Today’s Wall Street Journal has this controversial article: “Many Ties Link Pension Lobby To Regulators.” (Subscription required.) The article attempts to imply that IRS officials (which the article says have strong ties to pro-employer groups in the pension arena) are seeking to influence congressional staffers through social events at key IRS officials’ homes. The article reports that “[a]t the Internal Revenue Service, which is also responsible for formulating cash-balance and other pension regulations, some of the top positions traditionally filled by career experts have gone to lawyers and consultants with backgrounds representing employers, under a measure adopted in the late 1990s to bring in private-sector experts to help reshape the tax agency.”
The Wall Street Journal is also reporting: “Hartford Financial Changes To Cash-Balance Pensions.”
Another company is meeting its pension obligations by making contributions in stock, as reported by the Houston Business Journal: “Continental puts $100M ExpressJet stock into pension plan.” The article states that the contribution of ExpressJet shares reduces Continental’s percentage ownership of ExpressJet from approximately 44 to approximately 31 percent. Quote of Note: “Unlike our competitors, we are not asking the government to solve our pension issues, we are handling it ourselves,” said Continental Chairman and CEO Gordon Bethune. “By working hard to fulfill our pension obligations, we are doing the right thing for our employees.”
“Making firms insure workers: State employers could be required to pay for health care — but U.S. law may be a hurdle“: The Sacramento Bee reported last week. According to the article, California companies with 20 or more employees would be required to offer workers health insurance or contribute to a state health insurance pool under the proposed legislation. The article discusses how the legislation might run afoul of ERISA. Quote of Note: “Other states have largely shied away from employer mandates under the assumption that they couldn’t do it,” said Ken Thorpe, a professor of health policy at Emory University in Atlanta. “If California found a way to structure the law and got away with it, that would be a real test case for other states to copy.” More about the bill:
- KaiserNetwork.org: “California Legislature Likely To Consider Bill Requiring Employers To Provider Worker Health Coverage”
- The Foundation for Taxpayers and Consumer Rights: “Measure Calls for Health Benefits; Landmark legislation would require state’s employers to buy insurance for workers“
The Motley Fool has a very interesting article today discussing why you should contribute to a Roth IRA: “Why the Roth Rules.” The article states:
If you’re confused about which type of retirement account to choose, here’s the quick and easy (and probably smartest) strategy: Put your money in a Roth IRA. Compared to an employer-sponsored retirement account — such as a 401(k) or 403(b) — or a traditional IRA, the Roth is by far more flexible and likely will lead to more money in retirement.
However, the article goes on to say that “[i]f your employer matches contributions to your work-sponsored plan, then it’s probably best to take advantage of that free money.” The article’s main point is that most people do not save–but rather spend–the money that constitutes their tax-savings from making pre-tax contributions to a 401(k) plan, and that it is better to pay the tax now (when income is higher) than later in retirement. (For those who do not know, contributions to Roth IRA’s are not deductible.)