Category: Benefits

Luce, Forward, Hamilton & Scripps LLP has published a summary of the Jobs and Growth Tax Relief Reconciliation Act of 2003.

Today’s Federal Register is here and contains corrections to temporary regulations issued under section 1502 of the Internal Revenue Code, pertaining to the suspension of losses on certain stock dispositions.

Benefits are certainly in the news today. The protests in Europe which began in France over pensions has spread to Austria, Germany and Italy as reported by Catherine Bremer for Reuters with demonstrators touting: “Make the jet set pay” and “Retirement for everyone at 60.” And then there is this article by Jonathan Chevreaua at the National Post in Canada: “Actuaries fended off day of reckoning over pensions: Regulators are … trying to identify the wounded so they can be shot.”

Regarding this hearing of the House Financial Services Capital Markets Subcommittee, chaired by Rep. Richard H. Baker (LA), which was held yesterday, to discuss accounting treatment of employee stock options, the Associated Press for the Boston Globe reports that “fault lines are forming in Congress” over the issue. FASB Chairman Robert Herz wants Congress to stand aside and let FASB regulate the matter. The Board is currently working on a proposed rule which will be submitted for public comment. This article by Carolyn Lockhead for the Chronicle Washington Bureau at SFGate.com–“Stock options battle raging; State lawmakers aid Silicon Valley“–indicates that congressional subcommittee members seemed more “friendly” to legislation sponsored by Rep. Anna Eshoo, D-Atherton, and Rep. David Dreier, R- San Dimas (Los Angeles County), that would prevent expensing of options but require greater disclosure. Today’s edition of the Wall Street Journal in an article by Judith Burns reports that Former Federal Reserve Board chairman Paul Vocker, a trustee on the International Accounting Standards Board, reminded the panel that European companies likely will start expensing stock options in 2005 and that “lavish options awards to U.S. executives” may have been a major contributor to the recent corporate scandals. The article reports that “lawmakers are split.”

Today’s Federal Register is here and contains corrections to temporary regulations issued under section 1502 of the Internal Revenue Code, pertaining to the suspension of losses on certain stock dispositions.

Benefits are certainly in the news today. The protests in Europe which began in France over pensions has spread to Austria, Germany and Italy as reported by Catherine Bremer for Reuters with demonstrators touting: “Make the jet set pay” and “Retirement for everyone at 60.”

Regarding this hearing of the House Financial Services Capital Markets Subcommittee, chaired by Rep. Richard H. Baker (LA), which was held yesterday, to discuss accounting treatment of employee stock options, the Associated Press for the Boston Globe reports that “fault lines are forming in Congress” over the issue. FASB Chairman Robert Herz wants Congress to stand aside and let FASB regulate the matter. The Board is currently working on a proposed rule which will be submitted for public comment. This article by Carolyn Lockhead for the Chronicle Washington Bureau at SFGate.com–“Stock options battle raging; State lawmakers aid Silicon Valley“–indicates that congressional subcommittee members seemed more “friendly” to legislation sponsored by Rep. Anna Eshoo, D-Atherton, and Rep. David Dreier, R- San Dimas (Los Angeles County), that would prevent expensing of options but require greater disclosure. Today’s edition of the Wall Street Journal in an article by Judith Burns reports that Former Federal Reserve Board chairman Paul Vocker, a trustee on the International Accounting Standards Board, reminded the panel that European companies likely will start expensing stock options in 2005 and that “lavish options awards to U.S. executives” may have been a major contributor to the recent corporate scandals. The article reports that “lawmakers are split.”

CorpLawBlog has just posted an excellent discussion on the question raised here (and other places) yesterday regarding whether or not a 906 Certification is required for SEC 11-K filings with respect to employee benefit plans. The issue pertains to new requirements under the Sarbanes-Oxley Act of 2002.

