| BenefitsLink Retirement Plans Newsletter |   |
February 11, 2004 - 13,655 subscribers
Today's sponsor: PenChecks, Inc.
(Click on company name or banner to learn more.)
PLAN NOW TO ELIMINATE NEXT YEAR’S 1099-R PAIN! Penchecks, Inc. provides distribution services to over 200 plan administration firms and over 1,500 plan sponsors. Our services include:
- Complete election forms, checks, tax remittance and reporting
- Check writing, tax remittance and reporting only
- Monthly annuity payments
- Missing participant IRAs
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
IRS EP Rulings Director Explains Effect of GUST Amendments on Plans Amended for EGTRRA (PDF)
Excerpt: "[S]ome plan sponsors adopted EGTRRA good faith plan amendments before amending their plans for GUST. Adopters of pre-approved (M&P and volume submitter) plans that have an extended GUST remedial amendment period may be more likely to have done this than adopters of individually designed plans. We have learned that a number of these plan sponsors have subsequently adopted GUST plan restatements that do not incorporate or otherwise reflect the previously adopted EGTRRA ... amendments." (Internal Revenue Service)
Technical Explanation of the 'Pension Stability Act' Passed by the Senate on January 28, 2004 (PDF)
29 pages. (U.S. Congress Joint Committee on Taxation)
Issue Brief on Replacement of 30-Year Treasury Bond
Excerpt: "The ... document is ERIC's latest Issue Brief regarding legislation to replace the 30-year Treasury bond with a composite corporate rate." (ERISA Industry Committee)
2004 Adjustment in Defined Contribution Plan Limit Has Unusual Impact on Non-Calendar Year Plans
Excerpt: "[F]or a plan that uses a non-calendar plan year, the $41,000 limit [to the maximum annual limit under Code Section 415 on the total contribution that can be made for any participant under defined contribution plans] actually applies earlier [than 2004]. For example, for a plan that uses a year ending on June 30th, the $41,000 limit applies to the year that began on July 1, 2003 and will end on June 30, 2004." (Faegre & Benson LLP)
Overview: IRS Issues Guidance on Electronic Payee Statements (PDF)
Excerpt: "The IRS has issued Notice 2004-10, which provides guidance on the electronic delivery of payee statements (e.g., Form 1099) that must be furnished to beneficiaries of certain retirement and health and welfare plans. According to the notice, plan administrators or custodians may provide these reports electronically for 2003 and later years." (Mellon's Human Resources & Investor Solutions)
ESOP Appraisals from a Lawyer's Point of View
Excerpt: "Because valuing the ESOP stock is crucial in the design and implementation of an ESOP transaction, lawyers need to have a fundamental understanding of stock valuation techniques that are unique to ESOPs. Lawyers should also be aware of the legal requirements for having an independent appraisal and the questions that typically arise under the current, somewhat ambiguous standards and methodology used in such appraisals." (Buchanan Ingersoll)
ESOP Government Contractors Have a Ball
Excerpt: "The Ball Corporation decision by the Armed Services Board of Contract Appeals (ASBCA) on April 3, 2000 is good news. It constitutes a reaffirmation by the ASBCA of the position it previously espoused in Ralph M. Parsons Co.... to the effect that reasonable contributions by cost-plus Government contractors to leveraged ESOPs to enable them to, in turn, amortize stock acquisition loans constitute costs which are allowable, allocable and, accordingly, reimbursable." (Buchanan Ingersoll)
Unlocking the Lock-In Effect of Selling to an ESOP
Excerpt: "Ordinarily, when you are dealing with the sale of a company, the seller pays a tax on the gain and the buyer gets no deduction. A sale of stock to an employee stock ownership plan (ESOP), however, produces an entirely different set of results." (Buchanan Ingersoll)
Total Retirement Income at Large Companies: the Real Deal
Excerpt: "To assess the projected levels of retirement income for employees at large corporations, Hewitt conducted a study of 23 large U.S. employers, representing more than 560,000 employees. The study focused exclusively on levels of retirement income generated through the current U.S. system, combining employer-sponsored plans and Social Security, and the impact of several key variables, such as late retirement, early retirement, increased savings, and presence of a defined benefit plan." (Hewitt)
Break In Service? Ex-President in Iraq Will Get Pension
Excerpt: "Iraq's interim government said Tuesday it would pay a monthly pension to a former president overthrown more than 35 years ago in a coup that brought Saddam Hussein's Baath party to power." (KATU.com)
