April 30, 2002 - 11,626 subscribers Today's sponsor: PPC (Click on company name or banner to learn more.) Get Your Compensation & Benefits Answers From PPC! PPC's Compensation and Benefits Consultant is your one-stop resource for all your compensation and benefits needs! Act now and as a BenefitsLink subscriber you'll receive special introductory pricing. PPC is the leading provider of practical, step-by-step guidance written in plain English for CPAs, attorneys, and other professional advisors. Find out what our customers have known for over 23 years-- PPC is YOUR source for quick, no nonsense answers. (Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay our way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor) EGTRRA Conformity Legislation Awaits California Governor's Signature Excerpt: "Unless otherwise specified, the two identical bills would conform California law to the Internal Revenue Code as of January 1, 2001, for taxable and income years beginning on or after January 1, 2002, thereby incorporating numerous federal income tax law changes enacted in 2001 and prior years." (taxCCHGROUP.com) Overview: IRS Provides PEOs With Relief From Disqualification of 401(k) and Other DC Plans Excerpt: "Though compliance with this Revenue Procedure is 'technically' not required, as a practical matter compliance is mandatory. If a PEO doesn't comply ... it will not be able to rely on a determination letter that its plan is qualified. PEOs currently sponsoring 'single employer' defined contribution plans covering worksite employees will want to seek legal advice regarding which compliance approach is most desirable (plan termination, or conversion to a 'multiple employer' plan)." (EBIA Weekly) Another Question is Answered in the Who's the Employer Q&A Column Have you heard back from the IRS regarding Rev. Proc. 2002-21? Can we expect any additional guidance? (BenefitsLink.com) Massachusetts Attorney General Asks Court to Require Buyer to Maintain Polaroid's Pension Plan Excerpt: "Earlier this month, Polaroid announced an agreement to sell most of its assets to One Equity Partners, the venture capital arm of Bank One Corp., for $265 million. Under the agreement, however, the company would not assume liabilities for Polaroid's pension fund." (AP via Lycos) Overview: IRS Issues Final Required Minimum Distribution Rules (PDF) Excerpt: "The Final Regulations clarify that an employee's individual account can be divided into separate accounts that will satisfy the minimum distributions rules separately at any time, either before or after the employee's required beginning date. [They also] provide that separate accounts are recognized for purposes of determining required minimum distributions only after the later of (a) the year of the employee's death and (b) the year the separate accounts are established." (LeBoeuf, Lamb, Greene & MacRae, L.L.P.) Using Promissory Notes to Repurchase ESOP Stock Becomes More Difficult Many ESOP-owned companies pay for the repurchase of company stock from departing employees by issuing promissory notes in payment for the shares of stock. These companies have often purchased surety bonds to serve as collateral for the promissory notes. Recently, the principal issuer of surety bonds in this market has indicated it will no longer issue the surety bonds, leaving many ESOP companies in a precarious situation. (National Center for Employee Ownership) Commentary: Social Security Reform to Become Theme of Fall Congressional Races Excerpt: "Democratic leaders ... say they hope to turn the issue into a powerful political weapon against Republican candidates to win back the House and strengthen their one-vote hold on the Senate. The Republican Party's campaign officials say they expect to be hit with a major Democratic offensive, replete with mass mailings, telemarketing calls and television and radio ads aimed at elderly voters who could well decide the election's outcome." (Washington Times) ERIC Provides Comments on 'Catch-Up' Rules (PDF) Excerpt: "I have only three comments [about the IRS proposed regulations] this morning. Two relate to the so-called universal availability requirement. The third relates to the proposed regulations' definition of 'employer-provided limit.'" (ERISA Industry Committee) DOL Updates List of EFAST-Approved Form 5500 Software Vendors Excerpt: "The following vendors have successfully completed software certification for the EFAST 2001 Forms Print control (i.e., to generate machine print forms with the 1D and/or 2D Bar Code) and/or certification for transmitting Form 5500 Series Reports via magnetic media and modem-to-modem." (U.S. Department of Labor, Pension and Welfare Benefits Administration) Ex-Andersen Partners Sue To Block Mergers Excerpt: "The former partners are worried that the plans of Andersen partners in the United States and elsewhere to defect to rival firms will decimate the pool of money available to pay pension and other benefits to those who have retired from Andersen." (Chicago Tribune via The [San Jose] Mercury News) Labor Department Announces Plan to Correct Non-Standard Form 5500 Returns/Reports Excerpt: "According to a DOL representative we talked to, the most common mistakes were: (1) using a pre-1999 Form 5500 and simply crossing off the old date; (2) copying the information copy of the Form 5500 from the EFAST website even though it is printed with the legend 'DO NOT USE FOR FILING'; and (3) using non-approved software to generate the form." (EBIA Weekly) Retired Andersen Partners Sue, Cite Concerns Over Firm's Ability to Continue Payment of Benefits Excerpt: "As sellers, [the actively employed] partners must set divestiture terms fairly and fund pensions properly to meet their fiduciary obligations to the retired partners and spouses of deceased partners who depend on the payment and security of retirement plan benefits under ERISA laws and contracts." (Business Wire via Yahoo! Finance) New FASB Chief to Jump Into the Fray Excerpt: "New FASB chief Bob Herz will walk right into a hornet's nest of controversy when he takes over for outgoing chairman Edmund Jenkins on July 1 ... [but whether] companies should treat all stock options as an expense is one area where he's happy to let the IASB take the lead. The IASB plans to issue an exposure draft on the subject by the end of this year, and is likely to issue a formal standard next year." (CFO.com) Newly Posted or Renewed Job Openings -
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