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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 5, 2002 - 11,383 subscribers
Today's sponsor: Actuarial Systems Corporation

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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)

Marriage, Minimum Distributions, and Mayhem: IRAs under Florida's New Elective Share Statute
Excerpt: "On October 1, 2001, Florida's new elective share statute, new F.S. §732.2035(7), became effective. To most, this would not seem to be an event of utmost significance, but to those of us dealing in the world of IRA administration every day, this means change.... Since IRAs and qualified plans now fall under the second tier of the three-tier priority system imposed by the elective share statute, this presents new potential problems." (The Florida Bar Journal)

Analysis: IRS Releases Section 457 Regulations-- Problems for Discounted Options on Property
Excerpt: "The most important provisions could put an end to nonprofit employers using nonqualified stock options as deferred compensation. The regulations provide that §457(f) limitations would now apply to mutual fund options and options on other property when the options are not conditioned on the executive's future performance. These transactions were formerly covered under Section 83, which allowed taxes to be deferred until the option was exercised." (Watson Wyatt)

Overview: IRS Releases Plan Amendment Disclosure Regulations
Excerpt: "The IRS has proposed new regulations on the participant notice requirements for plan amendments that reduce the rate of future benefit accrual. The notice requirements were revised by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). The regulations provide guidance on a wide variety of topics concerning the revisions, including what triggers the notice requirements, when notice must be given and what the notice needs to say." (Watson Wyatt)

Another Question is Answered in the Who's the Employer Q&A Column
A Client Organization (as that term is defined in Rev. Proc. 2002-21) is terminating its 401(k) plan and adopting the PEO's multiple employer 401(k) plan. The PEO has told the CO that current CO employees should be allowed, on plan termination, to receive taxable distributions or elect rollovers into IRAs or into the PEO plan. We disagree. We believe that the PEO plan will be a successor plan. Your comments? (BenefitsLink.com)

Weighted Average Interest Rate Update for June 2002 (PDF)
Excerpt: "Sections 412(b)(5)(B) and 412(l)(7)(C)(i) of the Internal Revenue Code provide that the interest rates used to calculate current liability for purposes of determining the full funding limitation under § 412(c)(7) and the required contribution under § 412(l) must be within a permissible range around the weighted average of the rates of interest on 30-year Treasury securities during the four-year period ending on the last day before the beginning of the plan year." (Internal Revenue Service)

Another Question is Answered in the Who's the Employer Q&A Column
In Q&A 190 you give an example of Zeke, a retired executive on a consulting agreement. He's paid as in independent contractor but he's still legally an employee. Would it be possible for the employer to define an acceptable class of employees to be excluded from the qualified plan so that Zeke would be considered as having changed to an excluded class of employment? If so, what might the class be called? (BenefitsLink.com)

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

Analysis: California Law Restricts Use and Communication of Social Security Numbers
Excerpt: "The law goes into effect July 1, 2002, and will change the way employers use SSNs, including in employee benefit plan transactions. Other states, including Arizona, Pennsylvania, Connecticut, Ohio and Vermont, are considering similar or identical legislation." (Watson Wyatt)

Executive Compensation and Benefits: Understanding Nonqualified Deferred Compensation Plans (PDF)
13 pages. Excerpt: "In the following pages, we will discuss how deferral plans and, more specifically, nonqualified deferred compensation plans work. We will discuss the various types of available plans and establish the standards for best practices. We will give you an easy-to-follow, seven-step process for successful plan design. And, we will discuss options for securing and funding the plan you ultimately choose." (Clark/Bardes Consulting-Compensation Resource Group)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
401(k) /Pension Administrator for Great Lakes Pension Administrators, Inc.
in MI
Benefits Claims Coordinator for Chicago Transit Authority
in IL
Senior Pension Administrator for RAI
in DC
Assistant Fund Manager - Employee Benefits for Major National Taft-Hartley, Multiemployer Benefits Fund Organization
in AL
Manager of Qualified Plans for International Chemical Company - US HQ location
in TX

Newly Posted Conferences (Post Yours!)
Fundamentals of Qualified Plans Seminar (3-day program) 11 Locations; June-July in CA, CO, DC, IA, IL, MI, MN, MO, NE, NY, OH, TX, WI on June 6, 2002
presented by SunGard Corbel
403(b)/457 Plan Workshop (1-day program) 16 Locations; June and Julyin CA, CO, DC, GA, IA, IL, MN, MO, NE, NY, PA, TX, UT, WA, WI on June 6, 2002
presented by SunGard Corbel
Fundamentals of Qualified Plans (3-day program) 7 Locations; September - Octoberin CA, GA, MA, NC, PA, WA on September 18, 2002
presented by SunGard Corbel
ERISA Workshop (1-day program) 37 Locations; September - Novemberin CA, CO, CT, DC, FL, GA, IA, IL, IN, KS, LA, MA, MI, MN, MO, NC, NE, NJ, NM, NY, OH, OR, PA, TX, WA, WI on September 19, 2002
presented by SunGard Corbel
The Benefit Managers' Forum on College Savings Plansin MA on September 23, 2002
presented by Financial Research Associates, LLC
Company Stock in 401(k) Plans: Practical Ways to Minimize the Risk - Teleweb Seminarin ALL STATES on June 20, 2002
presented by International Foundation of Employee Benefit Plans

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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.