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The BenefitsLink Newsletter -
Retirement Plans Edition
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April 3, 2002 - 11,902 subscribers
Today's sponsor: Profit Sharing/401(k) Council of America

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State Street Bank Rethinking Enron Roll In Light of Ruling that Expenses Must Come from Plan Assets
Excerpt: "[State Street Bank's] move followed a ruling by Judge Arthur Gonzalez of the U.S. Bankruptcy Court in New York that the costs of overseeing the plans shouldn't by paid out through Enron's assets -- a term originally reached to by the Labor Department, Enron and State Street Bank. Instead, the judge ruled in favor of a group of Enron's creditors who think the pension plans themselves should bear the service costs." (Dow Jones Business News via Yahoo! News)

Andersen's Retired Partners Fear Benefits May Slip Away
Excerpt: "... with Andersen's future shaky, its workers now fret that their pensions are at risk, and its retired partners have filed suit against the company, a limited liability partnership, to try to protect their benefits, a move whose outcome is anything but certain." (New York Times; free registration required)

When Will the Secret of 401(k)s be Exposed? Most Employees Know Too Little To Succeed
Excerpt: "If employee-directed retirement plans are to provide employees with adequate retirement income, it's essential that the plans be accompanied with an effective retirement education. And the providers of retirement education need to have specific measures to ensure individual participants are acquiring the knowledge they need ..." (Dennis Ackley, Ackley Associates)

401(k) Survival Kit for Employees and Investors
Excerpt: "Are you concerned about your 401(k)? Do you understand how it works and what you are supposed to do in relation to it? Do you know how to make informed decisions about your 401(k)? Amidst confusion and growing public concern about 401(k)s, the nonprofit Alliance for Investor Education (AIE) [has published] at www.investoreducation.org the '401(k) Survival Kit,' a collection of its members' best-available information on the topic." (Alliance for Investor Education (AIE))

Selling 401(k)s Post-Enron
Excerpt: "Selling 401(k) plans is the perfect business for brokers and the current post-Enron environment may be one of the perfect times to do so. Why? Four reasons: ..." (Rick Meigs and Matthew D. Hutcheson published by OnWallStreet.com)

Corporate DB Plan Asset 'Raiders' Now Facing Deficits
Excerpt: "14 years ago, Goodyear transferred $400 million from its overfunded pension plan into the general fund.... [The company] now faces a $1 billion deficit in its pension fund after two disappointing years in the stock market that have wiped out hundreds of millions of dollars from the fund in the last two years. At the same time, Goodyear's pension obligations are rising as the company has offered early retirement plans to hundreds of workers in recent years to cut costs." (The [Akron, Oh.] Beacon Journal)

Ad Hoc Retirement Plan COLAs (PDF)
Article begins on page 8. Excerpt: "[S]ome defined benefit plans that do not provide for automatic cost-of-living adjustments (COLAs) are considering granting special, one-time COLAs as a means to stem some of the effects of inflation on the purchasing power of retirees. This article offers a guide to implementing an ad hoc COLA in a defined benefit pension plan, using those individuals from the greatest generation as the target population." (Mark Beilke, ASA of Milliman USA)

New York's Pension Funds Reel After Taking a Dual Blow
Excerpt: "One of the most damaging but least scrutinized causes of New York City's current fiscal crisis is the city's pension system, which is being forced to pay out more generous benefits to retired civil servants just as its investments have lost more than $9 billion in the stock market." (New York Times; free registration required)

TIAA-CREF Announces U.S. Shareholder Initiatives for 2002
Press release. Excerpt: "TIAA-CREF, the premier pension system for educational and research institutions, today announced its corporate governance initiatives for 2002, including a major push to secure the right of shareholders to approve stock option plans, as well as efforts to encourage auditor independence." (PR Newswire via Yahoo! Finance)

Treasury to Suspend Certain Investments by Thrift Savings Plan So Gov't Won't Exceed Debt Ceiling
Excerpt: "The Treasury Department will suspend daily investments of billions of dollars of federal employees' retirement funds for two weeks to avoid breaking the federal debt ceiling, Treasury Secretary Paul O'Neill said Tuesday.... Federal employee representatives were sharply critical of the G Fund maneuver." (GovExec.com)

Assessing Retirement Income Needs (PDF)
Excerpt: "The answers will be different for each individual and will generally depend on daily living expenses, medical needs, tax implications, and sources of retirement income. The planning process is complex and should take all variables into account. There is no magic formula. This article presents the retirement income needs assessment process and explains some of the issues that individuals approaching retirement should confront before heading off into the sunset." (Milliman USA)

The Pension Bomb: Lower Equity Returns to Plans Will Put Pressure on Corporate Earnings
Excerpt: "It's a 'trillion dollar time bomb.' That's how investment manager Robert Arnott refers to the developing gap between returns institutional investors expect and what they are likely to get in the new Post-Bubble market." (Scott Burns of The Dallas Morning News)

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

Bill Targeting Stock Option Accounting Faces Opposition
Excerpt: "A bill to deny companies tax breaks for granting stock options to employees faces opposition in House and Senate tax committees and from a countermeasure offered by a Senate committee chairman." (Bloomberg News via the Boston Globe)

Opinion: Stock Options-- Now You Care?
Excerpt: "It seems that when investors were getting wealthy by holding stocks of almost any flavor stock options grants were of little concern. Now that the stock market has turned sour, investors are no longer very patient with insiders getting multi-million dollar stock options grants. Well, it's about time. The Motley Fool has been howling about this for several years." (The Motley Fool)

CalPERS Wants Aetna To Change Governance Measures
Excerpt: "The nation's largest pension fund is urging Aetna Inc. to revamp key corporate governance provisions." (TheDeal.com)

Spencer Publishes 5500 Analysis For 2001 Plan Years
A new Spencer analysis finds that the Form 5500 and 5500-EZ for the 2001 plan year are essentially unchanged from the prior year, as noted in the just-released line-by-line analysis by Charles D. Spencer & Associates, Inc. (Spencernet)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) Investment Educator for ADP, Inc.
in CA, MA, TX
Benefits Specialist for Heartland Health
in MO
Manager, Retirement Plans for LifeBridge Health, Inc.
in MD
Senior 401(k) Administrator for The Pension Group, Inc.
in CA
Benefits Paralegal/ERISA Specialist for Florida Power & Light Company
in FL

Newly Posted Webcasts (Post Yours!)
Confronting the Challenges of Long-Term Care: A State Focus on April 2, 2002
presented by KaiserNetwork.org

Newly Posted Conferences (Post Yours!)
ASPA Benefits Council of DFW Legislative Updatein TX on April 24, 2002
presented by ASPA Benefits Council of Dallas/Ft. Worth

Newly Posted Press Releases
AFS Releases AFS-LINK (American Financial Systems, Inc.)
ORTEC Introduces Advanced Retirement Planner: "RAMI" (ORTEC International)

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.