| The BenefitsLink Newsletter - Retirement Plans Edition |  |
July 20, 2001 - 13,354 subscribers
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Full Text of ACLI Testimony Supporting Boehner Retirement Security Advice Act
Excerpt: "ERISA's prohibited transaction rules-- as interpreted and administered by the Department of Labor ('DOL')-- have discouraged the delivery of individualized investment advice services to plan participants.... [T]he financial services firms that provide investment options and administrative services to employer plans are experienced and willing to provide advice services, but they are effectively barred from providing such services under ERISA's prohibited transaction rules." (American Council of Life Insurers)
Employee Ownership Update for July 20, 2001
NCEO executive director Corey Rosen reports on upcoming sample amendments to conform to the new tax law; a proposed bill to eliminate AMT on incentive stock options; the controversy over the IRS's position on withholding on ESPPs and ISOs; a possible indictment of a Microsoft executive in Japan for stock options tax evasion; and a Massachusetts case regarding a terminated executive who sued when he had to sell back his unvested pre-IPO restricted stock at the price he paid for it. (National Center for Employee Ownership (NCEO))
Analysis: Back Wages and Payment of FICA and FUTA Taxes
Regarding the United States v. Cleveland Indians Baseball Co. case decided earlier this year by the Supreme Court. Excerpt: "Employers should withhold and pay taxes on back wages using the applicable rates and wage bases for the year the wages are paid." (Journal of Accountancy, from the American Institute of Certified Public Accountants)
Ex-Congressman Fights the Hand That Overfeeds Him
Excerpt: "[T]he man of the house, former Representative Hastings Keith, sits with his back to this serene scene as he works on his one cause: saving America from overly rich COLA's. The object of Mr. Keith's ire is not sugary soft drinks, but cost-of-living adjustments in federal pensions and Social Security that he says cover inflation and then some ..." (New York Times; free registration required)
Analysis: IRS Releases Draft Revisions of Forms 5300, 5307, 5310, 6406 and Schedule Q
Excerpt: "As stated in Announcement 2001-77, the following are the principal changes to Forms 5300, 5307, 5310 and Schedule Q: ..." (EBIA Weekly)
PBGC Issues August 2001 Interest Rates For Valuing Terminating Pension Plans
For single-employer pension plans terminating in August 2001, and for multiemployer plans undergoing a mass withdrawal, the interest rate established by the Pension Benefit Guaranty Corporation for calculating immediate annuities is 6.40%. (Spencernet)
ABA Comment Letter: Application of Gramm-Leach-Bliley to Attorneys
Excerpt: "Relevant examples of covered financial activities include financial, investment, and economic advisory services, real estate settlement services, and tax planning and return preparation services. Legal services are not included in the list of covered activities.... For [the reasons set forth in this letter] we feel that lawyers and law firms engaged in the practice of law should be excluded from the set of regulated entities under Title V of this Act." (American Bar Association)
Mutual Fund Association Publishes Comments on Proposals for More Frequent Performance Disclosures (PDF)
Excerpt: "This issue of Perspective examines the potential effects of [monthly or quarterly] portfolio disclosure on the performance of mutual funds. This study concludes that, with more frequent portfolio disclosure, the total return shareholders receive from mutual fund investments would likely be lower than that under the current disclosure standard." (Investment Company Institute)
SEC Jurisdiction Over Investment Advice: What Every CPA Should Know
Excerpt: "CPAs can provide limited investment advice to clients without registering. The key question is whether a CPA's investment advice brings him or her under the definition of 'investment adviser' in the Investment Advisers Act of 1940. Even if the answer is yes, a CPA may still be excepted under the professional's safe harbor." (Journal of Accountancy, from the American Institute of Certified Public Accountants)
Panel Argues for Changing Social Security
Excerpt: "A commission appointed by the Bush administration set out a rationale [on Thursday July 19] for overhauling Social Security, describing the current system as plagued by financial problems and a crisis of confidence.... [T]he commission's staff and its co-chairmen said demographic and economic pressures left no choice but to reshape Social Security to allow workers to invest in stocks and bonds -- the sooner the better." (New York Times; free registration required)
2000 CFO Pay: Whopping Option Gains Bulked Up Compensation
Excerpt: "'These guys did well because they exercised options' at lucrative moments in 2000, rather than receiving huge incentive-based grants and raises last year, [Peter Oppermann of William M. Mercer] tells CFO.com." (CFO.com)
Analysis: the Impact of the New Tax Law on Employee Benefit Plans
Excerpt: "This article describes the significant changes affecting employee benefit plans. Note, however, that we do not cover some of the changes that affect certain types of plans maintained by only a few employers, such as ESOPs, SIMPLEs or 457 plans. It also does not cover the changes affecting IRAs." (Faegre & Benson LLP)
Dealing With Underwater Stock Options, Part 2 of 2
Excerpt: "Another alternative to eliminate underwater stock options is to give employees a cash settlement in exchange for the options, effectively canceling the underwater stock options.... It is also possible to provide a cash bonus to employees without canceling their underwater stock options.... [S]ometimes the simplest solution is to grant new stock options without making any adjustment to the underwater stock options." (Barbara Baksa of E*TRADE, published by the Foundation for Enterprise Development)
Newly Posted or Renewed Job Openings (Post Yours!)
| Health and Welfare Associate Consultant | for Arlen Group in CA |
| Employee Benefits Tax Manager | for PricewaterhouseCoopers in MA, PA |
| Senior Compliance Specialist | for Putnam Investments in MA |
| 401(k) Client Service Manager - Full or Part Time | for Independent 401(k) Advisory Firm in Harrisonburg, Virginia in VA |
Newly Posted Press Releases
| ExpertPlan Develops Flexible TPA Online Product (ExpertPlan) |
| U.S. Bank Selects ExpertPlan to Provide Private Label Web 401(k) Product (ExpertPlan) |
| Bankers Systems to Transition out of Qualified Plan Recordkeeping (Bankers Systems, Inc.) |
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Copyright 2001 BenefitsLink.com, Inc., but you may freely distribute this email newsletter in whole. This newsletter is edited by David Rhett Baker, J.D.
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