Take Their Lumps: the Risk of Poor Investments
Excerpt: "Consider that before long, more Americans than ever will start retiring, as the baby boomers begin turning 65. When that happens, some of the same investors who've struggled to manage their retirement savings accounts all along will suddenly have to manage a massive sum of money -- their 401(k) accounts -- worth hundreds of thousands of dollars. But there will no longer be time to recover from screwups." (TheStreet.com)

Technical Tip: Use of Seasoned Money to Purchase Insurance Under Profit Sharing Plan
Excerpt: "[T]he plan allows for the use of 'aged money'--i.e., the amount that could be distributed under the five-year rule--to purchase life insurance over and above that which could be purchased under the incidental rules. Does the use of such aged money result in taxable income to the participant--not just the PS 58 amount ..." (Reish Luftman McDaniel & Reicher)

Senate Democrats Tap Social Security in Budget Plan
Excerpt: "Senate Democrats, who have frequently criticized President Bush for using excess Social Security receipts to fund other programs, yesterday unveiled a budget plan that would tap Social Security every year for the rest of the decade. They called on the next Congress to solve the problem." (Washington Post)

Senate Committee Passes Bill to Provide Catch-Up Contributions Under Federal Thrift Savings Plan
Excerpt: "Under the bill, the limit on TSP contributions for federal employees aged 50 or older would be $2,000 higher than for younger workers in 2003, $3,000 higher in 2004, $4,000 higher in 2005 and $5,000 higher in 2006." (GovExec.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) Administrator for The Pension Group, Inc.
in CA
Senior Regulatory Compliance Specialist for US Airways
in VA
Trust Account Executive for Guardian Life Insurance Company
in NY

Newly Posted Press Releases
Benefit Software Announces New Broker Partnerships (Benefit Software 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.