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May 20, 2003 - 13,192 subscribers
Today's sponsor: Reish Luftman McDaniel & Reicher
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Suppose you had questions about... 401(k) investments? Fiduciary issues? Get the answers in the Participant Directed Investment Answer Book by Fred Reish and Bruce Ashton of Reish Luftman McDaniel & Reicher. You'll find an in-depth look at issues unique to participant directed plans, including: 404(c) compliance, 401(k) fiduciary responsibility for plan sponsors, investment issues arising out of Enron, revenue sharing and fiduciary issues for investment providers, brokers, TPAs and others. To purchase, click above or call (800) 638-8437.
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Full Text of Proposed IRS Regs on Deemed (or 'Sidecar') IRAs in Qualified Retirement Plans
Excerpt: "[A] qualified employer plan and a deemed IRA are to be treated as separate entities under the Code and that each entity is subject to the rules generally applicable to that entity ... [T]he availability of a deemed IRA is not a benefit, right or feature of the qualified employer plan under Sec. 1.401(a)(4)-4. Thus, the availability of a deemed IRA is not subject to [the rule requiring] that benefits, rights, and features be available in a plan in a nondiscriminatory manner." (Internal Revenue Service)
Full Text of H.R. 1000, the Pension Security Act of 2003
On the target page, click on the link for 'Pension Security Act of 2003 (Engrossed as Agreed to or Passed by House) [H.R.1000.EH]." (Library of Congress)
Full Text of Joint Committee's Explanation of House-Passed Pension Security Act (PDF)
57 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, provides a technical explanation of H.R. 1000, as passed by the House of Representatives [on May 14, 2003]." (U.S. Congress, Joint Committee on Taxation)
Joint Committee's Estimate of Revenue Effects of House-Passed Pension Security Act (PDF)
2 pages. (U.S. Congress, Joint Committee on Taxation)
Some Employers Offer Brokerage Account Option Under Self-Directed Plans
Excerpt: "By offering their employees freewheeling brokerage accounts within traditional 401(k) retirement plans, some firms crack open new options for tax-deferred investing.... The record so far points to responsible behavior among the self-directed." (The Christian Science Monitor)
Despite Sinking Investment Returns, Retirees Doing Better Than Expected
Excerpt: "[I]ndividual retirement savers are building an adequate cushion, said Jack VanDerhei, a Temple University economics professor and a fellow at the Washington-based Employee Benefits Research Institute. 'Employees by and large don't have a clue as to whether they're prepared for retirement,' he said. 'They do have a tendency to be on track anyway, whether it is through dumb luck or paternalistic employers.' What critics miss is that the 401(k) revolution has another 30 years to run ..." (Knight Ridder Newspapers via NewsAlert.com)
Anger Over Pension Reforms Grips France
Excerpt: "A fresh wave of anger over government pension reforms swept across France as more than 300,000 protesters marched and striking teachers prevented students from taking part of their high-school graduation exams." (Newsday.com)
Another Question is Answered in the Davis-Bacon Act Q&A Column
If a company is an S Corp with a Davis-Bacon plan, do the owners of the company have to be excluded from the plan? If not, is there any downside to allowing them to participate in the plan? (BenefitsLink.com)
IRA Payments Received Under Election Against Will Qualified for Deduction for Estate Tax on IRD
PLR 200316008. Excerpt: "An IRS letter ruling untangles the income and estate tax consequences in the case of a surviving spouse who elected against the deceased spouse's will and received IRA payments in partial satisfaction of the election.... [T]he surviving spouse, who apparently died shortly after her husband died, and the beneficiaries of her estate, are allowed an income tax deduction under Code Sec. 691(c) for the estate tax attributable to the IRAs in each estate." (RIA Tax News)
RMDs and IRA Separate Accounts: More Lessons
May 19, 2003. Excerpt: "The IRS recently issued three unfavorable letter rulings concerning separate accounts established to make after-death required minimum distributions (RMDs) of amounts held in a decedent's IRA. In each situation, a trust was designated as beneficiary and separate shares were going to be created following the IRA owner's death." (Tax Facts fx)
Vast Majority of Participants in Montana State Pension Plan Forego New DC Option
