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October 4, 2002 - 11,860 subscribers
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IRS Publishes Fall 2002 Issue of Employee Plans News
Contents: Interview with Paul Shultz; EP Reviewing White Paper Comments; Legislative Update-- 401(k) Blackout Periods; Another GUST Reminder; Publication 3998; EPCRS Made Even Easier; Published EP Guidance; The Corner of Forms & Pubs; Relief for PEO Defined Contribution Plans; Vesting of Separated Participants upon Plan Termination; Calendar of EP Benefits Conferences. (Internal Revenue Service)

NPR Audio File: Global Crossing Chairman Offers Cash to Employees
2 minutes, 17 seconds. Excerpt: "Global Crossing Chairman Gary Winnick pledges to use his own money to compensate employees who lost money in the fiber-optic company's breathtaking fall. NPR's Jim Zarroli reports. Oct. 2, 2002." (National Public Radio)

Commentary: Lawmakers Enjoy Secure Pensions But Delay Reforms for Private Plans
Excerpt: "[O]n Capitol Hill, the long-promised pension reform has become ensnarled in a legislative pileup as Congress tries to shut down and head home for reelection campaigns. One thing is certain, however. Even if lawmakers lose their $150,000-a-year jobs on Election Day, those with 20 or more years in office can look forward to a secure retirement." (Cox News Service via International Foundation of Employee Benefit Plans)

Labor Department Supporting Participants' Suits Against Officers in Companies Sponsoring 401(k)s
Excerpt: "The Labor Department indicated this week that its recent court filing on behalf of Enron workers who lost money in their 401(k) savings plans could be the first of multiple efforts to help workers reclaim their lost investments. In uncompromising and sometimes blistering language, the department asked a federal judge to reject efforts by former Enron executives to be absolved of their legal responsibilities for losses suffered in the company's 401(k) savings plan." (The [Jackson, Miss.] Clarion-Ledger)

Democrats Focusing on Coming 401(k) Jolt
Excerpt: "Democrats are attempting to use the imminent mailing of millions of dismal investment statements to return voters' attention to the struggling economy before next month's midterm elections." (Washington Post)

Participant's Testimony Before Congress Moved Global Crossing CEO to Promise 401(k) Contribution
Excerpt: "[Lenette] Crumpler, a Gates [N.Y.] resident and single mother of two, told the House Energy and Commerce Committee's oversight and investigations panel on Tuesday that she lost her entire retirement savings -- $86,000 -- because she believed company leaders' pledges.... 'I am pleased that there is a human side to him, but I think he can dig a little deeper in his pockets,' [Crumpler said]." (The [Rochester N.Y.] Democrat and Chronicle)

3 Things CFOs Need to Know About Retirement Plans, Post-Enron
Excerpt: "Good governance is the best protection.... The role of company stock continues to be questioned.... Many 401(k) participants do not diversify.' Includes hypertext links to articles about governance, company stock. (Watson Wyatt)

Employee Benefits Library Modified to Reflect Reoganization of IRS Web Site
Effective as of October 1, the Internal Revenue Service Web site has been completely reorganized. This page shows commonly used links that were affected by the reorganization. (BenefitsLink and Carol Calhoun's Employee Benefits Site)

Defined Benefit Pension Plan Sponsors Under Immediate Pressure (PDF)
4 pages. Excerpt: "Because stock market returns are negative in almost all sectors, and interest rates continue to drop, even well-funded plans could soon be underfunded. This underfunding could result in a 'hit on equity 'on corporate financial statements and could require both higher pension expenses and cash contributions. After reviewing the causes and effects, this Alert identifies steps that plan sponsors can take to soften the financial impact and be prepared ..." (Aon Consulting)

Watson Wyatt's Online FAS Assumption Toolbox
Excerpt: "This tool draws on Watson Wyatt's industry-leading knowledge of fundamental trends in pension and benefits planning. The data available here is based on a continuous survey of retirement-plan assumptions reported by Fortune 1000 companies. You may examine the sets of data displayed to the right. The results can be narrowed by specific industry, and you can also benchmark your assumptions against the industries you select." (Watson Wyatt)

