If this message looks garbled to you or if the headlines in this message don't connect you to Web pages when you click on them, please request the "plain text" version of this newsletter ("Retirement Plans Edition") by emailing your request to publisher Dave Baker
March 22, 2001
Today's sponsor: The Retirement Plan Distribution Book (click)
Federal Government Thrift Plan to Allow Deferrals Immediately Upon Employment
Excerpt: "New federal employees will be able to contribute money to Thrift Savings Plan accounts as soon as they start working, under a law passed by Congress last year. But employees still have to wait for up to a year to begin receiving matching contributions from their agencies." (GovExec.com)
IRS Publishes Resource Page for the Joint Board for the Enrollment of Actuaries
Excerpt: "This web page provides information for Enrolled Actuaries, or for individuals who wish to become Enrolled Actuaries. On this page you can find information on: The latest news from the Joint Board; What an Enrolled Actuary is; How to become an Enrolled Actuary; Administration of the Enrolled Actuary program; Regulations governing Enrolled Actuaries; [more]." (Internal Revenue Service)
Another Question is Answered in the Distributions: Taxation and Planning Q&A Column
The normal form of benefit under a defined contribution plan is a qualified joint and survivor annuity. Under Internal Revenue Code section 411(d)(6), may the plan eliminate installment and life annuity with period certain payment options, and retain the joint and survivor annuity, life annuity and lump sum options? (BenefitsLink.com)
Another Question is Answered in the Who's the Employer Q&A Column
A is an accounting corporation; B is an S Corporation that does recruiting; C is an LLC that also does recruiting. If C is a First Service Organization (FSO) and A and B are each A-Organizations, within the meaning of Code section 414(m), does that necessarily mean that all three entities are members of one affiliated service group? (BenefitsLink.com)
Court Rules On Case About Divorced Couple Pension Benefits
Excerpt: "State laws generally cannot divert a deceased person's employee benefits to someone other than the designated beneficiary, the U.S. Supreme Court ruled Wednesday." (Associated Press via CNN.com)
New IRA Distribution Rules Benefit Retirees
Excerpt: "The Internal Revenue Service has significantly simplified the rules that require retirees to start taking money out of their traditional IRAs and qualified retirement plans.... First, 'You're no longer doomed by the beneficiary you pick,' [says Lisa Start-Khalilian, a tax expert at the College for Financial Planning]." (Associated Press)
Using Periodic Payments to Retire Early
Excerpt: "A drawback to having all your retirement savings in an IRA is that the distribution rules don't easily accommodate workers who want to retire before age 59-1/2. If you withdraw money before that age, you have to pay a 10 percent early withdrawal penalty unless you qualify for an exception. By contrast, 401(k) and 403(b) retirement plans allow you to withdraw money if you are at least 55 when you stop working for the employer sponsoring the plan." (IRAjunction.com)
April Applicable Federal Rates Released
Excerpt: "This revenue ruling provides various prescribed rates for federal income tax purposes for April 2001 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code." (Ernst & Young)
Highlights: New Rules for Required Minimum Distributions
On the IRS Web site. Excerpt: "The dawn of a new millennium has brought a significant simplification of rules for required minimum distributions from qualified plans, IRAs, section 403(b) annuities, and section 457 deferred compensation plans. Not only are the rules less complex, but they reduce the amount of distributions required to be taken each year for the majority of employees and IRA owners." (Internal Revenue Service)
IRS Clarifies Required Minimum Distribution Model Amendment
Excerpt: "[W]e have spoken with the IRS and they have confirmed a plan may not apply the new RMD rules for 2001 without the model amendment. If the model amendment is not in effect, plan participants must receive an RMD amount computed under the old rules." (Sungard Corbel)
CalPERS Targets Five Stocks for Annual Laggard List
Excerpt: "The Warnaco Group -- a maker of Calvin Klein and Speedo clothing -- and electronics retailer Circuit City Stores Inc. have joined three others on the largest U.S. public pension fund's annual list of corporate America's poorest performers. The California Public Employees' Retirement System, or CalPERS, Wednesday released its annual list of companies it said had the most egregious corporate governance practice and poorest performance among their industry peers." (Reuters via Excite News)
As National Savings Go Up, Worries Go Down (A Little)
Excerpt: "The number of Americans saving for retirement has jumped sharply in the last few years, a recent New York Times poll has found. And while a majority of those questioned worry about setting aside enough money, anxiety on the subject appears to have eased, at least a bit." (New York Times, via Global Action on Aging)
Issue Brief: Social Security Benefits: Changes to the Benefit Formula and Taxation (PDF)
Revised to include data from Social Security Trustees' 2000 report. Excerpt: "To protect the system's solvency, Congress is considering far-reaching options for reform. Such options include changing the benefit formulas or the taxation of benefits. This issue brief discusses these reform options and their possible implications." (American Academy of Actuaries)
Issue Brief from American Academy of Actuaries: Raising the Retirement Age for Social Security (PDF)
