January 3, 2006
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GM Woes Can't Touch Its 401(k) Plan
Excerpt: "As General Motors ... spins its wheels trying to avoid bankrup.tcy court, many of its employees fear their 401(k) plans are threatened because the plan includes mutual fund-like portfolios run by a GM subsidiary. That fear, while understandable, is also unfounded. The funds 'are not owned by General Motors; they are not even owned by the funds themselves. ...,' ...." (MSN Money)
Overview: Roth 401(k) Final Regulations Issued
Excerpt: "Is it permissible under the law to have a Roth-only 401(k) plan? No, according to final regulations issued by Treasury and IRS today." (Attorney B. Janell Grenier via BenefitsBlog.com)
With 401(k)s from Previous Employment, Most Employees Are on Their Own
Excerpt: "As hard as they try to boost 401(k) participation and savings in their own plan, employers aren't doing much to help workers manage their accounts from previous jobs, mainly because of liability concerns, notes Richard Johnson, a principal research associate at the Urban Institute, a Washington, D.C.-based economic and social policy research organization." (Employee Benefit News via CareerJournal.com)
Overview: Treasury and IRS Issue Roth 401(k) Final Regulations
Excerpt: "The Treasury Department and the IRS issued final regulations under §§401(k) and 401(m) on December 30, 2005 relating to designated Roth contributions. The regulations finalize the proposed rules issued on March 2, 2005 and are effective January 3, 2006 for plan years beginning after December 31, 2005." (ERISA Expertise LLC)
Another Question is Answered in the 401(k) Plans Q&A Column
How are rollover contributions (amounts rolled into our plan) treated for purposes of coverage, top heavy, annual addition, deduction, and nondiscrimination testing? Could you provide citations? (BenefitsLink.com)
Before Taking an Early Retirement Buyout, Consider the Costs
Excerpt: "In today's ever-changing business environment, in order to reduce overhead, employers are often faced with offering employees a buyout in the form of early retirement." (Seattle Post-Intelligencer)
The Year in Employee Ownership 2005
In his January 1 Employee Ownership Update, NCEO Executive Director Corey Rosen discusses the Year in Employee Ownership for 2005. His top 10 list of important developments includes new accounting rules for options, lawsuits based on drops in stock prices, a presidential panel urging an end to most defined contribution plans (which would include ESOPs), deferred compensation rules, the persistence of ESPPs, and more. (National Center for Employee Ownership)
Legislative Tracking Charts -- Retirement -- Updated December 29, 2005 (PDF)
17 pages. These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors. (Towers Perrin)
A Nascent Trade Group Aims to Foster a New Way of Looking at Retirement Income Planning
Excerpt: "What's the biggest issue facing all retirees, particularly baby boomers? You guessed it: having enough income to sustain them through what will likely be a longer retirement than they anticipated. To address retirees' income issue head on, financial services executives have joined up to launch a new trade group, the Retirement Income Industry Association (RIIA)." (Investment Advisor)
Two Letters to the Editor: Baby Boomers Are 'Entitled' to a Return on Social Security Input
Excerpt: "Robert J. Samuelson's Dec. 28 column, 'Our Entitlement Paralysis,' argues that the moral claim of rich baby boomers is 'dubious,' a conclusion that Samuelson draws from a thought experiment in which, if we were designing Social Security today, 'we'd question why age alone (not need) should qualify people for government assistance.' The thought experiment is intellectually dishonest, because it omits the fact that we baby boomers have been paying Social Security taxes directly ...." (The Washington Post; one-time registration required)
SEC No-Action Letter Authorizes Private Company to Facilitate Internal Stock Market
Excerpt: "The staff of the Security and Exchange Commission (SEC) Division of Market Regulation ('Staff') has issued a 'no action' letter in response to an inquiry from a private company whose stock is not registered and for which there is no public trading market. The company intends to implement a stock sale and repurchase program without registering as broker-dealers in accordance with Section 15(b) of the Securities and Exchange Act of 1934." (Beyster Institute)
Links to Items on Executive Comp, Benefits in General
The FASB Rules on Post-Retirement Accounting Are Changing -- Employee Benefits Could Suffer
Excerpt: "The nation's accounting rulemaker, the Financial Accounting Standards Board, recently announced that it will revamp how companies account for pensions and 'other post-retirement employee benefits' (OPEBs) -- mainly retiree health insurance. In a recent report to clients, analysts at Bear Stearns (BSC) wrote that they expect this to be 'the most controversial project the FASB has ever undertaken.'" (BusinessWeek)
Other Postemployment Benefits: A Plain-Language Summary of GASB Statements No. 43 and No. 45 (PDF)
30 pages. Excerpt: "As the name suggests, other postemployment benefits (OPEB) are postemployment benefits other than pensions. OPEB generally takes the form of health insurance and dental, vision, pres.cription, or other healthcare benefits provided to eligible retirees, including in some cases their beneficiaries. It may also include some types of life insurance, legal services, and other benefits." (Governmental Accounting Standards Board)
Overview: New Transition Relief for Valuing Private Company Stock under Section 409A
Excerpt: "On December 23, 2005, the Internal Revenue Service provided guidance that allows many privately-held employers to have greater confidence that stock options issued in the past and in the near future will not violate Code Section 409A." (O'Melveny & Myers LLP)
Overview: Separation Pay Exclusions (PDF)
2 pages. Excerpt: "The Proposed Regulations provide that certain types of separation pay arrangements will not constitute deferred compensation and, as such, will not be subject to the rules of 409A. Among the arrangements that are excluded are ...." (Haynes and Boone, LLP)
Legislative Tracking Charts - Human Resources -- Updated December 29, 2005 (PDF)
9 pages. These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors. (Towers Perrin)
Legislative and Regulatory Developments for Employee Benefit Plans -- December 2005 Update
Excerpt: "This Perkins Coie Update highlights selected legislative and regulatory developments affecting employee benefit plans. .... The [pension plan] topics covered are: IRS Issues Section 409A Proposed Regulations; Katrina Emergency Tax Relief Act; Roth 401(k) and 403(b) Accounts; and, IRS Staggered Remedial Amendment Period for Qualified Plans." (Perkins Coie)
A Preliminary Evaluation of the Tax Reform Panel's Report, Published December 5, 2005 (PDF)
Excerpt: "While one might claim that the payroll tax was beyond the purview of the panel, the panel did propose altering the taxation of Social Security benefits in a way that has a direct effect on the Social Security and Medicare trust funds. Thus, some creative efforts to integrate payroll and income taxes or to exempt the first segment of payroll from such taxation would have been relevant." (TAX NOTES via Urban Institute)
Newly Posted Events
Top Tools To Insure A Tobacco-Free Workforce: Why? What? And How?
Nationwide on January 12, 2006
presented by National Business Coalition on Health
Newly Posted Press Releases
Treasury And IRS Finalize Rules Regarding Roth 401(k) Contributions
(U.S. Treasury Department and Internal Revenue Service)
Newly Posted or Renewed Job Openings
Financial Transactions Specialist
for ExpertPlan. Inc.
Record Keeping Specialist
for AKT Retirement Plan Services LLC
401(k) Implementation Specialist
for 1st Global
for JRN Benefits, Inc.
Retirement Plan Administrator
for Noble Consulting Services, Inc.
Retirement Plan Consultant
for Pension Benefits Unlimited, Inc.
for R.J.L. Pension Services, Inc.
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