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The BenefitsLink Newsletter -
Retirement Plans Edition
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September 3, 2002 - 11,413 subscribers
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Doors May Open to Expanded 401(k) Advice for Employees
Excerpt: "More investors may gain access to professional advice for their 401(k) plans as a result of Congressional action expected this fall. But Congress must still decide whether companies that manage 401(k)'s will be allowed to provide that advice themselves and promote their own services. Senator Tom Daschle, the majority leader, vows that pension reform will be second on the agenda only to the Homeland Security Bill when Congress returns after Labor Day." (New York Times; free registration required)

Investor Behavior and the Purchase of Company Stock in 401(k) Plans-- the Importance of Plan Design
Working paper, available from for $5. Excerpt: "[T]he average share of participant's discretionary 401(k) contributions in company stock was almost 20 percent ... [This research paper] relates this share to plan design features and firm financial characteristics. We find that the number of investment alternatives offered ... and whether the company requires some of the match to be in company stock are key factors of the share of total contributions in company stock ..." (Nellie Liang and Scott Weisbenner, published by the National Bureau of Economic Research)

ERIC Sets Forth Proposal for Replacement of 30-Year Bond Rate for Pension Funding (PDF)
4 pages. Excerpt: "ERIC proposes targeted improvements to the current law funding standards.... Specifically, ERIC proposes to: replace the current mandated 30-year Treasury bond rate with a new composite corporate bond rate; phase in the new rate for lump sum calculations; coordinate the new rate with related mortality assumptions; and reduce the frequency with which employers bounce in and out of current liability funding and quarterly contribution requirements." (ERISA Industry Committee)

California State Pension Fund Establishes Jobs Board to Attract Retirees to Part-Time Work for State
Excerpt: "State retirees will find it easier to get a part-time job with the State of California with a new on-line search tool. The California Public Employees' Retirement System (CalPERS) and the Department of General Services' Statewide eGovernment Initiatives Office have launched iJobs, an online tool that allows retirees to search for work on the web as retired annuitants with the State of California." (California Public Employees' Retirement System)

Cooperative Fund of New England Attracts Investment through Self-Directed IRAs
Excerpt: "Self-directed IRAs offer a win-win situation for nonprofits, which benefit from low-interest loans, and investors, who benefit from tax-friendly community investment." (

Another Question is Answered in the 401(k) Plans Q&A Column
A start-up company incorporates on 1/1/2002 and decides to establish a 401(k) plan effective 12/1/2002 with a 12/31 plan year-end. Assume there are no more-than-5% owners. Will there be any highly compensated employees for the first short plan year if there are employees who have earned compensation in excess of the compensation limit in the 12-month period preceding 12/1/2002, or do you look back to 2001 where there can be no highly compensated employees because the employer did not exist? (

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

Study of U.S. and Foreign Compensation Costs In Manufacturing: Our Costs Grew More Slowly
From the June 2002 issue of Monthly Labor Review Online. Excerpt: "Despite the appreciation of the dollar, U.S. hourly compensation costs have grown more slowly than costs in foreign countries over the 19752000 period." (Bureau of Labor Statistics, U.S. Department of Labor)

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

Pension Consultants/Administrators; F/T & P/T
for Northern NJ Mid-Size Pension Consulting Firm in NJ, NY

Part Time, 401 (k) Enroller/ Contractor - Bilingual
for Transamerica in FL, GA, IL, PA, TX

Part time 401 (k) Enroller/ Contractor
for Transamerica in FL, GA, IL, TX

Benefits Analyst
for UCLA in CA

Chief Actuary
for in WA

Benefits Coordinator/Analyst
for a Fortune 200 company in Charlotte NC in NC

Director, Employee Benefits
for MTA New York City Transit Authority in NY

Newly Posted Conferences (Post Yours!)

Split Dollar as Executive Compensation: The Continuing Controversy-- The New Regulations
in ALL STATES on September 10, 2002
presented by American Bar Association's Joint Committee on Employee Benefits; other co-sponsors

Corporate Governance Developments: Employee Benefits and Executive Compensation Impacts
in ALL STATES on September 19, 2002
presented by American Bar Association's Joint Committee on Employee Benefits; other co-sponsors

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