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December 3, 2004
Today's sponsor: William J. Stecker, CPA
(Click on company name or banner to learn more.)
A Practical Guide To Substantially Equal Periodic Payments And Internal Revenue Code §72(t) New 4th edition by William J. Stecker, CPA with all of the updates needed to reflect the issuance of Revenue Ruling 2002-62 in October, 2002 as well as all Private Letter Rulings issued subsequently. This text is a must read for anyone under age 60 who is contemplating early retirement and has substantial 401(k) or IRA assets. This text will teach the reader everything they need to know about avoiding the 10% surtax on early withdrawals as defined in IRC 72(t). All computational methods are covered and how to plan and properly execute substantially equal periodic payments. This is the definitive text on IRS 72(t) including more than 190 footnotes citing all of the relevant legal authorities. Click above to purchase and download now
(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)
Tax Reform May Include Eliminating the Tax Deduction for Employer-Based Health Insurance
Excerpt: "If you want to understand why the Bush administration is pondering eliminating the tax deduction for employer-provided health insurance, consider this year's Economic Report of the President. There, White House economists assert that the deduction unfairly subsidizes employees of some companies while encouraging overly generous health policies that focus on routine medical care." (The Washington Post; one-time registration required)
Report: Tracking Health Care Costs: Spending Growth Slowdown Stalls in First Half of 2004 (PDF)
8 pages. Excerpt: "The recent slowdown in health care spending growth stalled in the first half of 2004 as health care costs per privately insured American increased 7.5 percent during the first six months of 2004--virtually the same rate of increase as in 2003. Private-sector spending on health care constitutes more than half of all health care spending, and both the private and public sectors are subject to similar cost pressures." (Employee Benefit Research Institute)
Consumer Reports to Launch Pres.cription Drug Comparison Resource
Excerpt: "Consumer Reports next week will launch a Web site that compares the effectiveness and cost of several popular pres.cription drugs, the AP/Miami Herald reports. The site will make drug comparisons available to low-income consumers, such as senior citizens and those whose insurance does not include pres.cription drugs. Unlike Consumer Reports' other sites, the new site is free of charge (AP/Miami Herald, 12/1)." (California Healthcare Foundation)
Premium Only Plans Offer Additional Benefits with Little Cost to Employers
Excerpt: "Let's explore the simple idea of using a Section 125 premium-only plan (POP) in conjunction with a voluntary benefit plan .... Employers are always looking for ways to enhance their employee benefits package. However, they want to do so with as little cost as possible. Voluntary benefit plans enable an employer to add benefits that cost them only the administrative expenses of managing the payroll deductions from the employees' pay because the employee is paying the full premium." (AdvisorToday.com)
Hewitt Associates Study Shows Holidays Will be Celebrated at Work this Year
Excerpt: "About 75% of employers will host a holiday party this year, with the average party costing $20,000, .... Firms that offer holiday bonuses aim to show appreciation (54%), maintain tradition (24%), and improve staff morale (17%), the Hewitt study shows. However, 46% of firms have never offered a holiday bonus, and 16% have discontinued them. Firms that eliminated them cited cost (65%), entitlement issues (37%) and new pay-for-performance programs (28%)." (BenefitNews Connect)
Health Care Administration Technology Is a Promise Unfinanced As Funding Dropped from Bill
Excerpt: "Bringing patient records and pres.criptions out of an era of ink and paper into the computer age, health experts agree, would make health care more efficient and reduce medical errors, saving lives and dollars. President Bush repeatedly sounded that theme this year, starting with his State of the Union address. 'By computerizing health records,' he said, 'we can avoid dangerous medical mistakes, reduce costs and improve care.'" (The New York Times; one-time registration required)
Overview: Are There Answers in a Clinical Data Repository for Improved Health Care Delivery?
