| BenefitsLink Retirement Plans Newsletter |   |
February 24, 2004 - 13,655 subscribers
Today's sponsor: Employee Benefits Institute of America Inc. (EBIA)
(Click on company name or banner to learn more.)
The Country's Best 401(k) Plans Manual Questions about 401(k) plan administration or legal requirements? Need some sample forms? Look no further--EBIA is here to help! Our two-volume 401(k) Plans manual is a thorough, easy-to-use, and cost-effective solution. Written and edited by top employee benefits attorneys, our 401(k) Plans manual has over 1,700 pages packed with the information you need to answer your 401(k) plan questions. For more information, visit www.ebia.com.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Mutual Fund Trading by Pension Plans Probed by DOL
Excerpt: "The U.S. Department of Labor is investigating possible trading abuses by pension fund administrators who control assets totaling $1.1 trillion in mutual funds and similar pooled investments." (Bloomberg)
Text of DOL Advisory Opinion 2004-02a on QDROs
Excerpt: "This is in response to your request on behalf of Northwest Airlines, Inc. Retirement Plan for Pilot Employees (the Plan) for an advisory opinion ... Specifically, you ask whether a domestic relations order that changes a prior assignment of benefits to an alternate payee to reduce the amount assigned to the alternate payee may be a 'qualified domestic relations order' (QDRO) within the meaning of section 206(d)(3) of ERISA." (U.S. Department of Labor, Employee Benefits Security Administration)
California Attorney General Says School Districts Can't Assess Admin Fees on 403(b) Providers (PDF)
6 pages. Excerpt: "Even though a school district has broad authority to conduct its programs and activities, it may not assess a fee upon providers of deferred compensation plans to cover its costs of administering the plans for district employees." (Via 403bWise.com)
Minnesota Moves to Tighten Police and Fire Pensions
Excerpt: "The first steps in changing the state's pension fund for police officers and firefighters were made in a legislative pension committee on Monday after testimony about skyrocketing claims for questionable disabilities." (StarTribune.com; one-time registration required)
Sweetening of Pension Pot for New York State Employees Was 'Huge Mistake'
Excerpt: "On July 11, 2000, New York Gov. George Pataki signed a law to provide automatic cost-of-living increases to current and future government retirees. The numbers were modest enough.... Less than four years later, local government officials and other critics are openly questioning whether the largesse of 2000 -- which came with strong political overtones -- was wise or even necessary." (Ithaca [N.Y.] Journal)
Tax Court: No Excuses for Failure to Repay Loan from Qualified Plan
Leonard v. Comm'r, T.C. Summary Opinion 2004-11 (2004). Excerpt: "EBIA Comment: This case is a reminder that the Code's rules governing participant loans must be followed and that few, if any, excuses will be accepted for not doing so. The opinion was issued under Code Section 7463(b), which provides that the decision cannot be reviewed by any other court and cannot be used as precedent for any other case." (Employee Benefits Institute of America (EBIA))
Overview: Rollover Accounts Are Free From Some Distribution Restrictions If Accounted for Separately
Excerpt: "EBIA Comment: ... Note that the IRS describes what a plan may allow but does not require it. In other words, it would be perfectly acceptable for a 401(k) plan to provide that a distribution from rollover funds will not be allowed unless one of the plan's triggering events has occurred. It is important to confirm that a plan's distribution provisions are consistent with its distribution forms and procedures." (Employee Benefits Institute of America (EBIA))
Overview: Response from IRS on Abusive 412(i) Plans and Other Life Insurance Issues
Excerpt: "Expected for some time now, the Treasury and IRS have finally issued four pieces of guidance addressing abusive 412(i) arrangements and other questionable practices relating to life insurance held in qualified plans. Here's a quick review of the guidance issued." (TRI Pension Services)
Moving From the Business Case for SRI and CSR to the Fiduciary Case
Excerpt: "The business case for socially responsible investing and corporate social responsibility may not drive individual investors, but the fiduciary case engages institutional investors." (SocialFunds.com)
Nondeductible IRA Contributions-- A Reminder
Excerpt: "As taxpayers begin the annual task of filing their income tax returns, some will find that their regular or spousal traditional individual retirement account (IRA) contributions for 2003 are nondeductible. While removing such contributions has long been the suggested response, here is a reminder of two others, perhaps more valuable." (Compliance Headquarters)
Overview: GUST Restatements Will Not Supersede Prior EGTRRA Amendments
Excerpt: "EBIA Comment ... [S]ponsors will want to be sure that they can produce clear evidence that the EGTRRA amendments were previously adopted and that the plan has operated in compliance with these amendments. And remember that this guidance applies only to the limited situation it describes. In general, failure to include all of a plan's terms in a restatement could put the plan's qualification at risk." (Employee Benefits Institute of America (EBIA))
Retirement Study Finds a Challenging View of the Golden Years
Excerpt: "Perhaps the most salient finding in Towers Perrin's 2003 Retirement Study is that more than three-quarters (78%) of employee respondents say they plan to work past retirement age either for financial reasons or simply to stay active. Fewer than one in four employees (22%) say they'll retire as early as possible and will not seek other employment." (Towers Perrin)
