'Rollovers As Business Start-Ups' Mostly Fail, IRS Says
– "Preliminary results from the Rollovers as Business Start-Ups (ROBS) Compliance Project, initiated by the IRS's Employee Plans . . . unit, indicate that most ROBS businesses either failed or were on the road to failure with high rates of bankrup.tcy, liens, and corporate dissolutions."
(Wolters Kluwer)
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How Retirement Is Being Reinvented Worldwide
– "[T]he real impetus behind an aging workforce is demographic. People are living longer. Older people are also becoming a larger share of the population in many nations, simply because of declining birthrates and shrinking ranks of young people."
(The Christian Science Monitor)
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Should the Retirement Age Be Lower, Not Higher?
– "According to economist James K. Galbraith, [raising the retirement age] is exactly backward. In an article in the latest Foreign Policy magazine titled 'Actually, the retirement age is too high,' Galbraith, a professor at the University of Texas at Austin, contends that older workers should be encouraged to retire earlier, not later."
(The Washington Post; one-time registration required)
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2010 Annuity Distribution Survey: Key Findings (PDF)
– 10 pages. "While tax deferral is an important component of fixed annuity positioning, Cerulli believes the appeal of these products owes more to principal protection and guaranteed rates of return. To wit, the product set sales records at the nadir of the bear market as investors fled the equity markets for save havens. However, the tax-deferred nature of this product helps to increase rates of return on an after-tax basis."
(Insured Retirement Institute / Cerulli Associates)
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What Changes to Defined Benefit and Defined Contribution Plans Mean for Plan Sponsors and Their Service Providers (PDF)
– 28 pages. "Sponsors of defined benefit and defined contribution plans are working to solve a most pressing question: how to provide employees with retirement benefits that offer sufficient funding without causing further strain to employer balance sheets or government budgets. This report identifies how managers of retirement plans view this challenge and how their service providers, including their custodians and asset managers, can help confront it."
(The Bank of New York Mellon Corporation)
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Annuities Education Still Lacking
– "The Insured Retirement Institute (IRI) notes that an average of 7,000 people will be turning 65 each day this year, and that by the beginning of 2012 more than 41 mil.lion Americans will be age 65 and older. IRI President and CEO Cathy Weatherford says the insurance industry is well positioned to aid consumers looking for ways to provide income throughout their retirement."
(Employee Benefit News; one-time free registration required)
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Proskauer Rose's ERISA Litigation Newsletter, January 2011 Issue
– "This month's article takes a look back at some highlights from 2010 and offers some predictions about what's in store for 2011. As the authors discuss . . ., ERISA cases continue to get the attention of the U.S. Supreme Court. . . . The coming year also may be the year that significant decisions are issued with respect to the availability and scope of discovery in benefit cases, and the burdens of proof in plan communication claims."
(Proskauer Rose LLP)
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Qualified Retirement Plans: Analysis of Distribution and Rollover Activity
– "The probability of receiving a distribution and the fraction of gross distributions cashed out are roughly equal across income groups, but the portion cashed out represents a higher percentage of income for the lower-income groups."
(The Pension Research Council; registration required to download papers)
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[Opinion]
ERIC Comments on Proposed Target Date Fund and QDIA Disclosure Requirements
– "While noting that ERIC strongly supports the goal of making sufficient information available to participants to make informed investment decisions, ERIC's letter contends that the desire to provide more information must be balanced against the risk of information overload, as well as the cost and effort required to prepare more information than participants will or can utilize."
(The ERISA Industry Committee)
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Benefits in General; Executive Compensation
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IRS Guidance on $500,000 Compensation Limitation Applicable to 'Health Insurance Providers'
– "[U]nlike the rest of Code Section 162(m), this $500,000 limitation applies to both privately held and public traded companies. Additionally, the limitation applies to any employee of any employer that has a 'covered health insurance provider' within its controlled group of companies or group of trades or businesses under common control."
(Michael S. Melbinger via Winston & Strawn LLP)
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2010 Tax Act Summary
– "This alert outlines the recently passed 'Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010' . . . . The Tax Act extends the Bush tax cuts for two more years, allows a 2% cut in payroll tax and self-employment tax for 2011, provides for a two-year patch on the Alternative Minimum Tax problem, extends the child tax credit and higher education tax credits [and extends several tax benefits set to expire.]"
(Nixon Peabody LLP)
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Employee Ownership Update for January 14
– The Eighth Circuit ruled an employee who sold stock at a profit lacked standing to sue even if alleged fiduciary violations in the offering of company stock in a 401(k) plan were true. The SEC has started looking into the trading of shares in private companies like Facebook. The NCEO is compiling a list of firms acquired by ESOP companies in recent years. Another large staffing company became almost 100% ESOP-owned. Principal's best practices guide for employee financial security is available. (National Center for Employee Ownership
(NCEO))
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Journal of Employee Ownership Law and Finance Back Issue Set
– The NCEO's Journal of Employee Ownership Law and Finance, published from 1989 to 2010, was the only professional journal in the U.S. devoted to employee ownership, ranging from ESOPs to stock options and more. This is a set of the back issues that are still in print (see the link for a list). (National Center for Employee Ownership
(NCEO))
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Press Releases
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