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The BenefitsLink Newsletter -
Retirement Plans Edition
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May 10, 2002 - 11,615 subscribers
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DOL Proposed Amendment to PTE 86-128 Expanding Relief for Securities Transactions
Excerpt: "The proposed amendment, if adopted, would allow a fiduciary that is a plan trustee to engage in a transaction covered by PTE 86-128.... subject to conditions involving (1) the size of the plan, and (2) at least annual reporting to the authorizing fiduciary of each plan of annual brokerage commissions ... and (3) at least annual reporting of average brokerage commissions ..." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

DOL Proposed Amendment to PTE 92-6 Expanding Relief for Sales of Insurance or Annuity Contracts
Excerpt: "The Department ... proposes to amend PTE 92-6 ... to include the sale by an employee benefit plan ... of an individual life insurance or annuity contract to a personal or private trust ... established by or for the benefit of an individual who is a participant in the Plan and the insured under the policy, or by or for the benefit of one or more relatives ... of the participant." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

2001 ASPA Financial Survey Available for $75 (PDF)
Excerpt: "Ever wondered about salaries, health and welfare benefits, time off, and bonuses for the employees of our industry? How about the fee schedules and billing practices of companies like yours? Want to know how your company's business profile stacks up to others' in your region? ... in the country? ASPA's 2001 Financial Survey answers these and other questions." (American Society of Pension Actuaries)

Fiduciaries Did Not Breach Duty in Delayed Deposit of 401(k) Funds, Court Says
Excerpt: "As the execution of fiduciary duty comes under greater scrutiny, one case was decided in favor of the plan sponsors. In Golden v. wwwrrr, Inc.[,] a case brought against a now-defunct 'dot-com' company, plan participants charged that the plan fiduciaries of the wwwrrr, Inc., 401(k) retirement savings plan violated ERISA by not depositing plan assets in a timely manner, a charge that the District Court of Minnesota rejected." (Thompson Publishing Group)

Plan Communications: 10 Ways to Maintain Participants' Confidence in This Jittery Market
Excerpt: "The following 10 steps, recommended by Annapolis, MD-based The Scarborough Group, Inc., an investment advisory firm, are a good refresher course for your participants still feeling shell shocked by losses and uncertain whether the current upturn is here to stay or will-- as some pundits predict-- take another dip before the third quarter of 2002 is over." (IOMA's Report on Managing 401(k) Plans via International Foundation of Employee Benefit Plans)

Pollyanna Pensions Pumping Up Profits
Excerpt: "Some companies are pumping up profits with optimistic pension-plan assumptions. Be wary of them. Evidently the word is not yet out that the market peaked two years ago. For its 2001 shareholder report, Goodyear Tire & Rubber optimistically hiked its expected return on pension-plan assets from 9.5% to 10%." (Forbes magazine via Yahoo! Finance)

Another Question is Answered in the Who's the Employer Q&A Column
My firm uses a PEO to handle payroll. We have treated all workers as our common law employees and covered them under our qualified retirement plan. We just got a call from the PEO telling us that starting in 2004 we will be required to cosponsor their plan and cover our employees under it. Is that true? (BenefitsLink.com)

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

New IRS Employment Tax Rules May Harm Use of Stock Options, Employee Stock Purchase Plans
Excerpt: "[C]ritics say new taxes will discourage employees and companies from participating in what are some of the most widely used benefits to both attract and retain workers, particularly in the hard-hit technology industry.... The tax previously went into effect early last year, when the IRS declared a ban on payroll taxes on certain stocks as obsolete. But the IRS immediately declared a moratorium on the change until it could clarify its potential effect." (CNET News.com via Yahoo! News)

IRS Proposal to Collect Payroll Taxes on Stock Options Faces Challenge
Excerpt: "Rules proposed by the IRS would impose the 15.3 percent tax, which funds Social Security and Medicare, on incentive stock options and employee stock purchase plans. That would reverse a 31-year-old IRS position on the issue. The rules would take effect Jan. 1. Opponents say this amounts to a new tax burden, never authorized by Congress ..." (AP via StarTribune.com)

Newly Posted Conferences (Post Yours!)
Understanding ERISA 2002: An Introduction to Basic Employee Retirement Benefitsin NY on July 11, 2002
presented by Practising Law Institute
Certification Institutein AZ on October 6, 2002
presented by WorldatWork

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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.