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The BenefitsLink Newsletter -
Retirement Plans Edition
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June 28, 2002 - 11,391 subscribers
Today's sponsor: The Plan Sales System

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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)

Contributions During Employer's Taxable Year Deductible Even For Post-Taxable-Year Compensation
Excerpt: "This notice addresses two other variations on the Rev. Rul. 90-105 fact pattern, neither of which involves grace period contributions. One variation involves an actual payment to [a DC] plan before the end of the taxable year ... The other variation involves ... guaranteed minimum contribution ... Because these variations involve actual payments before the end of the taxable year, section 404(a)(6) and Rev. Rul. 90-105 ... do not affect the deductibility of the contributions." (Internal Revenue Service)

Class Action Filed Against WorldCom Alleging 401(k) Losses by Participants Due to Fiduciary Breach
Press release. Excerpt: "Keller Rohrback L.L.P. ... has filed a ... class action against WorldCom, Inc. on behalf of participants and beneficiaries of WorldCom's 401(k) retirement plans ... The complaint filed alleges that WorldCom, and its plan administrators, breached their fiduciary duties ... when material information was withheld or concealed from the Plan participants and beneficiaries with respect to the Company's business, financial results and operations ...'" (Business Wire via Yahoo! News)

IRS Elaborates on 1990 Ruling on Deductibility of Contributions for Post-Taxable-Year Comp
Revenue Ruling 2002-46. Excerpt: "Rev. Rul. 90-105 holds that contributions to a [401(k) plan] ... are not deductible by the employer for a taxable year, if the contributions are attributable to compensation earned by plan participants after the end of that taxable year.... The facts in this revenue ruling are the same ... except for the addition of [a] plan amendment and [a] board resolution setting a minimum contribution for the plan year. These factual differences do not change the result." (Internal Revenue Service)

Another Question is Answered in the Who's the Employer Q&A Column
In Q&A 100, you concluded that illegal aliens should be considered employees and participants of a qualified 401(a) plan even though they are not employed legally. Does the Supreme Court opinion in Hoffman Plastic (122 S. Ct. 1275, 3/27/02) change your opinion? (BenefitsLink.com)

IRS Publishes Supplement to Pub. 590, Providing New Tables for RMD Calculations (PDF)
Excerpt: "The IRS has published final regulations that include new tables for use in figuring required minimum distributions. The new tables replace Tables I, II, and III in Publication 590. This supplement contains the new tables in their entirety. You can use these new tables to figure your 2002 required minimum distribution, or if you prefer, you can use the tables in Publication 590." (Internal Revenue Service)

State Pension Funds Take WorldCom Losses
Excerpt: "The largest pension funds in the United States, overseers of multibillion-dollar public employee retirement funds, said on Thursday they lost well over $1 billion on stock and bond investments in troubled telecoms giant WorldCom Inc." (Reuters via Yahoo! News)

Overview: Proposed Regs on ERISA 204(h) Notices of Reductions in Future Pension Benefit Accruals (PDF)
Excerpt: "The proposed regulations affect defined benefit and money purchase pension plans that are subject to ERISA's minimum funding requirements. The proposed regulations apply to plan amendments that take effect on or after June 7, 2001. Until the IRS adopts final regulations, plan administrators must make a reasonable, good-faith effort to comply with the law." (The Segal Company)

Irate Over All the Scandals, Pension Funds Go to Court
Excerpt: "Public pension funds, facing losses of more than $1 billion from WorldCom and billions more from other companies involved in scandals, are frustrated that their years of speaking out on behalf of shareholders has done so little to clean up corporate behavior. Now they are taking their anger to court." (New York Times; free registration required)

Mutual Funds Hold 21 Percent Share of U.S. Retirement Market Assets
Press release. Excerpt: "Mutual funds retained a 21 percent share of the $10.9 trillion U.S. retirement market in 2001 with $2.3 trillion in assets held in retirement accounts, according to new research released today by the Investment Company Institute, the national association of the mutual fund industry." (PR Newswire via Yahoo! News)

Links to Items on Executive Comp, Benefits in General
(These items appear in both editions of the BenefitsLink Newsletter)

Survey Finds Discrepancy Between Employers' and Employees' Perception of Access To Online Benefits
Excerpt: "While over half of all employers believe their employees can access work related benefits services online, only one in five employees believe they can manage their benefits online, according to a new survey by employee benefits provider CIGNA." (iHealthBeat.com; free registration required)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Senior 401(K) Plan Administrator for Seeking Senior Plan Administrator in Baltimore
in MD
PEO Specialist for Transamerica
in CA
PEO Unit Manager for Transamerica
in CA
Health and Welfare Benefits Consultant for Leading Benefits Software Company
in CA, CT, MA, NY, VA
Relationship Manager for ABN AMRO Asset Management
in IL
Attorney - Benefits and Compensation for PricewaterhouseCoopers
in PA
Defined Benefit Plan Administrator for Alliance Benefit Group/401k Plus, Inc.
in TX
Pension Administrator for Gelman Pension Consulting, Inc.
in NY

Newly Posted Conferences (Post Yours!)
403(b)/457 Plan Workshop - Last Chance This Year!in DC, IL, MN, NY, PA, WI on July 10, 2002
presented by SunGard Corbel
Fundamentals of Qualified Plans (3-day program) 4 Locations; Julyin CO, MI, OH, TX on July 10, 2002
presented by SunGard Corbel

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