Proposal May Aid Pension Sponsors
Business Insurance (09/12/02) p.1; Geisel, Jerry

The ERISA Industry Committee has gone to Capitol Hill to submit a proposal they say would lower the contribution amount employers pay to pension plans. The centerpiece of the plan is a new calculation method for determining pension liabilities that would supplant the use of long-term U.S. Treasury bonds currently used to calculate pension liabilities with the yields of long-term and highly rated corporate bonds. Should Congress vote to adopt the method, ERISA says, employers would be able to use a higher interest rate assumption to value their pension liabilities and plan contributions. As a result, corporate cash flow would likely improve.

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States Make Their DC Plans Even More Competitive
Pensions & Investments (09/12/02) p.2; Jacobius, Arleen

One reason that a number of states are either launching defined contribution (DC) plans or revamping existing DC plans is new federal regulations allowing public sector DC or deferred compensation plans to look more like corporate plans. Another reason is the increased competition, as participants are now able to roll over money into a number of qualified accounts or plans--particularly 457 plans. Under the Economic Growth and Tax Relief Reconciliation Act of 2001, 457 plan participants can roll over funds into 401(a), 401(k), 403(b), 457(b), and IRA plans. Insurance: Is Yours Safe?
Newsweek (09/02/02) p.47; Quinn, Jane Bryant

Insurance experts urge policyholders to exercise caution when shopping for an insurance policy. Among the things to consider when looking for an insurance company, buyers should check the safety-and-soundness rating of the carrier they are considering with a rating agency like Standard & Poor's. People should also be vigilant in tracking the performance of the company once they have settled on a carrier. ICI: Traditional IRA Holders Own More Annuities
National Underwriter (Life and Health Financial Services Edition) (09/17/02) p.47; Bell, Allison

A new report by the Investment Company Institute shows that those who own traditional individual retirement accounts are more likely to own whole life insurance policies and annuities than those who own Roth IRAs, though in some ways the households are similar, sharing close annual household incomes and marital status. Both groups also have similar risk tolerance, but the researchers say that those who made the financial decisions in traditional IRA households are generally older and more likely retired than those in Roth or employer-sponsored IRA households, and Roth IRA holders also have lower IRA assets and total assets. The report shows that 51 percent of traditional IRA holders have whole life insurance policies with a cash value, 12 percent have IRAs at life insurers, and 28 percent own fixed or variable annuities, while only 42 percent of Roth IRA owners have whole life policies with cash values, 6 percent have their IRAs at life insurers, and 16 percent own annuities. Analysts: 401(k) Providers Must Appeal to Participants
National Underwriter (Life and Health Financial Services Edition) (09/11/02) p.47; Bell, Allison

A new report by Lehman Brothers reveals that life insurers looking to increase 401(k) plan services profits will have to look to "assets under management." According to figures from the Spectrem Group, however, providers have done a poor job of increasing the percentage of eligible employees who participate in 401(k) plans or persuading clients to increase contributions. The challenge for providers, analysts say, will be to find efficient ways to boost assets under management by building stronger relationships with individual clients.

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