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February 4, 2003 - 12,861 subscribers
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General Explanation of Retirement Savings Provisions in the Administration's 2004 Proposed Budget
Excerpt prepared by BenefitsLink; much shorter to view/download than the complete Treasury Department blue book. (U.S. Treasury Department)
Audio Excerpt: Administration Proposes Changes to Encourage Savings
Excerpt: "The White House proposes major changes to encourage individuals to save more money toward retirement. The plan would replace Individual Retirement Accounts with personal-savings accounts featuring higher allowable contributions. Critics say the proposals would increase federal deficits. NPR's Kathleen Schalch reports.' (Feb. 3, 2003) (National Public Radio)
Commentary: Bush Retirement Savings Proposals Might Shrink Federal Revenue
Excerpt: "These accounts could be funded with after-tax dollars, meaning there is no deduction for putting money into them. But there would be no taxes on withdrawals. A lifetime of compounding could drive these accounts into the millions of dollars, and for the wealthy, who might never need to tap them, the repeal of the estate tax would allow them to pass these sums along to later generations to draw out tax-free." (Albert Crenshaw in the Washington Post)
Bush Plan: the New Private Retirement System
Excerpt: "[T]he proposal must still be approved by Congress and many said it's too early to tell if the package will sail through the approval process. 'Who knows with this White House. It's proven to be very, very effective on Capitol Hill,' said Ed Ferrigno, vice president of Profit Sharing 401k Council of America.... [S]mall business owners could find it's no longer worth the expense or trouble of establishing retirement savings accounts for themselves and their employees ..." (Money.CNN.com)
Bush Savings Proposal Would Let People Squirrel Away Up To $29,000 Every Year
Excerpt: "'You go from a current cap of $3,000 on IRAs to $15,000 for two of the new accounts,' said Martin Nissenbaum, National Director of Personal Income Tax Planning for Ernst & Young. 'Plus, you'd be able to put up to $12,000 into the third new (retirement) account.' ... Financial firms were quick to applaud the proposals." (Investors.com)
American Benefits Council Provides Chart Summarizing Bush Budget's Retirement Savings Proposals (PDF)
1 page; prepared by Davis & Harman LLP. (American Benefits Council)
American Benefits Council Chart Shows Effect of Bush Proposals on Existing Plan Designs (PDF)
1 page; prepared by Davis & Harman LLP. (American Benefits Council)
Financial Executives Support Bush Budget's Retirement Plan Proposals
Excerpt: "FEI believes that these ... Presidential initiatives will go a long way to increasing savings for the American public, reducing burdens on employers who sponsor qualified retirement plans and encourage new employers to sponsor such plans." (Financial Executives International)
What's In the Bush Tax Proposals for You
Excerpt: "The initiative is widely seen as help for the retirement-savings industry, which complained that Bush's $364 billion plan to kill taxes on shareholder dividends would hurt tax-deferred IRA and 401(k)-style plans whose owners owe ordinary income tax when money is withdrawn.... Critics called the retirement-plan changes a gimmick that would let wealthy couples shelter income while exploding federal deficits once 76 million baby boomers start cashing in retirement savings." (Scripps Howard News Service via the [Wichita Falls, Tex.] Times Record News)
Commentary: Get the Gold Watch, Forget 401(k)
Excerpt: "While retirement savings can't exceed an individual's wages, anyone can have a Lifetime Savings Account, no matter what their age or income. 'It's a financial planner's dream come true,' says Sue Stevens, a Deerborn, Ill., financial planner.... [I]n the weeks ahead, Americans can expect a vigorous debate on whether tax breaks on $15,000 in savings will solve a savings crisis in the country or run up a tremendous deficit by cutting taxes for the wealthy." ([St. Paul, Minn.] Pioneer Press)
S Corp ESOP Abuse Crackdown Continues
Excerpt: "The Internal Revenue Service (IRS) is catching up quickly to ESOPs that do not benefit their employees as advertised. The Treasury Department and IRS released Revenue Ruling 2003-6 (RR 2003-6) on December 17, 2002 to make sure that the new ESOP rules from the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) are enforced as intended immediately." (Beyster Institute)
Links to Items on Executive Comp, Benefits in General
Treasury Department Provides General Explanation of Administration's 2004 Budget Proposal (PDF)
156 pages. Excerpt: "As announced in last year's Budget, the Administration is pursuing a tax simplification project which is focusing on immediately achievable reforms of the current tax system ... [including] proposals relating to: ... consolidating IRAs into Lifetime Savings Accounts and Retirement Savings Accounts (LSAs/RSAs), consolidating defined contribution retirement plans into Employer Retirement Savings Accounts (ERSAs) ..." (U.S. Treasury Department)
Benefits Briefs: January 2003 (PDF)
6 pages. [Who'd-uh thunk that articles about employee benefits compliance could be this entertaining? -- Editor] (Nixon Peabody LLP)
Commentary: Tom Siebel Gives Up Options on 26 Million Shares
Excerpt: "However complex his motives Tom Siebel, founder and CEO of software maker Siebel Systems Inc., performed a heroic deed in giving up options on 26 million shares. What's more, Siebel wasn't granted any options during 2002." (Graef Crystal on Bloomberg.com)
Overview: New SEC Rules Restrict Director and Officer Trading During Retirement Plan Blackouts
Excerpt: "Under Regulation BTR, a blackout period occurs when at least 50% of the participants or beneficiaries located in the United States (and its territories and possessions) under all individual account plans of a company in which company equity securities may be held are temporarily precluded for more than three consecutive business days ... from being able to purchase, sell or otherwise acquire or transfer any equity security of the company held in such ... plan." (Faegre & Benson)
Financial Executives Respond to FASB Request for Comments on Stock Option Accounting Rules (PDF)
Excerpt: "We understand that accounting for stock options creates unique problems under the deferred tax model because the option expense recognized does not true up to the value at exercise date. While we acknowledge that exercise date accounting for stock options would solve those problems, the Board is familiar with the issues that arise under that model, which are even more difficult to solve than those addressed in this letter." (Financial Executives International)
Nasdaq President: Companies Shouldn't Be Required to Expense Stock Options
Excerpt: "Proponents of expensing stock options, who include investor Warren Buffett and Federal Reserve Chairman Alan Greenspan, say that options are compensation and therefore should be viewed the same as salaries and other employee related costs. Opponents argue that options are tough to value and expensing them could confuse investors." (AP via New York Times; one-time registration required)
Newly Posted or Renewed Job Openings
Junior Accountant
for The Senex Group
in CA
Benefits Coordinator
for Twentieth Century Fox
in CA
Senior Benefit Systems Analyst
for Towers Perrin
in NJ, PA
401k Client Service Representative
for ADP
in NJ
Newly Posted Press Releases
(Post Yours!)
Harvard Pilgrim Health Care Launches SmartSpend
(Evolution Benefits)
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