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December 26, 2002 - 12,880 subscribers
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IRS Releases 2002 Version of Pub. 721, 'Tax Guide to U.S. Civil Service Retirement Benefits'
Explains changes for 2002, including the ability to roll over certain amounts from the Civil Service Retirement System, the Federal Employees' Retirement System, or the Thrift Savings Plan to a tax-sheltered annuity plan or to a state or local government section 457 deferred compensation plan. (Internal Revenue Service)

How Voluntary Compliance Programs Began at the IRS
Excerpt: "Here is the background to the 'how and why' employee plans voluntary compliance started.... The attorneys in my group and I came to understand that the real-world ramifications of the technical position calling for disqualification was no longer realistic and quite often unfair. Disqualification often led to adverse tax consequences to the employer, participants, and trust, that were frequently totally disproportionate to the nature and type of plan failure(s)." (Steve Leventhal, J.D. LL.M. Taxation)

Opinion: Limitation of Liability Clauses Protecting Pension Service-Providers are Laughable
Dec. 2002 issue. Excerpt: "The surest sign trouble lies ahead for pensions is the recent effort by some of the largest actuarial and pension consulting firms ... to coerce their pension clients to agree to limitation of liability (LOL) provisions in their contracts.... Errors by these firms can be disastrous to pensions. What do these professionals know that has them running scared? Why are they so worried now?" (The Benchmark Companies)

Opinion: Proposed Cash Balance Regs Are Too Employer-Oriented
Excerpt: "[C]onverting old-style pension plans for current employees [to cash balance plans] is horrendously complicated. In 1999, IBM employees alleged that the company was using a conversion to effectively strip them of many of their benefits. As a result, the government imposed a moratorium on all conversions pending these new rules. The proposed rules, however, are too weighted toward corporate interests and insufficiently toward the needs of employees." (New York Times; free registration required)

Analysis: Eighth Circuit Sets Precedent on Standing and Statutory Exemption for Fiduciary Self-Dealing
Harley v. Minnesota Mining and Manufacturing Co. (8th Cir. 2002). Excerpt: "The Eighth Circuit's decision in Harley holds that ERISA Section 408(c)(2) provides a separate exemption for fiduciary self-dealing as long as the compensation paid was reasonable and it may open the door for a challenge to the DOL regulation under ERISA Section 408(b)(2)." (Tess J. Ferrera, Esq. of Kilpatrick Stockton LLP)

Newly Posted or Renewed Job Openings
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Relationship Manager - Defined-Contribution Plans
for The Vanguard Group
in AZ

Associate Counsel
for 1199 National Benefit & Pension Funds
in NY
Newly Posted Conferences
(Post Yours!)

2003 ASPA Annual Conference
in DC
October 26, 2003

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