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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 10, 2002 - 11,385 subscribers
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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)

Alabama Income Tax Laws to Conform to EGTRRA Catch-Up Rules (PDF)
Excerpt: "Alabama law is not directly tied to [Internal Revenue Code] Section 414(v), but the technical changes in the stimulus act amended IRC Section 402 to incorporate the catch- up provisions of IRC Section 414(v). Thus, since Alabama tax law is directly tied to IRC Sections 402 and 219, Alabama's tax treatment of the catch-up provisions will mirror federal tax treatment with the same effective date." (Alabama Department of Revenue)

Survey: Employees Lack Knowledge to Successfully Manage Retirement Savings
Press release. Excerpt: " Most employees are ill-equipped to manage investment risk, according to the most recent TP Track survey from Towers Perrin. The survey findings further fuel growing concerns about retirement income security, since investment risk in 401(k) and similar plans rests wholly with the employee." (Business Wire via Yahoo! Finance)

ABA Course Materials for Sale: '401(k) Plan Fiduciary Concerns After Enron-- No Stock, No Problems?'
By authors Mary Ann Arlt, Jeffrey Lewis and Howard Shapiro. Excerpt: "This audio program focuses on 401(k) fiduciary concerns after Enron, with an emphasis on non-employer stock fiduciary issues. It include discussion of how proposed legislation may affect 401(k) plans that do not include an employer securities option." (American Bar Association)

Technical Tip: What to Do If Insurer Won't Issue Annuity Contract for a required QJSA Payment?
Excerpt: "The IRS takes the position that if a participant elects to receive a QJSA which is less than the minimum that an insurance company will provide, annuity payments to the participant must be made directly from the plan." (Reish Luftman McDaniel & Reicher)

Beware of S Corporation ESOP Management Company Scams
NCEO executive director Corey Rosen warns against scams involving an employee stock ownership plan (ESOP) set up in an S corporation management company created for the purpose of avoiding taxation through the use of the ESOP--that is, avoiding taxation until it all falls apart. (National Center for Employee Ownership)

Sanders Introduces Bill To Improve DOL Enforcement of Cash Balance Plans
Rep. Bernie Sanders (Vt.) has introduced the Pension Protection Act of 2002 (H.R. 4778), which would amend ERISA to provide 'more effective' enforcement by the Department of Labor of ERISA's requirements relating to participation, vesting, benefit accrual, and funding. The bill is targeted at employers' conversions of traditional defined benefit plans into cash balance plans. (Spencernet)

Social Security Pension Offset for Teachers in Massachusetts Stirs Teachers' Organization to Lobby
Excerpt: "Massachusetts is one of 15 states where public workers pay into the state's pension plan instead of Social Security.... 'We want the law change to take back the money people deserve,' said Richard Stutman, secondary field representative for the Boston Teachers Union. However, he emphasized, 'we're not in the [Social Security] system and we don't want to be in the system.'" (Boston Globe)

Case Studies: Three Ways to Deliver Investment Education
Excerpt: "Some companies offer [investment education] programs out of the goodness of their heart, or as part of their commitment to work/life programs, Arnone says. Others do it to avoid litigation by employees who find that they don't have enough money to retire because of bad investment decisions. Still others view investment programs as a way to get the most bang for their benefits buck." (Workforce via International Foundation of Employee Benefit Plans)

Enthusiasm Ebbs for Tough Reform in Wake of Enron
Excerpt: "Proposals have been made to force companies to account for options as a compensation cost -- now they are not charged against corporate earnings -- and to limit the ability of companies to take tax deductions for issuing options. But technology companies, financial firms and corporate trade groups -- with the backing of President Bush -- have lobbied lawmakers around the country to maintain the current system." (New York Times; free registration required)

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

Economy In 2000 Took Rare Bite from CEO Pay in Pacific Northwest
Excerpt: "Driven by a sputtering economy, drooping stock prices and the Enron accounting scandal, executives and boards slashed bonuses and reined in stock awards last year, sending CEO pay down for the first time in more than a decade." (The Seattle Times)

Strategies for Underwater Stock Options
Excerpt: "Table 1 is a decision-making matrix designed to assist executives and financial managers in understanding the range of strategies available and selecting the most appropriate path for their organization." (Strategic Finance)

Analysis: Tougher Stock Option Rules Proposed by N.Y. Stock Exchange
Excerpt: "It's not surprising that Nasdaq would pursue a weaker standard than the NYSE because Nasdaq has more companies that spread around options like fertilizer." (San Francisco Chronicle via Society for Human Resource Management)

Dentist Was An "Employee," and Not An Independent Contractor, According To Tax Court
The U.S. Tax Court has ruled that a dentist who performed services for his own professional corporation was an 'employee,' rather than an independent contractor, and thus was liable for payment of employment taxes. The ruling came in Katz, D.D.S., P.C. v. Commissioner (Docket No. 8498-00. T.C. Memo. 2002-118). (Spencernet)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Defined Contribution Plan Administrator for Northeast Planning Services, Inc.
in MA
401(k) Investment Educator for ADP, Inc.
in MA
Retirement Plan Specialist for Diversified Investment Advisors
in CA, IN, TX
Brokerage Sales & Retention Manager for CUNA Mutual Group
in WI
Retirement Plan Administrator for L. R. Webber Associates, Inc.
in PA

Newly Posted Announcements of Promotions and New Personnel (Post Yours!)
Judith Sitton (GEMGroup)

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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.