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The BenefitsLink Newsletter -
Retirement Plans Edition
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April 11, 2002 - 11,782 subscribers
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Pension Legislation Heads to House Floor
Excerpt: "The House compromise bill that will be on the floor Thursday will contain Boehner's provision allowing workers to receive investment advice from the same companies that manage their 401(k) retirement accounts.... The final bill also will include a proposal included in the Ways and Means Committee-passed bill to let workers pay for their own investment advice with pretax dollars automatically deducted from their paychecks." (AP via Lycos)

Democrats Criticize House Pension Bill
Excerpt: "Democrats say it does not go far enough to safeguard against conflicted investment advice and encouraging workers to diversify their investments." (AP via Lycos)

PBGC Issues Final Regs on Optional Forms of Benefits and Earliest Retirement Date (PDF)
11 pages. Excerpt: "The PBGC is amending its regulations to make several changes in how it pays benefits, including giving participants more choices of annuity benefit forms, clarifying (for certain purposes under Title IV of ERISA) what it means to be able to 'retire' under plan provisions, and adding rules on who will get certain payments the PBGC owes to a participant at the time of death.... The new rules will apply to benefits in any plan with a termination date on or after June 1, 2002." (Pension Benefit Guaranty Corporation)

Another Question is Answered in the Who's the Employer Q&A Column
A company is a single-member LLC that is disregarded for income tax purposes. The single member of the LLC is a limited partnership. Some of the employees who perform services for the LLC are limited partners. Is there any reason these employees/limited partners should not (1) be treated as employees for employment tax purposes and (2) participate in the employee benefit plans sponsored by the LLC? (BenefitsLink.com)

Opinion: 401(not OK)s
Excerpt: "[T]he tax law should be changed so workers don't have to choose between a pension and an IRA.... Congress should again make the IRA universal by eliminating the income limits on both the traditional and Roth accounts." (John Berlau in the National Review)

Commentary: Retirement Disasters Loom for Many Baby Boomers
Excerpt: "One group that won't likely have as many problems with retirement security will be union members, because the vast majority have defined benefit pensions as part of their union contract's benefit package. In contrast, less than half of the non-union workforce even has a pension, and most of those are the unpredictable defined contribution type." (Rick S. Bender, President of the Washington State Labor Council, AFL-CIO)

Self-Annuitization, Consumption Shortfall in Retirement and Asset Allocation: the Annuity Benchmark
Working paper temporarily available for downloading. Excerpt: "[We consider] a retiree of a certain age who is endowed with some wealth and is facing alternative investment opportunities. One possibility is to buy a single premium immediate (participating) annuity-contract.... The alternative possibility is to invest the single premium into a portfolio of mutual funds and to periodically withdraw a fixed amount that is assumed to be equivalent to the consumption stream generated by the annuity." (Peter Albrecht and Raimond Maurer, published by the Pension Research Council)

Personal Retirement Accounts and Social Security Reform
Working paper temporarily available for downloading. Excerpt: "Some ... argue that personal accounts would provide all workers a higher rate of return than can be paid under the current Social Security system. In this note, I explore the limits of this last argument. I show that Social Security returns are projected to be low mainly because today's workers are committed to paying for the system's past debt." (Olivia S. Mitchell, published by the Pension Research Council)

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

Proxy Advisory Firm Backs Retirees' Proposal to Exclude Pension Gains from Exec Comp Calculations
Excerpt: "Institutional Shareholder Services, an influential proxy advisory firm, is supporting a proposal submitted by a retirees' organization to exclude pension income in calculating compensation for executives of Verizon Communications.... Proposals to separate pension gains from determining executive compensation also have been submitted to shareholders of AT&T Corp., International Business Machines Corp., General Electric Co., and Qwest Communications International Inc. this year." (Dow Jones Business News via Yahoo! News)

April 2, 2002 Issue of Andersen's Alert: U.S. Compensation and Benefits News Briefs (PDF)
Articles include U.S.-Canada Income Tax Convention and pensions; suggestions requested for Treasury/IRS FY 2002-2003 Guidance Priority List; cases on late COBRA notices, COBRA after plan cancellation, QDROs and welfare benefits, TPA audit report as legal work product, dismissal of ERISA claim, COBRA procedures and proof of mailing, LTD coverage on last day of employment, pension garnishment to satisfy criminal fine. (Andersen)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Pension Administrator (Junior Level) for Slavic401k.com, Inc.
in FL
Pension Supervisor for Benefit Resources, Inc.
in CA
Employee Benefits Relationship Manager for BB&T
in NC

Newly Posted Conferences (Post Yours!)
Employee Benefits Law Conference 2002in NC on May 1, 2002
presented by McGuireWoods LLP
Troubleshooting the 2001 Form 5500in ALL STATES on April 25, 2002
presented by Thompson Publishing Group, Inc.
2002 Spring Conferencein AZ on May 22, 2002
presented by Phoenix Chapter, Western Pension & Benefits Conference

Newly Posted Press Releases
AFS Appoints New President (American Financial Systems, Inc.)
vSimplify Introduces Voluntary Benefits (vSimplify)
Get on-line access to more than 25,000 pages of HR documentation, pay programs and personnel policies (Watson Wyatt Data Services)
Alexander Hamilton Institute Releases New Free Report - State Breast-Feeding Laws (Alexander Hamilton Institute)
New National Medical Support Notice Form Makes Qualified Medical Child Support Order (QMCSO) Administration Easier (International Foundation of Employee Benefit Plans)

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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.