Retirement Plans Edition
December 20, 2000
Today's sponsor is The Plan Sales System (click on banner for more information)
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Pension Plan Trustee Sued For Making Improper Loans To Sponsoring Employer
Excerpt: "The U.S. Department of Labor has filed a lawsuit alleging that Wade & Sons, Inc. and its owner improperly transferred funds from the company's profit sharing plan, thereby resulting in more than $146,600 in losses to the plan." (U.S. Department of Labor press release)
Annuitization and Options (PDF)
Excerpt: "A new explanation why people delay annuitization or do not annuitize... This paper by Moshe Milevsky of York University Canada adds a new explanation based on real option theory. Where the decision to annuitize is irreversible, individuals have an option value to wait to annuitize because circumstances could change and individuals could get a better deal." (Moshe A. Milevsky, published by Centre for Pensions and Social Insurance)
ESOP Repurchase Obligation Issues in S Corporations
Judith Kornfeld, a well-known authority on the employee stock ownership plan (ESOP) repurchase obligation, discusses how S corporation status bears on repurchase obligation issues, such as whether to redeem shares or recirculate them. (National Center for Employee Ownership)
For the New Year, Resolve to Save Another 1 Percent
Excerpt: "You might wonder how significant an extra 1 percent savings can really be. On the other hand, you might wonder how on earth you could manage to put that money aside without missing it. Either way, read on to find the answers." (401Kafe.com)
Another Question is Answered in the Who's the Employer Q&A Column
A limited liability company (LLC) in Arizona is treated as sole proprietor for tax purposes, all his employees (about 40) including himself are leased employees through a leasing company (a "PEO"). Most of the employees including the owner participate in the leasing company-sponsored 401(k) plan. Can the owner set up and participate in his own separate qualified plan, because he has profits to him through the LLC? (BenefitsLink.com)
(Following also appears in Welfare Plans Edition)
Advisory to Compensation Professionals on the Use of Compensation Surveys in 2001
Excerpt: "Compensation professionals who use surveys to determine competitive stock options/long-term incentive grant guidelines for 2001 need to be aware that such surveys may reflect an extraordinary level of grant activity in 2000 caused by the market decline in equity values since April." (Frederic W. Cook & Co., Inc.)
Market Turmoil Tarnishes Luster of Stock Options
Excerpt: "As the job market and the economy cools, experts say, 2001 is likely to see a major refocusing on core salaries, performance-based bonuses and lifestyle-oriented benefits instead of stock options." (CNET.com)
IRS Says Use of New W-2 Code for Exercise of Nonstatutory Stock Options in 2001 is Optional
Modifying Announcement 2000-79. Excerpt: "The purpose of this announcement is to advise employers of a change to Announcement 2000-97. Announcement 2000-97 advised employers that a new code (Code V -- Income from the exercise of nonstatutory stock options) was added for use in box 12. In response to employer concerns about implementing the reporting procedures, the use of Code V is optional for the 2001 Forms W-2." (Internal Revenue Service)
Jointly-Employed Contingent Workers Can Be Organized Without Employer Consent
Excerpt: "On August 25, 2000, the National Labor Relations Board, reversing earlier precedents, sanctioned for the first time unlimited union organization of jointly-employed workers." (Nixon Peabody LLP)
| Executive Compensation & Benefits Consultant | for Clark Bardes Consulting/Compensation Resource Group, Inc in CA, DC, GA, IL, NY, OH, TX |
| 401(k) DC Administrator | for Karel & Associates, Ltd. in IL |
| Business Development Associate | for PensionOnline in ALL STATES |
| Marketing Communications Specialist | for New England Financial/MetLife, leading financial services organization specializing in Life Insurance, Pension Plans, Annuities and Securities. in MA |
| ERISA Compliance Specialist | for New England Financial in MA |
| Product Manager - Qualified Plans | for American Skandia in CT |
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