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Retirement Plans
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December 20, 2002 - 12,880 subscribers
Today's sponsor: NCEO

(Click on company name or banner to learn more.)

   Our Bookstore now carries books published by the NCEO!

   The National Center for Employee Ownership (NCEO), a nonprofit
   membership and research organization that provides information on
   broad-based employee stock plans, now has over a dozen of its
   most popular publications available for purchase in the
   BenefitsLink bookstore. Topics range from employee stock
   ownership plans (ESOPs) to stock options to employee stock
   purchase plans (ESPPs).

(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay your way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)
Applying New EGTRRA Comp Limit to All Former Employees Won't Cause Nondiscrimination Problems (PDF)
4 pages; Rev. Rul. 2003-11. Excerpt: "Section 611(c) of EGTRRA [increased the compensation limit] to $200,000, and changing the method used for cost-of-living adjustments.... A plan amendment to apply the increased compensation limits under section 611(c) ... to all former employees (or all former employees who retain accrued benefits under the plan) that is effective as of the first plan year beginning after December 31, 2001, satisfies the requirements of §401(a)(4) and §410(b) of the Code." (Internal Revenue Service)

IRS Clarifies Minimum Distribution Reporting by IRA Custodians and IRA Trustees (PDF)
2 pages; IRS Notice 2003-3. Excerpt: "[A] trustee can satisfy the requirement to provide statements regarding required minimum distributions to the owners of the IRAs for which it is the trustee by using one of the two alternatives provided in Notice 2002-27 for some IRA owners and the other alternative for other IRA owners. Further, this notice provides guidance on how these statements can be transmitted electronically." (Internal Revenue Service)

In Notice 2003-2, IRS Explains Upcoming Transition Rule for DB Plan Required Minimum Distributions (PDF)
4 pages; IRS Notice 2003-2. Excerpt: "[T]he regulations will contain a transition rule permitting plans to satisfy certain requirements set forth in proposed regulations under § 401(a)(9) issued prior to 2002 in lieu of complying with the requirements in ... the Temporary Income Tax Regulations.... [And it] is anticipated that the regulations will provide that governmental plans must comply ... as of a special effective date ... and will provide transitional relief ..." (Internal Revenue Service)

DB Plans Get Extension of Time to Make Required Minimum Distribution Amendments (PDF)
4 pages; Rev. Proc. 2003-10. Excerpt: "This revenue procedure modifies Rev. Proc. 2002-29 ... to postpone until the end of the EGTRRA remedial amendment period the time by which qualified defined benefit plans must be amended to comply with final and temporary regulations under § 401(a)(9) ... relating to required minimum distributions ... [U]ntil further notice determination letters for defined benefit plans will not take into account the requirements of these regulations." (Internal Revenue Service)

IRS Extends Nondiscrimination Rule Relief to Certain Governmental Plans (PDF)
4 pages; IRS Notice 2003-6. Excerpt: "[F]or governmental plans within the meaning of § 414(d), other than for plans of State and local governments or political subdivisions, agencies or instrumentalist thereof ... [upcoming IRS] regulations will provide that such governmental plans will be deemed to satisfy § 401(a)(4), 401(a)(26), 401(k)(3), and 401(m) of the Code until the first day of the first plan year beginning on or after the date final regulations are issued." (Internal Revenue Service)

Economists Study Retirement and the Stock Market Bubble of the Late '90s
Working paper, available for $5 from SSRN.com. Excerpt: "The extraordinary returns in the stock market in the late 1990's . . . increased retirement for the HRS sample of workers by over 3 percentage points by the turn of the century and would have decreased the average retirement age by about a quarter of a year if it had not been interrupted.. . . [A]ny continuing effects of the bubble after its end will probably be minimal." (Alan L. Gustman, Thomas L. Steinmeier, published by the National Bureau of Economic Research)

Overview: PBGC Issues Semiannual Regulatory Agenda
Excerpt: "The PBGC has issued its semiannual regulatory agenda, which lists all regulations that are currently under development or review or that the Agency expects to have under review during the next twelve months.... The PBGC is expected to issue final regulations that replace its policy statements about penalties with an updated and expanded set of penalty policies codified in its regulations.... The PBGC ... is withdrawing its project on cash balance plans with variable indices." (CCH News & Information Library (Pension/Benefits))

Get a Lump Sum from a Cash Balance Plan? Check the Numbers
Excerpt: "The Xerox Corp. may have shortchanged thousands of its retirees and former employees by miscalculating their lump-sum retirement benefits. And their plight may be the tip of an iceberg of stunted retirement payouts to employees of other firms." (Kiplinger's Personal Finance)

All 457 Plans Are Not Alike: Governmentals, Tax-Exempts and Top Hats
Excerpt: "There are three types of 457 plans, and all have different rules. State and local government employers may offer one type of 457(b) plan to all employees. Tax-exempt organizations may offer another type of 457(b), only to upper management and highly paid employees. Both types of employer can offer the 457(f), but only to top-level employees. This type of plan is sometimes called a 'top-hat' plan." (mPower Cafe)

PBGC Takeover to Hurt Some in Buffalo, N.Y. Area
Excerpt: "The federal takeover of Bethlehem Steel Corp.'s pension protects basic benefits, but it will halt a $400-a-month 'plant closing' payment for perhaps hundreds of retirees in Western New York, company and union officials said. The plant-closing payments are an income supplement for workers younger than 62, the minimum age for Social Security. 'That was a negotiated benefit, over and above the pension itself,' said Louis Thomas, District 4 Director of the United Steelworkers." (Buffalo News via International Foundation of Employee Benefit Plans)

Social Security Programs and Retirement Around the World
Working paper available for $5 from SSRN.com. Excerpt: "While countries may differ in many respects, the employees in all countries react similarly to social security retirement incentives. The simulated effects of illustrative reforms reported in the country papers make clear that changes in the provisions of social security programs would have very large effects on the labor force participation of older employees." (Jonathan Gruber, David A. Wise, published by the National Bureau of Economic Research)

Welcome to new BenefitsLink advertiser CMC Pension Services, Inc.
Excerpt: "CMC Pension Services, Inc. is a full service Third Party Administrative Firm; including Daily Valuation Service. We provide Administrative Services for all Qualified Retirement Plans, Plan Design and Document Preparation and submission to the Internal Revenue Service, and consulting services."

Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Fun & Challenging DC Compliance Position
for Louis Kravitz & Associates, Inc.
in CA

529 Operation Implementation Manager
for ADP
in NJ

Retirement Benefits Analyst
for Rexam
in NC

Retirement Plan Consultant
for Invesmart
in MA

Investment Consultant
for Invesmart
in PA

Retirement Plan Consultant
for Invesmart
in DE
Newly Posted Webcasts
(Post Yours!)

What Health Legislation Can We Expect from the New Congress?
on December 19, 2002
presented by KaiserNetwork.org

National Issues Briefing To Examine Rising Hospital Costs
on December 2, 2002
presented by KaiserNetwork.org
Newly Posted Conferences
(Post Yours!)

Benefit and Executive Compensation Implications under Sarbanes-Oxley
in GA
January 16, 2003
WEB Atlanta Chapter

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