Carrie Johnson for the Washington Post reports: “SEC Again Probes IBM Accounting.” William Bulkeley for the Wall Street Journal points out that among the criticisms levied at IBM in past years by SEC staffers has been a criticism that IBM failed to disclose what proportion of its earnings came from gains on its overfunded pension fund. The article reports that IBM agreed to include much more info on pension income in its future annual reports (which it reportedly did in its 2001 annual report.) However, pension income issues do not appear to be the problem in this recent investigation.

This article at Computer World discusses the new virus reeking havoc across the globe: “Sobig.C worm getting bigger: While not malicious, it specifically targets e-mail traffic.” The virus is apparently gaining notoriety for featuring a Microsoft e-mail address from the company’s technology support desk and even pretends to be the founder of the company, using the address bill@microsoft.com.

Today’s edition of the Wall Street Journal has an inciteful article by Michael Schroeder–“States Fight Exodus of Jobs“–which discusses the battle that is being waged by states and labor unions to stop the flow of jobs to foreign countries, including legislation which would require foreign call center employees to identify where they are located. This article at IndiaExpress.com highlights the controversy. For many years, HR demographers have been predicting an abundance of jobs and fewer workers in the coming years when the baby boomers retire, but with the amount of jobs moving out of the country, will the predictions hold true?

Today’s Federal Register is here which includes the DOL’s proposed class exemption for the acquisition and sale of REIT shares by individual account plans sponsored by trust REITS.

Some very good articles have been posted at EBIA Weekly: this article on the recent Supreme Court case of Nevada Dept. of Human Resource v. Hibbs previously discussed in this blog and this article on another U.S. Supreme Court ERISA case of Black & Decker Disability Plan v. Nord also discussed here. The latter article emphasizes what plan administrators need to be reminded of (if they do not know it already), that is, that even though a plan administrator need not give deference to a treating physician’s opinion, a treating physician’s opinion cannot be ignored and must at least be considered in the decisionmaking process along with the other evidence provided by the claimant.

An action item has been pointed out in this wonderful article by Deloitte & Touche via Benefitslink: “ACTION NEEDED– Proposed Guidance on COBRA Notice Requirements Warns Administrators to Stop Using Old Model Notice Immediately, Update Description of COBRA Rights in SPDs.” (By the way, a new category called “Action Items” will be added under the “Browse By Topic” section to catalogue action items that benefits professionals must worry about.)

Speaking of worry, the Philadelphia Inquirer points out in an article yesterday that scientists have discovered a gene that is associated with worrying . . .(now I have an excuse for worrying) . . and that is why some people worry more than others.

Can you believe the pandemonium in Europe over France’s pension system as reported in the news by Reuters and other news sources? Is this what we’re in for in the U.S. sometime down the road if we don’t take care of the whole Social Security malady as discussed in this article at StarTribune.com by Mike Meyers: Will baby boomers see less of their retirement in coming years? Or the health care crisis as discussed in this article by Don McCanne, MD for the Journal of the American Board of Family Practice: Why Incremental Reforms Will Not Solve the Health Care Crisis. More things to worry about . . .

And there’s this very good article by Kris Frieswick at CFO.com which highlights the issues and concerns associated with ESOPs which are now under the post-Enron magnifying glass: “ESOPs: Split Personality: An ESOP is a retirement plan. No, it’s an ownership investment. Wait — it’s neither one.”

Thanks, Jerry, for the very kind words about this blog! The support and encouragement one receives from the blawging community as well as the general blogging community as a newbie blogger is simply heart-warming. I am amazed that Ernie and Howard took the time to answer my newbie questions and I too wonder (along with Denise and Circuit Judge Michael Daly Hawkins of the U.S. Court of Appeals for the Ninth Circuit in this interview with Howard) when the prolific Mr. Bashman has time to sleep. In the vein of Rick Klau (who simply posts his questions about blogging on his website), I am still searching for a news aggregator that will search the internet for certain topics in the benefits and ERISA area and deliver them to my desktop each morning (or is this a clipping service I want?). I still do not know how to make permalinks or do static pages in Movable Type, but I am learning something new each day . . . including a little bit of html and css.

Great-West provides us with this commentary on the new deemed IRA regulations at 403bwise.com.