Excerpt: "According to a recent report by the Oakland, Calif.-based California HealthCare Foundation, chronic disease accounts for about 75 percent of healthcare spending in the United States, and as chronic disease becomes more prevalent, health plans and medical groups are becoming increasingly challenged by the vast array of data they must acquire in order to manage populations, provide care, improve delivery processes and manage the business of healthcare." (HealthLeaders News)
New Financial Model Sees Higher Payment, Retooled Family Physician Practices
Excerpt: "A new financial model that would increase payments to family physicians for preventive, chronic, and acute care services under the current fee-for-service system could increase annual compensation by 26% (from $167,457 to $210,288), according to a new analysis published in the November/December issue of the Annals of Family Medicine. And if family physicians choose to manage their patients' chronic diseases, provide medical advice via e-mail, and demonstrate clinical skills that ...." (Medscape Medical News)
Estimate: New Medicare Pres.cription Drug Benefit Cost Will Be Greater than the Current National Debt
Excerpt: "[A]ccording to government estimates, the ultimate drain from the new Medicare pres.cription-drug benefit will be greater than the current national debt. That's right. All prior unbalanced federal budgets will someday be topped by a single pre-election program for Medicare recipients. Like most governmental numbers, this one requires a little explanation. The figure is based on a 75-year projection by the actuaries who scrutinize the Medicare program." (USA TODAY)
Report Says Americans Relying More on Pres.cription Drugs
Excerpt: "More than 40 percent of Americans take at least one pres.cription drug, and 17 percent take three or more, the government said Thursday in a comprehensive report on the nation's health. The report documented the growing use of medications in the last decade, a trend that it attributed to the growth of insurance coverage for drugs, the discovery and marketing of new products, and clinical guidelines that recommend greater use of drugs to treat high cholesterol, high blood ...." (The New York Times; one-time registration required)
Watson Wyatt Survey Finds Satisfaction with Health Benefits Despite Rising Costs
Excerpt: "Despite escalating health care benefit costs, most employees remain satisfied with their employer-sponsored health plans, a new survey finds. Conducted by Watson Wyatt Worldwide in Washington, the survey of nearly 13,000 employees from a broad range of U.S. companies revealed that 61% of workers in 2004 are satisfied with their health plans. In 2002, that percentage was 64%. Just 17% of workers this year reported dissatisfaction, with the remainder indicating mixed feelings." (Business Insurance)
UK Could Have Best Health Care System in World, According to U.S. Expert
Excerpt: "'The biggest reason is simple,' Dr. Berwick wrote in an editorial in the journal Quality and Safety in Health Care. 'The UK has people in charge of its health care -- people with the clear duty and much of the authority to take on the challenge of changing the system as a whole.' But in the United States the health system is leaderless and chaotic, he added." (Reuters via Medscape)
Audio: Health Savings Accounts Increasingly Popular on NPR's Morning Edition, December 2, 2004
Excerpt: "Businesses are embracing a new trend in health insurance, offering so-called health savings accounts to replace traditional insurance and HMO plans. Generally, premiums are lower and savings higher, but it's costly for those who need healthcare the most. NPR's Julie Rovner reports." (National Public Radio)
Private Long-Term Care Insurance Policies -- AARP Publication Updated September 2004
Excerpt: "This fact sheet briefly describes the characteristics and costs of private long-term care insurance policies and highlights some critical public policy issues. ... By the end of 2002, 9.16 million long-term care insurance policies were sold in the United States. About 6.4 million of these policies remain in force. Most policies sold today cover services received in nursing homes, in assisted living facilities, and at home." (AARP)
Links to Items on Executive Comp, Benefits in General
Implication of New Definition of Dependent for Employer-Sponsored Plans
Excerpt: "In the absence of any further guidance ..., it may be prudent to communicate the new definition of dependent to participants in dependent care spending account plans and permit those employees who planned to submit expenses for non-qualifying individuals to revoke and/or revise their elections so as to avoid any forfeitures. In addition, employers should review their hardship withdrawal procedures under 401(k) and 457 plans to determine whether any changes are required." (McDermott Will & Emery LLP)
Overview: Provisions Affecting Deferred Compensation in the American Jobs Creation Act of 2004 (PDF)
Excerpt: "The Act makes vested nonqualified deferred compensation taxable on a current basis unless certain requirements, which are significantly different than the requirements currently in effect, are met. As a result of the broad coverage of what is considered to be 'nonqualified deferred compensation,' the Act has implications that affect traditional deferred compensation plans, as well as stock appreciation rights, restricted stock units and nonqualified retirement plans." (Frederic W. Cook & Co., Inc.)
