If this message looks garbled to you or if the headlines in this message don't connect you to Web pages when you click on them, please request the "plain text" version of this newsletter ("Retirement Plans Edition") by emailing your request to publisher Dave Baker
Jobs | Today's Messages | Topical News | Q&A Columns | Services & Products | Search | Reference

The BenefitsLink Newsletter -
Retirement Plans Edition
To BenefitsLink home page Fill your job openings fast by advertising on BenefitsLink

August 19, 2002 - 11,391 subscribers
Today's sponsor: Actuarial Systems Corporation

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


   For over 20 years ASC has provided complete automation for the
   pension office, including DC/401(k) and DB administration and
   valuation systems, as well as sophisticated Compliance Testing
   and DV Direct, a revolutionary solution for daily valuation
   functions.  All ASC Technical Support Members had experience as
   practicing Pension Administrators or Actuaries before joining
   ASC-- and most have been with ASC for over 10 years.

(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)

Congress Urged to Close Pension Loophole That Allows One-Day Social Security Windfall
Excerpt: "There's a new wrinkle in the debate over what to do with the Government Pension Offset, the curse of many federal and state retirees. Congressional investigators have discovered a loophole in the offset that could drain millions of dollars from the Social Security trust funds, and the General Accounting Office has recommended that Congress come up with a fix." (Washington Post)

Multiemployer Plan Had No Duty to Advise Employees of Benefit Change Not Under Serious Consideration (PDF)
Mushalla v. Teamsters Local No. 863 Pension Fund (3d Cir. Aug. 12, 2002, No. 01-2879). Excerpt: "[T]he administrators of multiemployer plans have no greater duty of clairvoyance than any other ERISA fiduciary.... [W]e hold that [the] 'serious consideration' test [of Fischer v. Philadelphia Electric Co.] applies with the same force to multiemployer plans as it does to single employer plans." (U.S. Court of Appeals for the Third Circuit, via FindLaw.com)

Overview: Advance Notice of Blackouts, Stiffer ERISA Criminal Penalties Enacted As Part of New Law
Excerpt: "For an individual, the maximum fine is now $100,000 (rather than $5,000) and the maximum prison term is 10 years (rather than 1 year). For a non-individual (e.g., corporation), the maximum fine is now $500,000 (rather than $100,000)." (TRI Pension Services)

Another Question is Answered in the 401(k) Plans Q&A Column
What particular section in the Internal Revenue Code defines the exception to the 10% early distribution tax on withdrawals from qualified 401(k) retirement plans made to a qualified domestic relations order ('QDRO') by an alternate payee? (BenefitsLink.com)

American Academy of Actuaries Invites Actuaries to Register for Pension Assistance List
Excerpt: "The Pension Assistance List, or 'PAL,' is a nationwide referral service created by the American Academy of Actuaries. It is open to actuaries who are interested in helping individuals understand their pension benefits. Taking part in PAL is a great way for actuaries to help clear up some of the misconceptions participants may have about actuaries. PAL gives you a chance to serve both the profession and the public good." (American Academy of Actuaries)

The Challenge of Social Security Reform in Transition Economies: the Case of China (PDF)
20 pages. Working paper, temporarily available online. Excerpt: "While China has adopted the World Bank's 'three pillar model' of social pool, individual accounts, and supplementary pensions, the challenge for China is to implement this system by recentralizing control over social security policy by implementing a national scheme to replace the existing decentralized enterprise system." (Mukul Asher and David Newman of the National University of Singapore)

Another Question is Answered in the Distributions: Taxation and Planning Q&A Column
I rolled my 401(k) assets from a previous employer into a personal IRA. I want to have these assets safe from creditors, but I understand the only way to do that is to have the assets in a qualified plan. I now am working for a new employer and belong to its SEP (Simplified Employee Pension) plan. Can I roll the IRA that holds my previous 401(k) assets into the new employer's SEP and have those assets protected from creditors? (BenefitsLink.com)

