One of the most commonly used expressions in articles about taxes is this one: “tax trap for the unwary”. While I would like to be more creative than that, that expression effectively sums up a common situation we’ve seen involving the compensation of shareholder-employees of S corporations. The objective of an S corporation is, of … Continue Reading
Maybe 401(k) plan sponsors are on the wrong side of the generation gap – at least when it comes to communicating with their under 30 year-old employees – when I asked the question, Face it. Maybe we’re not using the right medium to communicate 401(k)?. I suggested text messaging, and here’s some supporting anecdotal evidence. … Continue Reading
We are in the midst of a robust merger and acquisiton environment. Much of it is being fueled by private equity firms flush with cash. The other part of the equation has to do with demographics – those Boomer business owners looking to cash out. Two sets of issues can slow down or even derail … Continue Reading
That’s the metaphorical objective of any regulatory agency whose responsibility is to interpret and administer laws passed by Congress- to translate those laws into regulations, rules, and produres. Mitchell Port on his California Tax Attorney Blog gives us an initiation to understanding IRS guidance, excellent background for anyone who is involved with retirement plans, and especially the Pension … Continue Reading
The marshmallow experiment is a famous test conducted by social psychologist Walter Mishchel at Stanford in the 1960s. Mishcel, now at Columbia, put marshmallows in front of a room full of 4-year olds, and told them that they could have one marsh mallow now, but if they could wait several minutes, they could have two. … Continue Reading
Attorney Rush Nigot blogging about Document Retention and Electronic Discovery on his new Blog, Rush on Business, tells us that in today’s business environment, organizations need to respond to an increasing number of document requests, from regulatory compliance issues to internal investigations to full-scale litigation. And there’s certainly an ERISA component to that. So in … Continue Reading
Pardon me if my generation gap is showing, but Marshall McLuhan was right, "The medium is the message." Investment News reports that some of the major investment banks, Citigroup, Goldman Sachs, Lehman Brothers, Bear Stearns, and UBS, have put firewalls in place to bar staffers from using Facebook. Citigroup leads the list with almost 8,500 … Continue Reading
401(k) fees showed up on the political radar screen in March when U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, held hearing. The blips got louder last Thursday when Congressman Miller formally introduced legislation calling for better disclosure of 401(k) fees. The legislation, called the 401(k) Fair Disclosure for … Continue Reading
If dealing with pension and fiduciary issues are getting you down, then you’ve got the Pension Tension Blues. Dr. Susan Mangiero, founder and President of Pension Governance, and Steve Zelin, the Singing CPA, have co-written a satirical song on the current state of affairs for retirement plan sponsors and participants. I’ll never see them on … Continue Reading
Earlier this month in my article, It ain’t over till it’s over, I discussed the insurance industry’s objection to stable value funds not being part of the Department of Labor (DOL) regulation for default funds. The Pension Protection Act of 2006 directed the DOL to designate “default” investment elections that employers could select to meet … Continue Reading
No, it’s not a David Letterman list. It’s more akin to the FBI’s Ten Most Wanted List. The list that "investment seminars" made for the first time is the annual list of Top 10 Traps for Investors put out by the North American Securities Administrators Association (NASAA), the oldest international organization devoted to investor protection. … Continue Reading
Yesterday, I discussed the first of two big changes ahead for 403(b) plans that would make 403(b) plans resemble 401(k) plans, proposed IRS regulations that would be effective in 2008. Here is the second big change, the IRS Universal Availability Project. The IRS is sending out letters and questionnaires to public school districts regarding their … Continue Reading
Major changes are on the way for 403(b) plans. Named after Section 403(b) of the Internal Revenue Code enacted in 1958, 403(b) plans are retirement annuity contracts, mutual fund custodial accounts for employees of certain tax-exempt organizations, public educational organizations, and retirement income accounts established by churches or church-affiliated organizations. The Internal Revenue Service is … Continue Reading
The quotation above is one of the best-known Yogiisms, and it neatly describes the battle that is shaping up before the Department of Labor (DoL) finalizes its proposed regulation on default funds. On one side are the mutual fund companies and on the other are the insurance companies. And here’s what it’s all about. The … Continue Reading
In a recent email, American Express pointed me to some good stuff about protecting against identity theft. What plan sponsors can’t protect against, however, is employee personal and financial information stolen from 401(k) providers. I’ve written about this in the past. Take for instance the 401(k) provider that had personal data on 160,000 current and … Continue Reading
In a June 20 memorandum dismissing a lawsuit against John Deere, Inc. and two subsidiaries of Fidelity Investments, the U.S. District Court for the Western District of Wisconsin ruled that ERISA does not require plan sponsors or service providers to disclose revenue sharing information to 401(k) plan participants. For those of you that don’t know … Continue Reading
401(k) plan focus is shifting from the accumulation phase to the distribution phase. The why is obvious. The first wave of Baby Boomers are reaching age 60 who have significant concerns about running out of money. The how is being provided by 401(k) providers – insurance companies and mutual funds – who are beginning to … Continue Reading
It’s not just the environmental groups that are actively participating in the debate – and politics – of climate change. Now the institutional investors that are entering the arena. This past Earth Day I wrote about institutional investors in the U.S. becoming vocal. Now as leaders of G8 most industrialized nations are to meet in … Continue Reading
The 401(k) fee issue continues to percolate. This time it’s 12b-1 fees, those fees charged by mutual funds to compensate underwriters and brokers for sales. And last year, it was $11 billion according to Securities and Exchange Commission estimates. It’s time for review said the SEC, and it announced last week that it will hold … Continue Reading
If you are still not convinced that 401(k) participants need investment advice, then check out the results of a recent survey as reported by Investment News, 43% of investors are suckers. The survey was conducted by Money-Track, a public-television series, and Investor Protection Trust. Most of the survey results I would have expected. I’m not … Continue Reading
There was a lot of media coverage recently that the financial holdings of Presidential candidates Rudy Giuliani (R) and John Edwards (D) who have spoken out about genocide in Darfur, included investments in companies that do business in Sudan. But let’s cut these guys some slack. These investments were in companies that were part of mutual fund holdings … Continue Reading
Diehard Cubs fans will know who this is. It’s Pat Pieper, the legendary Cubs’ field announcer, who for 59 years started each game with the announcement above. But that was back in the day when you could look at the number on the back of the uniform and know who that was and what position … Continue Reading
On May 3, 2007, the House of Representative’s Education and Labor Subcommittee on Health Employment, Labor, and Pension held a hearing to consider technical corrections to the Pension Protection Act of 2006 (PPA). Technical corrections are designed to fix mistakes and inconsistencies that were inadvertently included in original legislation. Subcommittee Chairman Rob Andrews (D-NJ) indicated … Continue Reading
