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July 21, 2003 - 13,277 subscribers
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Joint Committee on Taxation 'Blue Book' on Portman-Cardin Pension Bill (PDF)
84 pages. Excerpt: "The House Committee on Ways and Means has scheduled a markup of H.R. 1776, the 'Pension Preservation and Savings Expansion Act of 2003' for July 18, 2003. This document, prepared by the staff of the Joint Committee on Taxation, provides a description of the Chairman's amendment in the nature of a substitute ..." (U.S. Congress, Joint Committee on Taxation)
House Ways and Means Committee Approves H.R. 1776 (Portman-Cardin Pension Bill)
Excerpt: "The legislation ... was approved by Republicans while Ways and Means Committee Democrats were huddled in an adjacent room. It could be considered by the full House next week.... The bill ignores a Treasury Department proposal that would have used high-quality corporate bonds to measure pension liabilities for two years, followed by a formula that takes into account the demographics of a company's work force." (Washington Post)
Reuters Coverage: House Committee OKs Pension Fix Amid Acrimony
Excerpt: "Companies with underfunded pension plans would get relief for three years under legislation backed by the U.S. House of Representatives Ways and Means Committee, but the minority Democrats complained that House rules had been violated." (Reuters via Washington Post)
House Pension Plan Faces Long Battle In Senate
Excerpt: "The Senate Finance Committee is working on legislation to better protect workers in the wake of the Enron scandal. Committee aides said they were studying the Portman-Cardin legislation. key element of the bill is replacement of the 30-year Treasury bond as the basis for calculating defined benefit plan obligations. (AP via Ocala [Fla.] Star Banner)
Two-Page Summary of Chairman's Mark of Portman-Cardin Pension Bill (PDF)
Excerpt: "The Chairman's amendment would help workers increase their retirement savings by accelerating the increases in 401(k) and IRA savings limits enacted in the 2001 law (to $15,000 and $5,000, respectively).... The new [pension interest rate] benchmark would be based on a blend of long-term, conservative corporate bond rates. A permanent replacement will be considered in the context of a comprehensive reform of the funding rules and actuarial assumptions to ensure sounder pension funding." (U.S. House of Representatives Committee on Ways and Means, Chairman Bill Thomas)
House Democrats Storm Out of Ways and Means Committee Meeting About Portman-Cardin Bill
Excerpt: "Committee Democrats complained that the Republican majority had not given them enough time to review a substitute bill that they had received shortly before midnight Thursday. Most of the Democrats then moved to a nearby library to plot strategy after they demanded that Republicans read the legislation line by line. Infuriated, Ways and Means Committee Chairman Bill Thomas (R-Calif.) instructed the Capitol Police to remove the Democrats from the ornate library." (Washington Post)
Treasury Department: Portman-Cardin Bill 'Begins the Process'
Excerpt: "Today's action on the Portman-Cardin pension bill by the House Committee on Ways and Means begins the process intended to strengthen the retirement security of working and retired Americans with traditional pension plans. We will continue to work with Congress to achieve the President's goal of accurate pension funding rules, and to ensure that pension promises made are pension promises kept." (U.S. Treasury Department)
Bottom-Up QNECs: How a 401(k) Loophole for the Rich Can Mean a Windfall for the Poor
Excerpt: "In the name of closing a loophole in the anti-discrimination rules covering 401(k) plans, the Bush administration last week issued what seems to be a nationwide invitation to businesses to take advantage of it." (Ander Crenshaw in the Washington Post)
Proposed 401(k) Regulations Restrict Bottom-Up QNECs (PDF)
2 pages. Excerpt: "The new proposed 401(k) rules would not apply until at least 12 months following the publication of final regulations.... In addition to retaining the existing QNEC rules, the IRS proposes that the maximum targeted QNEC that any NHCE could receive would be double the 'representative contribution rate,' as described below." (Milliman USA)
Joint Committee on Taxation's Estimate of Revenue Cost of Portman-Cardin Pension Bill (PDF)
3 pages. (U.S. Congress, Joint Committee on Taxation)
Interview with President of BISYS Retirement Services Group
Excerpt: "BISYS Retirement Services is part of the Investment Services group and they are one of the largest independent retirement plans recordkeepers and the leading full service outsourcer.... BISYS was not viewed favorably a few years back, but service has improved considerably and most would agree that BISYS has come a long way in recent years." (401kDueDiligence.com)
Opinion: Will Congress Let Accounting Fiction Obscure Pension Reality?
