If this message looks garbled to you or if the headlines in this message don't connect you to Web pages when you click on them, please request the "plain text" version of this newsletter ("Retirement Plans Edition") by emailing your request to publisher Dave Baker
Jobs | Today's Messages | Topical News | Q&A Columns | Services & Products | Search | Reference

The BenefitsLink Newsletter -
Retirement Plans Edition
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

May 20, 2002 - 11,355 subscribers
Today's sponsor: In Plain English

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


   Our CompFacts Report shows each employee how much your company
   pays for their salary, bonus, and benefits.  Clear, and
   easy-to-read, and customized on your letterhead.  For more
   information and our very affordable price, call 1-800-274-9645 or
   email Rwohl@InPlainEnglish.com.

   For more benefits communication ideas, click below:

(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)

Lump Sum Payment Dispute Goes to Court in Milwaukee
Excerpt: "The largest Milwaukee County employee union went to court Friday to preserve 'backdrops,' lump-sum retirement payments that have become extremely popular since the county pension scandal surfaced earlier this year." (The [Milwaukee] Journal Sentinel)

Federal Employees' Thrift Savings Plan to Become Daily Val in Mid-September
Excerpt: "Currently, participants can move their money among the TSP's five funds on a monthly basis. In some cases, however, it can take six weeks to complete the transaction. Many TSP employees have complained that the monthly system puts them at a disadvantage when making investment decisions." (Washington Post)

Wisconsin State Officials Urge Legislators to Pass EGTRRA Conformity Bill
Excerpt: "A provision to make the tax changes is included in both the Assembly and Senate versions of legislation intended to fix the state' s $1.1 billion budget deficit. Leaders from both houses started meeting five weeks ago to work out differences between the two bills but have had little success. The new federal limit on contributions to an IRA is $3,000, while Wisconsin's is $2,000. For 401(k) plans, the contribution limit increased to $11,000, while Wisconsin's limit remains at $10,000." (StarTribune.com)

Opinion: It's Time to Put Muscle in Participant-Directed Retirement Plans
Excerpt: "Restrictions on when and how employees are able to buy and sell securities for their 401(k)s also must end totally. There are many companies that limit changes in 401(k) portfolios to once a month, or once a quarter, or even once a year.... So long as pension money is run by typical financial houses, conflicts of interest will continue ... This can be solved by assembling and empowering a group of professionals beholden neither to employers or to Wall Street, but only to workers." (William Wolman and Anne Colamosca in USA Today)

Overview: Economic Stimulus Bill Includes Technical Corrections To EGTRRA
In March 2002 important technical corrections to EGTRRA were made as part of the Job Creation and Worker Assistance Act. This article sets out the corrections, including anti-cutback relief provided to an employer who wants to eliminate the automatic benefit increase under a plan that incorporates by reference the defined benefit limit under Code Section 415. JCWAA permits an employer to freeze the accrued benefit to the pre-EGTRRA level, provided a plan amendment is adopted by 6/30/02. (Sanders, Schnabel & Brandenburg, P.C.)

The Pension Bombshell in the Fine Print: Lowering Predicted Pension Fund Returns
Excerpt: "Footnote 18 to a company's financial statements is an odd place to find a bombshell. But that's where you'll find the one Berkshire Hathaway dropped in its recent 10-K ... Warren Buffett's company cut its projected rate of return for its corporate pension plans to 6.5% for 2001, from 8.3% in 2000 ... And unless the stock market starts turning in regular double-digit quarterly gains in the next few months, it looks like other U.S. companies will have to follow Berkshire's lead." (Jim Jubak in TheStreet.com)

Opinion: General Electric Needs to See Light on Pensions
May 13, 2002 column. Excerpt: "The General Electric retirees illuminate a devastating truth about corporate pension plans. Inflation will ravage pension savings because most retirement plans are not inflation-indexed. Even at the average 3.2 percent rate of inflation for the last 75 years, the value of any retirement fund withdrawn in monthly payments would be cut in half over 22 years, finds a study conducted ... for the TIAA-CREF Institute, a investment research organization." (John Wasik on Bloomberg.com)

Another Question is Answered in the Who's the Employer Q&A Column
Should we file one Form 5500 on behalf of a multiple employer plan, or is each participating client employer in the plan required to also file a Form 5500? (BenefitsLink.com)

CalPERS Launches Online Financial Planning Center
Excerpt: "The Center, developed by American General Financial Advisors (AGFA), provides CalPERS members with three primary services ... Five core financial planning courses on cash management, risk management, investment securities, investment strategies and retirement planning; Five reports on estate planning, insurance planning, retirement planning, saving for education and a financial overview.... and Access to a no-cost-no-obligation counseling session with a AGFA financial advisor." (California Public Employees' Retirement System)

Overview: Understanding the Final Minimum Distribution Rules
Excerpt: "The IRS issued final minimum distribution regulations on April 16, 2002." (Natalie Choate, Esq.)

