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The BenefitsLink Newsletter -
Retirement Plans Edition
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August 23, 2002 - 11,413 subscribers
Today's sponsor: The Plan Sales System

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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)

Overview: September 3 Deadline for Late GUST Amenders to Avoid Disqualification (PDF)
Excerpt: "Plan sponsors that missed the deadline to amend their plan for GUST can now avoid plan disqualification using a special procedure announced by the IRS.... A special IRS procedure now allows employers whose plans are not amended by their GUST amendment deadline to update their plans and avoid plan disqualification without using a formal Employee Plans Compliance Resolution System (EPCRS) correction program. However, this procedure is only available until September 3, 2002." (CIGNA's Pension Analyst)

Seeing Through Self-Directed Brokerage Windows
Excerpt: "[Plan] sponsors are tapping [self-directed brokerage accounts, or SDBAs] to give their participants access to some or all of the universe of stocks, bonds, and mutual funds for use in their defined contribution portfolios. A small minority has opted for a more limited approach, giving participants access to preselected mutual funds only-the so-called fund 'window.'" (

Four Judges in Cleveland to Take Advantage of New Law Allowing Pension Payments While Working
Excerpt: "Four [Cleveland] area judges are among at least 18 elected officials across the state planning to exploit a legal loophole this fall that would allow them to temporarily retire, start collecting pensions and then return to the same job and salary. The maneuver is legal under a new law that tried to limit 'double dipping' by public officials, but it is drawing criticism." (

Ohio Legislator Criticizes Law Permitting Retirement Distributions While Still Working
Excerpt: "A lawmaker wants to bar elected officials from receiving both their pensions and salaries or at least make sure the practice is more widely publicized. At least 18 elected officials throughout [Ohio] have announced plans to get the double payment by running for office Nov. 5 and then temporarily retiring before starting a new term ..." (Dayton Daily News)

Analysis: Retirement is Becoming a Multiphased Transition (PDF)
6 pages. Excerpt: "[R]ather than being a well-defined, one-time event, retirement is more and more a multiphased transition with workers moving slowly into full-time leisure. The paper also reviews data as to the trend to earlier retirement ... [T]his trend may have stopped, at least in the United States. The paper then discusses alternative pension design features ... [P]ension plans that were appropriate for the workplace of the 1950s and 1960s may not be appropriate for the 1990s." (Robert L. Brown, Ph.D., F.S.A., F.C.I.A., A.C.A.S., published by the Society of Actuaries)

Analysis: How Do People Choose a Retirement Age? (PDF)
14 pages. Excerpt: "The items influencing an individual's decision can be categorized into two distinct subsets: ... rational allocations of scarce individual and family resources, and ... institutional influences, social and organizational-level standards, and norms. This paper begins by reviewing literature that has investigated these two sets of effects on the individual decision-making process. Two sets of propositions, based on known determinants of retirement, are then developed." (Linda Smith Brothers, A.S.A., M.A.A.A., E.A., published by the Society of Actuaries)

Understanding Retirees' Needs from Retirement Through the End of Life (PDF)
9 pages. Excerpt: "Although there has been much attention given to retirement planning and related issues, most of it has been focused on accumulating assets at retirement age, with little analysis of the period after retirement. The pension practice area of the [Society of Actuaries] took up the challenge to respond to these issues with a special research project, which we have named the Retirement Needs Framework." (Society of Actuaries)

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

Opinion: Only Thing Stopping CEO Pay is the Outrage Constraint
Excerpt: "The high pay of America's C.E.O.'s reflects intense competition among companies for the best managerial talent. Stock options and other typical forms of executive compensation are designed to provide incentives for performance. These incentives align the personal interests of managers with those of shareholders. Nothing in the preceding paragraph is true. That's the message of an extraordinary research paper ..." (Paul Krugman in the New York Times; free registration required)

Relink: Executive Compensation in America: Optimal Contracting or Extraction of Rents?
Here's the working paper described in Paul Krugman's column today in the New York Times, linked on BenefitsLink in December 2001 and now relinked (I just made up that word) for your convenience --Ed. (National Bureau of Economic Research)

Commentary: Investment Advice Paid by Employer is the Best Benefit You're Not Getting
Excerpt: "A law that took effect in January (part of last year's massive tax cut measure) allows employers to offer not just education related to your company plan but also broader 'retirement advice' to you and your spouse individually, as a fringe benefit. This means your employer could take a tax deduction for the cost, and you wouldn't have to pay taxes on the value of the advice/benefit you receive." (Business Week)

Stock Options: a Little Honesty Goes a Long Way in the Market
Excerpt: "You might think investors would punish companies that have decided to expense stock options. After all, most of corporate America has been battling for years to avoid such a fate ... And yet, as a small but growing band of big-name companies makes the switch, investors have for the most part showered them with love." (

Newly Posted or Renewed Job Openings - Post a Help Wanted Ad

401(k) /Pension Administrator
for Great Lakes Pension Administrators, Inc. in MI

401k Client Relationship Manager
for Great West Life & Annuity in MN, NC, WA

Operations/Administration Management
for INVESCO Retirement, Inc. in GA

Pension Administrator
for FBD Consulting, Inc. in KS

Newly Posted Conferences (Post Yours!)

Retirement Plans in the Wake of Enron
in AZ on September 19, 2002
presented by Western Pension & Benefits Conference - Phoenix Chapter

Minimum Distributions, Beneficiary Designations & Estate Planning
in AZ on September 24, 2002
presented by Western Pension & Benefits Conference - Phoenix Chapter

DataPath Annual Conference
in ALL STATES on September 24, 2002
presented by DataPath Software Solutions

Newly Posted Press Releases

Bill Rasmussen Join Benefit Management Group
(Benefit Management Group)

Online Training & Certification Courses for HR Professionals
-- Including COBRA, HIPAA, FMLA, and others -- Now Available!


Ameritrade Corporate Services and SunGard Announce Agreement to Provide Self-Directed Brokerage Accounts
(SunGard Corbel)

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