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February 21, 2003 - 13,051 subscribers
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In Rev. Rul. 2003-27, IRS Requires Basis Adjustments for ESOPs Holding S Corp Sponsor's Stock
Excerpt: "HOLDINGS: (1) An employee stock ownership plan (ESOP) is required to adjust its basis in S corporation stock under § 1367(a) for the ESOP's pro rata share of the corporation's items. (2) Upon the distribution of S corporation stock by an ESOP to a participant, the stock's net unrealized appreciation under § 402(e)(4) is determined using the ESOP's adjusted basis in the stock." (Internal Revenue Service)
In Rev. Proc. 2003-23, IRS OKs Direct Rollovers from S Corp ESOPs of Stock to IRAs if Repurchased
Excerpt: "If the requirements of this revenue procedure are satisfied, the Service will not treat a corporation's S election as terminated when an ESOP distributes stock of that corporation to a participant's IRA in a direct rollover." (Internal Revenue Service)
New Daily Val Recordkeeping System for Federal Employees' Thrift Savings Plan Still Not Ready
Excerpt: "The launch date for a long-awaited computer system that would give federal employees more control over their 401k-style Thrift Savings Plan accounts is still up in the air, according to TSP officials." (GovExec.com)
Local Governments in New York State Getting Sticker Shock Over Pension Funding Obligations
Excerpt: "The state pension grew dramatically throughout much of the 1990s. When the pension was flush, then Comptroller H. Carl McCall passed along the savings to local governments. Localities often paid less than 1 percent of their payroll into the pension and some years they didn't have to pay anything." (The [Albany, N.Y.] Times Union)
Steelworkers Union Objects to Bethlehem Steel Pension Takeover by PBGC
Excerpt: "The United Steelworkers of America announced Thursday that it will fight efforts by the U.S. Pension Benefit Guaranty Corp. to take over the pensions of 97,000 at bankrupt Bethlehem Steel Corp." (Northwest Indiana News)
US Airways Pilots Set to Fight Attempt to End Pension Plan
Excerpt: "Pilots are expected to argue in court today that US Airways cannot terminate a collective bargaining agreement-- the pension is included as part of the contract-- without going through the 'mandatory grievance and arbitration procedures' the contract calls for." (The Boston Globe)
Another Question is Answered in the Stop, Look & Listen: Railroad Retirement Q&A Column
Would I be eligible for any of my former husband's Railroad Retirement? We were married for almost 10 years but I have remarried now. (BenefitsLink.com)
Watson Wyatt Comments on Proposed IRS Age Discrimination/Cash Balance Regs
Excerpt: "We believe the regulations are well-intentioned and offer some long overdue and positive news for plan sponsors, rejecting the charge that cash balance plans inherently violate age discrimination through the introduction of a specific cash balance safe harbor. Essentially all defined contribution plans are similarly blessed." (Watson Wyatt's Insider)
Fed Ex Implements Cash Balance Plan; Employees Have Choice to Stay in Traditional DB Plan
Excerpt: "FedEx is taking great pains to accentuate the 'choice' aspect of its cash balance plan as well as the fact that no benefits accrued will be lost regardless of which option an employee chooses. The benefits in the traditional pension benefit plan will remain there, future pay increases will still be applied and that money will be distributed as a monthly lifetime check upon retirement, the company says. FedEx's normal retirement age is 60." (GoMemphis.com)
San Francisco Mayor Loses Bid to Become President of Country's Largest Pension Fund
Excerpt: "The California Public Employees' Retirement System governing board elected labor leader Sean Harrigan 8-4 over [San Francisco Mayor Willie Brown], a former Assembly speaker who was backed by Democratic Gov. Gray Davis.... CalPERS is increasingly using its influence to push for social change. In the past year, the fund has asked major companies that moved their headquarters offshore for tax purposes to return to the United States ..." (AP via Las Vegas Sun)
Beware: IRS Does Not Approve IRA Investments!
