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January 20, 2003 - 12,861 subscribers
Today's sponsor: Actuarial Systems Corporation
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ASC - QUALITY SOFTWARE FOR THE PENSION INDUSTRY FOR OVER 20 YEARS ASC provides complete automation for the pension office, including: DC/401(k) and DB administration and valuation systems, sophisticated Compliance Testing, DV Direct Daily Valuation, Advanced Information Manager Database (AIM), and Single-Step Processing. All ASC Technical Support Members were experienced Pension Administrators or Actuaries before joining ASC-- and most have been with ASC for over 10 years.
(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)
Bankruptcy Wipes Out Value of US Airways Stock
Excerpt: "The employee stockholders had sought to be treated like creditors with higher priority, who will get stock in a new US Airways after it emerges from bankruptcy court. But bankruptcy law precludes that from happening.... While many investors suffered from the stock's decline, perhaps none were hurt more than US Airways employees who held it in their 401(k) plans." (The Charlotte Observer via NewsAlert.com)
IRS Faults New York City on Pension Dealings
Excerpt: "The Internal Revenue Service has found that New York City violated federal tax laws by withdrawing $177 million over seven years from municipal pension systems and using it to pay its own operating expenses, according to a tentative settlement agreement reached this month between the city and the I.R.S." (New York Times; one-time registration required)
Financial Service Firms Begin Offering Investment Advice Using Independent Firms to Do Calculations
Excerpt: "Along with other employees of the Holston Medical Group in Kingsport, Tenn., [James McCoy] will be among the first Americans to delegate active management of their 401(k)'s to the financial professionals who run their retirement accounts. In a pilot program offered by AIG, the financial services giant, Dr. McCoy's 401(k) portfolio will be tailored for him, factoring in his age, risk tolerance, savings level and retirement goals, as well as current market conditions and forecasts." (New York Times; one-time registration required)
Another Question is Answered in the Who's the Employer Q&A Column
If leased employees are represented by a collective bargaining unit, does the recipient client get to exclude them when doing its coverage test under IRC 410(b)? If not, it would be at the mercy of a union that bargained for pay instead of benefits because it would end up paying twice for the services. But I can't read the Code to say that the exclusion applies, because the "employer" (client) wasn't part of the bargaining process. (BenefitsLink.com)
ESOP Sows Division At Amsted Industries
Excerpt: "Embittered by the plunging value of their retirement accounts, workers accuse Amsted executives of mismanagement in the disastrous $790-million purchase of Varlen Corp. in 1999. In a class-action lawsuit certified in federal court here last month, they blame company brass and ESOP committee members for the steep drop in share value ..." (Crain's Chicago Business)
First RMD Report Deadline for IRA Custodians/Trustees: January 31, 2003
Excerpt: "Beginning with 2003 required minimum distributions (RMDs), IRA custodians/trustees must notify each IRA owner by January 31 of his/her RMD for the year. If you have not made arrangements to provide the new RMD reports before the end of this month, you may be scrambling!" (Bankers Systems, Inc.)
Former Illinois Governor to Make More in Retirement Than in Office
Excerpt: "With a career spanning three decades in state government, the 68-year-old Ryan immediately qualifies for a $128,000 pension ... State lawmakers and constitutional officers ... participate in the most lucrative state pension system, one allowing them to collect 85 percent of their final pay after 20 years of service.... A year from now, Ryan will likely be pulling down a pension higher than his $150,691 governor's salary." (DailyHerald.com)
Illinois State Senator Criticizes Pensions for Legislators and Judges
Excerpt: "The move comes in the wake of a report by the The Pantagraph showing how several retired lawmakers are receiving annual pensions substantially larger than the salaries they received when in office.... Currently, a lawmaker can begin receiving a pension worth 85 percent of the final salary after serving four years in office." (Pantagraph.com)
Commentary: Why Pension Investment Advisory Fees Are So High
January 2003 issue of Alert. Excerpt: "As a result of investment consultant conflicts of interest, lack of informed negotiations with managers and manager non-compliance with 'most favored nation's' clauses, many of the nation's pensions are paying excessive investment advisory fees.... 'Most favored nation's' clauses are common among public pensions but vary considerably in their wording and complexity." (The Benchmark Companies)
Links to Items on Executive Comp, Benefits in General
SEC Lumps Executives In With Employees, in New Stock Blackout Regulations
Excerpt: "Corporate executives will be banned from buying or selling company stock during periods when employees cannot trade the shares held in their retirement accounts, federal regulators decided Wednesday." (AP via Society for Human Resource Management)
Book Shows CEO Pay, Profits Link Is Weak
Excerpt: "During the boom years of the late 1990s, many of the nation's biggest companies justified lavish option grants to chief executives as a reward for delivering equally out-sized earnings. Not so, say the authors of a new book, who scrutinized almost a decade of regulatory filings by bricks-and-mortar corporations and came to the conclusion that the bottom line has failed to keep pace with executive pay." (Reuters via New York Times; one-time registration required)
Senators Renew Attack on Stock Options Accounting
Excerpt: "Two senior U.S. senators have renewed their assault on the accounting treatment of employee stock options, calling them the '800-pound gorilla' that has yet to be captured by corporate reform." (Reuters via Forbes.com)
Newly Posted or Renewed Job Openings
Independent Sales Associate
for Pre-Paid Legal Services Inc.
in ALL STATES
Pension Administrators
for Alliance Benefit Group of Illinois, Inc.
in IL
Project Manager
for Transamerica -The Winning Organization
in CA
Retirement Plan Consultant
for Primary Consulting, Inc.
in ALL STATES
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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