Another Question is Answered in the Who's the Employer Q&A Column
I worked as a commissioned sales person. Commissions from company A were reported using a Form W-2, but commissions from all the other companies were reported on Form 1099. The owner of company A held 100% ownership in all of the companies and directed each company. All companies were in the same office space. Shouldn't all commissions have been subject to reporting on a Form W-2? I think the way it was handled will limit my retirement contributions. (BenefitsLink.com)

Commentary: Pension Reform Being Held Captive?
Excerpt: "Amid a series of congressional hearings convened to get to the bottom of the Enron fiasco, lawmakers introduced a flurry of bills aimed at ensuring that workers at other companies don't experience what Enron employees have: a total nuking of their 401(k) money. That was last year. Today, most proposed changes have remained that-- proposed. Very few have actually become law." (The Dallas Morning News; free registration required)

Opinion: Corporate Irresponsibility-- America's Newest Export (PDF)
Excerpt: "Lawrence E. Mitchell believes U.S. pension funds should be leading the socially responsible investment charge. But he's not optimistic." (Benefits Canada)

White Paper: the Impact of Social Security Reform on Low-Income and Older Women
Excerpt: "This report first describes how women's Social Security benefits are likely to change over the next four decades. It then considers how proposed reforms to the Social Security system might affect American women's economic well-being." (AARP Research)

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

Third Circuit Finds Camelot Music's COLI Arrangement Lacked Economic Substance (PDF)
IRS v. CM Holdings, Inc. (3d Circuit Aug. 16, 2002, No. 00-3875). Excerpt: "Appellant CM Holdings, Inc. ('CM Holdings'), the parent company of Camelot Music, Inc. ('Camelot'), challenges the District Court's holding that loading dividends used to fund insurance premiums for corporate-owned life insurance ('COLI') policies were shams in fact, and that the transactions as a whole lacked economic substance. We affirm ..." (U.S. Court of Appeals for the Third Circuit, via FindLaw.com)

In Notice 2002-59, IRS Throttles Back Valuation Methods in Certain Split-Dollar Arrangements
Excerpt: "Treasury and the Service understand that, under certain split-dollar life insurance arrangements (some of which are referred to as 'reverse' split-dollar), one party holding a right to current life insurance protection uses inappropriately high current term insurance rates, prepayment of premiums, or other techniques to confer policy benefits other than current life insurance protection on another party." (Internal Revenue Service)

Enron Executive Played Favorites in Allowing Compensation Plan Cash-Outs
Excerpt: "A top Enron executive wrongfully allowed employees who stayed with the company to cash deferred-compensation claims worth at least $32 million, while denying similar payments to former employees, legal experts say." (The Houston Chronicle via Society for Human Resource Management)

Interview with New Chairman of Financial Accounting Standards Board
Excerpt: "Our current proposal still doesn't deal with [whether to require all companies to include stock-option expenses on their income statements]. The International Accounting Standards Board (IASB) is heading toward that requirement. Once the IASB issues its rules later this year, we'll put out another document explaining the differences between current U.S. rules and the ones the IASB will be proposing. We'll get comments on that, then we'll try to figure out what we'll do." (Business Week)

Lack of Rigid Rules For Stock-option Pricing Makes Earnings' Manipulation Easy
Excerpt: "Don't think the new movement by public companies to record expenses for the stock options they give employees will be a cure-all for manipulative accounting." (Associated Press via Ottawa Citizen)

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Account Manager for National Retirement Services, Inc.
in NC
DC Administrator for Northern CA TPA
in CA
Retirement Sales Specialist for Deutsche Bank (Scudder Investments)
in MA
Customer Relations Representative for UMB Financial Corporation
in MO
Retirement Plan TPA for TravisWolff & Company
in TX
Client Services Consultant for American United Life Insurance Company
in IL

Newly Posted Conferences (Post Yours!)
HIPAA PRIVACY REGULATIONSin NY on September 25, 2002
presented by NYC CHAPTER OF WEB
Assessment Centres for Recruitment and Developmentin on September 25, 2002
presented by The Institute for International Research

Subscribe to the Welfare Plans Edition, too (click)

Feel free to send this email to friends, colleagues or clients, if you copy or forward this email in its entirety (including this boilerplate part). Copyright 2002 BenefitsLink.com, Inc.

Published by:

BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151

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