Pennsylvania Governor Rendell Vetoes Nonqualified Deferred Compensation Plan Legislation
Excerpt: "In a major set back for Pennsylvania businesses and their employees, Governor Rendell has vetoed legislation that would have adopted the federal constructive receipt rule for purposes of applying Pennsylvania's personal income tax to nonqualified deferred compensation plans. While the governor's veto has likely put an end to any further developments on this matter for 2004, it very likely that Pennsylvania's General Assembly will revisit this issue when it reconvenes in 2005." (Buchanan Ingersoll PC)
Bush Board Overrules M.B. Sturgis Rule Regarding Bargaining Units that Include Leased Employees
Excerpt: "In a 3-2 decision ..., the National Labor Relations Board ... overturned a controversial 2000 ruling that had shaken one of the foundations of the temporary employment industry. As a result of the decision, the NLRB has returned to the position that temporary agency employees who are jointly employed by supplier ... and user ... employers cannot be made part of a single bargaining unit without the consent of both employers. H.S. Care L.L.C. , 343 NLRB No. 76 (2004)." (Littler Mendelson)
IRS Notice 2004-62 Providing Relief in Connection with Certain Employee Benefit Plans in Florida (PDF)
3 pages. Excerpt: "The Internal Revenue Service, the Department of Labor's Employee Benefits Security Administration ... and the Pension Benefit Guaranty Corporation ... are providing relief in connection with certain employee benefit plans because of damage in Florida caused by Tropical Storm Bonnie, Hurricane Charley and Hurricane Frances ('Florida Storms'). The relief provided by this notice is in addition to the relief already provided by the Service to victims of the Florida Storms." (Internal Revenue Service)
Newly Posted Events
Current Health Care Trends – 2005 and Beyond Based on survey research
Nationwide on December 16, 2004
presented by International Foundation of Employee Benefit Plans
Estate and Income Tax Planning for Qualified Plans and IRAs
in Pennsylvania on February 3, 2004
presented by SunGard Corbel
Estate and Income Tax Planning for Qualified Plans and IRAs
in Oregon on February 3, 2004
presented by SunGard Corbel
Estate and Income Tax Planning for Qualified Plans and IRAs
in Pennsylvania on February 3, 2005
presented by SunGard Corbel
Estate and Income Tax Planning for Qualified Plans and IRAs
in Oregon on February 3, 2005
presented by SunGard Corbel
Estate and Income Tax Planning for Qualified Plans and IRAs
in Massachusetts on February 4, 2005
presented by SunGard Corbel
Newly Posted Press Releases
Health Policy Fellowship - Don't Delay: Application Deadline January 10, 2005
(AcademyHealth)
Independent Fiduciaries Formalize Profession with Creation of the "ERISA Fiduciary Guild"
(ERISA Fiduciary Guild)
Newly Posted or Renewed Job Openings
Record Keeper/Tester
for WySTAR Global Retirement Solutions
in MN
Regulatory Oversight Consultant
for Merrill Lynch
in NJ
Consultant - New Business Manager
for Benefit Systems, Inc.
in CA, LA, OR, TX
Client Services Manager/Trust Associate
for WySTAR Global Retirement Solutions
in MN
Customer Service Representative
for Emjay Corporation
in WI
International Benefits Consultant
for Apple Computer, Inc.
in CA
Motivated Sales Representative
for Primark Benefits
in CA
Defined Contribution/401(k) Administrator
for Professional Capital Services, LLC
in PA
Association 401(k) Plan Consultant
for Independent Insurance Agents and Brokers of America
in DC, MD, VA
401(k) / Pension Administrator
for NestEgg Consulting, Inc. (a subsidiary of INTRUST Financial Corporation)
in KS
Contract Consultant
for The Paragon Consulting Group, Inc.
in ANY STATE
Marketing Communications Manager
for ADP
in GA
Defined Benefit Plan Administrator
for EMJAY Retirement Services, A Great-West Company
in WI
Principal Administrative Analyst
for University of California, Office of the President
in CA
Plan Consultant - Defined Contribution Services
for Franklin Templeton Investments
in FL
Daily Valuation Senior Conversion Specialist
for Fiserv Investment Support Services
in CO
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