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October 2, 2002 - 11,860 subscribers
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CEO of Global Crossing Promises to Contribute Personal Funds to 401(k) Participants
Excerpt: "Global Crossing Ltd. Chairman Gary Winnick told a House panel yesterday that his telecommunications company failed not because of fraud but because of a broader industry meltdown, and he pledged $25 million of his own money to help employees whose retirement savings were wiped out by the company's stock collapse." (Washington Post)

Full Text of DOL's Amicus Brief in Enron Case on Fiduciary Liability Issues, Part 1
ERISA legal issues addressed in Part 1 include: "Plaintiffs Sufficiently Allege that the Administrative Committee Members, As Well as Enron, Lay and the Compensation Committee, Breached Their Fiduciary Duties to Protect the Plans From the Losses Caused by Enron's Perilous Financial Condition and From Inaccurate and Misleading Information About Enron's Financial Performance"; and "Plaintiffs' Claims ... Are Not Defeated By Plan Terms That Provide For Investment In Enron Stock." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Full Text of DOL's Amicus Brief in Enron Case on Fiduciary Liability Issues, Part 2
ERISA legal issues addressed in Part 2 include: "The Complaint States a Claim that Administrative Committee Members, Lay, and Northern Trust Breached Their Fiduciary Duties to the Enron Savings Plan with Regard to the Lockdown Period" and "Plaintiffs Sufficiently Alleged a Claim Against Anderson for Knowing Participation in a Fiduciary Breach." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

ERIC Files Comments with IRS on 411(d)(6) Elimination of Benefits Regulation (PDF)
Excerpt: "In [Notice 2002-46], the Service and the Treasury announced that they intend to issue proposed regulations under section 411(d)(6) with respect to optional forms of benefit under defined benefit plans and requested comments on which optional forms of benefit (including early retirement benefits and retirement-type subsidies) should be permitted to be eliminated and the circumstances in which they should be permitted to be eliminated." (ERISA Industry Committee)

Employee Stock Ownership Plans: a Status Report
Originally published in June, 2000. Excerpt: "For the past 25 years, employee stock ownership plans (ESOPs) have provided employers with a means to transfer substantial ownership interests to their employees. But as the popularity of company stock as an investment for employees increases, employers have some new alternatives to consider. This report reviews the current status of ESOPs and describes the competition. In addition, it speculates about the future role of ESOPs." (Pamela Perun for the Urban Institute)

American Benefits Council Writes Senators, Expresses Concerns About Pension Reform Bill (PDF)
Excerpt: "Each provision individually would have significant negative repercussions. Cumulatively, these provisions mark a radical change to the rules governing defined contribution plans and could lead employers to scale back their contributions to employee accounts. Some employers, particularly small businesses, are likely to conclude that sponsorship of a defined contribution plan is simply too expensive and risky." (American Benefits Council)

DOL Suit Seeks to Prevent Discharge of Debt in Bankruptcy by Trustee Who Allegedly Commingled Funds
Excerpt: "The department filed civil and bankruptcy lawsuits in Chicago on September 16, 2002, alleging that [the trustee] commingled employee contributions owed to the plan with the company's general assets and used the plan's assets to pay the operating expenses of the company from July 1994 to December 1997.... [T]he department is seeking to prevent [the trustee] from discharging debts owed the plan as a result of his own personal Chapter 11 bankruptcy." (U.S. Department of Labor, Pension and Welfare Benefits Administration)

Congress, Employers Accused of Doing Too Little for Workers and Pensions
Excerpt: "'Congress in general has been long on rhetoric and short on action,' says Karen Friedman, director of policy strategies at the Pension Rights Center in Washington, D.C., a consumer organization that advocates protection of workers' pension rights. Experts say the delay has been caused by other distractions, such as the war against terrorism, and the corporate and accounting scandals that have ravaged the market in the last year." (The Dallas Morning News via International Foundation of Employee Benefit Plans)

