|
|
Employee Benefits Jobs
|
|
Webcasts and Conferences
|
|
|
|
|
Hand-picked links to the web's best news articles,
official guidance, jobs, webcasts and more.
|
[Official Guidance]
Text of IRS Rev. Proc. 2014-28, Procedures for Opinion and Advisory Letters for 403(b) Pre-Approved Plans (PDF)
"This revenue procedure modifies Rev. Proc. 2013-22, 2013-18 I.R.B. 985, which sets forth the procedures of the Internal Revenue Service (Service) for issuing opinion and advisory letters for section 403(b) pre-approved plans (that is, section 403(b) prototype plans and section 403(b) volume submitter plans). Under the program established by Rev. Proc. 2013-22, as modified by this revenue procedure, the Service will accept applications for opinion and advisory letters regarding the acceptability under section 403(b) of the Internal Revenue Code of the form of prototype plans and volume submitter plans, respectively, through April 30, 2015. This revenue procedure also makes certain modifications to the program established by Rev. Proc. 2013-22 that are intended to allow more pl an sponsors and eligible employers to participate in the section 403(b) pre-approved plan program."
(Internal Revenue Service [IRS])
|
[Advert.]
Compliance Testing Is Easier with ASC
Free yourself from frustrating re-runs and data manipulations! Let the ASC system generate multiple correction solutions for failed ADP/ACP tests for you. Confidently design & efficiently test any plan. Click to see why top firms use ASC.
|
|
|
|
|
Bill to Exempt Charities and Cooperatives from PPA '06 Funding Rules Clears Congress, Heads to President's Desk
"Bipartisan legislation authored by U.S. Senators Tom Harkin (D-IA) and Pat Roberts (R-KS) that would make it easier for charities and cooperatives to continue to offer pensions to their employees has cleared both houses of Congress and will be signed into law by the President. The Cooperative and Small Employer Charity Pension Flexibility Act of 2013 will ensure that charitable and cooperative associations are not swept into the Pension Protection Act of 2006 (PPA) funding rules, which would require them to divert funds from critical services and jeopardize their ability to provide pension benefits to their workers."
(Committee on Health, Education, Labor and Pensions, U.S. Senate)
|
Supreme Court Seeks Government View in Tibble; Limitations Period, Deference Level at Issue
"Signaling its potential interest in plan fee litigation, the U.S. Supreme Court invited the U.S. Solicitor General to file a brief expressing the government's views in a widely publicized plan fee case involving the statute of limitations applicable to claims challenging fiduciaries' selection of plan investment options.... In the employees' petition for review, they focused on the portions of the Ninth Circuit's ruling related to the statute of limitations and to the appropriate level of fiduciary deference."
(Bloomberg BNA)
|
Supreme Court Asks for DOL Input in Tibble v. Edison Petition
"In a surprise move, the Supreme Court has asked the Solicitor General of the United States, working in conjunction with the [DOL], to file a brief offering their view on the issues.... [T]hese issues are ripe for decision by the Supreme Court. Defining exactly how the 6 year statute of limitation should be interpreted would provide needed clarity to both plan participants and plan sponsors.... [T]he issue of deference to ERISA fiduciaries could not be more timely, as the 8th Circuit in the Tussey v. ABB appeal found that the district court should have viewed the action of the ABB defendants with regard to investment decisions at issue in the case through a lens of deference."
(FRA PlanTools, LLC)
|
Despite Upholding $13.4 Million Judgment Against Fiduciaries, Eighth Circuit Gives Plan Sponsors a Lot to Like in Tussey Decision
"The Eighth Circuit ... concluded that the District Court's determination that the Plan fiduciaries breached their duties to the Plan in regards to the recordkeeping fees Fidelity charged was amply supported by the record given that the Plan fiduciaries failed to take any action or make any investigation of the recordkeeping fees after Fidelity informed the Plan fiduciaries it provided other services to ABB for free or at below market cost and an outside consulting firm informed the Plan fiduciaries ABB was overpaying for recordkeeping services performed by Fidelity. The existence of these facts explain the Eighth Circuit's refusal to set aside the judgment against the Plan fiduciaries on this claim, and should also limit the precedential value of this case in situations where plan fiduciaries can show that they have adequately evaluated the recordkeeping fees the plan pays and are not
using amounts paid under a plan to subsidize other corporate expenses."
