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The BenefitsLink Newsletter -
Retirement Plans Edition
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May 16, 2002 - 11,342 subscribers
Today's sponsor: The EDSA Group

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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 Freeze on Lump-Sum Pension Payouts from Milwaukee Plan Causes Uproar
Excerpt: "A suggested freeze on lump-sum pension payments for Milwaukee County employees touched off a wave of anxiety and another retirement rush at the courthouse Wednesday." (The [Milwaukee] Journal Sentinel)

Felony Charges May Be Hard to Prove in Milwaukee Pension Case
Excerpt: "State Attorney General Jim Doyle faces a tough task in pressing criminal charges against a former Milwaukee County official for his role in the pension scandal, legal experts said this week." (The [Milwaukee] Journal Sentinel)

Foundation for Fiduciary Studies Publishes Draft Guidance for Pension Investment Committee Members
Excerpt: "PLANSPONSOR Editor-in-Chief Charles Ruffel caught up with the organization's president recently to learn a bit more about what makes the foundation tick-- and what plan sponsors can glean from its resources and research." (PLANSPONSOR.com; free registration required)

Link to 42-Page Draft: 'Prudent Investment Practices-- a Handbook for Investment Fiduciaries' (PDF)
April 3, 2002 draft; more details at www.ffstudies.org. Legal review by Fred Reish, Esq. of Reish Luftman McDaniel & Reicher. Excerpt: "The primary purpose of this handbook is to outline the simple and straightforward practices that define a prudent investment process for investment fiduciaries. The term 'fiduciary' is inclusive of ... people who have the legal responsibility for managing someone else's money, including members of investment committees of retirement plans ..." (Foundation for Fiduciary Studies)

Quantitative Measures for Evaluating Social Security Reform Proposals (PDF)
April 2002. Excerpt: "In this issue brief, the Social Insurance Committee describes a number of measures that can provide useful quantitative analysis of reform proposals. The issue brief explains how these measures can be used together to obtain a clearer picture of the relative advantages and disadvantages of the various proposals for bringing long-term financial soundness to Social Security." (American Academy of Actuaries)

An Actuarial Perspective on the 2002 Social Security Trustees Report (PDF)
April 2002. Excerpt: "This issue brief provides an actuarial perspective on the most recent report, together with sufficient background material for readers to obtain a good understanding of (1) what the trustees are saying about the future financial condition of Social Security and (2) the limitations of the trustees' assessment." (American Academy of Actuaries)

Another Question is Answered in the Who's the Employer Q&A Column
Your Multiple Employer Plan information has been great! You've covered how service is counted for someone in multiple locations and how the 415 limit is handled. For purposes of allocating the contribution, do you consider the compensation from each employer separately and, if so, how/when is the compensation limit factored in? (BenefitsLink.com)

The Lowdown on Cash Balance Plans
Excerpt: "According to a 2000 study by the General Accounting Office, roughly one in five large employers offers these plans ... But it's funny how some rotten PR combined with the risk of legal action can correct a situation. These days, the flood of companies converting to these plans has all but dried up." (SmartMoney.com)

Issue Brief: Promoting Annuitization-- Ensuring the Financial Security of Today's Workers for Life (PDF)
5 pages. Excerpt: "Converting a lump sum of savings into an annuity generates an income stream that lasts for a person's lifetime. Public policies that encourage annuitization would help insure the long-term financial security of future generations of American retirees." (American Council of Life Insurers)

White Paper: Women as Retirees (PDF)
Excerpt: "Women's savings in employer-sponsored defined contribution plans, on the average, will not support an adequate retirement. Furthermore, households that are the most ill-prepared financially for retirement are the same group that is most heavily dependent on Social Security benefits.... Because of their work force patterns, women have less access to employer pensions and many times leave employment before they are fully vested ... Over half of women have no pension coverage ..." (National Center for Policy Analysis)

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

California Law Restricting Use of Social Security Numbers; Implications for Plan Sponsors
Excerpt: "A California law intended to stem the rising tide of identity theft based on improper access to an individual's Social Security number (SB 168, Chapter 720 of the statutes of 2001) will affect retirement and health benefit plans that cover residents of California as well as written employee communications by California employers.... A major question for employee benefit plans that are subject to ERISA is whether the new state law is pre-empted as to them." (The Segal Company)

New Proposed Golden Parachute Regulations
On February 20, 2002, the IRS issued new proposed regulations relating to the tax treatment of golden parachutes under Internal Revenue Code Section 280G. The new proposal applies to any payments that are contingent on a change in control occurring on or after January 1, 2004. Taxpayers may, however, rely on the new proposal for parachute payments made after February 20, 2002. Alternatively, through December 31, 2003, taxpayers may continue to rely on the regulations proposed in 1989. (Sanders, Schnabel & Brandenburg, P.C.)

National Association of Manufacturers Challenges Legality of Regs Imposing Taxes on Stock Options
Press release. Excerpt: "[Bill Blaylock, speaking for NAM, said that] 'Although NAM member companies will comply with final regulations that impose taxation on the spread at statutory option exercise,' added Blaylock, 'many will likely file claims for refund of these taxes on the basis that the regulations are invalid. This claim for refund process will be burdensome on these companies, as well as on their employees and the IRS.'" (National Association of Manufacturers)

Welcome to new BenefitsLink advertiser Monarch Personnel
Excerpt: "Monarch Personnel offers a free, one page, monthly newsletter highlighting current Benefit Jobs and Benefit Candidates in Houston, TX. This is a free listing service available to all actively working Benefit Professionals in Houston. This quick, free newsletter will keep you current on who has moved to new positions, who is qualified and available to hire, and what companies are involved in active searches. Request your free newsletter now!"

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Benefits Coordinator with Attitude for UNX, Inc.
in CA
Junior Administrator for Florida Pensions, LLC
in FL
Manager Plan- Administration Services for Southwest Suburban Chicago, IL Plan Administration and Consulting Firm
in IL
ERISA Attorney- Boston, MA for Swift & Associates
in MA
Conversion/Operations Specialist for Alliance Benefit Group of New England
in NH
Attorney or Paralegal for Howard Simon & Associates, Inc.
in IL

Newly Posted Press Releases
ERIC Disputes Erroneous Cash Balance Report; Calls for Withdrawal (The ERISA Industry Committee)
Alexander Hamilton Institute Releases New Free Report: "Nixing Negativity In The Workplace" (Alexander Hamilton Institute)

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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.