An Analysis of Investment Advice to Retirement Plan Participants
27 pages; working paper. Excerpt: "This chapter examines the investment advice currently provided to participants in self-directed retirement plans (401k, 403b, etc.) by financial service firms and investment advisory services. It finds much of the advice to be logically flawed and dangerously misleading. There exists a strong bias in favor of investing retirement savings in the stock market without insurance against a market decline." (Zvi Bodie, published by the Pension Research Council)

Developments in Risk Management for Retirement Security
23 pages; working paper. Excerpt: "Recent volatility in capital markets, along with longer-term trends in pension system design, has prompted questions about how well the evolving retirement system is performing.... [W]e offer a brief analysis of why [DB plans are] abandoned in favor of [DC] plans. We also discuss some key risks that both defined contribution and defined benefit plans convey upon plan members ... and we highlight some of the ways ... for managing these retirement risks." (Olivia S. Mitchell and Kent Smetters, published by the Pension Research Council)

Growing Segment of Workers Participate In "Alternative" Retirement Plans, EBRI Finds
A growing proportion of the U.S. work force is covered by an employer-sponsored retirement plan, but traditional defined benefit plans that pay monthly annuity benefits are steadily losing ground to 'alternative' retirement plan options. The September EBRI Issue Brief examines these trends in terms of the types of firms that are affected by the increased use of defined contribution plans, the number of participants involved, fund resources, and the implications for retirement income security. (Spencernet)

Links to Items on Executive Comp, Benefits in General

Are Older Workers Responding to the Bear Market?
Excerpt: "In the past year, as the economy has weakened and unemployment has risen, the labor force participation rate for older workers (aged 55-64) has jumped by 2.0 percentage points-- an increase unprecedented in post-war U.S. economic history." (Andrew D. Eschtruth and Jonathan Gemus, published by the Center for Retirement Research, Boston College)

Are CEOs Worth Their Salaries?
Excerpt: "The skyrocketing salaries of corporate tycoons have sparked a heated debate over how to compensate executives at America's largest companies. But the real concern, according to Intel Corp. Chairman Andrew S. Grove, should not be how executives are paid, but how much.... 'Everybody wants to be near the top of the salary list,' said Graef Crystal ... 'It's like Lake Wobegon: No one can be below average.'" (Washington Post)

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

Administrator - Traditional and Daily Valuation Capable
for WESPAC Plan Services, Inc.
in CA

401k Client Service Representative
for ADP
in NJ

401k Compliance Analyst/Specialist
for ADP
in NJ

Government Reporting Specialist
for New York Life Benefit Services, LLC
in MA

Plan Administrator
for Ceridian
in FL

Employee Benefits Administrative Assistant
for AmSouth Bank
in FL

Employee Benefits SR Trust Administrator
for Union Planters Financial Services
in TN

Retirement Plan Consultant
for Invesmart
in PA

for The Heintzberger Company
in OR

Benefits Consultant
for Northern Trust Retirement Consulting, L.L.C.
in WA

Sr. Conversion Integration Analyst
for ADP
in NJ

Newly Posted Webcasts (Post Yours!)

Are Consumers Smart Enough to Pick Their Own Health Plan?
on September 27, 2002
presented by American Enterprise Institute

Hearing on Long-Term Care
on September 26, 2002
presented by Kaiser Family Foundation

Newly Posted Conferences (Post Yours!)

Managing Benefits in a Volatile Economy
in OH
October 17, 2002
WEB, Worldwide Employee Benefits Network

Yours, Mine and Ours: Sorting Out Benefits in Corporate Acquisitions
in CA
October 17, 2002
Western Pension & Benefits Conference - Orange County Chapter

Newly Posted Press Releases

S&P's Participant Newsletters Available To Retirement Plan Pros at Reduced Prices: Special One-Issue Trial of S&P Flagship Retirement Planning Newsletter
(Standard & Poor's Financial Communications)

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