Financial Accounting Standards Board Statement of Financial Accounting Standard No. 87 (FAS 87) became effective for non-U.S. plans for fiscal years beginning after December 15, 1988. Earlier application was encouraged. Later application was not discussed.

Many subsidiaries of U.S. companies required to comply with FAS 87 in Japan made no substantive changes to their consolidations. No actuarial valuation, the center-point of FAS 87, was ever provided. What now?

Ask two actuaries and two accountants and you will get three answers. Fortunately for the accountants, they control the answer!

The Balanced Budget Act of 1997 (P.L. 105-33) and the Taxpayer Relief Act of 1997 (P.L. 105-34) signed by President Clinton on August 5 mark important milestones in federal fiscal policy, setting the stage for the first balanced federal budget in decades. However, the new laws hold somewhat less than employers had expected, or feared, in terms of their impact on employee benefit and compensation programs. Not only did the lawmakers drop the most controversial Medicare proposals -- such as an increase in the eligibility age for Medicare benefits and means-tested Medicare Part B premiums -- they also greatly narrowed the scope of the so-called Boxer proposal, which could have limited severely the levels of employer stock that could be held in 401(k) plans, and abandoned, for now, a proposal to require a spouse's consent for 401(k) distributions.

Nevertheless, the legislation as enacted contains a wide range of provisions that will affect many employers' programs to a lesser or greater extent. Some of these changes offer added plan design or administrative flexibility, while others could increase compliance burdens for certain plans. Here's a quick overview of the most significant changes:

Social Security is a highly popular and successful program. While Social Security touches the lives of nearly every American family, many people do not know how it operates. In the Facts you will be able to test your knowledge and find answers to the most often asked questions about Social Security.

Question 1. I understand that HIPAA prohibits plans from discriminating among employees and dependents based upon health status. I also understand that some reference was made by Congress about not discriminating among employees with regard to coverage availability due to their participation in dangerous activities such as snowmobiling, skiing, motorcycling, and the like. Does this mean that I can no longer exclude coverage for injuries incurred in connection with such "dangerous activities"?

Employees become eligible for our 401(k) plan if they are 21 years of age and have one year of service. In 1996, we waived the service requirement for a newly hired executive, who earns more than $80,000, allowing him to enter the plan immediately. Does this disqualify the plan? If so, how can we correct this?

The Taxpayer Relief Act of 1997, signed into law on August 5, increases the tax advantages of individual retirement accounts for millions of Americans. But in adopting new rules and creating new types of IRAs, the law adds to the complexity of retirement investing.

This article explains the law's IRA provisions in an effort to help you compare the pros and cons of the various options. For more details or for help in developing your own IRA investment strategy, you may wish to consult a tax adviser or financial planner. Information on how IRAs are to be taxed under the new law refers only to federal tax. States will not necessarily follow Uncle Sam's lead.

Beginning in 1998, millions of Americans will be able to choose between two individual retirement accounts--the deductible IRA and Roth IRA--that provide important tax savings in very different ways.

Those who have earned income and fall below certain income limits may contribute to a Roth IRA, a deductible IRA, or both, so long as total contributions do not exceed $2,000. But it takes a bit of analysis to make the choice that is right for you. This article presents some issues you should consider.

Recently enacted budget legislation contains numerous provisions that will affect employee benefits and executive compensation. Fortunately, most of the provisions are constructive and eliminate or simplify troublesome rules. The provisions with the greatest potential financial impact on employer-sponsored plans are those extending and broadening the Medicare Secondary Payer provisions. Important simplifications include the elimination of the excise tax on excess distributions and excess accumulations in retirement plans, a phased-in increase in the full funding limit for defined benefit pension plans, and the extension of the exclusion for employer-provided educational assistance.

The budget package consists of two laws, both of which were signed by President Clinton on August 5: the Taxpayer Relief Act of 1997 (P.L. 103-34) and the Balanced Budget Act of 1997 (P.L. 105-33). This Update summarizes provisions in the new laws (TRABBA) that will affect qualified retirement plans (including retirement and other benefits provided by state and local governments and church retirement plans); health benefit plans; and other employee benefit programs. Several other miscellaneous items that could influence employers' compensation and benefits planning are also briefly discussed.