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April 28, 2003 - 13,144 subscribers
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Official Clarifies IRS Stand on Removing Retirement-Type Subsidies
Excerpt: "Removing retirement-type subsidy benefits prior to a contingent event will not disqualify a plan, but would subject the plan to payment of liabilities, according to senior IRS official Richard Wickersham." (Thompson Publishing Company)
DOL Advisory Opinion Allows Plan Sponsor to Keep Demutualization Proceeds Under Group Annuity
AO 2003-05A, 4/10/03. DOL's description of the request: 'Whether under ERISA [the employer] is entitled to retain the demutualization award paid to [the employer] by Principal for a group annuity contract that was purchased in connection with the termination of a retirement plan that had been established and maintained by [the employer]." (U.S. Department of Labor, Employee Benefits Security Administration)
Providian Financial Settles 401(k) Suit
Excerpt: "Credit card issuer Providian Financial Corp. announced Friday that it will pay $8.6 million to settle a class-action lawsuit alleging its 401(k) plan shouldn't have bought the company's plunging stock in 2001." (AP via Lycos News)
Can In-Kind Contributions "Fix" An Underfunded Pension Plan?
Excerpt: "One way employers can avoid diverting vital cash from their struggling businesses is by making 'in-kind' contributions to their plans. As described more fully below, under certain circumstances, employers may use noncash contributions such as stock or marketable debt to satisfy their funding obligations. However, plan sponsors must ensure that such contributions comply with the requirements of ERISA and the tax code." (Thompson Publishing Company)
S&P 500 Firms Carry Pension Shortfalls
Excerpt: "The extended downturn in the stock market resulted in a $206 billion shortfall in the pension plans of companies listed in the Standard & Poor's 500, a new report says." (AP via the Mercury News)
Employee Ownership Update for April 24, 2003
NCEO Executive Director Corey Rosen discusses the Pension Preservation and Savings Expansion Act of 2003's impact on ESOPs; shareholder proposals to link options to performance and to require companies to expense them; a study of the effect of stock option repricing on employee turnover; and a court decision that an ESOP's holding of employer stock (after profit sharing assets were rolled over into the ESOP) did not violate ERISA. (National Center for Employee Ownership)
Pension Measure for New Mexico Legislators Called Unfair
Excerpt: "The new retirement plan won't directly cost New Mexico taxpayers any money. To pay for it, legislators imposed a withholding tax on payments of oil and gas proceeds to non-New Mexico residents." (Albuquerque Tribune Online)
Proposed Texas Pension Benefit Measure Has Cities, Employees at Odds
Excerpt: "Several cities throughout the state are clashing with employee groups over a proposed Texas constitutional amendment that would limit a municipality's ability to reduce pension benefits." (The Fort Worth [Tex.] Star-Telegram via NewsAlert.com)
Retired Police, Firefighters Return To Work, Keep Pensions
Excerpt: "Retired police and firefighters, unlike many public servants in New Jersey, can return to work at higher salaries while continuing to draw pensions." (Newsday.com)
Hewitt Associates to Acquire Northern Trust Retirement Consulting
Press release. Excerpt: "Hewitt Associates ... and Northern Trust Corporation ... have executed a letter of intent for Hewitt to acquire substantially all of the assets of Northern Trust Retirement Consulting, L.L.C. (NTRC), Northern Trust's retirement consulting and administration business." (Business Wire via Yahoo! Finance)
Phased Retirement: a Solution for a Tight Labor Market
Excerpt: "Phased-retirement programs may be valuable in times of downsizing. When staff is being reduced, the need for enhanced efficiency and productivity from each employee increases, and experienced staff become even more important to retain. Yet these experienced, productive employees may lose heart as they witness staff reductions." (Thompson Publishing Company)
Links to Items on Executive Comp, Benefits in General
DOL OKs Amendment to Shift Retiree Health Expenses from General Assets to Overfunded DB Plan
AO 2003-04A, 3/26/03. DOL's description of the request: 'Regarding the application of ERISA to an employer's amendment of its plan to eliminate life insurance benefits for certain retirees and the amendment of its defined benefit pension plan to add similar benefits for those retirees, and the implementation of those amendments.... [Do] the amendments, along with their implementation, would not violate the anti-inurement, exclusive benefit and prohibited transaction provisions under ERISA." (U.S. Department of Labor, Employee Benefits Security Administration)
Execs, Not Workers, Get Pension Security
Excerpt: "A number of large companies are setting aside millions of dollars to protect pensions of top executives, even as they forgo contributions to financially strained pension plans for other workers." (The Wall Street Journal via the Contra Costa Times)
Must an ERISA Amendment Provision Identify an Individual Person Having Authority to Amend It?