Excerpt: "Raising the Normal Retirement Age further could significantly improve Social Security's financial status. Some reform proposals include an accelerated increase of the NRA to 67 and/or an increase in the NRA beyond age 67. Depending on its timing and magnitude, such a change could go a long way toward restoring the Social Security program to long-range actuarial balance (i.e., solvency for 75 years) and sustainability." (American Academy of Actuaries)
(Following items also appear in Welfare Plans Edition)
Statement of AARP Executive Director on Court Decision Allowing Employers to Require Arbitration
Excerpt: "It is a tremendous setback in the fight against workplace discrimination. The decision precludes employees who signed an arbitration agreement from going directly to court to seek redress for their rights. Today's decision will adversely affect all employees and is especially bad for older workers, who have much less mobility in the job market than younger workers." (US Newswire)
Court Says Employers Can Require Arbitration of Disputes
Excerpt: "The Supreme Court handed employers a major victory today by ruling that companies can insist that workplace disputes go to arbitration rather than to court. The 5-to-4 decision resolved a disagreement among the lower federal courts about the scope of the Federal Arbitration Act, a 76-year-old law that makes arbitration agreements enforceable in federal court." (New York Times; free registration required)
SEC Issues Exemptive Order Covering Certain Stock Option Repricings
Excerpt: "On March 21, 2001, the Division of Corporation Finance, pursuant to delegated authority from the Commission, issued an exemptive order under the Securities Exchange Act of 1934 (Exchange Act) for issuer exchange offers that are conducted for compensatory purposes. The order exempts these exchange offers from Rules 13e-4(f)(8)(i) and (ii), the all holders and best price rules, so long as specified conditions are met." (Securities and Exchange Commission)
Newly Posted or Renewed Job Openings ( Post Yours! )
Subscribe to the Welfare Plans Edition, too (click)
Copyright 2001 BenefitsLink.com, Inc.
You may freely distribute this email newsletter in whole.
Click here to learn how your company can sponsor a future issue!
BenefitsLink is a trademark of BenefitsLink.com, Inc., published by Dave Baker with much help from Mary Hall and lots of friends.
To subscribe (free): visit https://benefitslink.com/newsletter - or the person desiring to subscribe can send an email to BLretirement@add.mb00.net
To unsubscribe: visit https://benefitslink.com/newsletter - or you can send an email to BLretirement@remove.mb00.net
We have an online archive of prior issues at
https://benefitslink.com/newsletters/
The BenefitsLink Newsletter -
Retirement Plans Edition
Retirement Plans Edition
March 22, 2001
Today's sponsor: The Retirement Plan Distribution Book (click)
The Retirement Plan Distribution Book: No other resource is as comprehensive, yet accessible by everyone who has to answer distribution questions-- from customer service representatives to legal counsel. Available now, from National Underwriter Company, publishers of other fine compliance books including Tax Facts.
Federal Government Thrift Plan to Allow Deferrals Immediately Upon Employment
Excerpt: "New federal employees will be able to contribute money to Thrift Savings Plan accounts as soon as they start working, under a law passed by Congress last year. But employees still have to wait for up to a year to begin receiving matching contributions from their agencies." (GovExec.com)
IRS Publishes Resource Page for the Joint Board for the Enrollment of Actuaries
Excerpt: "This web page provides information for Enrolled Actuaries, or for individuals who wish to become Enrolled Actuaries. On this page you can find information on: The latest news from the Joint Board; What an Enrolled Actuary is; How to become an Enrolled Actuary; Administration of the Enrolled Actuary program; Regulations governing Enrolled Actuaries; [more]." (Internal Revenue Service)
Another Question is Answered in the Distributions: Taxation and Planning Q&A Column
The normal form of benefit under a defined contribution plan is a qualified joint and survivor annuity. Under Internal Revenue Code section 411(d)(6), may the plan eliminate installment and life annuity with period certain payment options, and retain the joint and survivor annuity, life annuity and lump sum options? (BenefitsLink.com)
Another Question is Answered in the Who's the Employer Q&A Column
A is an accounting corporation; B is an S Corporation that does recruiting; C is an LLC that also does recruiting. If C is a First Service Organization (FSO) and A and B are each A-Organizations, within the meaning of Code section 414(m), does that necessarily mean that all three entities are members of one affiliated service group? (BenefitsLink.com)
Court Rules On Case About Divorced Couple Pension Benefits
Excerpt: "State laws generally cannot divert a deceased person's employee benefits to someone other than the designated beneficiary, the U.S. Supreme Court ruled Wednesday." (Associated Press via CNN.com)
New IRA Distribution Rules Benefit Retirees
Excerpt: "The Internal Revenue Service has significantly simplified the rules that require retirees to start taking money out of their traditional IRAs and qualified retirement plans.... First, 'You're no longer doomed by the beneficiary you pick,' [says Lisa Start-Khalilian, a tax expert at the College for Financial Planning]." (Associated Press)
Using Periodic Payments to Retire Early
Excerpt: "A drawback to having all your retirement savings in an IRA is that the distribution rules don't easily accommodate workers who want to retire before age 59-1/2. If you withdraw money before that age, you have to pay a 10 percent early withdrawal penalty unless you qualify for an exception. By contrast, 401(k) and 403(b) retirement plans allow you to withdraw money if you are at least 55 when you stop working for the employer sponsoring the plan." (IRAjunction.com)
