For most families, the key to funding higher education is to start saving early and to save regularly.  And with the CollegeBoundfund Employee Payroll Direct Deposit Program, our clients can begin consistently saving for higher education.  With contributions of at least $50 per month into your CollegeBoundfund account, it is easy to maintain a regular investment program.  CollegeBoundfund can be used at accredited colleges, universities, graduate schools, and most community colleges and vocational-technical schools--in the U.S., as well as at many foreign institutions.

Please contact Tracie Zimmerman or Richard Hightower at 1-713-460-1000 for additional information.

CollegeBoundfund is a "529" plan, designed to meet the requirements of a qualified tuition program under Section 529 of the Internal Revenue Code is offered through Hand Securities, Inc. and managed by Alliance Capital, a leading global investment management firm.

In 2002, Hand Securities has taken the next step to assist our clients with their retirement needs.  Today, HB&T offers self-directed retirement accounts under an employer's qualified retirement plan, as well as Rollover Individual Retirement Accounts.  So, if you or any of your participants expect to receive a retirement or termination payout from your employee sponsored retirement plan, you can continue to benefit from the tax-deferred status of your funds through a Rollover IRA at Hand Securities.

With Hand Securities, you have the choice of placing orders for stocks and mutual funds through online trading, our Market Touch telephone system, or by contacting our broker services desk.  Online and Market Touch telephone transaction orders are accepted for almost any domestic security traded on a major exchange, including listed equities, OTC stocks, and preferred stocks.

You can choose no-load or no transaction fee (NTF) mutual funds as well.  We also offer a wide variety of competitively priced corporate bonds, U.S.  Treasuries, tax-free municipals and zero-coupon bonds, all available through our broker services desk.

HB&T investors may open a personal brokerage account, as well as other retirement, custodial and educational accounts, including the increasingly popular 529 College Savings Plan.  Based upon your investment objectives and the assets in your account, Hand Securities can offer a variety of solutions to help you reach your investment and retirement goals.  For more information or to open an account, please contact Richard Hightower, Executive Vice President, Hand Securities, Inc. at 1-713-460-1000 for more information.

*Hand Securities, Inc. offers securities transaction services through a correspondent relationship with U.S. Clearing, a division of Fleet Securities. Member NASD/SIPC.

Recently, HB&T completed an electronic mail notification system which permits flexible spending account participants to receive their quarterly account activity statements, notifications of direct deposit, and claims advices by email, rather than paper.  The initial response from clients and participants for this efficient and paperless system has been overwhelmingly favorable.

Also new is the availability for our cafeteria-plan providers to receive their periodic billing reports by electronic mail.  Again, the response has been positive, and numerous clients have requested this new on-line service.

Not so new, but extremely popular, is the direct deposit service which HB&T provides.  A large number of flexible spending account participants have already begun using this valuable and timesaving option.

To better serve you and your employees, HB&T is constantly enhancing its services.  So stay tuned for further developments!

The following investing tools will be available to plan participants:

• Morningstar Mutual Fund Selector
• Morningstar Mutual Fund Quicktakes and Quickranks
• Morningstar Stock Quicktakes and Quickranks
• Morningstar Analyst Updates
• Morningstar Mutual Fund Features

Morningstar, Inc., a global investment research firm, provides financial data, research, online advice, consulting services, and investment solutions for individuals, financial advisors, institutions, and the media worldwide.  Morningstar is a trusted source of investment information and analysis for stocks, mutual funds, exchange-traded funds, closed-end funds, and variable annuities.  Morningstar tracks nearly 100,000 securities worldwide.

To access Morningstar, direct your participants to click to "Access Your Account" on the Web site menu, then click "Retirement Accounts."  After logging-in with their Social Security Number and a PIN, click on the 'Morningstar Link" on the main menu.  Then simply follow the links to "Investing Center," "Fund Quicktakes," or "Stock Quicktakes."

