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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 13, 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)

Deductibility of ESOP Dividends After EGTRRA: Time to Revamp the Administration of ESOP Dividends
Excerpt: "[EGTRRA] liberalized the ESOP dividend deduction rules by adding a new provision to section 404(k) of the Internal Revenue Code ... ESOPs will have to be amended to take advantage of this new law, and the amendment must comply with recent guidance applicable to EGTRRA amendments. This guidance requires a 'good faith' amendment by the end of the plan year in which the first taxable year of the company for which the deduction is being sought ends." (Groom Law Group)

Another Question is Answered in the Who's the Employer Q&A Column
What impact will Rev. Proc. 2002-21 have on entities that are not necessarily labeled a PEO? My example is a hospital that leases employees to various employers within the community, and continues to cover the employees under the hospital's retirement plans (a m0oney purchase pension and a 401(k) plan). Can Rev. Proc. 2002-21 be applied in this situation? (BenefitsLink.com)

GAO Report: Efforts to Improve Social Security Disability Claims Process Have Fallen Short
Excerpt: "Many individuals who appeal SSA's initial decision will wait a year or longer for a final decision on their benefit claims. In fact, the commissioner recently testified that claimants can wait as long as 1,153 days from initial claim through a decision from the Appeals Council." (U.S. General Accounting Office)

Analysis: DOL Issues Prohibited Transaction Approving Passive Cross-Trading
Excerpt: "Many plan sponsors, fiduciaries and investment professionals have complained that ERISA's prohibited transaction rules and current statutory and administrative exemptions wrongly forbid cross-trades, i.e., trades between a plan (or an account holding plan assets) and another account managed by the same manager. Many financial professionals favor cross-trading as a favorable way to minimize transaction costs when buying or selling securities." (Kilpatrick Stockton LLP)

Private Pension Plan Bulletin: Abstract of 1998 Form 5500 Annual Reports (PDF)
117 pages. Excerpt: "This is the eleventh edition of the Private Pension Plan Bulletin. The tabulations presented in this report contain data based on 1998 Form 5500 filings. Reports for 1998 plan years were filed by plans with the Internal Revenue Service (IRS) for fiscal years beginning anywhere from January 1, 1998 to December 30, 1998. The IRS processed 1998 filings from August 1999 through July 2001." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Opinion: Republican Pension Plan Could Mean Seniors Spend Golden Years Working Under Golden Arches
Excerpt: "[I]t's no surprise that the pension-reform bill passed by the Republican-controlled House in April is more conservative than compassionate.... [T]he traditional defined-benefit pension has morphed into the famous 401(k), which is not a pension at all, but a personal savings plan to which the employer makes a defined contribution. The result has been to shift the risk that there might not be enough to retire on to the employee from the employer." (The American Prospect)

CitiStreet to Provide Investment Advice to Plan Participants Alongside Financial Engines
Press release 6/13/2002. Excerpt: "CitiStreet ... will be the first benefits provider to offer retirement plan participants fully integrated investment advice, powered by Financial Engines, a leading independent advice technology provider.... The DoL Advisory Opinion 2001-09A, issued Dec. 14, 2001, allows financial institutions to provide advice directly to retirement plan participants when the advice is based on the computer programs and methodology of a third-party, independent advisor ..." (CitiStreet)

Investment Managers Will Provide Investment Advice to Plan Participants
Excerpt: "Several retirement plan managers say they' ll take advantage of a recent Labor Department ruling by offering personalized investment advice to help savers make better decisions about their 401(k), 403(b) and other employer-sponsored accounts.... Earlier this week, CitiStreet, one of the nation' s largest retirement plan providers, said it would begin making personal advice available to plan participants through the Financial Engines advisory service in Palo Alto, Calif." (AP via StarTribune.com)

Survey: Income of the Elderly, 2000 (PDF)
Excerpt: "Income from pensions and annuities accounted for a steadily increasing share of the elderly's income from 1974 to 1996. In 1974, these sources accounted for 14.0 percent of the elderly's income; by 1996, that percentage had increased to 19.6 percent. Since 1996, the percentage of the elderly's income coming from pensions and annuities has declined to 19.1 in 2000." (Employee Benefit Research Institute)

Most Americans Oppose Federal Efforts To Restrict 401(k) Plan Investments, According To Poll
According to a poll recently conducted for Putnam Investments, despite the Enron Corporation debacle, 57% of investors who hold company stock in their 401(k) plan accounts oppose any federal efforts to restrict the amount of company stock that can be held in those plans, while only 26% favor limits. The online poll, which was conducted this past February among a nationwide sample of 1,000 respondents, solicited Americans' views on 401(k) investing, and investment advice in the workplace. (Spencernet)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Director Compensation & Benefits for Leading Construction and Building Materials Company
in FL
Account Manager, Benefits Administration Outsourcing for Aliquant Corporation
in CT, PA
Retirement Plan Administrator for Jones & Roth PC and Jones & Roth Wealth Management LLC
in OR
Pension Administrator for EBC, Inc.
in CA
Record Keeping Manager for INVESCO Retirement, Inc.
in RI
Account Executive for CitiStreet
in FL
Senior Level Project Manager for The Paragon Consulting Group, Inc.
in FL
Retirement Plan Services Manager for Ceridian
in FL

Newly Posted Conferences (Post Yours!)
Western Pension & Benefits Conference Annual Meetingin UT on August 18, 2002
presented by Western Pension & Benefits Conference

Newly Posted Press Releases
SunGard Corbel's Hoffman to Become Fellow of the American College of Employee Benefits Counsel (SunGard Corbel)

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Editor and Publisher: David Rhett Baker, J.D.