| The BenefitsLink Newsletter - Retirement Plans Edition |   |
August 5, 2002 - 11,391 subscribers
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401(k) Protection Takes Center Stage In Congress
Excerpt: "With a sweeping overhaul of corporate accounting standards now signed into law, Congress and the White House are moving on a second front to reassure rattled investors: enhancing protections for 401(k) savings plans. Retirement security is emerging as a major theme for both parties going into the November elections." (The Boston Globe)
Self-Employed People Get a New Kind of Account, But It's Not for All of Them
Excerpt: "[T]he new technique, sometimes called an 'individual 401(k),' won't work for everyone. People who are genuinely self-employed and have moderate incomes are likely to benefit, but those who make a lot of money may not. People who have jobs and earn money from self-employment on the side may or may not benefit, depending on their circumstances." (Washington Post)
401(k) Plan Fiduciary Concerns After Enron: No Stock, No Problems?
$150 cost; 90 minute tape of presentation by lawyers Howard Shapiro, Jeffrey Lewis and Mary Ann Arlt. 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." (ABA Joint Committee on Employee Benefits)
Protecting Participants and Beneficiaries in a Phased Retirement World (PDF)
25 pages. Excerpt: "This paper discusses the reasons for the trend toward phased retirement and looks at the legal and actuarial aspects of phased retirement as they apply to a simple defined-benefit plan. The calculation of final average pay is critical to the impact of phased retirement on the ultimate pension benefit.... Phased retirement can impact participant and spousal protections. This paper discusses some of those impacts and suggests possible safeguards." (Patricia L. Scahill, FSA, JD and Jonathan Barry Forman, JD; published by Society of Actuaries)
The Politics of European Pensions
Excerpt: "Seven-tenths of German pensions come from a state scheme with roots in Bismarck's day. It is financed mainly by a levy on wages, 19.1% this year, half paid by workers and half by employers. But, as all over Europe, the demographics are grim." (The Economist)
Retirement Option Decisions for Married Couples (PDF)
17 pages. Excerpt: "[H]ow should married couples exercise their distribution options from their employers' pension plans? What are the optimum decisions for such couples regarding the timing of their Social Security benefit commencement? What are the important variables that govern these decisions? How can U.S. pension laws be changed to allow more flexibility for couples who need to coordinate benefits from both spouses' retirement plans?" (Beverly J. Orth, FSA; published by Society of Actuaries)
The Impact of the Growth of Defined Contribution Plans on Bequests (PDF)
57 pages. Excerpt: "This paper explores the shift from [DB to DC] plans and considers how it might affect bequests and thereby consumption and saving. Our hypothesis is that both intended ... and unintended bequests will increase as retirees receive more of their pension benefits as lump sums rather than as annuity payments.... We argue that unintended bequests will rise because people are reluctant to spend accumulated wealth." (Alicia Munnell, Annika Sunden, Mauricio Soto, and Catherine Taylor, published by the Center for Retirement Research, Boston College)
ESOP Repurchase Obligation Issues In S Corporations
Excerpt: "The elimination of tax on the income attributable to the ESOP can create a large financial advantage, but it also affects the relative cost of different ways of handling repurchases and different funding methods. ESOP companies that have elected S status need to understand these issues, and they need to formulate a strategy for managing and funding the repurchase obligations that takes their tax status into account." (Foundation for Enterprise Development)
The Impact of the Growth of Defined Contribution Plans on Bequests (PDF)
57 pages. Excerpt: "This paper explores the shift from [DB to DC] plans and considers how it might affect bequests and thereby consumption and saving. Our hypothesis is that both intended ... and unintended bequests will increase as retirees receive more of their pension benefits as lump sums rather than as annuity payments.... We argue that unintended bequests will rise because people are reluctant to spend accumulated wealth." (Alicia Munnell, Annika Sunden, Mauricio Soto, and Catherine Taylor, published by the Center for Retirement Research, Boston College)
Participant's Consent Required Before Providing Information to a Prospective Alternate Payee?
Excerpt: "Requiring the participant's written consent before providing information to the participant's former spouse about the participant's account balance is not consistent with the DOL's views about the rights of prospective alternate payees to obtain information." (EBIA Weekly (Question of the Week))
Links to Items on Executive Comp, Benefits in General
(These items appear in both editions of the BenefitsLink Newsletter)
Overview: Accounting Oversight and Corporate Responsibility Reform Also Amends ERISA (PDF)
4 pages. Excerpt: "[T]his Alert ... focuses on the new rules that require advance notice of blackout periods for 401(k) and other defined contribution plans, bar insider trading during blackout periods, restrict loans to executives, and limit non-audit services by auditors." (Aon Consulting)
Legislative Update-- Executive Compensation Issues
Excerpt: "Given the apparent bipartisan support and the multitude of recent corporate scandals, it is quite possible that some executive deferred compensation proposals could be enacted later this year as part of Enron-related pension legislation or unrelated tax legislation.... Our summary of the executive deferred compensation proposals in the Thomas and Finance Committee bills follows." (Groom Law Group)
Senator Lieberman proposes stock options bill Requiring More Participation by Rank-and-File
Excerpt: "Lieberman's bill sidesteps the accounting debate. Instead, it includes measures to encourage broad distribution of options and accountability to shareholders, while reducing incentives for executives to manipulate earnings, said ... a Lieberman spokesman. The bill would require [that, in] order to claim tax deductions, companies must offer at least half of the total available stock options to employees making less than $90,000 annually." (ZDNet)
Open Standard for Benefits Enrollment Data Is Expanded and Improved
Press release. Excerpt: "The HR-XML Consortium ... has approved an updated version of its XML specification for employee benefits plan enrollments.... Today, insurance carriers and third-party benefits administrators often use either their own specifications or electronic data interchange (EDI) formats for accepting employee enrollment from external systems.... HR-XML's enrollment specification is easier to implement and more flexible since it is both standardized and based on XML." (HR-XML Consortium)
Newly Posted or Renewed Job Openings -
| 401(k) Investment Educator | for ADP, Inc. in GA, MN |
| Account Executive | for CitiStreet in FL |
| Market Manager, Defined Contribution | for New York Life Benefit Services LLC in MA |
| Employee Benefits Administrative Assistant | for Columbia Benefits, LLC in CO |
| Compliance Testing Specialist | for Diversified Investment Advisors in NY |
| Trust Officer/Vice President JO#321 | for Financial Institution in Eastern US in |
| Daily Valuation Administrator | for Union Bank of California in CA |
| Compliance Specialist | for Union Bank of California in CA |
| Employee Benefit Sales | for Horne/Guest Insurance Agency in SC |
| Senior Regulatory Compliance Specialist | for US Airways in VA |
| Senior Benefit Administrator (Client Delivery Specialist) | for Towers Perrin in VA |
Newly Posted Press Releases
| Coverage of EGTRRA, 457 Regulations, and Current Events Attracts Record Number of Pre-registrants to NAGDCA 2002 Annual Conference, September 7 - 11 (National Association of Government Defined Contribution Administrators, Inc.) |
| DESPITE DOW, PLENTY TO CELEBRATE ON 401(k) DAY (Profit Sharing/401(k) Council of America) |
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