Personal Retirement Accounts Would Drive Up Debt, White House Advisers Say
Excerpt: "Tapping the bond markets to pay for private accounts proposed by Bush's Social Security Commission would increase the nation's debt-to-GDP ratio by 23.6 percentage points by 2036, the White House Council of Economic Advisers said in its annual Economic Report of the President." (Reuters via Washington Post)
Opinion: Lifetime Savings Accounts-- the Forgotten Savings Plans
Excerpt: "[I]t seems that arguments over the budget deficit will relegate the President's proposed savings plans to being nothing more than an idea. If so, this will mark the second year in a row that one of the President's best ideas remains largely unnoticed.... Unlike current law, which taxes the money put into regular savings accounts and the money earned in those accounts, the new plans would ensure savings are taxed only once." (The Heritage Foundation)
Cross Testing: Creating New Tiers After Year-End
Excerpt: "Is this permissible?" (Reish Luftman Reicher & Cohen)
Sponsors Start Cracking Down On Market Timing By 401(k) Participants
Excerpt: "Amid rampant publicity about market timing in mutual funds, some sponsors have uncovered a disturbing problem: a small group of their own participants trying to market-time, and raising fund expenses for all participants in the process." (PLANSPONSOR.com; one-time registration required)
Overview: Top Heavy Exception for Safe Harbor Plans Clarified
Excerpt: "The IRS has issued a revenue ruling providing guidance as to whether certain plans meet the requirements of the top-heavy plan exemption for safe harbor plans under Code Sec. 416(g)(4)(H) for the 2004 plan year. A plan found top-heavy for a plan year will be required to satisfy the vesting requirements of Code Sec. 403(b) and the minimum benefit requirements of Code Sec. 415(c) for that plan year." (CCH News & Information Library)
Overview: DC Plans May Charge Former Employees for Administrative Expenses
Excerpt: "Because many plan sponsors directly pay the administrative expenses of their defined contribution plans, the opportunity to recoup a portion of these expenses from former employees will be a welcome development." (BNA Tax Management)
ALI Comments on SEC's Market Timing Proposal
Press release. (American Council of Life Insurers)
ACLI Comments on SEC's Late-Trading Proposal
Press release. (American Council of Life Insurers)
Links to Items on Executive Comp, Benefits in General
AARP Research Report: the State of 50+ America (PDF)
44 pages. Excerpt: "This 'state of 50+' report card tries to answer the question of how we are doing over the past 10 years, and over the past year. Are we making progress toward greater economic and healthcare security? Is the boomer generation on track to be better prepared for retirement than a decade ago? Is the level of civic participation rising or falling as we enter the 21st century?" (AARP)
Commentary: U.S. CEOs Replace Option Grants With Free Shares
Excerpt: "As the bulk of U.S. companies disclose executive pay for 2003, we will find that stock-option grants have declined in size. That's the good news for those who think chief executive officers are paid too much. The bad news is that free share grants have taken up, or more than taken up, the slack." (Graef Crystal on Bloomberg.com)
Newly Posted Events
Outlook for Health Spending
Nationwide on February 11, 2004
presented by Kaiser Family Foundation
Newly Posted Press Releases
Healthcare Plan Professional Joins SunGard Corbel
(SunGard Corbel)
BEMAS Software, Inc. Expands Capabilities With Office Location
(BEMAS Software, Inc.)
Newly Posted or Renewed Job Openings
Policy/Negotiations Project Manager (job number: 1911-03)
for UC Office of the President
in CA
K8517 Retirement & Savings Consultant
for (KBR) Kellogg Brown & Root, (a Halliburton company)
in TX
K8508 - Benefits Supervisor
for (KBR) Kellogg Brown & Root (a Halliburton company)
in TX
Senior Manager, Marketing
for Charles Schwab & Co., Inc.
in CA
ERISA Attorney
for Frost Brown Todd LLC
in OH
Compliance Consultant
for Hewitt Associates
in IL
Compliance Processor
for Hewitt Associates
in IL
Handy Links:
- View Today's Active Message Threads
- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
Copyright 2004 BenefitsLink.com, Inc.; except that you can forward this email in full (including this boilerplate part) or otherwise reprint this email in full (including this boilerplate part) without obtaining our permission.
Published by:
BenefitsLink.com, Inc.
https://benefitslink.com/about.html
1298 Minnesota Avenue, Suite H
Winter Park FL 32789
(407) 644-4146
Fax: (407) 644-2151
Editor and Publisher: David Rhett Baker, J.D.
Housekeeping: