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8/7: When it's a question of always having the right answer...turn to the 401(k) Answer Book. 1997 edition is now available.

8/6: From QDRO Services, Inc. of Houston, TX --
QDRO Briefs Newsletter No. 5: Creative Use of Revocable Interests
QDRO Briefs Newsletter No. 4: Pre- and Post-Retirement Benefits
QDRO Briefs Newsletter No. 3: Child Support and Security Interests
QDRO Briefs Newsletter No. 2: Military Retirement Systems
QDRO Briefs Newsletter No. 1: QDRO or No QDRO

8/6: The Employee Benefit Research Institute has published an Adobe Acrobat (.PDF) file entitled Benefits for Part-Time Workers.. Its tables provide background information concerning part-time workers and the benefits they receive. A timely issue, in light of the UPS strike!

8/5: 1997 Retirement Guide is now online, published by Fortune magazine (8/18/97). Articles include:
How to Beat the Boomer Rush
Investing
Income
Planning

8/5: Doing well by doing good good, from Forbes magazine (3/10/97). Excerpt:
UNTOLD NUMBERS OF PEOPLE are blissfully unaware that their IRAs are poised to die when they do. In certain unpleasant combinations of circumstances, tax laws dictate that an IRA goes into liquidation within a year of the owner's death. Between estate taxes and income taxes, there probably won't be much left over for the heirs.
There is an out, however, that a lot of smart estate planners are recommending these days for people with $1 million-plus IRAs. You set up a charitable remainder trust to receive the IRA. Heirs get income from the trust during their lifetime. When they die, the principal goes to a tax-exempt organization like a hospital, church or college.

8/5: Carriers Offering Medical Savings Accounts, a listing from Forbes magazine.

8/5: How One Company Makes Flex Attractive for Its Part-Time Employees, from the Institute on Management and Administration (IOMA)'s Managing Flexible Benefits Plans.
Excerpt:
For the most part, flex plan sponsors offer no flex benefits to their part-time workforce. But if you rely heavily on permanent part-time and seasonal employees, perhaps it's time to reconsider not only your traditional flex offerings, but those that would appeal to your part-time workers as well.
That's exactly the process one retail organization based in Minneapolis went through recently. The company -- which has 1,500 permanent part-time and 2,000 seasonal "full-time" employees (as well as 2,500 full-time employees) -- had a turnover rate that "was killing it," Richard Wald, a principal at William M. Mercer's Minneapolis office told attendees at the recent Employers' Council on Flexible Compensation conference in Washington, D.C.

8/4: Here's the full text of the pension and employee benefits title in the Taxpayer Relief Act of 1997, as reported out of the Conference Committee. And here's the Conference Committee's Report ("Statement of Managers"), explaining the differences between the House and Senate versions and the final version.

8/4: IRS Revenue Procedure 97-41 provides rules for amending tax-qualified retirement plans for recent changes in the tax laws. Excerpt:
This revenue procedure provides guidance to sponsors of pension, profit-sharing and stock bonus plans qualified under section 401(a) or 403(a) of the Internal Revenue Code (qualified plans) and tax-sheltered annuity plans described in section 403(b) (section 403(b) plans) with respect to the date by which they must adopt amendments to comply with changes in the law made by the Small Business Job Protection Act of 1996, Pub. L. 104-188 (SBJPA), the Uruguay Round Agreements Act, Pub. L. 103-465 (GATT), and the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L. 103-353 (USERRA). This revenue procedure provides that:
1 In general, there is a single deadline for adopting SBJPA, GATT and USERRA amendments to qualified plans.
2 The deadline for adopting SBJPA, GATT and USERRA amendments is the same as the date by which certain plans that have extended reliance on Tax Reform Act of 1986 (TRA '86) determination letters must be amended.
3 Plan sponsors are allowed, for qualification purposes, to anticipate in plan operation certain plan amendments that they intend to adopt as a result of changes in the qualification requirements.
. . . Specifically, under this revenue procedure:
1 Qualified plans have a remedial amendment period under section 401(b) with respect to certain amendments for SBJPA, GATT or USERRA through the last day of the first plan year beginning on or after January 1, 1999. Thus, these amendments will not have to be adopted before the last day of a plan's 1999 plan year.
2 The deadline for adopting plan amendments to reflect certain limitations under section 415(b), as amended by GATT and SBJPA, is also the last day of the first plan year beginning on or after January 1, 1999. In addition, relief is provided so that a plan amendment described in section 1449(d)(2) of SBJPA repealing an earlier plan amendment that implemented certain amendments made by GATT to section 415(b) need not be adopted before the last day of the first plan year beginning on or after January 1, 1999.
3 Plan sponsors are advised of the Service's intention to publish procedures for obtaining determination letters that include consideration of the changes to the qualification requirements made by SBJPA and GATT as soon as possible after necessary guidance is issued.
4 Amendments for SBJPA to section 403(b) plans, or to annuity contracts purchased under section 403(b) plans, are not required to be adopted before the first day of the first plan year beginning on or after January 1, 1998.

8/4: KPMG Peat Marwick has an online explanation of the Taxpayer Relief Act, including a brief discussion of its employee benefit provisions.

8/4: The following benefits-related item was added to the "Recently Issued Reports" page on the U.S. Government Accounting Office's World Wide Web site (http://www.gao.gov/new.items/newtitle.htm) in Portable Document (PDF) format. (Use the free Adobe Acrobat reader to view it.)
- Medicare Home Health Agencies: Certification Process Is Ineffective in Excluding Problem Agencies. T-HEHS-97-180. 12 pp. July 28, 1997.
  http://www.gao.gov/new.items/he97180t.pdf

8/4: IRS Notice 97-45 provides guidance as to the application of the "highly compensated employee" definition of Code section 414(q) for 1997 and other "transition" years. Excerpt:
Specifically, this notice provides:
* Guidance on making the top-paid group election permitted by section 414(q)(1)(B)(ii), under which an employee (other than a 5-percent owner) with compensation in excess of the dollar threshold is an HCE only if the employee is among the highest paid 20 percent of an employer's workforce.
* A new calendar year data election under which an employer that maintains one or more plans on a fiscal year basis has the option to use calendar year data to simplify the determination of whether an employee is an HCE on account of compensation under section 414(q)(1)(B).
* Transition relief from certain requirements of the top-paid group election and the calendar year data election.
* Guidance on plan amendments to reflect the revised definition of HCE, including the application of the remedial amendment period under section 401(b), and certain other matters relating to the determination of HCE status.

8/4: The Bureau of Labor Statistics has issued its Report On Employee Benefits In Medium And Large Private Establishments, 1995. Excerpt:
Retirement plan participation by employees in medium and large private establishments (those with 100 workers or more) has remained fairly constant, but there has been a shift in the types of plans providing coverage, according to a 1995 survey conducted by the U.S. Department of Labor's Bureau of Labor Statistics . . . 55 percent of all full-time workers participated in defined contribution plans, which specify the employer's contribution but not the eventual benefit, up from 49 percent in 1993.

8/4: Correcting Improper Return of Excess Contributions - Part 4. More answers in the popular Question and Answer column, Q&A for Plan Defects: Correction/VCR/CAP, written by attorneys Fred Reish and Bruce Ashton of Reish & Luftman, a Professional Corporation. Last week's column analyzed whether whether improper distributions to correct an ADP failure would be an "insignificant defect" under the IRS' Administrative Policy Regarding Self-Correction (APRSC). In this week's Q&A, the column discusses the means for self-correcting such a defect.

8/4: Designing Effective Strategies for Retiring 401(k) Participants, from the Institute on Management and Administration (IOMA)'s Managing 401(k) Plans. Excerpt:
If you've stepped up your efforts to get employees into your 401(k) plan and helped them make appropriate investment decisions, you're already doing what most conscientious plan sponsors are. One important facet of employee education you may be overlooking, however, is the information you need to provide to 401(k) participants who are near or approaching retirement age. In some more extreme instances, participants think they can afford to retire when in fact they can't. But even if they're on the right track for retirement, they need to be equipped to make decisions about plan distributions, the impact of Social Security, and how to handle their investment mix post-retirement.
While there is no legal requirement to provide such education, it's good management policy to ensure that your employees can retire comfortably when they expect to. And no plan sponsor wants to deal with a participant whose 401(k) investments are so eroded by inflation that his retirement assets are insufficient for more than a few years of comfortable retirement.

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