Month: July 2003

“Corporate Reform Could Go Too Far“: Steven Pearlstein reports for the Washington Post. Pearlstein says the problem with stock options is not how they were accounted for, but rather that they were misused and “gave executives too great an incentive to manipulate earnings through other means.” (Thanks to Mike O’Sullivan of CorpLawBlog for the link.)

The IRS has just issued its special edition of the Employee Plans News: “Summer Shower of Regulations.”

Thanks to a reader for alerting me to what went on today on Capitol Hill regarding the debate over the Portman-Cardin bill (HR 1776). Several news sources are reporting that the Capitol Hill police were called Friday morning to a Ways and Means Committee markup after Democrats stormed out and locked themselves in a nearby library room to protest the GOP’s handling of the bill. You can read about it in this article from the Wall Street Journal: “House Committee Passes $50 Billion Pension Bill.” Also, Reuters via Yahoo! News reports–“House Panel OKs Pension Fix Amid Acrimony“–and the Dow Jones Newswire also via Yahoo! News reports–“US House Panel OKs Pension Formula Fix, 401(k) Boost.”

UPDATE: Another article regarding the day’s events via the Washington Post: “House Democrats Storm Out of Ways and Means Committee Chairman Calls Capitol Police to Restore Order.”

FURTHER UPDATE: This statement from Treasury Secretary Snow on action taken by the House Committee on Ways and Means.

The New York Times has this op-ed by Peter Fisher regarding pension funding: “Will Congress Let Accounting Fiction Obscure Pension Reality?“

“U.S. execs oppose more pension disclosure“: Reuters reports via Forbes.com.

Susan Kelly at Treasury & Risk Management reports on the importance of 401(k) participant education: “Seek Directions: A rough ride from the markets is prompting 401(k) participants to demand advice.” The article reports Ann Longmore, fiduciary liability practice leader at insurance broker Willis Group Holdings, as saying that companies that are currently being sued in relation to company stock holdings in 401(k) plans would have been in a better position had they provided participant advice because the employees that are suing would have far less sympathy “if they were told by a professional that it’s not in the best interest of their portfolio to have such a concentration.” (Comment: I am all for participant education, but diversification does not seem to be the focus of the class action lawsuits–rather the focus is on the ERISA fiduciaries and their failure to disclose to participants certain crucial information about the company’s financial well-being.)

Today’s Federal Register contains some non-benefits tax-related regulations:

• final regulations relating both to the amount treated as a transfer under section 2519 of the Internal Revenue Code (the “Code”) when there is a right to recover gift tax under Code section 2207A(b) and to the related gift and estate tax consequences if the right to recover the gift tax is not exercised; and
• temporary and proposed regulations relating to the reduction of tax attributes under sections 108 and 1017 of the Code. These temporary regulations affect taxpayers that exclude discharge of indebtedness income from gross income under Code section 108.

Blogs are the subject of this op-ed in the Wall Street Journal today: “The Blog Shall Make You Free.” (Subscription required.) The op-ed talks about the impact blogs are having in Iran and the story of Iranian journalist Sina Motallebi, apparently arrested for the crime of blogging. Glenn Reynold’s Instapundit is mentioned in the article.

The Wall Street Journal also reports: “House to Consider a Pension Bill Based on Corporate-Bond Rates.” (Subscription required.) The article reports that the House Ways and Means Committee today is expected to take up legislation to establish a temporary benchmark for calculating a company’s pension-fund liability, as part of a broader effort to overhaul federal-pension rules.

This lively Wall Street Journal op-ed discusses what the auto industry is facing as it negotiates with unions over health care benefits: “Detroit’s Health-Care Tar Pit.” (Subscription required.)

James Klein, president of the American Benefits Council, provides this op-ed for USAToday.com regarding pension disclosure: “Avoid information overkill.”

PlanSponsor.com provides this discussion of the new proposed 401(k) and 401(m) regulations: “IRS, Treasury Unveil “New” 401(k) Regs.“

Reish Luftman McDaniel & Reicher provides the unofficial views of the Employee Benefits Security Administration (Department of Labor) on mapping: “404(c) Protection Lost Where Funds are Mapped.“

OnQue Technologies Inc. provides an analysis of Rev. Rul. 2003-70: “IRS Issues COBRA Revenue Ruling: When small employers receive stock or acquire assets, how are employees counted for COBRA?“