(Stinson Leonard Street)
|
GASB Declines to Delay Implementation Date of Pension Standards
"The Governmental Accounting Standards Board [has] voted unanimously not to delay the implementation date of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The requirements of Statement 68 are effective for periods beginning after June 15, 2014. The request to the Board for an indefinite delay in implementation date came from stakeholder groups that asserted that such a delay is necessary until related auditing procedures have been implemented for a sufficient period. The concern was expressed that governments in multiple-employer pension plans will receive a modified audit opinion on their financial statements in the interim."
(Governmental Accounting Standards Board)
|
Defined Benefit Plans Brace for a One-Two Punch
"Not only do employers face a 52% increase by 2016 in the regulatory cost of administering their pension plans, but also a $150 billion surge in liabilities from longer-living retirees. The looming costs and growing liabilities are forcing many companies to consider ways to cut pension expenses, accelerating a decades-long shift away from defined-benefit pensions plans -- which guarantee a set payout for life -- to plans that shift the burden of retirement savings to workers."
(The Wall Street Journal; subscription may be required)
|
How Prevalent Is the '13th Check' from Public Pension Plans?
"How common is it for a public retirement plan to issue 13th checks? While there are a few known states and municipalities that distribute them, there is not, in fact, comprehensive data on their prevalence.... Typically payments are linked to some sort of investment return-gain sharing. Such payments can be either ad hoc or automatic. Actuarial recognition would also vary from spontaneous to advanced, respectively. While 13th checks can be an extra payment, others reflect a cost-of-living adjustment-in other words, deferred compensation used to offset or reduce the effects of inflation on retirement income."
(PensionDialog)
|
Experts Split Over Effectiveness of DC Retirement System
"In testimony before a Senate panel earlier this month, Robert Hiltonsmith, an analyst with the research and policy consulting firm Demos, said many individual retirement account (IRA) brokers and 401(k) financial advisors take advantage of a lack of knowledge among employers and employees. Savers lose an average of nearly 1 percent in returns due to poor choices by plan fiduciaries ... Hiltonsmith told the senators.... Surveys find workers like many aspects of the defined contribution model, from its portability to the choices it offers to the unmatched convenience of the payroll deduction. Financial advisors are widely viewed as a net positive to investors."
(InsuranceNewsNet.com)
|
How Would Defined Contribution Participants React to Lifetime Income Illustrations? Evidence from the 2014 Retirement Confidence Survey (PDF)
"The vast majority of respondents said the retirement income projection was useful; more than 1 in 3 (36 percent) of the respondents thought that it was very useful to hear an estimate of the monthly retirement income they might expect from their plan, and another 49 percent thought it was somewhat useful. A total of 17 percent of the respondents indicated that this information would lead them to increase the amount they were contributing. However, of those responding that their illustrated value was much less or somewhat less than expected, 35 percent indicated they would increase their contributions."
(Employee Benefit Research Institute [EBRI])
|
SEC Staff Analysis of Data and Academic Literature Related to Money Market Fund Reform
"The [multiple] analyses examine: [1] The spread between same-day buy and sell transaction prices for certain corporate bonds from Jan. 2, 2008 to Jan. 31, 2009. [2] The extent of government money market fund exposure to non-government securities. [3] Academic literature reviewing recent evidence on the availability of 'safe assets' in the U.S. and global economies. [4] The extent various types of money market funds are holding in their portfolios guarantees and demand features from a single institution."
(U.S. Securities and Exchange Commission)
|
How ESOPs, Profit Sharing Plans, and Stock Bonus Plans Differ as Employee Ownership Vehicles
"Stock bonus and profit sharing plans have somewhat less restrictive rules than ESOPs, ... particularly around distribution requirements, valuation requirements, and what percentage of assets must be held in company stock. In general, companies not needing to borrow money through the plan, not using the plan to provide the seller the special tax deferral treatment available to sellers to C corporation ESOPs, and/or not wanting to be an S corporation to obtain the special S corporation ESOP tax benefits may find there are no special benefits to having a statutory ESOP. [A table] summarizes the key differences between these plans."
(National Center for Employee Ownership [NCEO])
|
The DOL's Proposed 401(k) Fee Roadmap: Merely Ineffective, or a Major Plan Sponsor Sandtrap?
