February 6, 2003 - 12,861 subscribers

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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay your way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)

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Bush Retirement Savings Proposal Meets Skepticism in Senate
Excerpt: "[Senate Finance Committee Chairman Charles Grassley, R-Iowa] said there was a great deal of nervousness about pension issues and said he wants to examine the new accounts and their impact on small businesses. 'I'm not going to throw cold water on it because I haven't studied it,' he said." (Dow Jones Newswires via Quicken Brokerage)

Critics Say Bush's Retirement Savings Proposals Will Be Ineffective
Excerpt: "[It is] the proposal's flexibility, particularly the lack of penalties for withdrawing funds from the Lifetime Savings Accounts, that concerns most of the critics.... Another charge levied on the administration is that the plan caters to the wealthy who have the additional funds to put into the accounts.... Also, the ability to put away $15,000 a year in these savings accounts may lead fewer small business owners to offer retirement plans at work." (Newsday)

PSCA: President's Proposals Will Reduce the Appeal of Employer Plans
Excerpt: "PSCA believes that any proposal affecting retirement savings should address four questions. Will overall retirement savings increase? How will the at-risk population of lower paid workers be affected? Will leakage of retirement savings increase? Will non-savers be induced to save? While we are confident the administration believes their proposals will result in affirmative responses to these questions, we must disagree." (Profit Sharing/401(k) Council of America)

SBCA: Bush Proposal Will Cause Millions of Small Business Employees To Lose Plan Contributions
Excerpt: "This proposal cutting back the tax incentives inside the retirement plan would gut the small business retirement plan system. About 42 million Americans are covered by 401(k) plans. Anything that would impair them is very, very serious ..." (Small Business Council of America)

Pension Practitioners React to Bush Retirement Savings Proposal
Visit this popular message thread, or join in! (BenefitsLink)

PLANSPONSOR.com Publishes Readers' Comments on ERSA Proposal
Excerpt: "Because politicians and lobbyists are involved, I wonder if ERSA is the illegitimate love child of ERISA and IRS?" (PLANSPONSOR.com; registration required)

Opinion: Bush Retirement Savings Plan Meets People's Needs
By Matthew P. Fink, president of the Investment Company Institute. Excerpt: "The administration's proposal creates a single, simpler Employer Retirement Savings Account. This would cut the red tape that discourages many small employers from offering their workers a chance to save for retirement.... The administration's plan is a milestone. If Congress enacts it, long-term savings and investment opportunities truly will be within the reach of every working American." (USA Today via Yahoo! News)

Rethinking Retirement Savings
Excerpt: "President Bush's much-touted proposal to eliminate dividend taxes has gotten most of the attention, but his sweeping plan to overhaul the nation's retirement savings system, unveiled last week with little fanfare, could have a far greater impact." (MSNBC.com)

Bush Proposal Would Allow Roth-Type 401(k)s
Excerpt: "A little-noticed provision of the White House retirement proposal would let employers start offering Roth IRA-style contributions to 401(k) plans next year.... The 2001 tax package passed by Congress had called for the so-called Roth 401(k) accounts to start in 2006. This proposal would move up the effective date to January 2004." (USA Today via Yahoo! News)

A Look at Bush's One-Size-Fits-All Retirement Plan
Excerpt: "[A]s we've all learned at one time or another, one size does not really fit all. A closer look at the proposal reveals some, er, irregularities.... 'Simplicity without flexibility is just a straitjacket,' says Janice Gregory, vice president of the ERISA Industry Committee in Washington, D.C., an employee-benefits lobbying association of Fortune 100 companies." (TheStreet.com)

Summary of Bush Proposal for Consolidating Employer-Based Savings Accounts
In outline form. (Profit Sharing/401(k) Council of America)

Summary of Proposed Expanded Tax-Free Savings Opportunities: LSAs and RSAs
In outline form. (Profit Sharing/401(k) Council of America)

Opinion: Bush Sets Sights on IRAs
Excerpt: "In his rush to provide even more tax breaks for people who need them least, President Bush has proposed an ill-conceived plan that, among other things, would end Individual Retirement Accounts as we know them." (The [Fort Wayne, Ind.] Journal Gazette)

Bush's Plan Would Scrap Many Investor Taxes
Excerpt: "Piece by piece, President Bush's new tax proposals would go a long way toward achieving a goal cherished by many of his top advisers: eliminating taxes on investment income. White House officials insist that their proposals are not part of a comprehensive plan to push through a fundamental overhaul of the tax system." (New York Times; one-time registration required)

