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The BenefitsLink Newsletter -
Retirement Plans Edition
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August 6, 2002 - 11,391 subscribers
Today's sponsor: The Plan Sales System

(Click on company name or banner to learn more.)


   The Plan Sales System is a comprehensive, 16-step system for
   growing a retirement plan sales practice. It provides detailed
   resources, contact names and numbers, checklists, charts,
   handouts, letters, extensive prospecting techniques, descriptions
   of current market opportunities, and tools for planning and
   monitoring sales activity.

(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)

Overview: DOL Addresses Correcting Late Deposits of Participant Contributions Under VFC Program
Excerpt: "[T]he loss date for purposes of calculating lost earnings is the date on which the contributions reasonably could have been segregated from the employer's general assets and not the end of the maximum time period. VFCP applicants must document the loss date: the FAQs note that this may be done with the plan sponsor's past withholding and remittance history, the sponsor's withholding and remittance process, and the minimum period between withholding and remittance." (EBIA Weekly)

Commentary: Partisan Sniping, and Compromise, On Pension Reform
Excerpt: "Observers suspect some compromise between the Senate Democratic bill and the House bill will reach the president's desk. Reformers hope public annoyance at the impact of scandals will get a tough bill through the process." (The Christian Science Monitor)

Being Single in a 401(k) Just Got Better
Excerpt: "Single-participant 401(k)s, or micro plans, are the fastest-growing segment of the defined-contribution market, according to Boston-based business consultants Cerulli Associates. The self-employed have always been able to invest in regular 401(k)s. But it wasn't until EGTRRA, which allows the self-employed to contribute more money to 401(k)s with fewer limitations, that they became an attractive investment choice for sole proprietorships." (TheStreet.com)

QDRO Entered After Participant's Death Is Not Enforceable
Stahl v. Exxon Corp. (S.D. Texas 2002). Excerpt: "In entering judgment for Exxon and the retirement plan, the court noted that the majority of cases hold that a surviving spouse annuity vests in favor of the current surviving spouse on the date of the participant's death, and therefore a QDRO entered posthumously is not enforceable." (EBIA Weekly)

Sarbanes-Oxley Act of 2002 Addresses Blackout Periods and Role of Auditors
Excerpt: "]N]ew blackout rules will become effective January 27, 2003.... The DOL must issue initial guidance and a model notice no later than January 1, 2003. Interim final rules are to be promulgated by October 13, 2002.... [T]he criminal penalties [under ERISA] were increased ... [T]hese increased penalties apply not only to the new blackout period requirements but also to existing summary plan description, annual report and other disclosure requirements." (EBIA Weekly)

Matching Contributions to TSP Required Under USERRA if Employee Makes Up Missed Contributions (PDF)
5 pages; final regulations for the Thrift Savings Plan established in 1986 for federal employees, published July 30, 2002. Excerpt: "The employee is entitled to lost earnings on missed agency contributions ... The employee will elect to have the lost earnings calculated using either the rates of return based on the contributions allocation(s) on file for the participant during the period of military service or using the rates of return for the G Fund ..." (Federal Retirement Thrift Investment Board)

Gradual (Phased) Retirement: An Additional Option in Work and Retirement (PDF)
24 pages. Excerpt: "[This paper] discusses the role of gradual retirement in introducing flexibility into the range of choices between work and retirement. Part I explains the rationale for gradual retirement. Part II discusses some of the major barriers and possible solutions to gradual retirement, along with some examples of gradual retirement arrangements in both the public and private sectors." (Yung-Ping Chen and John C. Scott, published by the Society of Actuaries)

Communication Gaps Can Cost You 404(c) Compliance
Excerpt: "[A] surprisingly large number of plan sponsors seem to think that, if they (a) offer daily valuation, (b) offer a dozen or so funds, and (c) arrange to have mutual fund prospecti distributed to participants, they will avail themselves of the protections of 404(c).... However, plans most commonly fall short of the 404(c) requirements in areas that have little or nothing to do with the number of funds or frequency of transfer." (Attorney Fred Reish in PLANSPONSOR.com)

The Role of Economic Policy in Social Security Reform: Perspectives from the President's Commission
37 pages. Working paper, temporarily available for downloading. Excerpt: "Recently we were asked to serve on the President's Commission to Strengthen Social Security ... This paper explains how the Commission arrived at some of its recommendations and the role that economics played in contributing to these recommendations. We describe the key institutional constraints confronting efforts to reform Social Security and how these constraints influenced Commission decisions." (John F. Cogan and Olivia S. Mitchell, published by the Pension Research Council)

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

Employer's Procedures for Distributing SPDs Enough to Prove That Employee Received It
Hunter v. Lockheed Martin Corp. (N.D. Ca. 2002). Excerpt: "[U]nder the terms of the plan, the participant was eligible for benefits only if she submitted a claim within two years of being laid off.... The participant then brought suit, claiming that she had never been provided with a summary plan description (SPD) or any other information about the terms of the disability plan." (EBIA Weekly)

Survey Results: 2001 Board of Directors Profile and Compensation at Nasdaq-100 Companies (PDF)
30 pages. Excerpt: "This report ... presents an analysis of the structure, demographics and compensation for boards of directors of the companies included in the Nasdaq-100 Index as of July 1, 2001." (Frederic W. Cook & Co., Inc.)

Planning for the New Shareholder-Approval Requirements for All Equity Grants to Employees (PDF)
2 pages. Excerpt: "[T]he NYSE proposed rule applies to uses of stock under all equity plans, not just stock option plans. Thus, the rule change may apply to restricted stock grants, LTIPs paid out in shares, bonuses paid out in restricted stock, voluntarily deferred stock paid out in actual shares, employee stock purchase plans, equity grants for outside directors, and even small grants of stock to lower-level employees as part of reward/recognition programs." (Frederic W. Cook & Co., Inc.)

Compensation Consulting Firms Issues Report on Status of Stock Option Debate (PDF)
Excerpt: "The July 14 announcement by Coca-Cola and subsequent action taken by several other prominent companies to begin expensing the cost of stock options may be one of the most significant developments affecting executive compensation in the last several years. This letter provides background on the 'stock option accounting' issue, a summary of the ongoing debate, and the possible impact on publicly-traded U.S. companies." (Frederic W. Cook & Co., Inc.)

Stock Option Accounting: When Honesty is the Most Expensive Policy
Excerpt: "For most of the companies that have agreed to reflect the cost of options, it wasn't a terribly expensive decision, a few pennies a share each year in most cases. But for many technology companies, it could mean the difference between posting a profit or a loss." (TheStreet.com)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Alliance Manager (Bundled Retirement Products) for Bank of America
in NC
Plan Administrator for Florida Pensions, LLC
in FL
VICE PRESIDENT, NATIONAL SALES for Corporate Benefit Services of America, Inc.
in MN
Retirement Plan Sales Consultant for Invesmart
in TX
Retirement Plan Consultant for Invesmart
in OR
Benefits Manager (Service Delivery Manager) for Towers Perrin
in VA
Plan Administrator for Sample & Bailey, CPAs, PC
in CO

Newly Posted Webcasts (Post Yours!)
Health Care Costs and Health Coverage on August 2, 2002
presented by Alliance for Health Reform, with support from the Robert Wood Johnson Foundation

Newly Posted Conferences (Post Yours!)
PenServ's 13th Annual Fall Seminar Seriesin TX on October 1, 2002
presented by PenServ, Inc.

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