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The BenefitsLink Newsletter -
Retirement Plans Edition
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September 10, 2002 - 11,893 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)

Participants Unhappy with Handling of Pensions After Halliburton Acquisition
Excerpt: "Halliburton [said] that the Dresser-Rand employees who had turned 55 before the unit was sold would still receive all their pension options and benefits, as if the acquisition and spinoff had never happened. Officials had considered preserving the younger workers' benefits as well, Halliburton added, but decided not to, because 'it would be, in effect, paying for service with Dresser-Rand' after the employees had begun working for the company that had bought the unit." (New York Times; free registration required)

Pension Funds, Fiduciary Duty, and Socially Responsible Investing
Excerpt: "An interview with Meredith Miller from the Connecticut State Treasurer's Office gives some insight into why the State of Connecticut is increasingly embracing SRI." (SocialFunds.com)

Employee Ownership Update for September 9, 2002
NCEO executive director Corey Rosen reports on an IRS revenue procedure limiting most S corporations' taxable years to the calendar year; an SEC ruling that companies cannot exclude shareholder proposals under the Rule 14a-8 exclusion that allows companies to avoid shareholder votes on proposals dealing with 'ordinary business matters,' which some had used to avoid votes on broad-based equity plans; and the 8th Circuit's rejection of a management company ESOP in Beals Brothers Management Corp. (National Center for Employee Ownership)

SPARK Institute Says Congress Should Not Add Fiduciary Responsibilities Under ERISA 404(c)
Excerpt: "On September 5, the SPARK Institute made recommendations to the Senate Committees on Finance and Health, Education, Labor, and Pensions (HELP) regarding a proposal in the Committees' Enron-related pension bills to create a new ERISA fiduciary duty regarding the provision of investment information to participants. The Institute recommended that the proposed amendment be dropped from any final Enron-related pension reform legislation." (PR Newswire via Yahoo! News)

Commentary: the Mystery of the Disappearing Pension
Excerpt: "For years, employers have been quietly replacing pension plans with 401K programs, and putting retirement incomes at risk.... As corporations have switched from defined benefit plans to defined contribution plans, or 401K's, an entire generation will soon reach retirement age with a large number of people unable to retire and maintain their standard of living." (Utne Reader Online)

Opinion: the Right Fix for Social Security
Excerpt: "The individual accounts in all three of the commission's models would exacerbate these financing problems, requiring additional benefit cuts, more government borrowing or increased revenues." (The American Prospect)

Another Question is Answered in the Who's the Employer Q&A Column
Physician M owns 100% of a professional association ('P.A.'), which in turns owns 50% of a medical clinic that employs physicians and provides medical services to the public. P.A. does the billing for the medical clinic. The medical clinic in turn provides administrative services for P.A., for which P.A. pays the medical clinic. Under the A organization rules, what does it mean to 'regularly perform services' or to be 'regularly associated with the FSO' in performing services? (BenefitsLink.com)



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

Siebel Systems Salvaging Sunken Options
Excerpt: "One leftover of the burst bubble in technology stocks is the existence of millions of employee stock options that are far out of the money.... [A]n innovative plan is being offered by Siebel Systems [whose share price is now $8.60, down 93 percent from its 2000 peak of $119.88] ... The plan allows employees with options that have exercise prices of $40 a share or higher to sell them back to the company for $1.85 an option." (New York Times; free registration required)

Commentary: Taking Apart Siebel's Bid for Employee Options
Excerpt: "Siebel Systems Inc.'s employees who own underwater stock options have an opportunity that's usually available only to the holders of options traded publicly, on an exchange. The world's largest maker of customer-service software is offering $1.85 a share for employee options having a strike price of $40 or more.... The fact that a Silicon Valley company followed [the Black-Scholes option pricing] model is absolutely stunning by itself." (Graef Crystal on Bloomberg.com)

Lost Stock Option Values -- Is Your Company at Risk for Employee Lawsuits?
Excerpt: "In the rush in the 90s to extend stock option plan eligibility to employees below the executive level, many companies may not have considered all the potential issues associated with granting stock options to such a broad group, and many of the option plans may have been drafted imprecisely.... In this article ... authors Robbi Fox and Lisa Bridges of Hewitt Associates discuss areas of potential employer liability ..." (Hewitt Associates)

Stock Options in Corporate Divestitures
Excerpt: "In this article ... authors Robbi Fox, Lisa Bridges, and Mike Jones of Hewitt Associates address the effect of spin-offs, IPOs, and divestitures on employee stock options and suggest different treatment options in accordance with tax and accounting laws." (Hewitt Associates)

Accounting Consequences of Joint Venture Employees Receiving or Holding Parent Company Stock Options
Excerpt: "[G]ranting parent company stock options to executives who are transferred to a joint venture is complex because of the potential negative accounting implications associated with such grants. In this article ... authors Robbi Fox and Lisa Bridges of Hewitt Associates outline considerations and provide advice on stock options for companies considering a joint venture." (Hewitt Associates)




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


Pension Administrator
for Means & Associates, LLC in CA

Associate - Insurance Services - Deerfield, IL
for Mullin Consulting, Inc. in IL

Pension Administrator
for LAR Pensions, LLC in CT

Pensions/401(k) ERISA Compliance Specialist
for Pensioncareers Ltd. in NJ, NY

Institutional Pension Consultant
for TIAA-CREF in MA

Business Analyst
for INVESCO Retirement, Inc. in GA

Financial Transactions Specialist
for ExpertPlan, Inc. in NJ

Actuarial Assistant
for The Pension Service, Inc. in CT

Operations Analyst
for Fanning Personnel in MA

Pension Plan Administrator
for Elliott Davis, LLC in SC

Defined Contribution (DC) Plan Administrator
for The Ross Companies in NY

Business Development Associate
for Wells Fargo Retirement Plan Services, Inc. (Milwaukee, WI) in WI

Benefits Administrators
for Natl corporations in NYC - represented by BLB Consulting Inc Search firm in NY


Newly Posted Conferences (Post Yours!)


Cross-Tested Plans Specialty Workshops
in CO on October 24, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in TX on October 23, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in CA on October 25, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in MO on November 6, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in IL on November 7, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in MN on November 8, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in NC on November 14, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in PA on November 14, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in MA on November 15, 2002
presented by SunGard Corbel

Cross-Tested Plans Specialty Workshops
in GA on November 15, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in TX on October 23, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in CO on October 24, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in CA on October 25, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in MO on November 6, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in IL on November 7, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in MN on November 8, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in NC on November 14, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in PA on November 14, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in MA on November 15, 2002
presented by SunGard Corbel

Safe Harbor 401(k) Plans Specialty Workshops
in GA on November 15, 2002
presented by SunGard Corbel

NTSAA: Up the Ante . . . Knowledge is Power
in MS on February 27, 2003
presented by National Tax Sheltered Accounts Association


Newly Posted Press Releases (Post Yours!)


Two-Step Software Delivers the First Complete On-Line Minute Book - Includes Improved Stock Option Tracking
(Two-Step Software)

SunGard Corbel Releases EGTRRA Updated Multimedia Learning
(SunGard Corbel)

PlanMember Services Corporation Enhances Trust Bank Offering
(PlanMember Financial Corporation)

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