Excerpt: "In a recent review of our company's ERISA plan documents, I have discovered that each one provides that the company (XYZ Corporation) reserves the right to amend or terminate the plan. But, when I look at ERISA (Section 402(b)(3)), I see it requires 'a procedure for amending [the] plan, and for identifying the persons who have authority to amend the plan.' Should our language be more detailed and should it identify an individual person with amendment authority?" (EBIA Weekly (Question of the Week))
Delta Shareholders Approve Curb on Severance Pay for Execs
Excerpt: "Spurred by corporate excess, Delta Air Lines shareholders have approved nonbinding proposals to curb severance payments and expense stock options.... Under the severance proposal, shareholders must approve all payments to departing executives that are more than 2.99 times their salary plus bonus." (AP via the Las Vegas Sun)
Opinion: You Have a Voice in Bringing Executive Pay Back to Earth
Excerpt: "Executive comp plans typically pass handily when presented to the shareholders for approval. But shareholder voting is dominated by institutional interests, many of which are eager to remain cozy with management-- if for no other reason than to know enough to get out ahead of the little guy if the company goes sour." (Washington Post)
Stock Option Cutbacks Hurting Rank-and-File, Some Experts Say
Excerpt: "[C]ompanies say they will be cutting back on stock options. Fewer options should mean fewer reasons to manipulate earnings for personal gain, or so the logic goes. Trouble is, compensation consultants say all that's really happening is that fewer options are being given to average workers." (AP via the Detroit Free Press)
Apple Computer Inc. Shareholders Want Stock Options Expensed
Excerpt: "Apple Computer Inc.'s shareholders have voted to advise management to expense employee stock options, rejecting the company's wishes to keep the costs off the books." (AP via Yahoo! News)
Opinion: Excessive CEO Pay is Welfare for Capitalists
Excerpt: "[A] flourishing capitalist system ought to bestow great fortunes on people who create huge enterprises or revive flagging old ones. But great fortunes should not routinely go to people who merely preside successfully over existing firms. The CEO conceit is that everyone near the top of the corporate staircase should become a multimillionaire several times over." (Robert J. Samuelson in Newsweek via MSNBC.com)
Newly Posted or Renewed Job Openings
Retirement Plan Administrator
for Growing, Local, Private Trust Company
in PA
Document Production Coordinator
for Transamerica
in CA
HR Benefits Specialist/Associate Staff Analyst
for MTA New York City Transit
in NY
HR Benefits Administrator/Staff Analyst
for MTA New York City Transit
in NY
Newly Posted Press Releases
(Post Yours!)
MK Consulting, Inc. Expands Service Offering with MK Recruiting
(MK Recruiting - A Division of MK Consulting, Inc.)
AHI's BENEFITSALERT RELEASES NEW FREE REPORT: "Work/Family Conflicts"
(Alexander Hamilton Institute - AHI's BenefitsAlert.com)
Labor Department Obtains Court Order Appointing Independent Fiduciary
(U.S. Department of Labor, Office of Public Affairs, Boston)
Newly Posted Conferences
(Post Yours!)
EPCRS and the New Rev Proc - an IRS Presentation
in CA
May 13, 2003
Sacramento Chapter of NIPA
"Benefits...And All That Jazz!"
in CA
May 16, 2003
San Diego Chapter of the Western Pension & Benefits Conference
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