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The BenefitsLink Newsletter -
Retirement Plans Edition
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April 4, 2002 - 11,902 subscribers
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Labor Department Moves to Ease Harm From Enron
Excerpt: "Labor Department officials accused Enron yesterday of backing out of an agreement to pay an independent investment firm to oversee its three employee pension plans, a move that angry officials with the agency described as a 'repudiation' of a deal signed less than a month ago." (New York Times; free registration required)

American Benefits Council Publishes Updated Comparison Chart of Pending Pension Reform Bills (PDF)
14 pages. (American Benefits Council)

Notice 2002-28 Gives 3-Year Treasury Rates Applicable to April 2002
Although 30-year Treasury bonds are no longer being issued, the interest rate on them is still being used for certain calculations under sections 412 and 417 of the Internal Revenue Code. Accordingly, the Internal Revenue Service has issued this table of the latest figures. (Internal Revenue Service (converted to Web page by Calhoun Law Group, P.C.))

The Journal of Pension Economics and Finance Debuts
(Text of articles are not available online, however.) Articles in first issue include: A Forum for Developing Ideas and Solutions to Pension Challenges; Controlling the Cost of Minimum Benefit Guarantees in Public Pension Conversions; Social Security as a Financial Asset: Gender-Specific Risks and Returns; International Pension Swaps; How can China Solve its Old Age Security Problem? (Cambridge University Press in association with the International Network of Pension Regulators and Supervisors (INPRS))

Proposal to Require Federal Agencies to Account for Their Own Retirement Costs Draws Controversy
Excerpt: "Another concern for federal workers is the Bush administration's plan to change the way the government accounts for Civil Service Retirement System benefits and Federal Employees Health Benefits Program benefits. [The administration] is proposing to fund the full cost of the government's share of those benefits directly out of agencies' salary and expense accounts. Currently, those benefits are partially funded through a central account managed by the Office of Personnel Management." (GovExec.com)

Excerpts from new edition of Incentive Compensation and Employee Ownership
The National Center for Employee Ownership presents excerpts from the 4th edition of its book Incentive Compensation and Employee Ownership, which covers how companies can use incentives, ranging from stock options to cash bonuses to gainsharing, to motivate and reward employees in growing companies. The new edition features a chapter on a unique type of phantom equity plan. (National Center for Employee Ownership)

Analysis: Two More State Court Beneficiary Decisions Follow Egelhoff's ERISA Preemption Analysis
Excerpt: "Plan sponsors who cheered when the US Supreme Court handed down its decision in Egelhoff v. Egelhoff last March should be delighted with two subsequent state court decisions. Both found that ERISA preempts state laws affecting who can be designated as a beneficiary in ERISA plans." (PLANSPONSOR.com; free registration required)

Abuse of Involuntary Termination Clause Alleged in Operation of Massachusetts State Pension Plan
Excerpt: "An obscure law set up to benefit fired state employees is being used by hundreds of former state workers to obtain early pensions even though they left on their own, according to a review of state records by CommonWealth magazine." (Boston Globe)

PaineWebber Settles Pension Fund Dispute With Nashville
Excerpt: "Central to the dispute, which was settled on Tuesday, was PaineWebber's role as exclusive investment consultant to the $1.4 billion fund and the way it was paid. Instead of receiving a flat fee, as is typical, PaineWebber was paid based on the trades generated in the fund's portfolio." (New York Times; free registration required)

Nondeductible Contributions for Employees of Foreign Subsidiary Are Not Subject to Excise Tax
IRS Ltr. Rul. 200211050 (Dec. 19, 2001). Excerpt: "EBIA Comment: ... This ruling illustrates the IRS's position that contributions not exceeding the Code Section 404 deductibility limits are not subject to the 10% excise tax on nondeductible contributions, even under circumstances that make the contributions in fact nondeductible. This conclusion does not appear to be limited to circumstances that involve foreign employers." (EBIA Weekly)

Opinion: Financial Planners Should Not Back Boehner Investment Advice Bill
Excerpt: "[B]y throwing its support behind a bill that would permit advice dripping with conflicts of interest, the [Financial Planners Association] is letting down consumers. It's opposing AARP, AFL-CIO, the Consumer Federation of America, and other groups who have the best interests of plan participants at heart.... The group is backing a law that is very likely to encourage advisors to gouge their customers." (Andrew Gluck on InvestmentAdvisor.com)

Interesting Discussion: Handling Benefits of Owners at Termination of Underfunded DB Plan
Is a 'waiver' of benefits legal? But is it really needed, if the plan states that benefits shall be paid out to the extent funded, and the assets are shared in a nondiscriminatory manner? What about the PBGC's rules? (BenefitsLink Message Boards)

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


Overview: DOL Modifies Filer Voluntary Compliance Program
Excerpt: "The old rules provided only for use of the most current form available; the new rules allow the administrator to choose between the form for the plan year for which relief is sought, or the most current form available.... Now that the IRS will grant relief to filers that comply with the DFVC Program, plans will be assured that their participation in the DFVC Program will not lead to IRS problems." (EBIA Weekly)

Overview: DOL Modifies Voluntary Fiduciary Correction Program
Excerpt: "[T]he permanent VFCP retains the basic structure of the interim VFCP, but there are a few significant changes: The program will be expanded to permit the correction of delinquent contributions to insured welfare plans and welfare plan trusts.... The permanent VFCP eliminates the interim VFCP's requirement that written notice of the correction be provided to participants [but] the class exemption contains notice requirements that must be followed if excise tax relief is sought." (EBIA Weekly)

Opinion: the Perverse Incentives of Stock Options
Excerpt: "In the conclusion to a two-part column, Whitney Tilson highlights the many perverse incentives that stock options create and recommends that companies instead set up programs to encourage actual stock ownership." (The Motley Fool)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401 (k) / Retirement Plan Administrator for Pension Parameters, Inc.
in NJ
Benefits Calculation Associate for Towers Perrin
in NJ
Employee Benefits Analyst for Watson Wyatt Worldwide
in MA
Actuary for Benetech, Inc.
in CA
Pension Plan Administrator for Benetech, Inc.
in CA
Daily Valuation Administrator for Benetech, Inc.
in CA
ERISA Associate for Womble Carlyle Sandridge & Rice
in DC
Employee Benefits Trust Officer for Regions Financial Corporation
in AR
Pension Administrator/Consultant for Pension Benefits Unlimited
in CA



Newly Posted Conferences (Post Yours!)
15th Annual Cincinnati Employee Benefits Conferencein OH on June 20, 2002
presented by Internal Revenue Service, the U.S. Department of Labor, and the Cincinnati Bar Association Employee Benefits Committee



Newly Posted Press Releases (Post Yours!)
Sentinel Benefits Hires New Director of Marketing to Spearhead Marketing Campaign (Sentinel Benefits)
Sentinel Benefits Brings on Sales Pro Kevin Yew to Broaden Managed Care Marketshare (Sentinel Benefits)
CNA Trust Has Busy Easter Weekend Providing "No-Blackout" Transfer of More Than 750 Retirement Plans (CNA Trust)



Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
James W. Fredrickson (Innovative Process Administration, LLC.)

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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.