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The BenefitsLink Newsletter -
Retirement Plans Edition
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August 21, 2002 - 11,391 subscribers
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(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)

Harder Than It Looks: Daily Valuation System Delayed Again for Federal Thrift Savings Plan
Excerpt: "A new computer system that would give federal employees more control over their 401k-style Thrift Savings Plan account won't be ready until November, the TSP board announced Tuesday. The announcement marked the fifth time in two years that the computer modernization schedule has slipped." (GovExec.com)

United Bankruptcy Could Cast ESOPs in a Poor Light
Excerpt: "If United Airlines goes bankrupt, will it give employee stock ownership plans a black eye? Because United has the nation's second-largest employee stock ownership plan, there's some concern that the company's possible bankruptcy will throw a shadow over the whole concept of employee ownership ..." (Chicago Daily Herald via International Foundation of Employee Benefit Plans)

GM Says Underfunded Pension Plan Will Likely Drain Cash Flow
Excerpt: "General Motors Corp. on Tuesday said it expects to meet its annual earnings-per-share target of $10 by mid-decade despite rising pension costs, but the company warned that its pension liabilities will likely drain cash flow. During a conference call, Eric Feldstein, GM's vice president of finance, said that fixing GM's underfunded pension fund will likely consume a considerable amount of cash." (Dow Jones via Yahoo! News)

Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
How can I find someone outside of the government to recheck an annuity estimate given to me by the Railroad Retirement Board? (BenefitsLink.com)

Guide to International Social Security Agreements, July 2002
Excerpt: "International social security agreements vary widely. Understanding the nature of such agreements is important in benefit planning for international assignments. Some agreements allow contribution records in one country to count for eligibility purposes in the other country. Some eliminate dual coverage and social security taxes for those workers and their employers. Others merely cover cross-border administrative matters." (Mercer Human Resource Consulting)

Commentary: Government Pension Fund Fallout Anxieties
Excerpt: "If there is one thing the Bush administration had better pay lots of attention to it is the monetary losses suffered by state and local government pension funds because of corporate misbehavior and malpractice accounting in companies like Enron, Global Crossing, Tyco, Xerox, Dynegy.... There is no subtler, no surer means of overturning the existing basis of society than to debauch the securities market in which so many pension funds are invested." (Arnold Beichman in the Washington Times)

Survey Reveals Good News/Bad News for Governmental 457 Plans
Excerpt: "A recent survey of 457 governmental retirement plans shows a mix of good and bad news for participants. First, the bad news -- participation rates are declining ... The good news? Plans are improving. 457 plan sponsors have stepped up efforts to make their plans more attractive, and most include employees in the plan decision-making process ..." (mPower.com)

Commentary: Women Nearing Retirement Confront Pay Gap
Excerpt: "For all the strides that women have made in the workplace ... one sub-group has been left behind: older women. Those within five years of the normal retirement age have made no progress-- relative to men's earnings-- since 1975, according to a recent census report. Those within 10 years of retirement have advanced exactly one percentage point; by 1999, they were earning 56 percent of what men earned. Discrimination? Perhaps. But the findings suggest other factors are at work." (The Christian Science Monitor)



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

FASB Proposes Amendment of the Transition and Disclosure Provisions of Statement 123
Excerpt: "The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting.... At its August 7, 2002 and August 14, 2002 Board meetings, the Board addressed issues related to the transition and disclosure provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, and made the following decisions: ..." (National Association of Stock Plan Professionals)

Overview: Proposed Regulations for Split-Dollar Life Insurance Arrangements
(July 2002.) Excerpt: "On July 3, 2002, the Internal Revenue Service proposed extensive regulations concerning split-dollar life insurance arrangements (SDAs). The proposed regulations in many respects are consistent with Notice 2002-8, which announced that new rules would be established for equity split-dollar life insurance arrangements or Equity SDAs. An Equity SDA is an SDA that allocates cash value in excess of premium payments to an employee." (McDermott, Will & Emery)

Overview: Sarbanes-Oxley Act-- Implications for Executive Compensation
Excerpt: "Directors, executives, Section 16 compliance officers and human resources administrators will want to consider closely the following provisions under the Act: prohibition on personal loans to directors and executive officers; accelerated Section 16 filing deadlines; restrictions on company stock sales during retirement plan blackout periods; disgorging executive pay due to accounting restatements; [and] freeze on extraordinary payments to directors and officers." (McDermott, Will & Emery)

Forget Stock Options and Personal Loans-- Executives Now Want Cash
Excerpt: "Base salaries easily could top $1 million, a threshold many companies have stayed below because anything above it isn't tax-deductible. Many executives also are negotiating bigger performance-driven and signing bonuses." (AP via StarTribune.com)

Opinion: CEO Pay Tomorrow Will Be Same as Today
Excerpt: "With over-the-top pay and executive misbehavior so closely aligned, it might seem that exec compensation would be facing an overhaul. But the experts see little ahead that will reset the priorities of CEOs -- and certainly nothing that will ratchet down the average $11 million that top executives were paid in 2001." (Business Week)




Newly Posted or Renewed Job Openings - Post a Help Wanted Ad
Management Leader for Major Defined Contribution Provider
in GA
Director of Benefits for Fortune 500 hospitality company located in Southern California
in CA
Legal Assistant - Compensation, Employee Relations & Benefits for Dow, Lohnes & Albertson PLLC
in DC
Regional Account Manager for Pan American Retirement & Investment Services
in CA
401(k) Plan Administrator - Santa Barbara, CA for Accrued Benefit Administrators, Inc.
in CA
DC Administrator for Heaton :: Eadie
in IN
Counsel, Employee Benefits for National Rural Electric Cooperative Association
in VA



Newly Posted Press Releases (Post Yours!)
Alexander Hamilton Institute Releases New Free Report - "Preparing For The Anniversary of 9-11 (Alexander Hamilton Institute)

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