Excerpt: "Some investment promoters are trying a new tack this spring, touting their Individual Retirement Accounts (IRAs) as being approved by the Internal Revenue Service.... On Wednesday the Federal Trade Commission (FTC) issued a consumer alert warning the public that there's no such thing as an 'IRS-Approved' IRA." (AccountingWeb)
Commentary: LSA Proposal Shows How Presidential Jumper Cables Come Out Every Four Years
Excerpt: "The proposal that has me most excited, though, is the Lifetime Savings Account (LSA). These are investor nirvana. First, anyone with any capacity to save can take advantage of these accounts, so from a policy perspective, it seems fairer." (StarTribune.com)
Overview: IRS Extends Deadline for Adoption of Minimum Distribution Amendments by DB Plans
Excerpt: "In Revenue Procedure 2003-10, the IRS extends the deadline for plan sponsors to amend their defined benefit (DB) plans to comply with the 401(a)(9) final and temporary regulations. The new deadline is the end of the 2005 plan year." (Watson Wyatt's Insider)
Overview: Defined Contribution Plans and the Safest Available Annuity Provider Rule
Excerpt: "In Advisory Opinion 2002-14A, the [DOL] responds to a request from an insurance company for clarification of how the safest available annuity provider requirements, described in Interpretive Bulletin (IB) 95-1, apply to defined contribution plans. The DOL affirms that the general fiduciary principles set forth in IB 95-1 concerning selection of annuity providers are equally applicable to defined benefit and defined contribution plans. The DOL also answers some specific questions." (Watson Wyatt's Insider)
Links to Items on Executive Comp, Benefits in General
Second-Tier Accounting Firms Poised to Move Up
Excerpt: "In light of the changes in the accounting profession in the last year, CFO.com weighs in this month with a special report about the current state of the industry. The report looks at how these changes have affected the second-tier, or Group B, accounting firms, such as Chicago-based Grant Thornton or Seattle-based Moss Adams." (AccountingWeb)
Watson Wyatt Publishes Online Year 2003 ERISA Reporting Calendars
Excerpt: "Plan administrators of single and multiemployer pension and welfare benefit plans can visit the updated calendars for concise information on where, when and how to file annual and special reports with the DOL, IRS and PBGC. Information on how and when to disclose tax and benefit information to U.S. plan participants, beneficiaries and alternate payees is also available." (Watson Wyatt's Insider)
Plans Could Forgo Legal Claims In Some Litigation Settlements; EBSA Proposes a Class Exemption
The Department of Labor's Employee Benefits Security Administration (EBSA) has issued a proposed class exemption from ERISA's prohibited transaction restrictions for certain transactions engaged in by an employee benefit plan in connection with the settlement of litigation. Notice of the proposed exemption was published in the February 11 Federal Register. (SpencerNet)
The Enron Debacle: Lessons for Tax Policy
Excerpt: "[I]f we wish to discourage excessive concentration of retirement plan investments in employer stock--and there seem to be good reasons to do so-- we need to recognize that even if we adopt provisions that encourage more prudent diversification behavior in some types of plans, we are providing the juiciest tax benefits to employee stock ownership plans (ESOPs)-- plans that can invest solely (and must invest primarily) in employer stock." (Jane G. Gravelle, published by the Urban-Brookings Tax Policy Center)
Executive Compensation: Update from Washington (PDF)
3 pages. Excerpt: "[N]ew proposals to change the tax rules in [the deferred compensation] area continue to come from different sources, most recently from the Joint Committee on Taxation as part of its report on its investigation of Enron, and more can be expected." (Miller & Chevalier, Chartered)
Overview: FASB Issues New Disclosure Standard on Stock-Based Compensation
Excerpt: "In December 2002, the Financial Accounting Standards Board (FASB) issued FAS 148, Accounting for Stock-Based Compensation--Transition and Disclosure, which amends FAS 123, Accounting for Stock-Based Compensation. FAS 148 provides alternative methods of transition for companies that voluntarily adopt the fair-value method of accounting for stock-based employee compensation ..." (Watson Wyatt's Insider)
GE to Disregard Pension Earnings When Calculating Company Profits for Purposes of Exec Comp
Excerpt: "In a move that could have a significant impact on top-level pay at General Electric Co. (GE, news), the company has agreed to determine senior executive compensation without regard to any income generated by the pension plan, Friday's Wall Street Journal reported." (Dow Jones via Quicken Brokerage)
Working for Uncle Sam: Overview of Pay and Benefits
Excerpt: "The federal government offers a variety of forms of compensation to its employees. In many cases the total value of this compensation may substantially exceed the value of a private sector employer's offering, even if the basic government salary is lower." (Washington Post)
Commentary: Bethlehem Steel Sends Strong Message About Pension and Health Benefit Security
Excerpt: "Bethlehem's financial troubles, affecting present and future retirees, sound a cautionary note for hundreds of thousands, maybe millions of American autoworkers, pilots, and others who presume-- mistakenly-- that money set aside by their companies to cover pension and health-care benefits will be there no matter what." (Doron Levin on Bloomberg.com)
Target Corp. Decides to Expense Its Stock Options
Excerpt: "Target Corp. said Thursday that it will begin recording the value of stock options and stock-based compensation as an expense, making it the first Minnesota company to do so." (StarTribune.com)
Newly Posted or Renewed Job Openings
Account Executive
for Transamerica-The Winning Organization
in CA
Enrolled Actuary
for Mand Marblestone & Danziger, P.C.
in PA
Defined Benefit Administrator
for Senex Group in Woodland Hills
in CA
Newly Posted Conferences
(Post Yours!)
Benefits Communication and Technology Institute
in NV
April 14, 2003
International Foundation of Employee Benefit Plans
Certificate Series - Retirement Plan Basics
in WI
April 24, 2003
International Foundation of Employee Benefit Plans
Certificate Series - Investment Basics
in WI
April 28, 2003
International Foundation of Employee Benefit Plans
Certificate Series - Investment Basics
in WI
April 28, 2003
International Foundation of Employee Benefit Plans
Certificate Series - 401(k) Plans
in WI
April 30, 2003
International Foundation of Employee Benefit Plans
Davis-Bacon Act and DOL Training Program
in IL
April 10, 2003
Associated Prevailing Wage Contractors, Inc. in cooperation with Associated General Contractors of America and Foundation Sortware, Inc.
Health Plans, HIPAA, and COBRA Update
in ALL STATES
April 9, 2003
ALI-ABA (American Law Institute-American Bar Association)
Newly Posted Press Releases
(Post Yours!)
Intara's New Self Service Benefits Enrollment System Exceeds Launch Expectations
(Intara)
eePulse Helps InterFirst Improve Customer Satisfaction
(eePulse, Inc.)
CNA Trust Hires Jim Huennekens as VP, Regional Sales Director for Midwest
(CNA Trust)
Handy Links:
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- Search BenefitsLink
- Using the Web for Employee Benefits Research
- Employee Benefits Library
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