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The BenefitsLink Newsletter -
Retirement Plans Edition
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July 29, 2002 - 11,391 subscribers
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Wisconsin, North Carolina and Arkansas Are Only Remaining EGTRRA Non-Conforming States (PDF)
4 pages. Excerpt: "Here is the latest on the issue of state tax conformity with the retirement provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Please note that only nonconforming states (or states previously considered to be nonconforming) are listed below - For all other states, either they automatically conform with EGTRRA or conformity was never an issue (e.g. the state does not have an income tax)." (American Benefits Council)

Accounting Reform Bill Addresses Blackout Practices
Excerpt: "During those blackouts, directors and executive officers would be barred from buying or selling any stock in the company that he or she acquired in connection with his or her service or employment as a director or executive officer.... Plan administrators would now be required to provide participants and beneficiaries affected by a blackout period with at least 30 days advance notice (single participant plans are exempt from this requirement)." (PLANSPONSOR.com)

The New Pinch on Plan Sponsors Caused by Funding Needs of Defined Benefit Pension Plans
Excerpt: "Even if plan investments somehow manage to eke out 5% returns this year, companies in Standard & Poor's 500-stock index will be $40 billion short of their projected pension obligations, according to Morgan Stanley estimates. If plans lose 5%, they'll be $150 billion in the hole." (Business Week)

Pension Liability Sends General Motors Stock Falling
Excerpt: "Because of the prolonged stock market slump, the fund was underfunded by $9.1 billion at the start of 2002 and the deficit could swell to $12.7 billion or more by next year.... GM has a 'fairly aggressive plan' to raise $10 billion, much of which would be funneled into the pension fund. The plan includes the sale of some non-core assets." (Dayton Daily News)

Pension Increase for Kentucky Legislators Stopped by Court
Excerpt: "The court ruled 2-1 Friday that changes in pension laws for public employees must be accompanied by an actuarial analysis of the cost before the bill is considered by either the House or Senate." (StarTribune.com)

New Book on Cultural Diversity and Employee Ownership
The NCEO presents excerpts from its new book 'Cultural Diversity and Employee Ownership,' which discusses how companies with ESOPs and other stock plans deal with diversity and communicate employee ownership to a broad spectrum of employees. (National Center for Employee Ownership)

Overview: Some Small Retirement Plans Now Must Have Audited Financials (PDF)
Article at page 4 of 4. Excerpt: "Retirement plans with less than 100 participants at the beginning of a plan year .... have been exempt from the ERISA requirement of preparing audited financial statements and furnishing an accountant's opinion as part of the Form 5500 Annual Report. Under new Department of Labor regulations, this exemption will no longer apply unless one of the following alternatives is met: At least 95% of plan assets constitute 'qualifying plan assets.' ..." (Warner Norcross & Judd LLP)

Expelled Congressional Representative To Retain Annual Pension of $37,120
Excerpt: "Ohio Rep. James A. Traficant Jr. has been expelled from Congress and may be headed to prison, but that doesn't mean he must give up his congressional pension." (Washington Post via Post-Gazette.com)

Senate Waits on Pension Reform
Excerpt: "Don't expect Congress to act soon to improve protections for workers and their 401(k) retirement savings plans. The momentum in Congress that carried through legislation this week to crack down on corporate fraud hasn't worked at the same warp speed on pension reform." (AP via Yahoo! News)

Opinion: 401(k)-Only Programs Let Employees Play 'You Bet Your Life Savings'
Excerpt: "Retiring with only a 401(k) account or some other lump sum is to play a game, and actuary Charles Commander calls it 'You Bet Your Life.' That is because the retiree has to figure out how much she can take out each year without knowing (a) how long she will live, or (b) how the market is going to perform." (Washington Post)

Opinion: Bush Still Wants to Party Like It's 1999
Excerpt: "Since the early months of 2000, the Nasdaq has fallen about 75 percent, the broader S&P 500 more than 40 percent. These aren't mere paper losses; they translate into disappointment and even hardship for millions of Americans. Now more than ever we need institutions that provide a safety net for the middle class. Yet George W. Bush still wants to party like it's 1999. On Wednesday he insisted that he continued to favor partially privatizing Social Security." (Paul Krugman in the New York Times)

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

Form 5558 Available to Extend July 31 Deadline for Filing Form 5500 by Calendar Year Plans (PDF)
Excerpt: "A plan ... may obtain a one-time extension of time to file Form 5500 (up to 2-1 /2 months) by filing Form 5558 ... on or before the normal due date (not including any extensions) of the return/report. You MUST file Form 5558 with the IRS. Approved copies of the Form 5558 will not be returned to the filer. However, a photocopy of the extension request that was filed must be attached to the Form 5500. File Form 5558 with the Internal Revenue Service Center, Ogden, UT 84201-0027." (Internal Revenue Service)

Text of IRS Proposed Regulations on Effect of Compensatory Stock Options on Section 482 Calculations
Excerpt: "[S]tock-based compensation must be taken into account in determining operating expenses under §1.482-7(d)(1) ... [These proposed regulations provides] rules for measuring stock-based compensation costs [and] clarify that stock-based compensation should be taken into account in comparability determinations pursuant to the comparable profits method under §1.482-5." (Internal Revenue Service)

Text of Treasury Department Press Release on New 482 Regulations Addressing Stock Options
Excerpt: "'The proposed regulations address a significant international tax issue-- the treatment of compensatory stock options as a cost to be taken into account by related taxpayers participating in a cost-sharing arrangement for the joint development of intangible assets,' stated Acting Assistant Secretary (Tax Policy) Pamela Olson." (The Department of the Treasury)

Venture Capitalist to D.C.: Don't Mess With My Stock Options
Excerpt: "[S]tock options are still considered the magic beans of the tech economy, the source of so much astounding growth and innovation. Although options have lost much of their luster in the current bear market, companies still dole them out in the hopes of motivating talented employees to stick around and as an alternative to paying higher salaries." (Business 2.0)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Pension Administrators for Polycomp Administrative Services, Inc.
in CA
Defined Benefit Consultant for Mellon HR Solutions
in IL, NC, NJ
Defined Contribution Project Manager - MJ-020416-002 for Hewitt Associates
in GA
Benefits Assistant for YCS
in NJ
Programmer/Analyst for SunGard Corbel
in FL
Systems Analyst for SunGard Corbel
in FL
Regional Sales Representative - Qualified Retirement Plan Sales for Metavante 401(k) Services

Newly Posted Press Releases
AHI's BENEFITS ALERT RELEASES NEW FREE REPORT: Myths And Mistakes: Snaking Your Way Through COBRA Notification And Record-Keeping Traps (Alexander Hamilton Institute - AHI's Benefits Alert)

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