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June 29, 2004
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(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Experts Warn of Emerging Trend in ERISA Class-Action Lawsuits
Excerpt: "[T]here is reportedly a startling increase in fiduciary liability class actions, which are wreaking havoc on the fiduciary [insurance] liability line ... Looking at the plaintiff's view, [attorney Mark] Machiz noted that the structure of ERISA requires that somebody be responsible for everything." (Insurance Journal)

Saving More Than §403(b) Allows: the Advantage of §457 for Tax-Exempt Organizations
Excerpt: "This memorandum describes a voluntary retirement device, known as an eligible 457 plan ('457 Plan'), which allows employees of Tax Exempt Organizations to save amounts for retirement in excess of their Code 403(b) deferrals. The 457 Plan must comply with Code 457, and the participants must be a 'top-hat' group under ERISA, meaning a 'select group of management or highly compensated employees.' This memorandum does not address the special issues of governmental employees ..." (Rackemann, Sawyer & Brewster)

Opinion: the New Rules of Retirement Savings
Excerpt: "In just one decade, the rules of retirement have changed radically. A majority of employees with a retirement plan are now responsible for depositing their own dollars into investment vehicles they select, assuming the risks and rewards of those decisions, often with little or no guidance from financial professionals. In short, this is not your father's pension ..." (Ian Bowles and Peter Meade in the Boston Globe)

Distribution Taken Pro Rata From Each Investment Fund Did Not Violate ERISA
Hickey v. Pennywitt (N.D. Ohio 2004). Excerpt: "The court's opinion is a good lesson on how to avoid such claims and lawsuits by ensuring that the plan's rules are effectively communicated to participants. Here, two key items were missing from the SPD -- the committee's discretionary authority to interpret and administer the plan and the pro rata distribution rule for making distributions from a participant's investment choices." (Employee Benefits Institute of America Inc. (EBIA))

Ruling Provides Comfort for Contribution Deductions for ESOPs (PDF)
2 pages. Excerpt: "Many companies have believed that they would be required to cut back on their funding of other plans in order to support an ESOP. With this ruling, however, the IRS has made it clear that this is not necessarily the case. The specific contribution limits relating to leveraged ESOPs are calculated separately from those relating to other plans." (Jenkens & Gilchrist)

Overview: Right To Pool Assets In Group Trusts Given To Govt. 457 Plans, Roth IRAs and Deemed IRAs
Excerpt: "IRS has extended to governmental 457 plans, Roth IRAs, and deemed IRAs, the right to pool assets in a group trust without affecting the tax-exempt status of either the participants in the group trust or the group trust itself, if certain conditions are met... (Rev Rul 2004-67, 2004-28 IRB)" (RIA Tax News)

PBGC Disaster Relief In Response to Severe Storms and Flooding in Louisiana
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and flooding during the period May 12-19, 2004, in Louisiana." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms and Flooding in Ohio
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and flooding beginning May 18, 2004, in Ohio." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms and Tornadoes in Iowa
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and tornadoes beginning May 19, 2004, in Iowa." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms and Tornadoes in Nebraska
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and tornadoes during the period May 20-June 1, 2004, in Nebraska." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms, Tornadoes, Flooding, and Mudslides in Kentucky
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms, tornadoes, flooding, and mudslides beginning May 26, 2004, in Kentucky." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms and Tornadoes in Indiana
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms and tornadoes beginning May 27, 2004, in Indiana." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms, Flooding, and Landslides in West Virginia
Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms, flooding, and landslides beginning May 27, 2004, in West Virginia." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms, Tornadoes, and Flooding in Missouri
6/28/04. Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms, tornadoes, and flooding during the period May 18-31, 2004, in Missouri." (Pension Benefit Guaranty Corporation)

PBGC Disaster Relief In Response to Severe Storms, Tornadoes and Flooding in Virginia
6/28/04. Excerpt: "The Pension Benefit Guaranty Corporation is waiving certain penalties and extending certain deadlines in response to the major disaster declared by the President of the United States on account of severe storms, tornadoes, and flooding beginning May 24, 2004, in Virginia." (Pension Benefit Guaranty Corporation)

Links to Items on Executive Comp, Benefits in General

Update on Nonqualified Deferred Compensation Legislation
Excerpt: "The pending changes are far-reaching and would have a dramatic effect on a wide variety of compensation arrangements, including many arrangements that traditionally have not been considered to involve deferred compensation as such. Moreover, the proposed changes would take effect almost immediately, with little or no transition time for employers and employees to modify their arrangements." (Groom Law Group)

Update on the Older Worker
Excerpt: "Since 1997, Sara Rix has been tracking the shifting situation of American workers 55 and over and under 55, and reporting the results in this series of AARP Public Policy Institute Data Digests. Among the considerations covered are employment status, trends in participation rates, age and job discrimination, and changing work arrangements." (AARP Research)

Newly Posted Events
(Post Yours!)

Sizzling Issues and Cold Hard Facts NDCC annual conference
in District of Columbia on September 21, 2004
presented by National Defined Contribution Council
Newly Posted Press Releases
(Post Yours!)

Workplace Financial Education Expands At American Express
(American Express Retirement Services)
Newly Posted or Renewed Job Openings
Post a Help Wanted Ad

ESOP Administrator
for Arwood Associates, Inc.
in DC

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