List of Witnesses and Links to Written Statements: Enron's Influence on State Pension Funds
May 16, 2002. Includes statements from Bruce Calvert, Alliance Capital Management Corporation; Tom Herndon, Florida State Board of Administration; James Glassman, American Enterprise Institute; Michael Musuraca, American Federation of State, County, and Municipal Employees; Travis Plunkett, Consumer Federation of America; and Sarah Teslik, Council of Institutional Investors. (U.S. Senate, Committee on Commerce, Science & Transportation)

Overview: IRS Issues Proposed Code §457 Regulations
Excerpt: "The IRS has issued proposed regulations for Code §457 plans. The new regulations reflect tax law changes made to 457 plans by EGTRRA and other tax laws dating back to TRA 86.... A 457 plan may use the EGTRRA age-50 catch-up provision ($1,000 for 2002) or the special larger 457 catch-up rule.... A 457 plan participant may not use both catch-up limits for a particular year." (SunGard Corbel)

Dallas Teachers Fired Up About Social Security Pension Offset
Excerpt: "'If a person worked for a federal, state or local government that was exempt from paying Social Security taxes, the pension received from that agency may reduce Social Security benefits,' said Wes Davis, spokesman for the Social Security Administration in Dallas.... The problem is more prevalent here because Texas is one of 15 states where some public employees, including teachers in many school districts, don't have Social Security taxes withheld from their paychecks." (The Dallas Morning News; free registration required)

Early Retirements Reduce Michigan State Workforce By Nearly 8,000
Excerpt: "The early retirement offering will calculate pensions based on years of service times a factor of 1.75 percent of final average compensation, which is higher than the 1.5 percent rate offered with normal retirement. State employees with 30 years' experience who make $50,000 a year will receive an annual pension of $26,250 under the early retirement offering. They would have received about $22,500 annually under the regular program." (The Detroit News)

Survey: Corporate Pension Plans Concern Workers
Excerpt: "Many workers don't believe their bosses will make good on retirement payouts and strongly favor government protection of pension plans, two national surveys released today show. Four in 10 workers said they doubt their employer-sponsored pension plans will be liquid enough to pay benefits in retirement ..." (The [Bergen County, N.J.] Record via International Foundation of Employee Benefit Plans)

Welcome to new BenefitsLink advertiser ImagiSOFT
Excerpt: "ImagiSOFT's new RMD Software will help you: *enter and store client information into well designed, simple, input screens *provide your clients with accurate, easy to understand, printed reports *e-mail reports to clients in Adobe's Portable Document Format (PDF) *show your clients how to make their pension fund last throughout their lifetime *help your clients avoid massive IRS penalties Order your free demonstration version now!"

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

Beyond Age 50: Summary Tables and Charts, Including Pension and Health Coverage Information
Excerpt: "Through its analysis of both the status quo and developing trends, 'Beyond 50: A Report to the Nation on Economic Security' provides readers with an in-depth look at the well-being of more than one-quarter of Americans-- the 76 million people age 50 and older in 2000." (AARP)

ERIC Submits Comments on Federal Bill re Use of Social Security Numbers (PDF)
Excerpt: "Thank you for the opportunity to provide input and recommendations on the Social Security Number Privacy and Identity Theft Prevention Act of 2001 (H.R.2036). We submit these comments on behalf of public and private employers in their role as sponsors of comprehensive retirement, savings, health, and other benefit plans." (ERISA Industry Committee)

Aspen Publishers Acquires Charles D. Spencer & Associates, Inc.
Excerpt: "The acquisition further strengthens Aspen Publishers extensive pension and benefit product line. Aspen offers a market-leading series of single-volume books on pension and benefit topics written by industry experts, including The Pension Answer Book. This line will be augmented by Spencer's in-house authored, loose-leaf subscription products.' Aspen Publishers is part of Wolters Kluwer North America, as is CCH. (Charles D. Spencer & Associates, Inc.)

Opinion: Which CEO's Greed Scared Off Warren Buffett?
Excerpt: "The most interesting message Warren Buffett delivered ... last week was that his outrage toward CEOs was growing fast.... Then Buffett and [his associate, Charlie] Munger let slip an interesting fact: They had dumped their shares in some company after they saw what the CEO was paid. 'We felt we couldn't stomach it,' Buffett said.... [It is] astonishing that an investor who has this kind of power felt powerless to do anything but sell his shares and go quietly into the night." (Michael Lewis on Bloomberg.com)

Corporate Relocations to Bermuda May Mean Higher Compensation for Executives
Excerpt: "Spokesmen for Cooper Industries, Ingersoll-Rand and Weatherford International all said that increased pay for executives was the inevitable result of packages that reward executives for lowering costs, including taxes, and increasing share prices." (New York Times; free registration required)

EEOC Makes Second Accusation Against Allstate in Handling Employees Who Became Contractors
Excerpt: "A federal agency has accused Allstate Insurance Co. of unlawfully intimidating 650 life insurance agents who lost health and pension benefits when they were switched from Allstate employees to independent contractors." (AP via Lycos)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Retirement Sales District Manager for ADP, Inc
in IL, PA, WA
401(k) ERISA Compliance Consultant for Pinnacle Financial Services, Inc.
in FL
Sr. 401K Benefits Analyst for Tenet HealthSystem
in TX
ERISA Attorney for Tofias PC
in MA
Sr. Benefits Analyst for Barclays Global Investors
in CA
Retirement Plan Manager for Metavante 401(k) Services
in AZ
Employee Benefits Account Manager for Corporate Benefits, Inc.
in NC, SC
Manager, Retirement Client and Educational Services (Req 6194) for Mutual of Omaha Insurance Co.
in NE
Health & Welfare Benefits Analyst for Oglebay Norton Company
in OH
Actuarial Analyst for Hunt, DuPree, Rhine and Associates
in SC

Newly Posted Conferences (Post Yours!)
Fiduciary Responsibility and Risks: Where Are We Headed?in ALL STATES on May 23, 2002
presented by Hewitt Associates

Newly Posted Press Releases
Conquering Open Enrollment with Fringe Facts(R) Online (Benefit Software Inc.)

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.