| BenefitsLink Retirement Plans Newsletter |   |
July 18, 2003 - 13,238 subscribers
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Treasury and IRS Issue Temporary and Proposed Regulations on S Corporation ESOPs
Press release, with link to regulations. Excerpt: "Today, the Treasury Department and the IRS issued temporary and proposed regulations to shut down abusive arrangements involving certain employee stock ownership plans (ESOPs) holding stock in S corporations. The regulations, issued under section 409(p), will go into effect in 90 days for certain S corporation ESOPs." (Internal Revenue Service)
Text of IRS Temporary Regs on S Corporation ESOPs (PDF)
31 pages. Excerpt: "This document contains temporary regulations concerning requirements for employee stock ownership plans (ESOPs) holding stock of Subchapter S corporations. The temporary regulations provide guidance on identifying disqualified persons and determining whether a plan year is a nonallocation year under section 409(p) and on the definition of synthetic equity under section 409(p)(5)." (Internal Revenue Service)
Text of IRS Proposed Regs on S Corporation ESOPs (PDF)
6 pages. Excerpt: "The temporary regulations contain rules relating to the identification of disqualified persons and determination whether a plan year is a nonallocation year under section 409(p) and the definition of synthetic equity under section 409(p)(5). The text of those temporary regulations also serves as the text of these proposed regulations. The preamble to the temporary regulations explains the temporary regulations." (Internal Revenue Service)
Overview: Final 414(v) Regulations (Catch-Up Contributions) (PDF)
Excerpt: "During the regulatory process, various commentators sought certain exceptions to the universal availability requirement. Based on these requests, the IRS in the final regulations adopted the following exceptions to the universal availability requirement ..." (Kilpatrick Stockton LLP)
More Companies Helping Retirement Plan Participants to Get Financial Advice
Excerpt: "[M]any companies are choosing to help employees find their way through the financial upheaval. Why? Because in the long run, most are being told it is the best insurance against a whole host of possible rotten outcomes--probably the worst of which from a societal perspective is employees not saving in their 401(k)s at all." (Treasury and Risk Management magazine)
Playing Catch-Up Can Be Good for You
Excerpt: "Who's eligible to play catch-up? If your employer's retirement plan operates on a calendar year, you'll qualify if you turn 50 anytime that year." (Business Week)
Another Question is Answered in the Davis-Bacon Act Q&A Column
Can Davis Bacon contributions be used to satisfy the ADP test (as if they were deferrals)? (BenefitsLink.com)
Watch the Hearing on Administration Proposal to Replace the 30-Year Treasury Rate for Pensions
2 hours and 30 minutes; tape of hearing held on July 15, 2003. (U.S. House of Representatives Committee on Ways and Means, Subcommittee on Select Revenue Measures)
Overview: IRS Proposes to Eliminate Advance Notice Requirement Under Earlier Anti-Cutback Regs (PDF)
Excerpt: "Even though the advance notice requirement is proposed to be eliminated, the IRS notes in the preamble that plans subject to ERISA must continue to describe the plan amendments in a timely distributed SMM or revised Summary Plan Description ('SPD'). In general, sponsors of ERISA plans must furnish an SMM or revised SPD not later than 210 days after the close of the plan year in which the plan amendment was adopted." (Kilpatrick Stockton LLP)
Advocacy: Oppose More Tax Shelters for the Wealthy in the Pension Bill, H.R. 1776 (PDF)
2 pages. Excerpt: "[T]hese additional unpaid-for tax cuts for the wealthy are more than we can afford. These tax provisions expand tax shelters for higher-income individuals who already are accumulating substantial tax-favored savings for retirement, but do nothing to increase pensions or retirement savings for lower-income individuals most at risk of having inadequate resources in retirement." (Fair Taxes for All Coalition)
Advocacy: Minimum Required Distribution Rule Changes Under H.R. 1776 Promote Retirement Security (PDF)
1 page. Excerpt: "Raising the Starting Age to 75 Merely Keeps Pace with Increases in Life Expectancy.... Raising the Starting Age Helps Those Who Have Suffered Market Declines.... Increasing the Starting Age Would Benefit All Americans." (American Benefits Council)
