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The BenefitsLink Newsletter -
Retirement Plans Edition
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April 23, 2002 - 11,721 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

Proposed Regs on Notice of Significant Reduction in the Rate of Future Benefit Accrual
Excerpt: "This document contains proposed regulations relating to the requirements of section 4980F of the Internal Revenue Code (Code) and section 204(h) of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, which apply to defined benefit plans and to individual account plans that are subject to the funding standards of section 412 of the Code and section 302 of ERISA." (Internal Revenue Service)

Overview: Proposed Regs Provide Guidance on Notice of Reduction in Rate of Future Benefit Accruals
(Scroll down the target page a bit to reach the article.) Excerpt: "A reasonable time would generally mean at least 45 days before the plan amendment's effective date. Special timing rules would allow ... notice to be provided as late as 15 days before the effective date of the amendment in two types of cases: (1) ... amendments adopted in connection with business mergers and acquisitions; and (2) ... amendments of small plans." (taxCCHGROUP.com)

Top Ten Retirement Bloopers for Individuals
Excerpt: "Most people don't think of retirement mistakes on the same level as, say, flunking out of college or winding up in jail. But retirement mistakes are some of the worst blunders you can make, because they affect you for decades." (CNN Money)

After Enron, Firms Relax Rules on Employer Stock Investments
Excerpt: "62 percent of the [large employers that made matching contributions in the form of their stock] that had limits either have eased them or are considering doing so. Employers 'are very focused on diversification right now,' said Lori Lucas of Hewitt [Associates]." (Washington Post)

Raytheon Retirees Protest Pension Lag: Retiree Payments Stuck Although Stock Surges
Excerpt: "Dozens of retired Raytheon Co. workers are expected to picket the company's annual meeting in Lexington [Mass.] tomorrow, complaining that their pensions haven't increased since 1993.... From 1970 to 1993, management gave a cost-of-living increase to its retirees every three to four years, [Association of Raytheon Retirees president Fred] Churchill said." (Boston Herald via BusinessToday.com)

Another Question is Answered in the Who's the Employer Q&A Column
Our client is a limited liability company ('LLC') owned by 2 corporations, A and B. Corporation A is owned by about 10 individuals, but no five or fewer individuals own 80% or more of Corporation A. In determining if the LLC is part of a controlled group with another corporation, do we look through the entities and compare the individuals' ownership levels (deeming that they own interests in the LLC)? (BenefitsLink.com)

The Participant as Plaintiff: Will Employers Be Blamed for Inadequate Savings at Retirement Age?
Excerpt: "The biggest surprise ... may be the shock members of the first wave of baby boomers will feel when they reach retirement age and, in too many cases, discover they do not have enough money to support themselves without working. Right or wrong, it is inevitable that some will try to pin the blame on their employers." (PLANSPONSOR.com; free registration required)

Welcome to new BenefitsLink advertiser PENSCO Trust Company
Excerpt: "PENSCO Trust Company, an experienced and knowledgeable Self-Directed IRA specialist, can solve your clients' special asset rollover problems (e.g., we specialize in the administration of non-traded investments such as real estate, partnerships, private stock, etc.), thereby supporting you and indirectly expanding your client services. Unlike our competitors, we act as both the administrator and custodian for our IRAs."

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

Analysis: DOL Issues Final Regs on Use of New Technologies by ERISA Plans
Excerpt: "[F]or plan sponsors already using electronic media to satisfy certain ERISA disclosure requirements, it may make sense to conform current practices to the safe harbor, if possible. For those not yet using electronic media, now may be a good time to explore the possibilities presented by the new regulation." (Deloitte & Touche)

Participants' Attorney Mark Machiz Explains Why More Plans Are Being Sued
Excerpt: "One reason for the upswing is an increasing appreciation by the more generic plaintiffs' firms that ERISA is a meaningful area of litigation and of class-action litigation. I also think there is a very aware group of 50ish executives-- leading-edge baby boomers-- who have been subjected to early retirement windows and cash balance conversions and have been upset by it." (PLANSPONSOR.com; free registration required)

Companies Rethinking Equity Pay
Excerpt: "Overhang is the sum of all outstanding equity available for grants to employees that has not yet been exercised plus shares earmarked for future use. It's an issue that is starting to get significant attention from investors, who will usually stomach dilution so long as they're making money." (Investor Relations Business via Society for Human Resource Management)

Opinion: IBM's CEO Deserved His Pay, If Anyone Does
Excerpt: "Lou Gerstner earned $622.9 million, or $69.2 million a year, during his almost nine- year career heading International Business Machines Corp. A number that large doesn't pass easily down my gullet, but if anyone deserves to have earned that much money, Gerstner's the man." (Graef Crystal, on Bloomberg.com)

Lucent Workers Can Trade in Stock Options
Excerpt: "Lucent said the offer is not counted as a repricing of options because it is being done six months and a day after May 22, when it will expire." (PLANSPONSOR.com; free registration required)

Welcome to new BenefitsLink advertiser BSW Benefit Plans Plus, L.L.C.
Excerpt: "Let BSW Benefit Plans Plus, L.L.C. be your retirement plan expert... maximizing the design & administration of your retirement program. We offer simple solutions for complex issues in... Plan Design & Consulting, Qualified Plan Administration; 401(k)/Profit Sharing/Defined Benefit/Cafeteria Plans/ESOP's, Non-qualified plan administration; Comprehensive Document Services and Plan & Investment Communications"

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Plan Document Specialist for Diversified Investment Advisors
in NY
401(k) Administrators for Geller & Wind, Ltd.
in NY
Senior Conversion Specialist for First Trust Corporation
in CO
Savings Plan Manager for Apple Computer, Inc.
in CA
Account Manager/Assistant for Driscoll Insurance Agency
in CA

Newly Posted Conferences (Post Yours!)
Asset Retention Study Groupin CT on May 7, 2002
presented by LIMRA International
2002 Educational Outreach Programsin ME on June 3, 2002
presented by International Foundation of Employee Benefit Plans
2002 Educational Outreach Programin IL on June 5, 2002
presented by International Foundation of Employee Benefit Plans
2002 Educational Outreach Programin CA on June 7, 2002
presented by International Foundation of Employee Benefit Plans
Stars & Stripes 2002 National Public Employees' Retirement Funds Summitin FL on June 2, 2002
presented by Financial Research Associates
Preparing for the Reality of Pan-European Pensionsin ALL STATES on May 8, 2002
presented by Hewitt Associates

Dave Baker says world!
Editor and publisher Dave Baker says world and thanks for 7 great years, as BenefitsLink celebrates its seventh anniversary online!

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.