Month: May 2004

Brooks C. Holtom, Ph.D., has written an interesting article at About.com–“Are You Getting the Best Benefit From Your Benefits?” Here’s an excerpt from the article:

Is your benefits package giving you the payback you deserve in increased employee appreciation and satisfaction? Chances are, it’s not. On average, organizations spend 41 cents for benefits for every dollar of payroll. That’s 29 percent of the total employee compensation package. Research reported in the journal, Personnel Psychology, suggests that employees only understand and appreciate between 31 and 68 percent of the cost or market value of the benefits they receive.

What is most interesting is the Benefits Roundup which contains a list of benefits supposedly being offered by different organizations around the country. The “Bring a pet to work” day and bereavement period for loss of pets are ones I confess I had not heard of before.

Bev Butula has written an article on blogs for the Technology section of the May edition of the Wisconsin Lawyer. The article entitled “Blogs – Another Online Resource” provides some good thoughts on the benefits of reading blogs:

A good blog can enhance professional development because keeping informed translates into good business. Law journals, newsletters, magazines, and newspapers can accumulate in an office, often read only when a large block of time becomes available. Office routings can be slow in arriving. On the other hand, reading a Weblog (and possibly having it delivered to your email account) offers a concise, current, and focused summary of relevant information. And, unlike office routings or journals, a link (if included) supplements the Weblog piece by leading the reader to a decision, opinion letter, or full text article.

If you have ever been a part of large organization, you can relate to that statement. Remember that newsletter that arrives in your office in May of 2004 when it was dated back to October of 2003? As it got passed around from office to office, and sat on desk after desk for weeks, it finally arrives in your inbox. By then, the news is old, stale and outdated. . .

(No stale stuff here at Benefitsblog–hopefully! Many thanks to Bev for mentioning Benefitsblog in her article.)

The Senate Finance Committee (SFC) has released its report on the National Employee Savings and Trust Equity Guarantee (NESTEG) Bill of 2004, along with a summary of the bill. (You can access the Revenue Charts for the bill here.) The Committee approved the measure on September 17, 2003, as discussed in a previous post. According to CCH, it is unclear when further action on the bill will be taken. CCH also reports that a Committee spokesperson has remarked that staff turnover and the subject’s complexity delayed release of the documents until now.

Also, RIA is reporting that the House is expected to consider the following tax-related bills:

• H.R.4109, the “Simple Tax for Seniors Act” which would allow seniors with social security and pension income to file their income tax returns on a new simplified tax form (to be designated “Form 1040SR”) without regard to the amount of their taxable interest or taxable income.
• H.R. 4359, to make permanent the $1,000-per-child tax credit and ensure that soldiers serving in a combat zone do not lose eligibility for the refundable credit by reason of receiving nontaxable combat pay.

Many thanks to the Edward Bennett Williams Law Library of the Georgetown University Law Center for listing Benefitsblog and ERISAblog in its research guide devoted to Employee Benefits. You can access the Employee Benefits Research Guide here. There are a number of other guides on a variety of topics which you can access here, including such topics as the Bluebook, Briefs and Oral Arguments, Business & Company Research, Health Law, Labor and Employment Law, Legal Ethics, Legal Forms, Small Business, Supreme Court Research, and Tax Research – Federal.

The Department of Labor has issued a press release regarding the settlement reached earlier this week and discussed in a previous post–“Secretary of Labor Elaine L. Chao Announces Settlements Restoring at Least $66.5 Million to Enron Retirement Plans“:

U.S. Secretary of Labor Elaine L. Chao today announced the filing of settlements to restore at least $66.5 million to the Enron 401(k) and employee stock ownership plans. The proposed settlements, which must be approved by the court, cover agreements in both the Department’s litigation and the private class action lawsuit brought on behalf of the plans’ participants. Neither settlement applies to Enron Corporation and its former executives and inside directors, Kenneth L. Lay and Jeffrey K. Skilling . . .

The Labor Department’s agreement covers the former outside directors of Enron’s Board. The private settlement also covers the plans’ administrative committee and others. In addition to monetary recoveries, the outside directors are barred from knowingly assuming fiduciary responsibility with respect to ERISA-covered plans for five years unless agreed to by the department. Absent settlement, the department will continue its litigation against the plans’ administrative committee and will seek additional monetary recoveries and injunctive relief.

On May 12, the House passed H.R. 4279 which would amend the Internal Revenue Code to provide for the disposition of unused health benefits in cafeteria plans and flexible spending arrangements. (In other words, the bill would abolish the very unpopular “use-it-or-lose-it-rule” which has plagued these type of plans.) Articles:

• Wall Street Journal (subscription required): “House Passes Bill, Allowing Rollover of Unused Money In Flexible Spending Accounts”
• AP via SFGate.com: “House passes bill to allow rollover of unused money in flexible spending accounts”

Also, on May 12, H.R. 3574, the Stock Option Accounting Reform Act, was passed in the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. (Press release is here.) The bill would require companies to expense stock options granted to the five highest-paid officers and would also defer enforcement of any Financial Accounting Standards Board expensing rule until the Securities and Exchange Commission does a study on its economic impact. Articles:

• CFO.com: “House Bill Would Impede FASB”
• AccountingWeb.com: “Stock Options Accounting Legislation Clears House Subcommittee”
• Reuters via Forbes.com: “US House panel backs limit to options expensing”

Then, on May 13, the House voted (252-162) to approve H.R. 4281, the “Small Business Health Fairness Act of 2004” which would amend ERISA to provide for the establishment and governance of association health plans (AHPs). (H.R. 4281 has been appended to H.R. 4279 above.) AHPs would be group health plans whose sponsors are trade, industry, professional, chamber of commerce, or similar business associations, and which would meet certain ERISA certification requirements. The bill would establish rules governing AHPs (through ERISA preemption of state law), including requirements relating to certification, sponsors and boards of trustees, participation and coverage, nondiscrimination, plan documents, contribution rates, benefit options, applications for certification, notice of voluntary termination, corrective actions, and mandatory termination. Articles:

• KaiserNetwork.org: “House Approves Association Health Plan Legislation”
• Reuters: “U.S. House Backs Small Business Health Plans”

On May 13, the House by a vote of 344-76 also approved H.R. 4275, a bill to permanently extend the 10% individual income tax rate bracket. The provision would make permanent the expanded 10% income bracket by preventing the scheduled reduction in 2005 of the upper threshold for the 10% tax bracket (for single taxpayers, joint-filers, and qualifying surviving spouses). A Democratic amendment in the nature of a substitute was offered by House Ways and Means Ranking Democrat Charlie Rangel (D-NY), but was defeated by a vote of 190-227.

The Wall Street Journal is reporting: “Enron Employees to Settle Retirement Suit for $85 Million.” According to the article:

Approximately 20,000 current and former Enron Corp. employees who lost money in their retirement plans when the company collapsed in late 2001 will participate in an $85 million settlement of a class-action lawsuit.

The tentative settlement, filed yesterday, would be the largest to date for a case involving company stock in retirement plans, said Lynn Sarko, the attorney representing the employees. Earlier this year, employees of Global Crossing Ltd. settled for $79 million, and employees of Lucent Technologies Inc. settled for $69 million.

The article further notes that the “partial settlement resolves claims against Enron’s human-resource staff and company directors, but doesn’t settle claims against top Enron executives.” The settlement does not resolve claims against Northern Trust Corp. or Arthur Andersen.

More on the settlement from the New York Times here.