Benefits Counsel

Thanks CorpLawBlog for providing us with these comments (via the Los Angeles Daily Journal) by former SEC Chairman Harvey Pitt that Sarbanes-Oxley has “critical deficiencies,” “redundancies” and “inconsistencies” and “may not be comprehensible.” Read more about it here.

Today’s Federal Register is here and contains temporary regulations providing an automatic extension of time to file certain information returns and exempt organization returns. The temporary reg.’s eliminate the signature and explanation requirements for certain types of automatic extensions.

Another day of chaos in France over pensions as reported by AFP for Yahoo! News at Yahoo.com. Baby boomer demographics is the root cause reports this article by Reuters via Yahoo! News at Yahoo.com.

More on today’s news later . . .

The first of two NASA rovers, Spirit, began its 311 million mile journey to Mars yesterday as reported here for Comcast News at Comcast.net. Opportunity, another NASA rover, should follow it into space later this month, but no earlier than June 25th. Spirit should arrive on Mars in January of next year. The article reports that Spirit and Opportunity will join two other NASA spacecraft, both orbiters, already at Mars, and that additional spacecraft from Britain, Europe and Japan are on their way to the planet as well. Firouz Naderi, manager of NASA’s Jet Propulsion Lab’s Mars exploration program, calls this “an unprecedented assault on one planet.”

Benefitslink points us to this article by John Carroll for Managed Care Magazine at ManagedCareMag.com: “AWP Reimbursement Ruling May Be More Than Meets [the] Eye.” The article discusses how managed care will be affected by the U.S. Supreme Court case of Kentucky Association of Health Plans v. Miller (discussed here) which held that a state’s “any willing provider law” was not preempted by ERISA. The article cites predictions that the fallout of this ruling will be, for states that have “any willing provider” laws, different levels of co-pay and different levels of care that patients can choose from (since HMO’s can no longer restrict which providers will be part of the network) as well as different levels of pay to providers based on performance.

Watson Wyatt has posted an article with some interesting thoughts on the stock option accounting problem: “New Study on Disclosure of Stock Option Expense: Substance Matters More Than Form.” The article suggests that FASB’s proposals to expense stock options may not have the downward effect on stock prices that has been widely predicted. The article also suggests that companies look at alternatives to stock options, such as restricted stock, performance-based shares and management stock purchase plans (MSPP). Another article by Watson Wyatt looks at nonqualified plans and discusses the provisions governing these types of plans that were part of the Senate version of the Jobs and Growth Tax Relief Reconciliation Act before the provisions were dropped from the bill. The article suggests that the provisions have support from both the House and the Senate and may make it into legislation by the end of the year.

This article posted at MIT Enterprise Technology Review and recommended by Tom Mighell at Inter Alia is a good one. Thanks, Tom!

Gary Young for the National Law Journal at Law.com reports on the case of Millsap v. McDonnell Douglas Corp., No. 94-CV-633-H, from the Northern District of Oklahoma. The case, according to Law.com, represents only a handful of cases in which employees have prevailed in a claim that their employer violated ERISA “by closing a plant with the intent to shed employees whose benefit costs were high or who were on the verge of vesting in pensions.” Unfortunately, the $36 million settlement will never reach the hands of plaintiffs unless a 10th Circuit Court accepts the Court’s certification of its September 25, 2002 order denying McDonnell’s motion for summary judgment on the issue of back pay. Many are saying the “backpay” issue is doomed under the holding of Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, decided by the U.S. Supreme Court last year.

With all the bad news about Social Security and corporate pensions, this article by Robert Brokamp for the Motley Fool via Yahoo! News has the answer: open an IRA.

Today’s Federal Register is here.

French transport workers are again striking over pension changes as reported by Bloomberg.com.

Bloomberg.com also has this article: “U.S. Economy: Pension Costs Rise, Threatening to Slow Growth.”

CFO.com has this report on the rankings in the corporate governance report by Corporate Library discussed here yesterday.