We’ve been here before. Back when employers were freezing or terminating retiree medical care plans, affected employees were suing based on conflicts between plan documents and employee communication materials. Now, it seems that there’s been a flurry of litigation involving conflicts between plan documents and Summary Plan Descriptions. Two blogging lawyers have picked up on … Continue Reading
That’s what Evelyn Venable who voiced the Blue Fairy told Pinocchio about liars getting caught. But that was in the Disney classic. Now it’s a little more high tech. The newest method is Voice Stress Analysis (VSA), a technology with the same objective as the polygraph: to determine whether the subject being tested is lying. It’s currently being used in … Continue Reading
I’m not talking about my generation, but rather Gen X; and the nobody who doesn’t want them are financial advisers. According to a study commissioned by Edward D. Jones & Co., as reported by Investment News, advisers prefer older and wealthier clients. This despite the fact that younger workers are ahead of other generations when … Continue Reading
TANSTAAFL is an acronym for the adage "There Ain’t No Such Thing As A Free Lunch. It was popularized by the Nobel economist Milton Friedman, but the phrase, "free lunch", has its antecedents in American literature from about 1870 through 1920. The phrase refers to a tradition once common in saloons in many places in … Continue Reading
Divorce, unfortunately, is a fact of life, and can affect an employee’s benefits in a retirement plan. Jimmy Verner, who practices family law, illustrates why there must be a Qualified Domestic Relations Order (QDRO) to divide those retirement benefits in his newly launched North Texas Divorce and Family Law Blog. But a QDRO only comes … Continue Reading
"What was the number of mortgage foreclosures in July?" As reported,by Investment News citing Realty Trac, a marketplace for foreclosure properties. Foreclosure filing in the country increased by 9% between June and July and rose precipitously by 93% compared to the same period last year.… Continue Reading
I’ve written about retirement plan data security – or lack thereof – in the past, but always in the context of employee data on laptops that had been stolen. But as I read about a recent study cited by AccountingWeb.com, Pogo’s famous words came to mind, “We have met the enemy, and he is us.” Are … Continue Reading
Rush Nigot on his Rush on Business Blog provides valuable information for franchisees. But how do you finance it? There are a small number of trust companies that can help facilitate that process if you use self-directed IRA assets to invest in private equity, e.g., a franchise. It’s not just publicly traded securities that IRAs can invest in. There’s … Continue Reading
I recently wrote about retirees moving to Tibet, a metaphor for retirees moving from the “land of accumulation” to the “land of accumulation” and the new financial culture with which they will have to master. The “tour guides”, the financial industry, will have to solve the “annuity puzzle”, the investment industry term for the disconnect between … Continue Reading
It seems that there were these 2,500 traders surveyed by Traders Monthly who were asked whether they would parlay some insider information into a guaranteed $10 million trade. If they had a 50% chance of getting arrested, 93% said no; if they had only a 10% chance of getting arrested, 72% said no; and if … Continue Reading
In volatile markets, investment managers go to cash. That’s happening right now because of the prime mortgage meltdown. But not all money market funds are the same. Just as there are enhanced index funds, there are also enhanced money market funds. "Enhanced" meaning the fund manager seeks higher returns by taking slightly more risk. And … Continue Reading
They’re called "vulture funds". They’re financial organizations that specialize in buying securities in distressed environments, such as high-yield bonds in or near default, or equities that are in or near bankruptcy. Take for example, Argentina whose external public debt was bought up in substantial measure by vulture funds at very low prices. Or in this … Continue Reading
Baby boomers apparently are thinking about retiring to exotic locations. I saw an article about this in one of our trade publications in which an investment advisor was quoted as saying that retiring to Cancun was no different than retiring to Arizona. Well, not exactly. Hurricane Dean aside, what about cultural, political, and legal differences … Continue Reading
Employee or independent contractor? Attorney Rush Nigot warns us about making the mistake of treating employees as independent contractors. It’s an issue about which the IRS has sacked the NFL and caused Microsoft to reboot. Penalties and interest can pile up if someone is incorrectly treated as an independent contractor. And in the case of … Continue Reading
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
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
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
Normal retirement age is not just a state of mind. For ERISA purposes, it’s the lowest age specified in a pension plan at which a participant may retire without the consent of the employer and still receive retirement benefits. The IRS has something to say about it since a lower age than the traditional age … 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
A few months ago, I wrote about the possibility that a class action law suit might be filed against the National Education Association (NEA). Well, now it’s happened. The law suit claims that the NEA accepted payments from the 403(b) providers to endorse those retirement plans, and that the fees and expenses charged by the … 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
Here’s some financial juxtaposition to consider. As the stock market reached a new high which makes 401(k) participants happy, a survey released this week shows a speed-up in the decline of defined benefit pension plans. The survey (32 pages, PDF) by industry-supported Employee Benefit Research Institute (EBRI) and Mercer Human Resources Consulting of 162 employers, … 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
