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October 23, 2002 - 12,057 subscribers
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IRS National Office Memo Explains Why Change in Contribution Method Is Change in Acc'tng Method (PDF)
9 pages; IRS Chief Counsel Internal Legal Memorandum 200242001, 7/10/2002. Excerpt: "Issue: Whether a change in the criteria used to determine the proper time for deducting contributions made to certain pension plans constitutes a change in method of accounting for purposes of sections 446 and 481.' Although the memo concerns a pension plan, its reasoning sheds light on the reason the IRS issued Revenue Ruling 2002-73 concerning 401(k) plans with mismatched plan/taxable years. (Internal Revenue Service)
Third Party Administration Survival in the Retirement Market
39 pages; 9/25/2002. Excerpt: "An analysis of the opportunities and hazards faced in recapturing the retirement plans that were lost to subsidized pricing and 'bundled providers' in the 90s. If you are a third party administration (TPA) firm, this report will help you understand and control the exposure of your business asset base to technical evolution, stagnant investment returns and the refocus on both direct and indirect plan expenses." (Walker MacRae; free registration required)
Stock Market Volatility and 401(k) Plans (PDF)
77 pages. Excerpt: "This Article explores the issues that are likely to arise in future 401(k) plan litigation sparked by stock market volatility." (Prof. Colleen E. Medill of the University of Tennessee School of Law, reprinted courtesy of University of Michigan Journal of Law Reform)
Employers Respond to Workers' Desire for Advice, Personalized Education, Improved Plans
Excerpt: "Workers are starting to ask for help. A CIGNA Retirement & Investment Services study said 89 percent of employees want their employer to make personal financial planning advice available. This is an area where many employers and the benefits industry appear to have let workers down." (mPower.com)
Double Your Retirement Contributions With a 457?
Excerpt: "Public school teachers, healthcare workers, and other employees of governmental or tax-exempt organizations may be able to double their contributions to tax-deferred retirement savings plans under rules that took effect in 2002. The double contributions are possible if an employer offers a 457 plan with either a 403(b) or 401(k), or all three together." (mPower.com)
Pension Funds' New Realities Drag Profits Down
Excerpt: "Back in 2000, in the excitement of the bull market, hardly anyone took notice of the footnote in the year-end report from International Business Machines Corp. -- the one that disclosed that around 10 percent of its $11.5 billion in pretax profits came not from selling more computers but from investment income earned by its employee pension fund. They're noticing now." (Washington Post)
Securing Public Pension Promises through Funding
55 pages; Working Paper no. 2002-19. Excerpt: "Many pension schemes mandated by governments have accumulated large reserves.... The paper reviews strategies designed to limit potential problems arising from conflicts of interest that governments or quasi-governmental monopolies face when managing public pension reserves. An attempt is made to draw lessons from recent reforms in several OECD countries." (Robert Palacios, published by the Pension Research Council)
Wider Support Is Sought for Disclosing Votes by Mutual Fund Managers
Excerpt: "Three organizations yesterday urged [pension fund managers and other] investors to campaign for a new regulation that would require mutual fund companies to disclose how they voted on company issues.... The Labor Department requires pension fund managers that oversee investments of union pension plans to disclose their proxy votes. But mutual funds that oversee 401(k)'s are not subject to such a rule." (New York Times; free registration required)
Links to Items on Executive Comp, Benefits in General
Full Text of DOL Advisory Opinion 2002-10A on Governmental Plan Definition
Issued 9/30/2002. Excerpt: "Your inquiry concerns the effect on the UC Plans of 'unwinding' a joint venture between the University of California (UC) and Stanford University.... [Y]ou asked whether the status of the UC Plans as 'governmental plan[s]' ... would be adversely affected if certain former joint venture employees, when reemployed by UC, resume participation in the UC Plans, are given service credit under the UC Retirement Plan ... and are allowed to transfer account balances ..." (U.S. Department of Labor, Pension and Welfare Benefits Administration)
Aon Chart of 2003 Limits for Employee Benefit Plans (PDF)
4 pages. Excerpt: "Each year, the U.S. government adjusts the limits for private pension plans, Social Security, Medicare, and other benefit programs to reflect price and wage inflation, and changes in the law. As a result, employee benefits specialists at private firms must annually adapt their benefit plans to accommodate the new limits. All of the numbers in this Alert are official, unless otherwise indicated." (Aon Consulting)
Newly Posted or Renewed Job Openings -
DC Administrator
for Northern CA TPA
in CA
Account Executive/Client Services
for Diversified Investment Advisors
in CA, IL
Pension Assistant
for New York Presbyterian Hospital
in NY
Jr. Compliance Administrator 223-02
for Delaware Investments
in PA
Newly Posted Webcasts (Post Yours!)
President Bush Announces Proposal to Lower Prescription Drug Prices
on October 21, 2002
presented by Kaisernetwork.org
Newly Posted Press Releases
Franklin Templeton Investments Announces Enhancements To Its Defined Contribution Services' Web Site, Timetoinvest.com
(Franklin Templeton Investments)
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