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January 17, 2003 - 12,861 subscribers
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US Airways Workers Fear Effect Bankruptcy Workout Proposal Would Have on 401(k) Accounts
Excerpt: "US Airways' proposal to render all of its existing common stock worthless as part of its bankruptcy reorganization drew protests yesterday from many former and current employees, some of whom said at a U.S. Bankruptcy Court hearing that it would be painful because they had funded their 401(k) retirement plans with US Airways stock." (Washington Post)
The Florida and Nebraska Experience with Combined DB/DC Retirement Programs (PDF)
At page 21 of 36-page document; fall 2002 newsletter. Excerpt: "Tom Herndon, recently retired executive director of the Florida State Board of Administration, directed what has recently been called the largest pension plan transition in U.S. history.... Anna Sullivan, executive director of the State of Nebraska Retirement System ... presented compelling information about Nebraska's incentive to begin offering a DB plan [in addition to its almost 40-year-old DC program]." (National Association of State Retirement Administrators)
Watson Wyatt Points Out That Proposed IRS Regs Would Disqualify DB 'Pension Equity Plans'
Press release. Excerpt: "Proposed new regulations governing age discrimination in retirement plans would disallow some plans that are actually more generous to older workers than those that would comply under the new rules, according to Watson Wyatt Worldwide. Even Social Security would likely fail to meet the proposed rules, though it would be formally exempt from compliance." (Watson Wyatt)
Opinion: Proposed IRS Regs Are Balanced Response to Cash Balance Plans
Excerpt: "Like a breath of spring air amidst the wintry blasts of December, the IRS proposed new rules for cash balance plans in mid-December that, if adopted, promise to thaw the deep freeze in which cash balance pension plans have been captured for the past three years, ever since the employees of IBM, using the company's vaunted intranet system, unleashed a storm of protest against the proposed conversion of the IBM defined benefit plans into cash balance plans." (Alvin D. Lurie on BenefitsLink)
Another Question is Answered in the Who's the Employer Q&A Column
Company A leases approximately 90% of its employees to Company B. Companies A and B are in a controlled group. Company A maintains a 401(k) plan for its employees, including the employees leased to Company B. Does Rev. Proc. 2002-21 apply to this arrangement? (BenefitsLink.com)
2003 Magic Year: 1998 Roths Can Withdraw Conversion Money Penalty-Free
Excerpt: "Investors who converted traditional IRAs to Roth IRAs in 1998-- the first year Roths were available-- are now eligible to make penalty-free withdrawals of their money, for the first time. The reason: the Roth IRA five-year holding period expired on Jan. 1, 2003." (mPower Cafe)
Overview: DOL Advisory Opinion Addresses ESOP Refinancing
Excerpt: "In a new form of informal guidance called a Field Assistance Bulletin (FAB), the U.S. Department of Labor's (DOL) national office explained to its regional office staff (and, indirectly, to the private sector) what it believes are the fiduciary considerations under ERISA involved with refinancing an employee stock ownership plan (ESOP) loan. The DOL's stated positions, along with our thoughts, are described below." (Watson Wyatt's Insider)
American Benefits Council Publishes Retirement Plan Legislative Recommendations (PDF)
6 pages. Addresses executive compensation, pension interest rate reform, broad-based retirement savings initiatives, defined contribution plan reform, investment advice and broad-based stock ownership. (American Benefits Council)
DB to DC: Why? Why Not? (PDF)
At page 23 of 36-page document; fall 2002 newsletter. Excerpt: "The ever-present debate of defined benefit (DB) versus defined contribution (DC) plans has provided for a far more lively forum in the past bull markets. However, even with the state of the current markets, there are is still many very pertinent and current reasons to continue the debate, albeit for maybe less exciting reasons." (National Association of State Retirement Administrators)
Overview: Getting Tough on Soft Dollar Arrangements
2 pages. Excerpt: "A key fiduciary responsibility of a Defined Contribution (DC) plan sponsor is overseeing the selection of plan service providers.... When such services are paid for with plan assets, the sponsor has an obligation to monitor associated costs to be sure they are both permissible (in accordance with DOL guidelines and the plan's document) and reasonable." (Aon Consulting)
More Than 17% of Americans Own IRAs: EBRI
More than 17% of Americans age 21 or older, including nearly 21% of retirees, now own individual retirement accounts (IRAs), according to research by the Employee Benefit Research Institute (EBRI). According to an article in the December issue of EBRI Notes entitled IRA Assets And Characteristics Of IRA Owners, this number grew steadily from 1996 to 2001 and correlates with family income, education level, and age. (SpencerNet)
Opinion: Hispanics Would Benefit Disproportionately from Social Security Investment Choice
Excerpt: "Hispanics in the United States can be proud that there is an idea emanating from Latin America that can solve the imminent crisis in Social Security in a way that increases individual liberty and personal wealth and that creates security in old age. In the words of Newsweek magazine, the reform of pensions is probably the first policy initiative coming out of Latin America with relevance and applicability to the United States and other rich countries." (Cato Institute)
Links to Items on Executive Comp, Benefits in General
Increased Scrutiny of Executive Pay at Tax-Exempt Employers
Excerpt: "The IRS recently released two Technical Advice Memoranda (TAMs) concerning section 4958 taxes on excess benefit transactions, reflecting increased IRS scrutiny of tax-exempt organizations' pay practices. TAM 200244028 emphasizes how important it is for board compensation committees at tax-exempt organizations to rely upon appropriate pay data in establishing the pay level of certain executives, referred to as disqualified persons." (Watson Wyatt's Insider)
Executive Summary of American Benefits Council Membership Survey (PDF)
3 pages. Addresses health, retirement and general benefit issues. (American Benefits Council)
Results of American Benefits Council Survey of Members (PDF)
12 pages. Questions included making EGTRRA changes permanent, investment advice by financial institutions, interest rates used for pension fund calculations, company stock in qualified retirement plans, health insurance for the uninsured, and prescription drug coverage under Medicare. (American Benefits Council)
Overview: FASB Issues FAS 123 Transition and Disclosure Rules for Stock Options
Excerpt: "The disclosure rules are effective for financial statements for fiscal years ending after 15 December 2002. This means that companies with calendar fiscal years will have to comply with the enhanced disclosure requirements for the period ending 31 December 2002, regardless of whether they have elected to recognize fair value costs under FAS 123." (Mercer Human Resource Consulting)
Newly Posted or Renewed Job Openings
Pension Administrators
for Polycomp Administrative Services, Inc.
in CA
Client Service Representative
for LaRhette Manin Benefits Service Group
in MA
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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