Judge Rules Against Xerox for $300 Million In Cash Balance Plan Lawsuit
Excerpt: "A federal judge in Illinois has ruled that Xerox Corp.'s pension plan must pay nearly $300 million to thousands of retirees. Xerox said in a filing Thursday with the Securities and Exchange Commission that the ruling will be appealed. Both sides predicted they would prevail." (AP via Yahoo! News)

Consultant Improperly Took Loan From Firm's 401(k) Plan One Week Before Leaving: Seventh Circuit
In its second ruling in the case, the Seventh Circuit U.S. Court of Appeals has held that a former co-owner of a pension consulting firm improperly took a participant loan from the firm's 401(k) plan one week before leaving the business. The case is Fenster and Frank v. Tepfer & Spitz, Ltd., et al. (Nos. 00-1085 and 00-3674). (Spencernet)

Overview: Modified Distribution Guidance Issued by IRS; New Tables, One-Time Change Allowed
Excerpt: "New life expectancy tables. The life expectancy tables are revised to reflect the modified tables issued with the final regulations under IRC section 401(a)(9).... If the participant initially calculates substantially equal payments under the annuitization method or the amortization method, and then switches to the minimum distribution method for any later year, the switch is not treated as a modification within the meaning of IRC section 72(t)(4)." (TRI Pension Services)

Groundbreaking ESOP-Owned Steel Company Weighs Ceding Control To Outsiders
Excerpt: "Independent Steelworkers Union President Mark Glyptis speaks in reverent tones about the 'fabric of the ESOP,' the employee stock ownership plan that made Weirton Steel the nation's largest employee-owned company when it was formed in 1984. Eighteen tough years later, the fabric looks more like a loincloth." (The [Pittsburgh] Post-Gazette)

Pension Reform Prospects Dim as Election Nears
Excerpt: "Pension reform, once the hot legislative topic of 2002, appears likely to die this year as a result of lobbying by business interests and because Congress became distracted by other issues such as homeland security." (

Treasury, Education Departments Announce Initiatives to Raise Awareness About Financial Education
Excerpt: "The event also served as the official launch of the Treasury's Office of Financial Education, which is headed up by Deputy Assistant Secretary for Financial Education Judy Chapa. The Office seeks to develop the most effective ways to better educate all Americans about practical financial skills. This knowledge is the key to Americans making informed decisions on basic saving, retirement planning, credit management and home ownership." (U.S. Department of the Treasury)

Commentary: Workers' Retirement on Shaky Ground; Employers Can Help
Excerpt: "In addition to education, employers should consider providing investment advice for their workers ... An advisor, either online or in person, would help you determine how much to save and how to invest the money in order to have a good chance of meeting your retirement income goal. In addition to taking the guesswork out of retirement saving, an advisor could help you stick to your saving and investing plan, for example by encouraging you to rebalance your portfolio regularly." (

5 Things CFOs Need to Know About Pensions ... Post-Stock Market Decline
Excerpt: "Pension accounting is under scrutiny.... Pension expense is on the rise.... Most plans manage assets with too little thought about liabilities.... Many plan sponsors are facing significant contribution requirements.... Market volatility can impact investment strategy." (Watson Wyatt)

Links to Items on Executive Comp, Benefits in General

Trading Cash for Stock Options Is Popular at Silicon Valley Firm
Excerpt: "Nearly 3,400 Siebel Systems workers have voted with their pocketbooks. They gave up long-shot stock-option payoffs for a sure thing: trading in nearly 90 percent of their eligible ``underwater'' options for $1.85 a share in cash or stock. Siebel's offer to buy back its options will trigger an estimated $56 million charge to the software company's third-quarter earnings ..." (The [San Jose] Mercury News)

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

Trust Accounting Administrator
for Associated Pension Consultants-TPA Firm
in CA

Premium Only Plan Compliance Specialist
for ADP
in NJ

Employee Benefits Paralegal
for Hunton & Williams
in VA

Retirement Plan Administrator
for Retirement Plan Services, Inc.
in NC

Newly Posted Conferences (Post Yours!)

Retiree Medical Plans Revisited
in NY
October 17, 2002
New York Metropolitan Area Chapter - ISCEBS

Hot Topics Update Seminar
in FL
June 11, 2003
SunGard Corbel

Advanced Pension Conference
in FL
February 18, 2004
SunGard Corbel

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