Month: December 2003

Regarding the lawsuit against the NYSE by Calpers (the nation’s largest public pension fund, with assets of more than $157 billion), The Street.com reports: “Calpers Sues the NYSE.” Also, you can access the complaint filed here and the Calpers press release here.

The New York Stock Exchange this week sent notices to listed companies advising them of a list of Frequently Asked Questions (FAQ’s) regarding the shareholder approval requirements for equity compensation plans. Mike O’Sullivan at CorpLawBlog (here) and Broc Romanek have both commented on the FAQs.

The Cornell Law School Legal Information Institute has a helpful link to U.S. Supreme Court “Recent Decisions on Pensions and ERISA”. Listed are many of the U.S. Supreme Court cases benefits attorneys refer to often such as Boggs v. Boggs, Harris Trust, Egelhoff v. Egelhoff, and Great-West. Cases link directly to Federal Code sections and other cited case law.

I have added this link to the “Pertinent Laws” section over on the right.

The IRS has issued final regulations regarding Disclosure of Relative Values of Optional Forms of Benefit. The regulations “consolidate the content requirements applicable to explanations of qualified joint and survivor annuities and qualified preretirement survivor annuities payable under certain retirement plans, and specify requirements for disclosing the relative value of optional forms of benefit that are payable from certain retirement plans in lieu of a qualified joint and survivor annuity.” The regulations provide that they are applicable “to QJSA explanations with respect to distributions with annuity starting dates on or after October 1, 2004, and to QPSA explanations provided on or after July 1, 2004.” More on this later . . .

“Tax cuts may push some families into AMT trap“: USA Today.com reports. The article states:

The Bush administration’s tax cuts, the main reason many families will get a larger refund, will also force more taxpayers to pay the alternative minimum tax. . . The Bush tax cut exacerbated the problem because it reduced ordinary income tax rates but left AMT rates unchanged, says John Battaglia, a director with Deloitte, the U.S. arm of Deloitte Touche Tohmatsu, a financial services firm. While the Bush administration increased the AMT exemption amount for certain taxpayers, the AMT will still ensnare many upper-middle-income taxpayers who take advantage of widely used deductions.

Kerry Kerstetter offers his thoughts on the tax at the Tax Guru-Ker$tetter Letter:

Actually, it would be good if more people saw what an insane tax this is and demanded that our rulers eliminate it. It seems that until the number of victims reaches a certain critical mass, it will just be perceived as a tax on the evil rich, who deserve no tax breaks according to “popular wisdom” (an oxymoron if there ever was one).

There is something to be said for this type of compensation program–the mega Christmas bonus! CNN.com reports: “Shoe plant workers get up to $20,000 bonuses.” No discrimination testing to worry about, no vesting issues, no reporting and disclosure requirements, etc. Just one thing though–it might be hard to top this next year. Thanks to the Business Pundit for recommending the link.

There is a good article in the Philadephia Inquirer today: “Bloggers bang out reactions to capture.” “Worldwide chatter about Saddam Hussein erupted in the blogosphere within minutes of his capture and was still at fever pitch yesterday.” One blogger said it best, “”Think of every moment when some poor soul believed he was about to die, every moment spent in hellish prisons, every person tortured beyond imagining, every child dumped in a mass grave, every person of faith treated as an enemy of the state . . .To watch the perpetrator of this extraordinary evil brought low … is a privilege … a moment when some kind of cosmic justice breaks through the clouds. … It was a day of joy. Nothing remains to be said. Joy.”

Charles Jaffe for the Philadelphia Inquirer is giving out the 2003 Lump of Coal Awards in this article: “In fund world, some merit lumps of coal for holidays.”

Also, Morningstar.com has published “A Progress Report on Scandal-Tainted Fund Shops” which plan fiduciaries may find helpful.

For a Collage of Legalese on ERISA fiduciary concerns pertaining to the mutual fund scandal, I have collected all of the articles which have come to my attention so far (including the one here at Benefitsblog) and provided links to them here:

Articles by Law Firms and Attorneys:

Bullivant House Bailey, P.C.: “The Growing Mutual Fund Scandal: A Practical Guide for ERISA Fiduciaries.”
Gardner Carton & Douglas: “How Should Plan Fiduciaries Respond to Current Investigations of Mutual Fund Practices?“
B. Janell Grenier, Esquire: “Plan Fiduciaries: Navigating the Rough Waters of the Mutual Fund Investigations.”
McDermott, Will & Emery: “Fiduciary Responsibility in Light of U.S. Mutual Fund Industry Problems.”
The Groom Law Group: “Market Timing & Late Trading – Issues Affecting Employee Benefit Plans.”
Parker Poe: “Responses to Recent Mutual Fund Trading Scandal May Impact Retirement Plan Participants.”
Pepper Hamilton LLP: “What ERISA Fiduciaries Should Do About the Mutual Funds Investigation.“
Seyfarth Shaw: “Retirement Plans – Managing in the Mutual Fund Scandals.”
Sutherland Asbill & Brennan LLP: “Fiduciary Duties and Recent Mutual Fund Developments.”

Articles by Consultants:

AON: “Advice for Sponsors of Employer-sponsored Retirement Plans: A Prudent Fiduciary Response to the Mutual Fund Trading Scandals.”
Blue Prairie Group: “The Mutual Fund Scandal: What Should Plan Sponsors Do?“

I will be adding these articles in a Section over the on the right entitled “Mutual Fund Investigations & ERISA” in the next couple of days.

By the way, the 401khelpcenter.com has collected some good links on the mutual fund investigations in “COLLECTED WISDOM? on the Ongoing Mutual Fund Scandal.”