Newsday.com is reporting: “Avaya switching salaried employees from pension to 401(k) plan.” The article states that Avaya Inc. is ending its defined pension plan for U.S. salaried employees and instead beefing up its 401(k) plan, affecting approximately 8,300 salaried employees in the United States. According to the article, Avaya’s pension plan had assets of $1.94 billion and was underfunded by $798 million as of Sept. 30, 2002.
The Philadelphia Inquirer today reports: “United struggling with pension options.” The article states that “United Airlines, seeking ways to ease a huge pension burden before emerging from bankruptcy, faces several unpleasant options, including, as a last resort, terminating the plans, according to industry analysts.” The article also reports that “United is pushing Congress for changes to pension-funding laws, particularly regarding the deficit-reduction contributions, which have the effect of front-loading the financial burden.” Another article on the subject at RockyMountainNews.com: “Retired pilots defend pensions: Ex-United workers seek help to ensure benefits aren’t cut.”
On Wednesday, FASB pushed back the target date for issuing new rules to force companies to expense options as they began discussions on the controversial topic of stock option valuation. Reuters reports: “US accounting board tackles option valuation.” According to the article, FASB said it expected to issue a proposed rule in the first quarter next year and a final rule by the third quarter after that. It also debated the merits of various models to value stock options, “stating a preference for a model other than the widely used but often-criticized Black-Scholes method.” The San Mercury News reports on the action taken as well: “FASB delays stock-option proposal.”
EBIA Weekly in their newsletter is reporting that the Treasury Department has released two letters, Treasury Tax Correspondence, 2003 TNT 172-44 and 2003 TNT 172-45, indicating that it is reconsidering the issue of whether reporting on Form 1099 is required for payments to health care providers with debit/credit cards under health FSAs and HRAs. The letters state that Treasury is reviewing “whether the reporting requirement is appropriate under existing law [and] the appropriateness of applying any reporting requirements on a prospective basis.” As discussed here in a previous post, Harry Beker, Esq., of the Office of Chief Counsel with the IRS, speaking at a conference of the Employers Council on Flexible Compensation (ECFC), announced that officials were looking into a possible waiver of the 1099 requirement.