| The BenefitsLink Newsletter - Welfare Plans Edition |
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February 15 and 16, 2001
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Employee's State Law Claims For Golden Parachute Payments Were Not Preempted By ERISA
Excerpt: "A separation plan that provided one-time golden parachute payments to key employees was not an 'employee welfare benefit plan' within the meaning of ERISA and, hence, an employee's state law claims seeking to recover the payments were not preempted by ERISA. This was the ruling of the Tenth Circuit U.S. Court of Appeals in Lettes v. Kinam Gold, Inc., et al." (Spencernet)
Judge Clears Class Action Law Firm of Wrongdoing in Oxford Health Plans Litigation
Excerpt: "The case has highlighted friction among plaintiff firms over the role of lead counsel in securities cases — an assignment that includes the power to decide how legal fees are distributed in successful litigation. It also has focused attention on claims by defense lawyers that plaintiff firms sometimes exaggerate the damage done to their clients." (New York Times; free registration required)
Insurers To Settle Annuity Cases
Excerpt: "Four companies, including Prudential and First Union, and an individual have agreed to pay a total $112,000 to settle allegations by Wall Street's self-policing group that they improperly marketed and sold variable annuities, a popular way to save for retirement." (Associated Press, via Excite!)
Connecticut Doctors File Lawsuits Against Health Plans Organizations
Excerpt: "Two groups representing 7,000 Connecticut doctors filed a battery of lawsuits today against six large health maintenance organizations, claiming that the companies 'systematically harmed' patients by arbitrarily denying crucial medical treatment and illegally withholding millions of dollars in payments they owe doctors." (New York Times; free registration required)
Reimbursement for Employee Parking At Nontemporary Work Locations Is Excludable From Wages
Outline of Internal Revenue Code provisions applicable to this fringe benefit. Excerpt: "Employer-provided qualified transportation fringe benefits are excludable from the employee’s wages, up to certain limits. These fringe benefits include ..." (Practitioners Publishing Company)
Range of Benefits Turns Exceptional At Innovative Firm
Excerpt: "The washer and drier aren't the only unusual benefit The Promotion Network offers: [employee Howard] Hill also has a free gym membership, which he uses to run and lift weights. He gets a free massage at the office and the kitchen is filled with free food." (Chicago Tribune)
Double-Digit Growth In Health Care Costs Projected For Second Consecutive Year: Towers Perrin
Excerpt: "For the second consecutive year, large employers will experience a double-digit increase in their health care costs, according to the recently released 2001 Towers Perrin Health Care Cost Survey. The annual survey found that the cost of large employers' health benefit plans will increase about 13% on average in 2001..." (Spencernet)
IRS Advises Medical Savings Account Custodians of Changes In Annual Form 8851 Filing Requirements
Excerpt: "This announcement advises trustees and custodians of medical savings accounts of the requirement to file Form 8851, Summary of Archer MSAs, and changes for magnetic and electronic filing." (Internal Revenue Service)
Access to HMO Arbitration Records Asked
Excerpt: "For the California Department of Managed Health Care, the honeymoon is over. A consumer group's petition to make public records of HMO arbitration hearings sparked outrage from health plans and will force department director Daniel Zingale to step into a dispute with few easy answers." (Sacramento Bee)
DaimlerChrysler Dangles $35,000 Bait
Excerpt: "As part of the effort to trim its workforce by 20 percent, DaimlerChrysler AG is offering incentive payments of $35,000 to longtime Chrysler hourly workers who accept early retirement from the struggling automaker. Half the voluntary retirement incentive will be paid in cash, the automaker said Tuesday. The other $17,500 is in the form of a voucher that can be used to purchase a new Chrysler, Dodge, or Jeep vehicle." (Detroit News)
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IRS Notice Clarifies Application of FICA, FUTA and Income Tax Withholding To Statutory Stock Options
Excerpt: "[I]n the case of any statutory option exercised before January 1, 2003, the Service will not assess FICA tax or FUTA tax upon the exercise of the option and will not treat the disposition of stock acquired by an employee pursuant to the exercise of the option as subject to income tax withholding." (Internal Revenue Service)
IRS Moratorium On Tax Withholding for ISOs and ESPPs
Excerpt: "... the IRS recently issued Notice 2001-14 which makes it clear that in the case of any ESPP/ISO option exercised prior to January 1, 2003, the Service will not assess FICA tax or FUTA tax upon the exercise of the option and will not treat the disposition of stock acquired by an employee pursuant to the exercise of the option as subject to income tax withholding. This notice does not affect tax withholding for non-qualified stock options." (Kilpatrick Stockton LLP)
Frederic W. Cook Provides Comments to Proposed Changes in Shareholder Approval of Stock Option Plans
Excerpt: "With certain exceptions, both the New York Stock Exchange (NYSE) and the Nasdaq Stock Market generally require that stock option plans in which officers and directors may acquire company stock be approved by shareholders. Certain institutional investors and shareholder activist groups criticize these exceptions as being “unfriendly” to shareholders. We believe that changes to the existing rules may be appropriate, but that the proposal formulated by the NYSE is too restrictive." (Frederic W. Cook & Co., Inc.)
