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Retirement Plans
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November 26, 2002 - 12,959 subscribers
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(Help BenefitsLink to provide this newsletter at no charge to you -- our sponsors pay your way. Remember to visit them periodically; we try to make sure their products and services will be of interest to you. Thanks! --Editor)
U.S. Employers Predict Problems Funding Pension Plans Next Year
Excerpt: "Many large companies have enough money that contributing more to the pension plan will not be a hardship ... But in several troubled industries -- notably airlines and steel -- the pension obligations may siphon off money that is needed for day-to-day operations." (The [Bergen County, N.J.] Record)

Analysis: IRS Extends GUST Period for Pre-Approved Plans, Other Deadlines
Excerpt: "The [revenue procedure extends] the GUST remedial amendment period for pre-approved plans. The revenue procedure also extends the time for amending plans to ... include qualified transportation fringe benefits in their compensation definitions. Finally, the revenue procedure extends the deadlines for amending [certain] plans to reflect use of the new GAR mortality table and for purposes of incorporating 'deemed section 125 compensation' into a plan's compensation definition ..." (Deloitte & Touche Human Capital Advisory Services)

Pension/OPEB Accounting: Key Year-End Issues for CFOs (PDF)
6 pages; Nov. 22, 2002 issue. Excerpt: "[S]tock market declines and lower interest rates will result in higher expense under FAS 87, as well as year-end minimum liabilities and potentially significant charges to stockholders' equity, possibly causing debt covenant violations. Rising health care costs and lower interest rates will result in higher expense under FAS 106. Layoffs and downsizings will create complex accounting issues under FAS 88 and FAS 112." (PricewaterhouseCoopers, reprinted online by Financial Executives Institute)

IRS National Office: Don't Discount Estate Tax Value of IRAs Due to Income Taxes or Marketability (PDF)
6 pages; released 11/22/02. Excerpt: "Appraisal Firm hired by Decedent's executor appraised the IRAs at $b. This value reflects an aggregate c% discount for the potential income tax payable by the beneficiaries on IRA distributions, delays that might occur between the IRA custodian's receipt of a request for distribution and actual payment of distributions, and prohibitions on the transfer or the assignment of the accounts prior to distribution to the beneficiary." (Internal Revenue Service)

IRS Rules Withholdings from Partners' Periodic Advances Are Elective Contributions (PDF)
3 pages; Private Letter Ruling 200247052 (8/28/02). Excerpt: "Partnership A makes periodic advances of earnings to each partner throughout the plan year. These advances are designed to be equivalent to periodic payments of compensation to each partner as if such partner were a common-law employee. Partnership A intends to withhold an amount from each partner's periodic advances, where such partner has made a 'deferral election,' and contribute such amount to Plan X." (Internal Revenue Service)

Welcome to new BenefitsLink advertiser AQSoftware, Inc.
Excerpt: "AQSoftware, Inc. has been providing superior contribution calculation software to retirement industry professionals since 1990, when Congress complicated the calculation of earned income for self-employed plans. Their calculation modules include the ability to calculate for money purchase, profit-sharing, age-weighted, integrated, safe-harbor 401(k), SIMPLE IRAs and SIMPLE 401(k) plans of either corporate or self-employed (Keogh) sponsors."

Links to Items on Executive Comp, Benefits in General

2001 Important Developments Report by American Bar Association's Tax Section (PDF)
32 pages. Well-written summaries of principal employee benefits developments during 2001, in the areas of legislation, regulations, cases and rulings. (American Bar Association, Section of Taxation)

IRS Reminds Taxpayers About Separate W-2 Reporting for Nonstatutory Stock Option Comp in 2003
Announcement 2002-108. Excerpt: "[C]onsistent with Announcement 2001-92, the reporting of compensation resulting from employer-provided nonstatutory stock options in box 12 of the Form W-2, using Code V, is mandatory for Forms W-2 issued for the year 2003 and subsequent years in accordance with the Form W-2 and its instructions." (Internal Revenue Service)

War Over Stock Options Heats Up
Excerpt: "Faced with a growing threat to the way it compensates its workers, the high-tech industry is making a last-minute push to better explain how its companies grant employee stock options. But some observers say the high-tech lobby appears poised to lose this fight ..." (The Boston Globe)

Opinion: In Defense of Stock Options
Excerpt: "Stock options, in fact, founded Silicon Valley. It was frustration over Fairchild Camera's unwillingness to share its wealth in the form of stock that led the employees of subsidiary Fairchild Semiconductor to depart en masse and start Intel, AMD, National Semiconductor and all of the other pioneering companies of Silicon Valley." (Michael S. Malone on ABCNews.com)

Newly Posted or Renewed Job Openings
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Benefit Directors: NYC Opportunities
for New York, New York
in NY

VP/Employee Benefits Business Development Officer
for Growth-oriented holding company in Northern Missouri
in MO

Retirement Consultant
for Palmer & Cay, Inc.
in MO

for Invesmart
in WA

Newly Posted Conferences
(Post Yours!)

Six Decisions To Take Control of Future Health Care
November 27, 2002
Hewitt Associates

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Editor and Publisher: David Rhett Baker, J.D.