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The BenefitsLink Newsletter -
Retirement Plans Edition
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May 22, 2002 - 11,355 subscribers
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Massachusetts Publishes EGTRRA Guidance; No Conformity on Increased Limits Yet
Excerpt: "Technical Information Release 02-6 confirms the DOR's position that the elective deferrals of individuals to 403(b) and 401(k) plans are includible in Massachusetts gross income to the extent that the amount of such deferrals exceeds the amount excludible from gross income under the 1998 Internal Revenue Code." (Massachusetts Department of Revenue)

Expanded EGTRRA Rollover Rules Could Pose Trap for Some Older Participants
Excerpt: "This trap applies to participants who reached age 50 before 1986 (meaning they would now have to be at least 66) ... Capital gains treatment applies only to persons who participated in the plan prior to 1974.... The grandfathered [10-year averaging and capital gains] tax treatment is lost if the participant rolls money into the plan from a 403(b) tax sheltered annuity, a governmental 457 plan, a non-conduit IRA, or a spouse's qualified retirement plan." (Faegre and Benson, LLP)

Opinion: Investigating Brokerages
Excerpt: "From our experience we have learned wrongdoing in the money management and securities industry is far more pervasive than the public is aware. Over the past ten years this message has not always been enthusiastically received.... Today, however, many industry practices are being scrutinized and a consensus is building that many of these practices are harmful to investors." (The Benchmark Companies)

Overview: IRS Establishes Terms for 30-Year Treasury Calculations
Excerpt: "For the time being, the IRS will determine and publish the rate of interest on 30-year Treasury securities solely on the basis of the monthly average of the daily determination of yield on the 30-year Treasury bond maturing in February 2031. For plan sponsors, the certainty offered a temporary measure of comfort." (PLANSPONSOR.com)

Failure To Inform Fired Employee of Contemplated Change To Pension Plan Not a Breach of Duty
An employer did not breach its fiduciary duties under ERISA by failing to disclose a contemplated change to its pension plan to an employee who was involuntarily terminated two months before the change became effective. This was the ruling of the Third Circuit U.S. Court of Appeals in Nydes v. Equitable Resources, Inc., et al. (No. 01-2396). (Spencernet)

PBGC Issues June 2002 Interest Rates For Valuing Terminating Pension Plans
For single-employer pension plans terminating in June 2002, and for multiemployer plans undergoing a mass withdrawal, the interest rate established by the Pension Benefit Guaranty Corporation for calculating immediate annuities is 5.70%, down from the 5.90% rate that applied in May. The interest rate for calculating immediate lump sums is 4.50%, down from the 4.75% rate that applied in May. (Spencernet)

Redesigning Public Sector Pensions In Developing Countries
59 pages; working paper WP 2002-9, temporarily available for downloading. Excerpt: "[D]efined contribution (DC) pensions are now making headway in many cases as an alternative or sometimes an additional pillar of public employees' retirement systems. This paper examines public pension plan design and management decisions in developing countries ... We then discuss the rationales for and means of moving to a funded public pension system ... Finally we explore governance and investment issues ..." (Prof. Olivia S. Mitchell, published by Pension Research Council)

In a Corporate Merger, What Happens to Your 401(k)?
Excerpt: "Sometimes the merging of company retirement savings plans occurs in the open; most of the time, the details are hashed out among the new company officers in private. Here's a look at what sometimes happens behind these closed doors." (mPower Cafe)

ASPA Publishes Online QKA Kit for Prospective Qualified 401(k) Administrators (PDF)
16 pages. Excerpt: "The following materials have been included in this kit: Outline of Courses; Frequently Asked Questions; Testimonials from QKA Designees; Benefits of ASPA Membership; Deadlines & Fees At-A-Glance; Examination Registration Form; Publications Order Form; Frequently Asked Questions; Testimonials from QKA Designees; Benefits of ASPA Membership; Deadlines & Fees At-A-Glance." (American Society of Pension Actuaries)

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


Overview: IRS Eases Rule for Splitting Stock Options in Divorce
Excerpt: "The agency has decided that divorcing workers may transfer the most common kind of stock options to their ex-spouses without immediately triggering taxes." (The Mercury News via BayArea.com)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Employee Benefits Administrator for Kidder Benefits Consultants, Inc.
in IA
Sr. Consultant for Buck Consultants
in NJ
External Wholesaler for Mutual of Omaha
in AZ, CA, CO, IL, LA, MI, NC, OH, OR, SC, TX
Conversion Specialist for State Street Research
in MA
Employer Support Specialist for ICMA Retirement Corporation
in DC
ENROLLED ACTUARY for SAN DIEGO PENSION CONSULTANTS, INC.
in CA



Newly Posted Conferences (Post Yours!)
Full Disclosure: The Proposed Rules on Advance Notice of Future Benefit Reductionsin ALL STATES on June 18, 2002
presented by American Bar Association, Joint Committee on Employee Benefits
The Current State of 401(k)in NY on June 18, 2002
presented by New York Metropolitan Area Chapter - ISCEBS
Plan Sponsor Forum 2002in WY on June 5, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in MO on June 7, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in NV on June 10, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in OH on June 13, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IL, WI on June 14, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IN, KY on June 25, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in MN on July 16, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IA, IL on July 18, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IL, WI on August 23, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IL, MO on August 27, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in OH on August 30, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in NC on September 18, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in NC on September 18, 2002
presented by Caterpillar Investment Management, Ltd.
Plan Sponsor Forum 2002in IL, WI on September 24, 2002
presented by Caterpillar Investment Management, Ltd.



Newly Posted Press Releases (Post Yours!)
ERIC Calls for Investigation of Pension Information Leak (The ERISA Industry Committee)

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.