Option "Repricing" One Year After FIN 44
Excerpt: "The FASB severely restricted issuers' ability to 'reprice' options with its release last March of FASB Interpretation No. 44 (FIN 44).... Despite this rule, over the past year issuers whose stock price has declined and whose employees hold 'underwater' options ... have found ways of providing nearly the same economic benefit to optionees without adverse accounting consequences and, in many cases, without additional dilution." (Stephen G. Driggers, Esq. of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP )
Newly Posted or Renewed Job Openings (Post Yours!)
| Pension Specialist | for Western Growers Association (leading agricultural trade association) in CA |
| Business Development Consultant-Benefits Administration | for Towers Perrin in CA, IL, MA, MD, NJ, PA |
| 401(k) Pension Analyst | for REPTECH Corp. in CO |
| Retirement Plan Analyst | for The Paragon Consulting Group in CA |
| administrator | for Redwood Administrators, Inc. in NJ |
| Director of Employee Benefits | for Global Oil & Gas Company in OK |
| Benefit Analyst (Paralegal) | for HayGroup in PA |
| Compensation & Benefits Manager | for CyberSource Corp. The leading provider of eCommerce transaction services. in CA |
| Implementation Project Manager | for INVESCO Retirement, Inc. in GA, NC |
| Trust Employee Benefit Business Development Officer | for Old Kent Bank - Northern Michigan Region in MI |
| Trust Accountant | for Mand Marblestone & Danziger, P.C. in PA |
| Benefits Consultant/Manager | for Johnson & Johnson in NJ |
| PSC Project Leader | for Buck Consultants in NJ |
| ERISA Specialist | for Transamerica Life Companies in CA, IL |
| Regional Compliance Manager | for Transamerica Life Companies in CA |
| 401(K) Product Director | for Transamerica Life Companies in CA |
| Senior Service Consultant | for Transamerica Life Companies in CA, IL |
Newly Posted Conferences (Post Yours!)
| Fundamentals of Retirement Plans | in MA on May 3, 2001 presented by Greater Boston Chapter: Intl Society of Certified Employee Benefit Specialists |
| Leaves of Absence: State and Federal Requirements | in MA on April 10, 2001 presented by Greater Boston Chapter: Intl Society of Certified Employee Benefit Specialists |
| Fundamentals of Health & Welfare Plans | in MA on September 27, 2001 presented by Greater Boston Chapter: Intl Society of Certified Employee Benefit Specialists |
| Form 5500 Workshop • March 21- May 30 • 51 Locations | in AL, AZ, CA, CO, CT, DC, FL, GA, HI, IA, IL, IN, KS, KY, LA, MA, MD, MI, MN, MO, MS, NC, NE, NJ, NM, NY, OH, OK, OR, PA, TN, TX, UT, WA, WI on March 21, 2001 presented by SunGard Corbel |
| Form 5500 Workshop March 21- May 30 | in OR on April 5, 2001 presented by SunGard Corbel |
| Executive Retreat On Pension Reform | in MA on June 18, 2001 presented by Harvard University and World Bank Institute |
Newly Posted Press Releases
| Nicholas W. Ferrigno, Jr. and Frank J. Bitzer release The Insider's Guide to DOL Plan Audits. (Greenebaum Doll & McDonald) |
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