Supreme Court Rules That ERISA Protects Welfare Benefits
The Supreme Court has ruled that ERISA's prohibition against discharging an employee for the purpose of interfering with his or her attainment of any rights extends to welfare benefits -- even though such benefits are not vested and the employer is free to terminate the plan at any time.Health Bill Would Regulate Health Plans, Limit ERISA Preemption
Quality of health care and consumer protections have been key concerns for the 105th Congress, and a number of bills have been introduced to address these issues. Generally, these bills would require health plans to allow participants to choose their primary care physicians from all plan providers, require coverage for and access to certain types of benefits or services, and prohibit restrictions on doctor-patient communications.IRS Expands Guidance on Domestic Partner Taxation
The IRS has expanded its guidance on taxing employer-provided benefits for domestic partners of employees. Having previously ruled on the taxation of health benefits, the IRS has now confirmed in a private letter ruling (PLR) that the cost of group-term life insurance coverage of domestic partners and their dependents is taxable to the employee.Pensions for State and Local Public Sector May Get Statutory Discrimination Exemption
A new push to exempt state and local government pension plans from the discrimination rules has nonfederal government officials hoping for a permanent statutory carve-out. The IRS has been operating under an unofficial moratorium on applying nondiscrimination rules to public plans since 1977.
A. 10
B. 100
C. 1,000
D. 10,000
For nearly 38 years, Ginny Burton crunched numbers at Lord & Taylor's Manhattan department store. Then, in 1993, her bookkeeping job was phased out and she retired. When she left, she received her retirement benefits in a lump sum of $110,000--a figure she didn't think to question until a friend referred her to the National Center for Retirement Benefits Inc. (NCRB) at 800 666-1000.The Northbrook (Ill.) company reviews payouts from pension, 401(k), and profit-sharing plans. If NCRB discovers an error, it keep 30% of any money it recovers. Since there was no upfront fee, Burton figured there was nothing to lose. "Most of something is better than zilch," jokes Burton, now 73. Through the sleuthing of NCRB founders Paul Holzman and Allen C. Engerman, who refer to themselves as the "pension detectives." A year later, Burton received an additional $60,000.
QUESTION 38: A reader raises the following question: A 401(k) plan failed the ADP test in 1995, and excess contributions were distributed in 1996 to some of the participants believed to be highly compensated employees (HCEs). However, the prior administrator incorrectly determined the HCEs, so that the wrong amounts were distributed to the wrong people. The plan has 19 HCEs and 188 non-HCEs. The plan paid corrective distributions to six of the HCEs and two non-HCEs which were larger than they should have received. Three HCEs who should have received distributions did not. How can we correct these problems? Can we rely on APRSC or should we apply under VCR?
Congress is about to declare success a virtue again, and not in its typically windy way. With remarkably little fanfare, lawmakers are headed toward repealing a law that for good reason has been dubbed the "success tax," a 15% tax imposed on "excess" withdrawals from individual retirement accounts and 401(k)s.