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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 7, 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)

Percentage of Employees Wanting DB Plans Rises from 19% to 24%
Excerpt: "Though employers have added more defined contribution retirement plans, healthcare plans and disability insurance coverage to their benefits packages, unsatisfied employees are demanding defined benefit plans too, a survey finds." (PLANSPONSOR.com)

Pension Funds Blast Offshore Reincorporations
Press release. Excerpt: "A group of institutional investors announced today that they are opposing the proposed reincorporation of Nabors Industries to Bermuda on June 14th and that they have been informed by several influential public pension funds that they also intend to vote against the proposal.... H. Carl McCall, the Comptroller of the State of New York and sole trustee of the state's Common Retirement Fund, said the fund will be voting against the Nabors reincorporation." (PR Newswire via Yahoo! Finance)

For Participants: Your 401(k) Fee Guide
Excerpt: "Fees reduce your overall return.... Trying to calculate your 401(k) fees can be frustrating.... 401(k) plan fees typically fall into three categories: investment, administrative and individual service fees.... If you are tempted to stop contributing to your 401(k) because you think the fees are too high, reconsider. There is no free lunch. Someone has to pay for this benefit." (mPower Cafe)

Analysis: Catch-Up Contributions-- IRS Guidance and Technical Corrections
Excerpt: "Many important issues remain unresolved. For example: How do catch-up contributions fit within the context of the 401(k) safe harbor? If the safe-harbor matching contributions are applied to catch-up contributions, will the plan fail to meet the safe-harbor? ... Can a plan establish a 'negative election' for catch-up contributions on the same basis as for elective deferrals?" (Groom Law Group)

Plan Design: Consider a Cash Balance Plan
Excerpt: "Those who follow the pension industry may hesitate to consider a cash balance plan because many believe them to be overly aggressive or illegal in some way. This belief is caused by many news reports and lawsuits filed challenging the legality of such plans. However, those challenges concern company's converting traditional defined benefit plans to cash balance plans.... In fact, the [IRS] will review and issue determination letters with respect to new cash balance plans." (Scialabba & Morrison, P.C.)

Opinion: House "Enron" Pension Legislation Includes Provisions That Could Harm Rank-and-File Workers
Excerpt: "Under current law, the permitted degree of disparity between contributions for higher-income executives and rank-and-file workers is defined by two mathematical tests: the 'ratio percentage' test and the 'average benefit' test.... The House legislation ... would allow plans to satisfy the non-discrimination coverage requirements even if they fail to meet both of the above tests (as long as they are consistent with regulations to be issued by the Secretary of the Treasury)." (Center on Budget and Policy Priorities)

ASPA Membership Approaching 5,000
Excerpt: "ASPA is pleased to announce that it will soon welcome its 5,000th member." (American Society of Pension Actuaries)

Minimizing the Risk of Fiduciary Liability in a Declining Investment Market (PDF)
7 pages. Excerpt: "The importance of the fiduciary duty to provide notice to the participants of changes in the [plan's] investment funds cannot be overstated.... Whether a fiduciary has acted properly in making a decision about investments depends upon the circumstances at the time when the decision was made and not upon subsequent events." (David R. Levin, Esq. of Wiley Rein & Felding)

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

Available for Ordering from NELA: Course Materials for 'ERISA-- a Tool For the Employee Advocate'
Available for purchase by non-members of NELA. Purchase the complete course manual, full set of audio tapes, or both. Also available: tapes of particular course presentations. Course was presented in 2000. (National Employment Lawyers Association)

Underwater Stock Options? Restricted Stock Grants Could Be Solution
Excerpt: "As the restrictions lapse, the employee takes ownership of the stock with no out-of-pocket investment and no concerns about under-water valuations. He or she simply owns shares. It's a very effective tool for retaining employees. Companies also avoid negative accounting treatment related to options ... The downside? Uncle Sam again. The government taxes the entire market value of the stock as ordinary income when the restrictions lapse." (The [Minneapolis-St. Paul] Business Journal)

NYSE, NASDAQ Seek Stricter Corporate Governance Standards
Excerpt: "The NYSE wants to require shareholder approval of all stock option plans. The Nasdaq would mandate approval for stock option plans for officers and directors, but would exempt compensation packages for rank-and-file employees. Many corporations have already expressed concern about the scope of the NYSE proposal, including The Business Roundtable, an association of chief executives." (AP via Yahoo! News)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Director - TPA Business Development for MassMutual Financial Group
in MA
Benefits Compliance Consultant - JL-020524-010 for Hewitt Associates LLC
in IL
Senior Accounting Specialist for OneBeacon Insurance
in MA
Business Development: Personal Trust-Wealth Mgmt/EB-401(k)-ESOP/Charitable for Channel Synergy (exec recruiter)
in GA
Sales Account Manager for PFPC
Human Resources Benefits Manager for Tech Data
in FL
Retirement Service Account Manager 3 for Wells Fargo
Future Openings: Technical Specialist - Retirement - QPA for Edward Jones
in MO

Newly Posted Press Releases
ABC Payroll Announces Launch of New Product Lines (ABC Payroll)
Securian Retirement Receives Dalbar's Highest Web Site Rating (Securian Retirement Services)
FACTS Health Claims Management System Marks Its 21st Year In The Healthcare IT Marketplace (FACTS Services, Inc.)

Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
George F. Cicotte (George F. Cicotte, Attorney)

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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.