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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 19, 2002 - 11,394 subscribers
Today's sponsor: Actuarial Systems Corporation

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   For over 20 years ASC has provided complete automation for the
   pension office, including DC/401(k) and DB administration and
   valuation systems, as well as sophisticated Compliance Testing
   and DV Direct, a revolutionary solution for daily valuation
   functions.  All ASC Technical Support Members had experience as
   practicing Pension Administrators or Actuaries before joining
   ASC-- and most have been with ASC for over 10 years.

(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)

ASPA Encourages Pension Practitioners to Write Congress re Upcoming June 21 Vote on EGTRRA Extension
Excerpt: "[T]he pension reform provisions enacted last year in EGTRRA are scheduled to expire in 2011. On Friday, June 21, 2002, the House will vote on legislation (H.R. 4931) permanently extending pension reform. We need a strong vote on this legislation to make it clear to Congress and the Administration that eliminating the sunset on pension reform must be a priority." (American Society of Pension Actuaries)

Description of H.R 4931, the 'Retirement Savings Security Act of 2002' (PDF)
1 page. Excerpt: "The bill repeals the sunset provision of EGTRRA as applied to the provisions relating to pensions and IRAs." (Joint Committee on Taxation)

Joint Committee on Taxation Estimate Revenue Effects of Repealing EGTRRA Pension Sunset Provisions (PDF)
4 pages. JCX-70-02. Covers fiscal years 2002 through 2012. (Joint Committee on Taxation)

Analysis: Ruling is Welcome Relief for Money Purchase Plans Being Replaced by Profit Sharing Plans
Excerpt: "In Rev. Rul. 2002-42, the IRS formally dismisses the 'increased potential for reversion' analysis when a defined contribution plan is involved, stating that the issue arises only when accruals or reduced or ceased under a defined benefit plan." (TRI Pension Services)

Joint Committee on Taxation Explains Present Law and Background on Defined Benefit Retirement Plans (PDF)
40 pages. Excerpt: "Almost all changes to pension laws require the balancing of competing policy objectives, including concerns regarding retirement income security, simplification, reduction of administrative burdens, and fiscal and tax policy. In some cases, a single policy concern may result in competing issues.... Any legislative changes to the rules relating to defined benefit plans are likely to involve such balancing." (Joint Committee on Taxation)

Interview With Author of 'The 401(k) Hoax'
Excerpt: "The hoax is multifaceted...the promise that investing in stocks would somehow guarantee a comfortable retirement for the average American and would prove a far superior retirement system than either Social Security or old-style, defined-benefit pension plans ..." (Business Week via Yahoo! Finance)

Another Question is Answered in the Who's the Employer Q&A Column
Sherman owns a sole proprietorship. He also owns 60% of a C corporation; the remaining 40% is owned by an unrelated party. Are these businesses under common control for purposes of the Code section 415 limits? (BenefitsLink.com)

Release of Confidential Plan Sponsor Data in Cash Balance Study Draws Fire
Excerpt: "A U.S. Congressman and the Labor Department's Inspector General have come under attack for publicly releasing plan sponsor information [that was] provided under a promise of confidentiality." (PLANSPONSOR.com)

Supreme Court Allows Retiree To Appeal Settlement of Suit Over Elimination of Pension COLA
In a 6-3 decision, the U.S. Supreme Court has ruled that a retiree could appeal the settlement of a class action involving the elimination of a cost-of-living adjustment under a defined benefit plan even though the retiree was not a named class member. The ruling came in Devlin v. Scardelletti, et al. (Docket No. 01-417). (Spencernet)

Group Files Lawsuit Over California EGTRRA Conformity Bill
Excerpt: "A bill that brings California state tax law in line with EGTRRA changes is now the subject of a court fight over the way state legislators handle new tax bills." (PLANSPONSOR.com)

Private Pension Plan Assets Reached $4.02 Trillion In 1998, According To PWBA Report
Assets held by private pension plans totaled $4.02 trillion in 1998, a 13% increase from the $3.6 trillion reported in 1997. Assets of 401(k) plans increased by 22% to $1.5 trillion, while non-401(k) defined contribution plan assets decreased by 2% to $544 billion. Defined benefit plan assets increased by 12% to $1.9 trillion. These were among the findings cited in a report recently released by the Department of Labor's Pension and Welfare Benefits Administration (PWBA). (Spencernet)

Three Milwaukee County Supervisors Voted Out of Office; Pension Scandal Blamed
Excerpt: "The campaigns to recall various county officials were sparked after news disclosures early this year about lucrative pension improvements approved over the past two years. The improved benefits offered some officials six-figure pension deals." (StarTribune.com)

Policy Group Says Private Accounts for Social Security Would Be Heavily Subsidized
Excerpt: "The Commission proposals are able to restore long-term solvency, the study shows, only through very large transfers of tax revenues from the rest of the budget to compensate for the losses the private accounts would cause Social Security to incur." (Center on Budget and Policy Priorities)

Commentary: Privatization of Social Security Might Be Third Rail for GOP
Excerpt: "The other day, U.S. Representative Clay Shaw of Florida, a leading advocate of Social Security privatization, denied that he supports Social Security privatization. The House leadership has even refused to put the president's plan into a bill." (Boston Globe)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Account Executive - Philadelphia for Transamerica
in PA
ERISA Consultant to $60K for Fanning Personnel
in MA
Employee Benefits Consulting for ABD Insurance and Financial Services
in CA
DC/DB/ESOP Plan Administrator for CB&H Pensions
in NC
Qualified Plan Administrator for DST Systems, Inc.
in MO
Plan Administrator for Santa Barbara Pension Consultants, Inc.
in CA
Employee Benefits Manager for Management & Training Corporation
in UT

Newly Posted Press Releases
PERFORMAX - The Last Healthcare Plan You'll Ever Need (PERFORMAX)
PERFORMAX Adds Vision Program Offering To Health and Benefit Plans (PERFORMAX)
Alexander Hamilton Institute Releases New Free Report: "Bullying: A Serious Workplace Problem" (Alexander Hamilton Institute)

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