Before the dust has even settled on the "GUST" plan amendments (and the ink hasn't even dried on all the "EGTRRA" plan changes), Congress has given us the Job Creation and Worker Assistance Act of 2002 (P.L. 107-147, also known as the Economic Stimulus Bill).  President Bush signed the Act into law on March 9, 2002.  For the most part, the 2002 Act expands on the employee benefit provisions of EGTRRA and provides clarification and "technical corrections" where EGTRRA fell short. Here are some of the highlights of the new 2002 Act:

	Defined Benefit Plan Funding:
	Certain underfunded defined benefit plans with more than 100 participants are granted some relief for their 2002 and 2003 plan years from additional funding requirements, which affect large retirement plans that have plan assets valued at less than 90% of the plan's current liability. The Treasury Department stopped issuing 30-year treasury bonds, with a resulting decrease in interest rates.  However, defined benefit plans used an interest rate ranging between 90% to 105% of a 4-year weighted average of such treasury bonds to determine "current unfunded liability."  Consequently, the 2002 Act made changes that will enable a retirement plan to use a rate up to 120% of the weighted average of such treasury bonds, which will effectively reduce a plan's current liability.  This change, however, does not apply for purposes of determining participants' lump sum distributions under the Plan. For PBGC premium calculation purposes, the 2002 Act will permit a plan to use 100% of the 30-year treasury bond rate (rather than 85% of such rate) in calculating PBGC variable premium rates, which will decrease PBGC premiums for retirement plans for the 2002 and 2003 plan years.
	Disregarding "Rollovers" for Plan Cash-Out Rules:
	Under EGTRRA, a plan could disregard the value of a participant's rollover account in applying the $5,000 rule for involuntary cashing-out a participant's account balance. Unfortunately, plans saddled with the cumbersome joint and survivor annuity rules were not afforded the same opportunity under EGTRRA.  The 2002 Act extends this rule to include plans subject to the joint and survivor annuity rules.  So if a participant subject to J&S requirements has an account balance of $7,000 ($3,000 of which is from a rollover), the plan can force a severed participant to take a distribution of the entire account balance (subject to direct rollover rules) without the participant's or spouse's consent.
	Changes in Simplified Employee Pensions (SEPs):
	The 2002 Act increases the employee exclusion from income from 15% to 25% of compensation permitting larger deduction and Code Section 415 limits for SEPs.  Under the 2002 Act, employer's sponsoring these plans can also "gross up" for an employee's elective deferrals.  The 2002 Act also increases from $300 to $450 the amount of compensation eligible for contribution under a SEP.
	Catch-up Contributions:
	The 2002 Act clarifies that for 50-year-old participants wanting to take advantage of the additional deferral capability in a 401(k) plan ($1,000 in 2002), a plan determines whether an employee is age 50 or older on the basis of the taxable year and not the plan year, enabling a participant who turns 50 by December 31, 2002 to be eligible to make catch-up contribution as of January 1, 2002.  For example, if you have a July 1 plan year, and you had a participant who turned 50 at any time during 2002, he would be eligible to start making catch-up contributions as early as January 1, 2002, before the start of the 2002 plan year. Further, the 2002 Act provides clarification that an employer must aggregate plans of controlled group members in applying the catch-up limits.
	Increased 415 Limits - Anti-Cutback Rules:
	EGTRRA increased Code Section 415 annual benefit limits for defined benefit plans from $140,000 to $160,000 for limitation years (usually the plan year) ending after December 31, 2001.  Some plans which incorporate these limits "by reference" in their plan documents would result in automatic application of the new limit, perhaps unintentionally, before the employer actually amends its plan for EGTRRA.  The 2002 Act will permit an employer to amend its plan to the pre-EGTRRA limits without such amendment being an impermissible benefit reduction, if the amendment is adopted by June 30, 2002.

Congratulations to the following employees for passing recent certification exams:

• Stephen S. Hand, CIMA, (Certified Investment Management Analyst), Investment Management Consultants Association
  

• Megan Eyre, Erika Kusjanovic, Mary Leong and LaTricia Sanders, ASPA C1

• Demetri Barnett, ASPA Daily Valuation

• Jonathan Clay, Shannon Critchfield, and Paula McCord, CEBS 3

• Janene English, PA1A and PA1B

Congratulations on a job well done!