Multiple Challenges Confront Retirement Plan Sponsors
Excerpt: "Three-quarters believe their companies have a continuing obligation to help finance employee retirement programs, while almost all agree that, of necessity, employees will need to take more responsibility for their retirement in the years ahead." (Towers Perrin)
Pension Woes for a Millionaire
Excerpt: "Thousands of Americans, from steelworkers to airline pilots, have watched their pensions shrink as their companies ran into financial trouble. Add a millionaire baseball team owner to the list." (St. Petersburg Times)
Overview: Interim Guidance Allows "Cash Value" To Be Treated As "Fair Market Value"
Excerpt: "The IRS has issued a revenue procedure allowing the cash value of a distributed life insurance contract to be treated as fair market value, consistent with recently issued proposed rules." (CCH News & Information Library)
Small Plan Sponsors Dangerously Ignorant of Duties
Excerpt: "Recently, the Small Business Administration (SBA) joined with insurance and financial services provider Nationwide Financial, which specializes in small and medium-sized plans, in an educational venture to teach small business owners about their retirement plan responsibilities. To that end, they have published a guide outlining the duties of plan sponsors." (BenefitNews.com)
TVA Offering Early Retirement Packages
Excerpt: "The Tennessee Valley Authority, the nation's largest public utility, has offered voluntary early retirement and buyout packages to employees as part of efforts to cut its debt." (AP via Washington Post)
Links to Items on Executive Comp, Benefits in General
An Employer's Guide to Employee Benefits, 2004 Edition (PDF)
170 pages; written by Stephen A. Brunn, Wendy W. Citron and Carolyn S. Nestingen. Excerpt: "This Guide will discuss employee benefit plans, including both pension (i.e., retirement) and welfare (i.e., health, disability, death) benefit plans.... Originally published in 1995, this book has proven itself to be a useful tool for employers as they design benefit plans intended to attract and retain quality employees in a competitive marketplace." (Briggs and Morgan, P.A. and the Minnesota Department of Employment and Economic Development)
Rules Governing Executive Compensation In Rare State of Flux
By Abigail B. Pancoast and Stephen W. Skonieczny. (Dechert LLP)
Text of Proposed Revenue Procedure for Safe Harbor in Applying Student FICA Exemption (PDF)
10 pages; Notice 2004-12. Excerpt: "This notice contains a proposed revenue procedure providing a safe harbor that certain institutions of higher education, and certain affiliated organizations can use in applying the exception for services performed by a student provided under § 3121(b)(10) of the Internal Revenue Code (student FICA exception)." (Internal Revenue Service)
Text of Proposed Regulation on Definition of 'Student,' 'School' for Purposes of FICA Exemption (PDF)
37 pages. Excerpt: "This document contains proposed regulations that provide guidance regarding the meaning of 'school, college, or university' and 'student' for purposes of the student FICA exception under sections 3121(b)(10) and 3306(c)(10)(B) of the Internal Revenue Code (Code)." (Internal Revenue Service)
Occupational Employment Projections to 2012
Excerpt: "This article discusses a number of aspects of the projections along with related information: changes in the structure of employment at the major occupational group level; the detailed occupations that are projected to grow fastest as well as those with the largest numerical increases and decreases, along with their current educational and training requirements and earnings; and the total job openings projected to occur ... and the net replacement needs ..." (U.S. Department of Labor, Bureau of Labor Statistics)
Overview: IASB Issues Rule on Expensing Stock Options
Excerpt: "Although IFRS 2 will not apply to U.S. companies [that are not following international accounting standards], the Financial Accounting Standards Board is expected to propose a similar rule in March. The fact the IASB has now issued IFRS 2 puts additional pressure on the FASB to act on this issue." (Deloitte's Human Capital Advisory Services)
Newly Posted Events
WEB Excellence in Benefits Awards Banquet
in Virginia on April 22, 2004
presented by Worldwide Employee Benefits Network (WEB)
The 2004 Clinic – The Changing World of Employee Benefits
in California on April 26, 2004
presented by Society of Financial Service Professionals
The 2004 Clinic – The Changing World of Employee Benefits
in Connecticut on May 3, 2004
presented by Society of Financial Service Professionals
Newly Posted Press Releases
JANICE WEGESIN TO HOST AN ALL-NEW MCKAY HOCHMAN ESEMINAR: “OVERVIEW OF FORM 5500”
(McKay Hochman Co., Inc.)
APSCREEN Provides Free Searches On National Sex Offender Registry Website
(APSCREEN)
Labor Department To Recover $80,000 for Retirees Of Niagara Falls Memorial Medical Center
(U.S. Department of Labor, Office of Public Affairs, New York, N.Y.)
Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
(Post Yours!)
Patrick J. Haraden (Longfellow Financial, LLC)
Newly Posted or Renewed Job Openings
Assistant General Counsel
for General Board of Pension and Health Benefits of the UMC
in IL
Manager, Compliance Testing
for Diversified Investment Advisors
in NY
Defined Benefit Specialist
for Primary Consulting, Inc.
in ANY STATE
Plan & Tax Reporting Manager
for The Vanguard Group
in PA
New Business Representative
for BISYS Retirement Services
in PA
Retirement Services Specialist
for Doherty Employment Group
in MN
Pension Administrator
for Snyder Cohn
in MD
Administrator
for T.P.A. Consulting Firm
in PA
Pension Administrator
for The Weiss Group, Inc.
in IL
Implementation Consultant - Defined Contribution
for AIG VALIC
in TX
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: