Today’s Federal Register contains temporary and proposed regulations concerning requirements for employee stock ownership plans (ESOPs) holding stock of S corporations. The regulations provide guidance on identifying disqualified persons and determining whether a plan year is a nonallocation year under Internal Revenue Code section 409(p) and on the definition of synthetic equity under Internal Revenue Code section 409(p)(5).
Several news sources are carrying this Associated Press article today (this one via ABCNews.com): “Don’t Fret Over Pension Notice: Don’t Immediately Fret Over Notice From Employer of Underfunded Pension.”
Stephen Taub for CFO.com provides this report: “Ways and Means of Relieving Underfunded Pensions: Committee’s recommendation to full House of Representatives may ”free up cash for other corporate uses.” The article reports that shortly after the announcement that the Portman-Cardin bill had passed the Ways and Means Committee, Standard and Poor released a statement that its estimate of pension underfunding for the S&P 500 is under review. You can read the press release here. The press release provides:
“If the House approves the proposed three-year use of the high-grade corporate bond rate, which is currently yielding 128 basis points higher than the 30-year Treasury, the amount of pension underfunding among U.S. companies would significantly decrease, resulting in lower corporate contributions to their pension funds. . . This change would free up cash for other corporate uses.”
Business Week Online provides this op-ed by Steve Hamm: “Commentary: Expense Options–but Give Startups a Break.” The article discusses how FASB is open to creating special rules for Pre-IPO nonpublic companies.
Albert Crenshaw for the Washington Post discusses “bottom-up leveling” in 401(k) plans in this article: “How a 401(k) Loophole for the Rich Can Mean a Windfall for the Poor.”
Susan Tempor for the Detroit Free Press writes: “Tax law changes add 401(k) quirks.”