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The BenefitsLink Newsletter -
Retirement Plans Edition
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April 1, 2002 - 11,962 subscribers
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Interview with Ibbotson Associates on Use of Professionally Managed Accounts in 401(k) Plans
Excerpt: "Q: Do you think the participant will willingly sign over management of her retirement funds to a plan vendor? Henkel: If they understand that the investment decisions are being made by unbiased professionals, then yes. Plus, the advisory opinion makes it easy for the participants to take advantage of the program." (PLANSPONSOR.com; free registration required)

A Rapid Descent for Raytheon's Pension Gains; Large Expense Expected Next Year
Excerpt: "Two years ago, Raytheon's gain of $186 million from its pension fund exceeded the company's overall reported profit.... Now the company anticipates the pension gain will shrivel to about $85 million this year and turn into an expense of about $145 million next year.... Accounting rules permit companies deemed to have more than enough money in their pension funds in any given year to claim excesses as earnings that count toward their overall profit or loss ..." (Boston Globe)

Opinion: Questions and Answers on Legislation to Improve California 403(b) Plans
Excerpt: "Supporters of AB2506, which seeks to streamline 403(b) plans in California, make their case in a question and answer format." (403bWise.com)

Commentary: Pension Meisters Find Higher Rates Stimulating
Excerpt: "Will the higher [interest] rates jeopardize the health of pension plans because companies won't be putting as much money into them? Most people don't think so." (Pittsburgh Post-Gazette)

IRS Approves Termination of ESOP and Redemption of Stock in Suspense Account to Pay Loan Balance (PDF)
Private letter ruling 200213033. Excerpt: "[A]n ESOP loan will be exempt from the prohibitions provided in section 4975(c) and the excise taxes imposed by sections 4975(a) and (b) only if the loan is primarily for the benefit of plan participants and beneficiaries.... Substantial contributions to Plan X have been made on a continuing basis since 1997 resulting in a significant repayment of the Loan." (Internal Revenue Service)

Election to Cease Participation in DB Plan, Get Higher Contributions Under DC Plan Approved by IRS (PDF)
Private letter ruling 200213029. Excerpt: "The request concerns whether a proposed [one-time, irrevocable] election offered to employees participating in Plan X and Plan Y constitutes a cash or deferred election under Section 401(k) of the Internal Revenue Code." (Internal Revenue Service)

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

Stock Option Plans Surveyed by DOL's Bureau of Labor Statistics in National Compensation Survey
Spring 2001 issue of Compensation and Working Conditions Online. Excerpt: "Using a national sample, the National Compensation Survey program collected data on the incidence and provisions of stock options. For the first time, BLS obtained detailed information on such characteristics as vesting period and number of shares granted." (U.S. Department of Labor, Bureau of Labor Statistics)

Options Draw Scrutiny After Enron's Collapse
Excerpt: "Supporters of stock options say they give employees a financial stake in their companies' success, which ultimately benefits all shareholders.... Their opponents say stock options have bred a culture of irresponsible greed, showering executives with outlandish paydays that sometimes reach into the tens and hundreds of millions of dollars." (CareerJournal.com)

Federal Government Says Federal Pension, Health Liabilities Now Exceed Public Debt
Excerpt: "The U.S. government said Friday its chief financial liability is no longer the $3.3 trillion federal debt but the growing cost of pensions, healthcare and disability benefits it provides to its civilian workers, military personnel and veterans." (Dow Jones Business News via Yahoo! News)

Overview: DOL Implements Improvements to Voluntary Correction Programs (PDF)
Excerpt: "The interim VFC Program, established by DOL in 2000 ... was largely unsuccessful because (i) while it provided relief from ERISA remedies and penalties administered by the DOL, the interim program provided no relief from Code §4975 prohibited transaction excise taxes, and (ii) relief was conditioned on the plan sponsor's notifying plan participants of its application under the program, thereby potentially exposing the plan sponsor to lawsuits by participants." (Sutherland, Asbill & Brennan LLP)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
ERISA ATTORNEY for Swift & Associates, Executive Search Consultants, Portland, ME
in ME, NH
401(k) Administrator/Assistant for City National Bank
in CA
401k Plan Administrator for Waste Connections - Corporate Office
in CA
Data Analyst for CIGNA Retirement and Investment Services
in CT
Paralegal/ERISA Attorney for Dynamic Northeast Employee Benefits Firm
in MA
Actuarial Analyst for Northern Trust Retirement Consulting, L.L.C.
in GA
Supervisor Benefits Administration & HR for RSM McGladrey, Inc.
in IA

Newly Posted Conferences (Post Yours!)
Critical Topics Under the FLSA: 2002 Spring Updatein ALL STATES on April 19, 2002
presented by Thompson Publishing Group, 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.