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The BenefitsLink Newsletter -
Retirement Plans Edition
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August 7, 2002 - 11,391 subscribers
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The Role of Multiemployer Defined Benefit Plans in an Era of Phased Retirement (PDF)
29 pages. Excerpt: "To address the needs of phased retirees, this article recommends changes to current laws affecting employee benefits, which would provide substantial retirement security ... [Part II] describes the players and plans which may benefit from phased retirement. Part III addresses problems that contingent workers confront in obtaining retirement benefits. In Part IV, the rights of contingent workers are examined as they are being defined by the courts and the legislatures ..." (Denise M. Clark, published by the Society of Actuaries)

Debut Issue of International Journal on Funding and Operating Public Pension Plans
Articles are online in a pay-per-view format, but this inaugural issue includes the following free articles: 'Introduction: a forum for developing ideas and solutions to pension challenges'; 'Controlling the cost of minimum benefit guarantees in public pension conversions'; 'How can China solve its old-age security problem?" (Journal of Pension Economics and Finance)

Another Question is Answered in the Who's the Employer Q&A Column
John owns 100% of Corp A and 60% of Corp B. Corp B. owns 100% of Corp. B1. Employees of Corp B1 own the remaining 40% of Corp B stock, subject to substantial restrictions running in John's favor. If these employees were employees of Corp B, then their stock could be excluded from the controlled group test, thus creating a group of A, B and B1. But does that rule apply when they are employees of B1, a subsidiary of B? Does 414(b) make them Corp B employees for purposes of this exclusion? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
Company A, P.C. is owned by 4 partners. One of the partners (30% owner of Company A) also owns 100% of Company B, LLC. Company A and Company B do work for some of the same clients. Company A has 12 employees and a 401(k) Profit Sharing Plan. Company B has 2 employees (the owner and 1 NHCE). Am I correct that Company A & Company B are an ASG? If so, can Company B create its own retirement plan or can/should it adopt current 401(k) from Company A? which would be the better option? (BenefitsLink.com)

Can Latin American Experience Teach Us Something About Privatized Pensions with Individual Accounts? (PDF)
32 pages. Excerpt: "Out of all the regions in the world, Latin America has accumulated the most experience with pension privatization of individual accounts (in the form of defined contribution plans). Chile and seven other countries have privatized their pension systems in different degrees ... A number of policymakers (especially in conservative think tanks) have hailed privatization as a big success." (Tapen Sinha, published by the Society of Actuaries)

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

General Motors to Expense Its Stock Options
Excerpt: "General Motors said [on Tuesday, August 6, 2002] that it would start counting its stock options as an expense at the beginning of next year, becoming the first automaker to announce such a plan ... But G.M., the world's largest automaker, also said it believed that a better method of determining a stock option's value needed to be developed." (New York Times; free registration required)

Overview: August Report of Benefits Legislation Activity (PDF)
2 pages. (Milliman USA)

Emerging Issues Task Force Concludes Deliberations on Stock Compensation Project (PDF)
5 pages. Excerpt: "Because it has become virtually impossible to keep track of all the restrictive provisions in the new guidance, perhaps a more efficient exercise is to summarize what remains permissible under the new rules. Here is our short list ..." (Frederic W. Cook & Co., Inc.)

Description of Rep. Boehner's Workplace Employee Stock Option Act of 2002 (PDF)
Excerpt: "[The bill] would create a new type of stock option under Internal Revenue Code Section 423(d). The purpose of the bill is to promote broad-based company ownership through the use of employee stock options on a nondiscriminatory basis using pre-tax payroll deductions, similar to a 401(k) plan." (Frederic W. Cook & Co., Inc.)

Accounting Board Resuming Debate on Stock Option Rules
Excerpt: "The board that sets U.S. accounting rules today reopens the debate on how companies treat the cost of stock options. At its Norwalk, Conn., headquarters, the Financial Accounting Standards Board (FASB) will consider a rule that, if enacted, could influence how many more companies elect to count options as an expense." (Washington Post)

Seasonal Benefits Cost Increases Outstrip Wage Hikes, BLS Reports
The most recent Employment Cost Index released by the Department of Labor's Bureau of Labor Statistics (BLS) reveals that benefits costs in private industry continue to rise faster than salaries. According to the BLS's Employment Cost Index-June 2002, benefits costs for private industry workers increased 5.0% for the year ended June 30, 2002, an increase from 4.5% as of June 30, 2001. (Spencernet)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Life Insurance Specialist for SunTrust Bank
in FL
Account Administrator II for American Express Financial Advisors
in MN

Newly Posted Webcasts (Post Yours!)
Controlled Groups, Affiliated Service Groups, and Issues of Common Control on August 27, 2002
presented by ASPA

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