April Applicable Federal Rates Released
Excerpt: "This revenue ruling provides various prescribed rates for federal income tax purposes for April 2001 (the current month). Table 1 contains the short-term, mid-term, and long-term applicable federal rates (AFR) for the current month for purposes of section 1274(d) of the Internal Revenue Code." (Ernst & Young)
Highlights: New Rules for Required Minimum Distributions
On the IRS Web site. Excerpt: "The dawn of a new millennium has brought a significant simplification of rules for required minimum distributions from qualified plans, IRAs, section 403(b) annuities, and section 457 deferred compensation plans. Not only are the rules less complex, but they reduce the amount of distributions required to be taken each year for the majority of employees and IRA owners." (Internal Revenue Service)
IRS Clarifies Required Minimum Distribution Model Amendment
Excerpt: "[W]e have spoken with the IRS and they have confirmed a plan may not apply the new RMD rules for 2001 without the model amendment. If the model amendment is not in effect, plan participants must receive an RMD amount computed under the old rules." (Sungard Corbel)
CalPERS Targets Five Stocks for Annual Laggard List
Excerpt: "The Warnaco Group -- a maker of Calvin Klein and Speedo clothing -- and electronics retailer Circuit City Stores Inc. have joined three others on the largest U.S. public pension fund's annual list of corporate America's poorest performers. The California Public Employees' Retirement System, or CalPERS, Wednesday released its annual list of companies it said had the most egregious corporate governance practice and poorest performance among their industry peers." (Reuters via Excite News)
As National Savings Go Up, Worries Go Down (A Little)
Excerpt: "The number of Americans saving for retirement has jumped sharply in the last few years, a recent New York Times poll has found. And while a majority of those questioned worry about setting aside enough money, anxiety on the subject appears to have eased, at least a bit." (New York Times, via Global Action on Aging)
Issue Brief: Social Security Benefits: Changes to the Benefit Formula and Taxation (PDF)
Revised to include data from Social Security Trustees' 2000 report. Excerpt: "To protect the system's solvency, Congress is considering far-reaching options for reform. Such options include changing the benefit formulas or the taxation of benefits. This issue brief discusses these reform options and their possible implications." (American Academy of Actuaries)
Issue Brief from American Academy of Actuaries: Raising the Retirement Age for Social Security (PDF)
Excerpt: "Raising the Normal Retirement Age further could significantly improve Social Security's financial status. Some reform proposals include an accelerated increase of the NRA to 67 and/or an increase in the NRA beyond age 67. Depending on its timing and magnitude, such a change could go a long way toward restoring the Social Security program to long-range actuarial balance (i.e., solvency for 75 years) and sustainability." (American Academy of Actuaries)
Statement of AARP Executive Director on Court Decision Allowing Employers to Require Arbitration
Excerpt: "It is a tremendous setback in the fight against workplace discrimination. The decision precludes employees who signed an arbitration agreement from going directly to court to seek redress for their rights. Today's decision will adversely affect all employees and is especially bad for older workers, who have much less mobility in the job market than younger workers." (US Newswire)
Court Says Employers Can Require Arbitration of Disputes
Excerpt: "The Supreme Court handed employers a major victory today by ruling that companies can insist that workplace disputes go to arbitration rather than to court. The 5-to-4 decision resolved a disagreement among the lower federal courts about the scope of the Federal Arbitration Act, a 76-year-old law that makes arbitration agreements enforceable in federal court." (New York Times; free registration required)
SEC Issues Exemptive Order Covering Certain Stock Option Repricings
Excerpt: "On March 21, 2001, the Division of Corporation Finance, pursuant to delegated authority from the Commission, issued an exemptive order under the Securities Exchange Act of 1934 (Exchange Act) for issuer exchange offers that are conducted for compensatory purposes. The order exempts these exchange offers from Rules 13e-4(f)(8)(i) and (ii), the all holders and best price rules, so long as specified conditions are met." (Securities and Exchange Commission)
Newly Posted or Renewed Job Openings ( Post Yours! )
for Towers Perrin
in NJ
in NJ
for New York Life Benefit Services LLC
in MA
in MA
for ATR, Inc.
in PA
in PA
for TMCpeople.com/The First Church of Christ, Scientist
in MA
in MA
for Cherry, Bekaert & Holland, LLP (Certified Public Accountants & Consultants)
in VA
in VA
for well-established national insurance companies
in CA
in CA
Subscribe to the Welfare Plans Edition, too (click)
Copyright 2001 BenefitsLink.com, Inc.
You may freely distribute this email newsletter in whole.
Click here to learn how your company can sponsor a future issue!
BenefitsLink is a trademark of BenefitsLink.com, Inc., published by Dave Baker with much help from Mary Hall and lots of friends.
To subscribe (free): visit https://benefitslink.com/newsletter - or the person desiring to subscribe can send an email to BLretirement@add.mb00.net
To unsubscribe: visit https://benefitslink.com/newsletter - or you can send an email to BLretirement@remove.mb00.net
We have an online archive of prior issues at
https://benefitslink.com/newsletters/