"Will the proposed 'roadmap' be enough to show plan sponsors where to easily find service provider fees? ... [S]kepticism reigns among [some] professionals.... The idea of a simple one-page summary has been brought up before. It would include a single line for service and a single line for the fee.... But the problem goes beyond disclosure, no matter how efficient it is."
(Fiduciary News)
|
[Opinion]
March Is Women's History Month -- and the Winter of Our Retirement Discontent
"[F]or millions of women their retirement years are not a pretty picture at all.... What are the answers? The most important one is to increase Social Security, not cut it. Consider these facts: [1] Fifty-six percent of Social Security recipients age 62 and older are women. [2] Women make up 68 percent of recipients age 85 and older. [3] Social Security provides at least 90 percent of income for almost half of women 65 and older. [4] The average Social Security benefit for women is just over $13,000 per year. With more than 10 percent of women over the age of 65 living in poverty in 2012, cuts to Social Security would make this rate even worse."
(Pension Rights Center)
|
|
Benefits in General; Executive Compensation
|
[Guidance Overview]
Employment Tax on Settlement Agreements in ERISA Cases
"The IRS position is that a settlement payment made to a former employee in lieu of ERISA plan benefits would be wages for FICA tax purposes because the settlement payment arises from the employment relationship. Furthermore, related attorney's fees may also be includable as wages and thus subject to FICA taxation depending on how those fees are paid."
(Haynes and Boone, LLP)
|
Supreme Court Agrees with IRS, Finds Severance Payments Are Taxable
"The U.S. Supreme Court ruled on Tuesday that taxes are due for Social Security and Medicare on severance packages paid to workers who are laid off involuntarily, overturning a lower court ruling that could have triggered a wave of payroll tax refund requests from U.S. businesses.... The tax refund at issue was small, but the IRS said the stakes in the case were huge because, if Quality Stores had won, thousands more refund claims could have resulted, possibly totaling as much as $1 billion."
(Reuters)
|
Text of Supreme Court Decision: Severance Payments are Subject to FICA (PDF)
Excerpt from the syllabus: "The severance payments at issue are taxable wages for FICA purposes. FICA defines 'wages' broadly as 'all remuneration for employment.' ... As a matter of plain meaning, severance payments fit this definition: They are a form of remuneration made only to employees in consideration for employment.... FICA's statutory history sheds further light on the definition. FICA originally contained definitions of 'wages' and 'employment' identical in substance to the current ones, but in 1939, Congress excepted from 'wages' '[d]ismissal payments' not legally required by the employer ... Since that exception was repealed in 1950, FICA has contained no general exception for severance payments." [U.S. v. Quality Stores, No. 12-140 (S.Ct. Mar. 25, 2014)]
(Supreme Court of the United States)
|
Avoid Costly Mistakes on Tax Returns Involving Restricted Stock and Restricted Stock Units
"On tax returns involving restricted stock and restricted stock units, many potential errors involve the reporting of sold shares on IRS Form 8949 and Schedule D of IRS Form 1040.... After selling any or all of the shares at vesting, you still need to report this sale on IRS Form 8949 and Schedule D even though you are also including it as part of your compensation income on Line 7 of IRS Form 1040.... Even though you never purchased the stock, your tax basis for reporting the stock sale in column (e) on Form 8949 is the amount of compensation income at vesting that appeared on your W-2 (you already reported it on your tax return).... Another way to mistakenly double-report income can occur if you do not realize that your W-2 income in Box 1 already includes stock compensation income."
(myStockOptions.com)
|
|
Press Releases
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BenefitsLink.com, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Phone (407) 644-4146
Fax (407) 644-2151
Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager
Copyright © 2014
BenefitsLink.com, Inc. -- but feel free to forward this
newsletter without further permission from us, if you do not
modify the newsletter in any way (including this lower
portion).
All materials contained in this newsletter are
protected by United States copyright law and may not be
reproduced, distributed, transmitted, displayed,
published or broadcast without the prior written
permission of BenefitsLink.com, Inc., or in the case of
third party materials, the owner of that content. You
may not alter or remove any trademark, copyright or
other notice from copies of the content.
Links to Web sites other than those owned by
BenefitsLink.com, Inc. are offered as a service to
readers. The editorial staff of BenefitsLink.com, Inc.
was not involved in their production and is not
responsible for their content.
Useful links:
|