Excerpt: "The Bush administration is seeking to shed some light on this area and to get away from some of the worst accounting gimmicks that have arisen in past years. Unfortunately, the Bush plan will take years to phase in, meaning fictions will continue longer than they should." (Bloomberg via New York Times; one-time registration required)
Overview: Recent IRS Rulings on ESOPs (PDF)
12 pages. Excerpt: "Rollover of S Corporation Stock to IRA Will Not Terminate S Election ... ESOP Must Adjust Basis of S Corporation Stock for Pro Rata Share of Income ... Using S Corporation Earnings to Repay an ESOP Loan ... ESOP Loan Refinancing Decisions Implicate Fiduciary Duties ... Repayment of ESOP Loan to Acquiring Employer Does Not Breach Fiduciary Duties to Plan Participants ... Failure to Divest Employer Stock Does Not Breach Fiduciary Duties ... [and more.]" (Gardner Carton & Douglas LLC)
Links to Items on Executive Comp, Benefits in General
Full Text of Summer 2003 Special Edition of IRS' Employee Plans News (PDF)
2 pages. Excerpt: "It's the middle of summer and the weather isn't the only thing heating up. In the past few days, the IRS has issued proposed and final regulations on a number of topics. The new guidance provides rules on everything from 401(k) plans to retroactive annuity starting dates to welfare benefit funds. Below are capsule summaries of each of the new pieces of guidance. We follow this summary list with an article on the new 401(k) regs." (Internal Revenue Service)
Court: Employer Gets Sec. 83 Deduction Even if Taxpayer Doesn't Pay Income Tax on Bargain Element
Robinson v. U.S., No. 02-5154 (07/15/03, Fed. Cir.). Excerpt by FindLaw: 'Under section 83(h) of the Internal Revenue Code, addressing deductions for employers who use property transfers (other than money) to compensate employees, the amount of the employer's deduction is the value of the transferred property that is includible in the employee's gross income as a matter of law as opposed to only the amount that is actually included in the employee's gross income." (U.S. Court of Appeals for the Federal Circuit, via FindLaw.com)
2nd Circuit: Detrimental Reliance Showing Not Necessary for Plaintiff to Prevail Under Defective SPD (PDF)
23 pages; Burke v. Kodak Retirement Income Plan, No. 02-9051 (2d Cir. 7/17/2003). Excerpt: "[R]equiring plan participants or beneficiaries to show detrimental reliance to recover for a deficient SPD contravenes ERISA's objective to promote distribution of accurate SPDs to employees." (U.S. Court of Appeals for the Second Circuit, via FindLaw.com)
Opinion: the Downside of Using Restricted Stock to Compensate Executives
Excerpt: "The biggest single problem with stock options still exists: Executives are in charge of the decisions that will make them the most money, which may or may not benefit other shareholders in the long term.... Things to expect in coming years if this dividend infatuation goes too far: 1. A new class of restricted stock (for executives) that lets the recipient claim dividends but somehow allows them to have optionlike upside -- like a warrant with dividends." (Jonas Max Ferris on TheStreet.com)
Overview: Recent Executive Compensation Developments (PDF)
Excerpt: "IRS Issues New Proposed Regulations on Incentive Stock Plans ... SEC Approves NYSE and Nasdaq Rules for Shareholder Approval of Equity Compensation Plans ... Valuation of Equity Split-Dollar Life Insurance – Summary of New IRS Guidance ... New Accounting for Stock Options ... Frequently Asked Questions Regarding Electronic Filing of Section 16 Reports ... Tax on Exercise of Nonqualified Stock Options Not Deferred by 'Short Swing Profit Rule' or 'Lockup' Agreement." (Gardner Carton & Douglas LLC)
Newly Posted or Renewed Job Openings
Health & Welfare Consultant
for Towers Perrin
in CT, DC, GA, OH, PA
Health & Welfare Consultant
for Towers Perrin
in Location Other Than U.S.
Pension Administrator
for The Weiss Group, Inc.
in IL
401(k) Plan Administrator
for Benefit Resources, Inc.
in CA
Compliance Manager
for AMVESCAP Retirement, Inc.
in GA
Daily Valuation Administrator
for Union Bank of California
in CA
Pension / Benefits Specialist
for RBG&Co.
in MO
Insurance Administrator
for Insurance and TPA Firm near Southfield MI
in MI
Newly Posted Conferences
(Post Yours!)
ERISA Workshop
in CA, CO, CT, DC, FL, GA, IA, IL, IN, KS, LA, MA, MI, MN, MO, MS, NC, NE, NJ, NM, NY, OH, PA, TN, TX, VA, WA, WI
September 18, 2003
SunGard Corbel
Newly Posted Press Releases
(Post Yours!)
House Committee Passes Pension Bill With Lifetime Income Incentive
(American Council of Life Insurers)
Franklin Templeton Investments Announces Availability of Third Quarter Retirement Sales Brochure
(Franklin Templeton Investments)
Franklin Templeton Investments Receives Association of Graphic Communications Achievement Award
(Franklin Templeton Investments)
Benefit Costs Rise for High-Tech Firms
(Culpepper and Associates, Inc.)
Delta Dental's Call Center Earns Benchmark Portal Certification: Tri-State Dental Benefits Provider Exemplifies Best-Practice in Customer Relations
(Delta Dental Plan of Michigan)
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