Advocacy: Why H.R. 1776 Promotes Pension Portability for Workers (PDF)
1 page. Excerpt: "Rollovers Between Spouses' IRAs.... Rollovers by Nonspouse Beneficiaries.... Rollovers to Roth IRAs.... Rollovers of After-Tax Amounts.... Certain Plan Transfers and Mergers." (American Benefits Council)
Advocacy: Why H.R. 1776 Promotes IRAs (PDF)
1 page. Excerpt: "Accelerating Savings Limits.... Allowing IRAs for Disabled Americans.... Rollovers Between Spouses' IRAs.... Rollovers by Nonspouse Beneficiaries.... Rollovers to Roth IRAs." (American Benefits Council)
Advocacy: Raising Various Retirement Plan Limits Under H.R. 1776 Promotes Retirement Security (PDF)
1 page. Excerpt: "Congress Already Concluded That Raising Savings Limits is Good Public Policy.... Accelerating 401(k) Limits Still Fails to Keep Pace with Historic Levels and Inflation.... Accelerating 401(k) Contribution Limits Benefits Middle-Income Savers.... Accelerating 401(k) Contribution Limits Allows Workers to Save When They Have the Opportunity and Resources.... Increased Retirement Plan Contribution Limits Are Needed to Raise Historically Low Savings Levels." (American Benefits Council)
Advocacy: Why H.R. 1776 Promotes the Retirement Security of Low and Moderate-Income Workers (PDF)
1 page. Excerpt: "Extension of the Savers' Credit.... Reduced Vesting of Employer Nonelective Contributions.... Promotion of Defined Benefit Plans.... Ensuring that Workers Receive Earned Benefits.... Domestic Worker Coverage.... Expanding Pension Coverage." (American Benefits Council)
Advocacy: Why H.R. 1776 Promotes Retirement Security for Women (PDF)
1 page. Excerpt: "Faster Vesting of Employer Nonelective Contributions.... Rollovers Between Spouses' IRAs.... Acceleration of Catch-Up Contributions.... Domestic Worker Coverage.... Expanding Pension Coverage." (American Benefits Council)
Advocacy: Why H.R. 1776 Promotes Small Business Retirement Plan Coverage (PDF)
1 page. Excerpt: "Expanding and Improving SIMPLE Plans.... Improving Simplified Employee Pensions (SEPs).... Making Our Retirement System Simpler and More Attractive." (American Benefits Council)
Links to Items on Executive Comp, Benefits in General
Text of ABA Joint Committee on Employee Benefits 2003 Q&As with SEC Officials (PDF)
15 pages; dated May 2003. Excerpt: "Each year, the Joint Committee on Employee Benefits (JCEB) of the American Bar Association meets with officials of federal agencies in Washington, D.C., to discuss issues of interest to employee benefits practitioners. The question and answer transcripts listed below are based on these informal discussions between private sector representatives of the JCEB and agency officials." (American Bar Association Joint Committee on Employee Benefits)
Text of ABA Joint Committee on Employee Benefits 2003 Q&As with Internal Revenue Service Officials (PDF)
18 pages; dated May 2003. Excerpt: "Each year, the Joint Committee on Employee Benefits (JCEB) of the American Bar Association meets with officials of federal agencies in Washington, D.C., to discuss issues of interest to employee benefits practitioners. The question and answer transcripts listed below are based on these informal discussions between private sector representatives of the JCEB and agency officials." (American Bar Association Joint Committee on Employee Benefits)
Reader Clarifies Description of 5th Circuit Schlumberger Decision on Upcoming Plan Amendments
Excerpt: "This case presents the question whether the Employee Retirement Income Security Act of 1974 ... imposes upon a company that acts as administrator of its employee benefit program a duty to truthfully disclose, upon inquiry from plan participants or beneficiaries, whether it is considering amending the benefit plan." (BenefitsLink.com)
Attorney Was An Employee of His Law Firm and Thus Was Liable For Employment Taxes: Tax Court
An attorney who was the sole shareholder of his law firm was an employee of the firm, and not an independent contractor, and thus the attorney was liable for the payment of Social Security (FICA) and unemployment (FUTA) taxes. This was the decision of the U.S. Tax Court in Western Management, Inc. v. Commissioner (Docket No. 12686-99. T.C. Memo. 2003-162). (Spencer Benefits Reports)
Newly Posted or Renewed Job Openings
Retirement Services
for Administaff
in TX
Business Workflow Analyst
for Administaff
in TX
401(k) / DC Plan Administrator
for Moran & Associates, Inc.
in WA
Conversion Participant Accounting Representative
for M&I Corporation
in WI
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