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The BenefitsLink Newsletter -
Retirement Plans Edition
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May 7, 2002 - 11,615 subscribers
Today's sponsor: Actuarial Systems Corporation

(Click on company name or banner to learn more.)


   For over 20 years ASC has provided complete automation for the
   pension office, including DC/401(k) and DB administration and
   valuation systems, as well as sophisticated Compliance Testing
   and DV Direct, a revolutionary solution for daily valuation
   functions.  All ASC Technical Support Members had experience as
   practicing Pension Administrators or Actuaries before joining
   ASC-- and most have been with ASC for over 10 years.

Many Plans At Risk of Violating Proposed Catch-Up Regs, IRS Told
May 6, 2002 item. Excerpt: "Witnesses at an IRS hearing testified that plans for controlled groups, multiemployer plans, and plans with union and non-union workers are all at risk of violating the universal availability requirements under the proposed regulations on catch-up contributions. The IRS hearing on the proposed rules was held April 30, 2002." (CCH News & Information Library)

Governments, Businesses Share Pain of Bear Market, Including Pension Plan Ramifications
Excerpt: "During the boom years many companies enjoyed a pension holiday. In other words, returns on their investments were so good that they didn't have to contribute to their pension funds. Better still, accounting rules allowed many firms to book profits based on pension gains." (Boston Globe)

Most Small Businesses Unaware of New Tax Law Incentives to Sponsor a Retirement Plan (PDF)
Press release. Excerpt: "The most surprising finding from this year's [Small Employer Retirement Survey] is the large number of [small businesses] that are unfamiliar with the Economic Growth and Tax Relief and Reconciliation Act (EGTRRA) that was signed into law last year, which contains numerous incentives for retirement plan sponsors. Sixty-eight percent of sponsors and 86 percent of nonsponsors (companies not sponsoring a plan) say they are not familiar with this law ..." (Employee Benefit Research Institute)

Another Question is Answered in the Who's the Employer Q&A Column
With regard to a PEO "single employer" plan, does the new revenue procedure provide any relief from possible violations of 410(b), ADP/ACP and the like? Most of it deals with the exclusive benefit rule but there is a special rule for terminating plans in Section 4.03; if a single employer PEO plan terminates, does it get a complete pass on all of these other compliance issues? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
Section 5.09 of Rev. Proc. 2002-21 says that, after the Compliance Date (the last day of the 2003 plan year), a PEO may not rely on an IRS determination letter for a plan that benefits Worksite Employees, regardless of when it was issued. We work with several PEO plans that operate as multiple employer plans (as they should, we presume, given the recent IRS guidance). If they apply for determination letters for their GUST restatements, will those letters become null and void after 2003? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
Does Rev. Proc. 2002-21 have any impact on a division of a company if the company has determined that the employees of the division are common law employees of the company and participate in the company's qualified plan, even though the employees are leased from a PEO? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
A PEO complies with Rev. Proc. 2002-21, and ends up transferring assets for some Client Organizations to a Spinoff Retirement Plan. Must a separate spinoff plan be established for each CO? When the spinoff plan terminates, must distributions be offered to the employees, or could the assets be transferred to yet another single employer DC plan maintained by that particular CO? Does the successor plan rule apply, in which case that CO cannot have or establish any other DC plan for 12 months? (BenefitsLink.com)

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

First Circuit Takes Narrow View of ERISA Fiduciary Duty to Provide Individualized Information
Barrs v. Lockheed Martin Corp. (1st Cir. 2002). Excerpt: "The plaintiff ... was the ex-wife of an employee who was covered by two employer-sponsored life insurance policies ... The court drew a distinction between general fiduciary duties, owed to all participants, and individualized duties, which are usually created only by a special agreement. The distinction may be helpful to plan administrators who are accused of fiduciary breach based on a failure to provide individualized information." (EBIA Weekly)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Extraordinary & Fun Defined Benefit Consulting Opportunities in So. Calif. for Louis Kravitz & Associates, Inc.
in CA
Assistant General Counsel for Fortune 500 Firm
in TX
Senior Pension Administrator/Consultant for Pension Performance, Inc.
in IL
Transfer Education Specialists for ICMA Retirement Corporation
in DC
ERISA Paralegal for Prestigious National Law Firm In Atlanta Area
in GA
Director of Compensation & Benefits for Spencer Stuart Executive Search
Daily Valuations/Relius/Network Administrator for Freedom Capital, Inc.
in FL

Newly Posted Webcasts (Post Yours!)
EGTRRA: Implementing & Interpreting the Law Part 2 on May 8, 2002
presented by National Association of Government Defined Contribution Plan Administrators, Inc.

Newly Posted Conferences (Post Yours!)
Changes to HIPAA Privacy Requirements: Impact on Compliance Planningin ALL STATES on May 7, 2002
presented by Thompson Publishing Group
Recent Developments in Health Claims Subrogation and Reimbursement: The Impact of Great-West Life Ins. Co. v. Knudson.in ALL STATES on May 21, 2002
presented by Thompson Publishing Group
What Every Business Needs to Know About the Current Health Care Crisisin CA on June 17, 2002
presented by The UCLA Anderson Forecast Center
Health & Welfare Plan Fundamentals: A One-Day Seminarin NY on May 22, 2002
presented by New York Metropolitan Area Chapter - ISCEBS
After Enron: Employer Securities in Qualified Plansin on May 10, 2002
presented by ABA Center for Continuing Legal Education, ABA Tax Section
Retiree Health Care-- Trends and Alternatives Telewebin ALL STATES on May 16, 2002
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
TALX Corporation Forms Alliance With Bryan, Pendleton, Swats & McAllister (BPS&M) (BPS&M, A Wells Fargo Company)

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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.