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BenefitsLink
Retirement Plans
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February 13, 2003 - 13,101 subscribers
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2003 Update on Pension Activity Audio Conference Feb. 27, 2003

* President Bush's proposal
* Bills introduced on the Hill
* Shrinking 401(k) balances
* PBGC
* Real world application of future pension action

Martha Priddy Patterson, director of benefits policy analysis for
Deloitte & Touche, and Robert Davis, manager with Deloitte & Touche,
will bring you up to date on these points and more.

Plus-- you'll get answers to your tough questions on this revolving
issue at the end of the audio conference.

(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)
DOL Issues Advisory Opinion to Bankers Association on Overdraft Protection Services
2003-02A (Feb. 10, 2003). Excerpt: "This is in response to your request ... regarding the fiduciary responsibility provisions of [ERISA]. Specifically, you have requested an opinion clarifying the application of sections 408(b)(2) and 408(b)(6) ... to the provision of overdraft protection services, including any inherent extension of credit incident to such services, by banks, whether or not the bank or other financial institution or affiliate exercises investment discretion over plan assets." (U.S. Department of Labor, Employee Benefits Security Administration)

A 'Perfect Storm' of Circumstances Batters Corporate Pension Plans
Excerpt: "[Olivia S. Mitchell, Wharton professor of Insurance and Risk Management and executive director of the Wharton/University of Pennsylvania Pension Research Council,] notes that a 10-15% bump upwards in stock markets and a modest increase in interest rates could mean 'smooth sailing' for defined benefit plans, and for plan sponsors' perceptions of these retirement plans. Meanwhile though, the problem may extend beyond the direct effects of the stock market's ups and downs." (The Wharton School of the University of Pennsylvania)

US Airways Pilots Blast Pension Cuts as Illegal
Excerpt: "US Airways' unionized pilots today are expected to try to block the carrier from terminating their pension plan, saying the move represents an illegal attempt to annul its labor contract with the company.... [I]n papers filed last month in the U.S. Bankruptcy Court in Alexandria, Va., the airline contended that unless it can reduce its pension expenses by terminating the pilots' plan, it won't be able to pay off debts and emerge from bankruptcy protection." (The [Pittsburgh] Post-Gazette)

DOL Advisory Opinion Says Governmental Plan Can Include Deemed IRAs
Excerpt: "[I]t is the Department's view that amending the Plan to authorize such 'deemed IRAs' would not subject either the Plan or any 'deemed IRA' established in connection with the Plan to Title I of ERISA." (U.S. Department of Labor, Employee Benefits Security Administration)

No Valuation Discounts for IRAs
Article dated Feb. 10, 2003. Excerpt: "A recent technical advice memorandum disallowed discounts for individual retirement accounts (IRAs) for potential income tax liability and for lack of marketability. However, the memorandum concluded that the IRAs would be income in respect of a decedent (IRD) and an income tax deduction would be available for estate tax attributable to the IRAs." (National Underwriter)

Commentary: A Summary of Proposed Retirement Savings Reform
Excerpt: "[T]he RSA/LSA/ERSA scheme will disconnect taxpayers from the bargaining power and economies of scale that they enjoyed while participants in an employer-sponsored retirement plan, and they will have to deal one-on-one with brokers and asset managers." (Christine P. Roberts, Esq. of Mullen & Henzell, LLP)

Opinion: The Bush Tax Revolution-- Don't Fear Lifetime Savings Accounts
Excerpt: "The [Washington] Post also worries that the lifetime savings account 'could be raided at will, leaving [workers] without a cushion later.' It's true. A family would have to decide whether to 'raid' a savings account to pay for the children's college tuition, or to leave it in there for retirement and health-care needs. This is called freedom." (The National Review)

Labor Unions Use Multiemployer Plans to Push for Corporate Reforms
Excerpt: "Labor unions, with $400 billion in pension fund assets, are stepping up their demands for investor-friendly changes at public companies, starting with annual shareholder meetings in March." (AP via Lycos News)


Links to Items on Executive Comp, Benefits in General

Another Question is Answered in the Stock Options, Restricted Stock and Other Long-Term Employment Incentives Q&A Column
We're a start-up company that's thinking about issuing options with a vesting start date before the date of grant. Is there any problem with this? (BenefitsLink.com)

'On Demand' Employee Benefit Communications
Excerpt: "On Demand is based on a communications management process that looks at your participant information requirements and finds the most efficient, cost-effective way to produce and deliver information to the intended audience. This article explains how the On Demand process works and its advantages for managing employee benefit communication needs." (Aon Consulting)

Big Severance Packages for Top Execs are an Exception, Survey Finds
Excerpt: "Despite headlines announcing multi-million dollar severance packages to departing CEOs, the vast majority of companies worldwide limit exiting executives to four or fewer weeks of severance pay for each year of service, and only a quarter or fewer of employers offered perks such as financial planning, retirement planning, secretarial support or use of office space." (SmartPros)

Citigroup Chief Is Getting Options in Lieu of a Bonus
Excerpt: "In taking a pay cut last year, Mr. Weill had plenty of company on Wall Street. Most securities firms sharply reduced the bonuses of most of their employees and executives." (New York Times; one-time registration required)


Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

Senior Retirement Plan Conversion Coordinator
for Fifth Third Bank
in OH

Regional Vice Presidents of Sales - MidWest & CA
for Horizon Behavioral Services
in ALL STATES

Paralegal
for ING U.S.Financial Services
in CT

Retirement Plan Services Representative
for American Funds
in IN

Benefits Consultant
for Search Firm
in MA

Compliance Trainer
for T. Rowe Price
in MD
Newly Posted Webcasts
(Post Yours!)

Patient Access Crisis: The Role of Medical Litigation
on February 11, 2003
presented by KaiserNetwork.org
Newly Posted Conferences
(Post Yours!)

26th Annual Conference & Exposition of the SHRM Global Forum
in CA
March 31, 2003
Society for Human Resource Management

34th Annual Conference & Exposition of the Employment Management Association
in NV
April 23, 2003
Society for Human Resource Management

55th Annual SHRM Conference & Exposition
in FL
June 22, 2003
Society for Human Resource Management
Newly Posted Press Releases
(Post Yours!)

DATAIR Enhances DB Software to Accommodate Tiered Formulas by Class or Name
(DATAIR Employee Benefit Systems, Inc.)

ABA Praises Issuance of DOL Advisory Opinion on Overdraft Protection Services
(American Bankers Association)

Plastic Strengthens FSAs: Employer Reaps $225,000 in FICA Savings
(Evolution Benefits)


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