Excerpt: "A retirement plan that allows public employees to choose how their money is invested has attracted only a fraction of the eligible employees since being unveiled nearly a year ago. Since the 'defined contribution' plan went into effect, only 600 of the 30,000 eligible public employees have signed up, officials say." (AP via the [Missoula, MT] Missoulian)
California Pension Fund Wields Clout in Corporate America
Excerpt: "When the AIDS Healthcare Foundation wanted drug maker GlaxoSmithKline PLC to lower the $438 a person it charges in developing countries for a year's worth of AZT, it turned to an unlikely ally: America's largest pension fund." (The Boston Globe via SFGate.com)
Young Workers Aren't Saving
Excerpt: "According to a Fidelity Investments report published in 2000, less than half of workers in their 20s participated in their company's retirement savings plan. For those in their 30s, the participation rate increased to 64 percent." (Knight Ridder Newspapers via the Beacon Journal)
Links to Items on Executive Comp, Benefits in General
Former United Way CEO Loses Suit for Enhanced Supplemental Executive Retirement Benefits (PDF)
Aramony v. United Way of America, No. 00-7146 (2d Cir. 5/16/03). FindLaw's excerpt: 'In a suit by former CEO claiming a right to certain disputed benefits under the employer's replacement benefit plan, the contract at issue did not provide the disputed replacement benefits lost due to the 1986 enactment of Section 401(a)(17) of the Internal Revenue Code." (U.S. Court of Appeals for the Second Circuit, via FindLaw.com)
Opinion: Executive Compensation Reform is Elusive Target
Excerpt: "Bear markets have eroded savings and pension plans, prompting employees, shareholders, union leaders and politicians to join the chorus of those calling for CEOs to feel the pain, as well. But time has shown that executive compensation has a virus-like ability to adapt and overpower even the most powerful regulatory vaccines." (The [Minneapolis] Star Tribune)
Senate-Passed Tax Bill Includes Executive Compensation Provisions
Excerpt: "The Senate on May 15 narrowly approved a comprehensive tax cut bill that apparently includes significant proposed changes to existing rules relating to executive deferred compensation.... House and Senate leaders now face the difficult task of reconciling S. 1054 with a related tax cut bill (H.R. 2) the House approved on May 9 [which] does not have the executive compensation reform provisions included in S. 1054 ..." (Deloitte & Touche Human Capital Advisory Services)
Opinion: New York Municipal Employees' Perks-- How Sweet It Is!
Excerpt: "Total compensation for municipal employees increased almost twice as much as that of private-sector workers between 2000 and 2003. And fringe benefits for municipal employees increased a fantastic 48.2 percent over the same period, compared to 15.6 percent for private-sector workers." (The New York Post)
Tapes of ABA Tax Section May 2003 Meeting Available for Purchase
Taped programs (for purchase directly from the ABA, not from BenefitsLink) include Friday's Employee Benefits meeting, Saturday's Employee Benefits meeting, and a meeting entitled 'Employee Benefits and Employment Tax Treatment of Workers Engaged Through PEOs, Staffing Firms and Employee Leasing Firms." (American Bar Association, Section on Taxation)
Silicon Valley Battles To Turn Tide On Stock Option Expensing
Excerpt: "Silicon Valley companies are making a defiant last stand against an accounting reform that could cost them billions in paper profits by requiring them to treat their employees' coveted stock options as expenses." (AP via SFGate.com)
Investors Press Companies on Stock Options Expensing
Excerpt: "A shareowner resolution on options expensing is garnering support, and a California pension fund has released a study on how to best expense stock options." (SocialFunds.com)
Newly Posted or Renewed Job Openings
Senior Pension Consultant
for The 412i Company
in WA
Regional Account Manager
for Market Leading Provider of Life Insurance and Retirement Plans
in CA
Benefits Administrator- Vendor Manager Practice
for Towers Perrin
in NY
Extraordinary & Fun Defined Benefit Consulting Opportunities in So. Calif.
for Louis Kravitz & Associates, Inc.
in CA
Financial Analyst, Benefits
for Wyeth
in NJ
Plan Compliance Administrator
for Capital Investment Advisory
in FL
ERISA Technical Professional - Part Time
for Milliman USA
in DC, MD, VA
Retirement Plan Consultant
for CitiStreet - A State Street and Citigroup company
in HI
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