Increase in bankruptcies calls attention to creditor protection aspects of retirement plans

Bankruptcy cases increased approximately 35% for the 12-month period ending June 30, 2009 , according to statistics released by the Administrative Office of the U.S. Courts. The number of cases went from 967,831 to 1,306,305.

These statistics call attention to one of the often overlooked aspects of a retirement plan - protection from bankruptcy.

It's a complicated topic which I discuss in my other blog home, Slate's Bizbox blog sponsored by Open from American Express. Here is a link to my recent column, What Happens To Retirement Plans In A Bankruptcy?

For further information on the bankruptcy process itself, here is a link to Bankruptcy Basics published on the website of the U.S. Courts.

Posted In 401(k) Plans , Cash Balance Plans , Defined Benefit Pension Plans , Employee Stock Ownership Plans , Individual Retirement Accounts , Posts on SLATE
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Business and ERISA record retention myths

There a lot of business myths out there. One of the most potentially dangerous is that there is a "7-Year Rule" and a "6-Year Rule" respectively for maintaining business and ERISA records. Both may be guidelines, but not the practical side of record retention.

That's the topic of my recent post over at my other blog home, Slate's BizBox blog for small business. Here's a link to Hang On To Your Records

Posted In 401(k) Plans , Defined Benefit Pension Plans , Posts on SLATE
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You say "independent contractor", they say "employee"

It's the age-old story: worker classification, or rather misclassification. I wrote about it this past February, Independent Contractor or Employee? Employee Classification Still A High Priority Enforcement Matter.That was about the IRS auditing employers to determine whether those "independent contractors" were actually employees with required tax withholdings and possible inclusion in benefit plans.

I cover the same issue today in my other blog home, Slate's BizBox Blog, but this time it's about stepped up enforcement by the states for income tax withholdings and employment taxes. No doubt because of the economy. You can read about it here.

Posted In 401(k) Plans , 403(b) Plans , Cash Balance Plans , Defined Benefit Pension Plans , Independent Contractor or Employee , Posts on SLATE
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Timely matters

Over at my other blog home, Slate’s Bizbox Blog today, I wrote about Staying Up-To-Date on Your Retirement Plan. Not up-to-date in terms of your plan document as I'm doing in our EGTRRA Restatement Series, but up-to-date in terms of the timely deposit of payroll taxes and employees' 401(k) contributions.

So an article by way of Dave Baker's BenefitsLink provided some practical suggestions in dealing with this issue. Attorneys Kelsey N. H. Mayo and David L. Woodard of the North Carolina law firm, Poyner Spruill LLP write about Audit Risk Rising—What an Employer Can Do Before an Audit Happens.

While their article is about payroll taxes, they address the issue I mentioned in my Slate column about businesses outsourcing the payroll function. Here's what they have to say about that:

In addition, if you are an employer that has outsourced its payroll functions to a third-party, it is important to remember that the employer remains liable to the IRS for any employment tax violations. To identify and prevent issues you should:

* Receive regular documentation from your payroll vendor that shows how payroll taxes are being determined and paid.
* Periodically reconcile statements received from your payroll vendor to ensure employment tax amounts are being calculated and submitted correctly.

They also point out that

Given these impending audits, it is also important to remember that other agencies and states, including North Carolina, routinely share information with the IRS, including information regarding tax avoidance schemes and questionable tax practices. This information sharing could lead to additional investigations from other agencies and the state.

One of those information sharing agencies, by the way, is the Department of Labor. 

Posted In 401(k) Plans , Posts on SLATE
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The psychology behind today's economy

Remember the classic “Greed is good” speech by Gordon Gekko as played by Michael Douglas in the 1987 Oliver Stone classic, Wall Street. Here’s Douglas in his 1988 Academy Award winning role telling us why "greed is good":


Fast forward to today at a time when greed is viewed quite differently. It's one those psychological elements behind today's economy that was explored by an an interdisciplinary panel at a recent conference called, "Crisis of Confidence: The Recession and the Economy of Fear.”

Over at my other blog home, Slate’s Bizbox Blog, I write about this conference sponsored by the University of Pennsylvania's Department of Psychiatry and the Psychoanalytic Center of Philadelphia. Check out, Greed used to be good

And here's an interesting side note. Greed may no longer be good, but apparently power clothes are making a comeback. The ABA Journal Law News Now reports that Worried Lawyers Embrace Gordon Gekko’s Wardrobe. But as someone commented on the article, "It’s called Nordstrom Rack.  It’s where law students, lawyers, and consultants facing tougher times now go to shop".

Posted In 401(k) Plans , Audio/Visuals , Posts on SLATE
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"What are you doing?" in the work place

If you're one of the estimated 6 million people on Twitter as I am, you're familiar with the question in the headline. If you're not quite sure about exactly what Twitter is, then take a look at the video explanation by the extremely creative video producers at Common Craft called Twitter in Plain English.

Much of Twittering takes place at work. And sometimes that can cause problems in terms of time spent or inappropriate tweets. I discuss that matter including a Twitter policy in my blog post, Twitter in the Workplace. It appears over on at my other blog home, BizBox by Slate, a special promotion by OPEN from American Express. 

Posted In Audio/Visuals , Posts on SLATE , Whatever
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The times they are a-changin' for Wall Street and Big Law

The album cover pictured above is of The Times They Are a-Changin', singer-songwriter Bob Dylan's third studio album, released in January 1964. 

The title track is one of Dylan's most famous. Many at the time felt that it captured the spirit of social and political upheaval that characterized the 1960s. 

Now let’s fast forward some 45-plus year later. There’s another type of upheaval going on. This time it’s financial. And we’re seeing some profound changes taking place in the financial services industry. 

Over at my other blog home, Slate's Small Business blog, a special promotion by Open from American Express, both Marc Tracy and I see these changes taking place in two different areas. Marc on Wall Street, and me on “Big Law” (that's the colloquial expression given to the 250 largest American law firms, with about 15 of them having more than 1000 lawyers).

Marc writes that The Great Rearranging Hits Wall Street when he says

Indeed, the essential disappearance of the investment-banking industry--with all five of the major i-banks having either switched to less flexible and more regulated bank holding companies (Goldman, Morgan Stanley), been bought by bank holding companies with the aid of ample federal government subsidy (Bear Stearns, Merrill Lynch), or, er, filed for bankruptcy and disappeared (Lehman Brothers)--has left an absolutely gigantic vacuum for start-ups who now know that the only way to survive is to stay relatively small.

In Big Law and Small Business, I noted that the ABA Journal reports that for the first quarter of the year approximately 7,000 attorneys and staff have lost their jobs in addition to canceled summer programs, postponed first-year associate start-dates, and pay cuts across the board including partners. Not a pretty picture for the 43,000 imminent law-school graduates about to enter the legal job market. But at the same time, many of the smaller law firms and boutique law firms are doing very well, thank you.

So what does it all of this mean? Well, there are at least two ways to look at it.

There’s Seth Godin who said in his brilliant blog post, Small is the New Big. In the recent recession, it seem more right-on and prescient. And if all this seems pretty obvious to you, Seth wrote this in June, 2005.

And then there’s Dylan who in the climatic lines of the final verse of The Times They Are a-Changin' wrote and sang:

The order is rapidly fadin'
And the first one now
Will later be last
For the times they are a-changin'.

Here, take a look and listen yourself:

 


Lyrics | Bob Dylan lyrics - The Times They Are A-Changin' lyrics

Posted In 401(k) Plans , Defined Benefit Pension Plans , Posts on SLATE
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So how we doing?

In whatever what we're in now - recession, economic downturn, financial crisis. So the answer to the "how we doing" question is not uniform across the board. The sectors I see are our business owner clients and their employees who participate - or not - in their company's retirement plan. And each has an entirely set of feelings as to where they are now.

I've written about both groups in my other blog home, Slate's Small Business blog, a special promotion by Open from American Express.

Business Owners are generally optimistic as I noted in my column, An Optimistic Optimism Index. That's the findings of the new Small Business Success Index launched just this month by Network Solutions and the University of Maryland's Robert H. Smith School of Business.

Employees on the other hand are understandably concerned about job security and losing health insurance coverage as I noted in my column, New Grim Report on Small-Business Employees. That's the findings of the recently released Well-Being Index for the first quarter of 2009 by Principal Financial.

Picture above: Half Empty or Half Full by Jaxxon by way of Flickr.

 

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How entrepreneurs can succeed in this economy

Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article about how entrepreneurs can succeed in this economy. Bhaskar Chakravorti, a senior lecturer of business administration at the Harvard Business School was recently interviewed by Martha Lagace for the Harvard Business School’s Working Knowledge newsletter.

Mr. Chakravorti says that while the present economy removes opportunities and resources, it has also managed to add new and different opportunities. Here is a link to my article, Four Rules To Follow During This Economy, which contains a link to Ms. Lagace’s complete interview, Creative Entrepreneurship in a Downturn.

Posted In Posts on SLATE
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How the stimulus package affects employee benefits

Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article about the impact of the stimulus package affects employee benefits, specifically COBRA and Commuter Transit Benefits under Section 132 of the Internal Revenue Code. The stimulus package provides extended and subsidized COBRA benefits and increases the amount of transit benefits that can be provided on a pre-tax basis. Check out the details in COBRA and Transportation: How The Stimulus Affects Employee Benefits.

Posted In Commuter Transit Benefits , Posts on SLATE
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"Performance Persistance in Entrepreneurship"

Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article about new research in a just-published working paper by the Harvard Business School. The article, "Performance Persistence in Entrepreneurship", appeared in the Harvard Business School's Working Knowledge Newsletter.  Check out Persistance and Experience Pay Off.

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Which type of employer are you?

Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article about new research that MetLife recently unveiled regarding the four key types that employers embody when it comes to workplace benefits investments and strategies. Check out Thinking Critically About Your Benefit Package.

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You are who your clients are

This one goes out to all the business owners who provide either personal or business services - present company included. Over at Slate’s BizBox blog, a special promotion by Open from American Express, I posted an article that says why not have clients who you enjoy, are not toxic, and reflect your values. Check out You Are Who Your Clients Are.

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Self-employed retirement plan options: SEP, SIMPLE, or "Solo-K"

Over at Slate's BizBox blog, a special promotion by Open from American Express, I posted an article that discusses the financial advantages of a "Solo-K" for someone who is self-employed. 

In fact, "Solo-K" is not specifically mentioned in the Internal Revenue Code. It's a name given by some unknown, creative marketing person to describe a profit sharing plan with a 401(k) provision for the self-employed business person. Check out The Wonderful Solo-K.

Posted In 401(k) Plans , Individual Retirement Accounts , Posts on SLATE
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Parking spaces as a leading indicator of customer and client services

Over at Slate's BizBox blog, a special promotion by Open from American Express, I posted an article that discusses one of the things it takes for business owners to be able to make retirement plan contributions. Check out Be A Park-Down-The-Street-Businessperson.

Posted In 401(k) Plans , Cash Balance Plans , Defined Benefit Pension Plans , Employee Stock Ownership Plans , Posts on SLATE
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Your 401(k); Another Way to Borrow

Over at Slate's BizBox blog, a special promotion by Open from American Express, I posted an article that discusses the pros and cons of borrowing against your 401(k) account. Check out Your 401(k); Another Way to Borrow.

Posted In 401(k) Plans , Posts on SLATE
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