Rev. Rul. 2003-11 Does Not Address Section 401(a)(26) Additional Participation Requirements
Excerpt: "By applying the increased limit to prior years' compensation, benefits can be significantly increased for retirees whose benefits were previously limited by § 401(a)(17). However, the ruling fails to address IRC § 401(a)(26). Therefore, plan amendments that take advantage of Revenue Ruling 2003-11 could violate IRC § 401(a)(26).... [T]he potential impact, if any, of IRC § 401(a)(26) must be analyzed and communicated to employers when plan designs take advantage of the increased limit." (Deloitte & Touche Human Capital Advisory Services)

Another Question is Answered in the ERISA Q&A Column
The members of the Board of Directors at our company heard that as a result of the Enron case, they could now be liable for the fiduciaries they have appointed. Is that true? (BenefitsLink.com)

Is the Time Right for REITs in Your Company's 401(k) Plan?
Excerpt: "401(k) participants looking for ways to help stem those losses may be interested in a little-known and underused investment that has been posting consistent gains in this down market--real estate investment trusts (REITs), vehicles that essentially securitize the owning and/or operating and/or financing of real estate. A REIT mutual fund specializes in owning publicly traded REITs." (HR Magazine)

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Links to Items on Executive Comp, Benefits in General

Sprint Chief Defends Use of Tax Shelter
Excerpt: "Sprint Corp.'s chairman and CEO is defending his use of a controversial tax shelter reportedly responsible for his forced departure from the company. In a letter to employees Wednesday night, William T. Esrey said he was assured that the investment and tax strategy recommended to him in the late 1990s by the telecommunication company's auditors, Ernst & Young, 'was perfectly legal.'" (AP via Las Vegas Sun)

Tax Shelters for Executives Draw Scrutiny, Criticism
Excerpt: "Corporate executives and the independent accounting firms that monitor their companies are under legal and ethical scrutiny again. This time for questionable tax shelters designed to help executives defer millions in taxes owed from stock option gains." (USA Today)

Most Execs Don't Walk Away With a Bundle
Excerpt: "Despite headlines about CEOs departing with outrageously lucrative golden handshakes, most top U.S. executives don't walk away with millions of dollars' worth of perks." (Chicago Tribune; one-time registration required)

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Newly Posted or Renewed Job Openings


Pension Administrator
for White Plains law firm with expanding daily valuation department
in NY

Defined Benefit Consultant
for Invesmart
in MA

Recruiter
for S.C. International, Ltd.
in IL

Manager, Compliance Testing
for Diversified Investment Advisors
in NY

Benefits Administrator
for Peavey Electronics Inc.
in MS

Senior DB/DC Plan Administrator
for Gorrelick, Tievy & Associates, Inc.
in MD

Part-time Employee Benefits Attorney
for D'Ancona & Pflaum
in IL

401(k) Administrator
for Administrative Retirement Services, Inc.
in IL

Client Administration Non Qualified Benefit Plans
for Insurance Resource Group
in ALL STATES, NJ

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Newly Posted Webcasts
( Post Yours! )

HEALTH REIMBURSEMENT ARRANGEMENTS (HRAs)
on February 3, 2003
presented by Employee Benefits Institute of America LLC (EBIA)

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Newly Posted Press Releases
( Post Yours! )

Benefit Software Inc. Provides Butzel Long With Online Benefit Communications
(Benefit Software Inc.)

Small Business Council of America Warns That Administration's Retirement Plan Proposal Will Cause Millions Of Small Business Employees To Lose Retirement Plan Contributions
(Small Business Council of America)

President's Proposals Will Reduce the Appeal of Employer Plans
(Profit Sharing/401(k) Council of America (PSCA))

BLR Publication Simplifies HIPAA Privacy Compliance as Deadline Looms
(Business and Legal Reports, Inc.)

Steven Spurling Joins Stanton Trust Company as Director of National TPA Sales
(Stanton Trust Company, N.A.)

DOL Secretary Elaine L. Chao Testifies on Association Health Plans
(U.S. Department of Labor)

Intara launches new Self Service Benefits Enrollment System
(Intara)

Certain ALI-ABA Employee Benefits Course Materials and Tapes Now on Sale
(American Law Institute - American Bar Association (ALI-ABA))

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Movers and Shakers: Newly Posted Announcements of Promotions and New Personnel
( Post Yours! )

Gregory J. Dyson (ICMA Retirement Corporation)

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Handy Links:

• View Today's Active Message Threads
• Search BenefitsLink
• Using the Web for Employee Benefits Research
• Employee Benefits Library

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