Author: jfortenberry@fortenberrylaw.com

From the Federal News Radio.com, “Early Retirement, Buyouts, and Pickles“:

At one point during my newspaper career I had a job which required me to read the Federal Register every day. And to come up with a story. It taxes the imagination and, I am sure, shortens one’s life. I haven’t felt all that great lately. Anyhow…

From Forbes.com, “The Coming Retirement Crisis“:

Among older households–those headed by people 47 to 64–fewer than half have defined pensions, down from two-thirds 20 years ago, according to research by New York University economist Edward Wolff. The advent of self-managed pension plans such as 401(k)s will pick up some of the slack. But Wolff says that more than 40% of households headed by someone between the ages of 47 and 64 will not be able to replace even half of their retirement income once they stop working and that nearly 20% will have incomes below the poverty level.

Some great local news here on the Rousey IRA/bankruptcy case which will be heard by the U.S. Supreme Court.

An interesting article here from Law.com: “Top Law Professors’ Star Power: They’re a hot commodity, and schools are scrambling to keep them.”

Jenner & Block has announced a new online resource center devoted to ERISA fiduciary issues pertaining to company stock. A highlight of the resource center for me is this list of ERISA Fiduciary and Company Stock Cases (with links to the actual cases). Also, for those wanting to know what the “Fiduciary Fishbowl” is, check this out.

While we are on the subject of ERISA fiduciaries, Pepper Hamilton LLP has posted an article entitled: “ERISA Fiduciary Responsibility: CEOs and Directors In the Bull’s Eye.”

The PBGC has issued this report–“Companies Report $278.6 Billion Pension Shortfall in Latest Filings with PBGC“–providing an update on the status of underfunded pension plans:

Companies with underfunded pension plans reported a total pension shortfall of $278.6 billion in the latest round of filings with the Pension Benefit Guaranty Corporation (PBGC), the agency reported today. That is down slightly from the $305.9 billion reported last year, but up dramatically from the $18.4 billion reported in 1999.

View a chart entitled “Summary of Pension Underfunding Filings” here. It is important to note that the figures only include those companies with more than $50 million in underfunded pension liabilities. The announcement states that “[i]f underfunding in all insured pension plans is included . . . the total shortfall in the defined benefit pension system is significantly higher than $278.6 billion.”

Reuters has an article here. Quote of Note:

U.S. companies with pension underfunding of more than $50 million at the end of 2003 were required to file special reports to the agency by April 15, giving details of the shortfalls. While the reports are confidential, the agency is allowed to release the aggregated data to the public.

Usually the agency waits months to release the information, but its new director Brad Belt decided it should go out now, while Congress and the Bush administration are discussing possible reforms to the pension system.

“Workers and investors have a right to know the financial status of pension plans,” Belt said in a statement.

The Wall Street Journal (subscription required) is reporting: “Charities to Face Senate Panel’s Tax Scrutiny.” According to the report:

Charities and other tax-exempt groups will face fresh scrutiny Tuesday when the Senate Finance Committee holds a hearing on reports of major abuses. The committee plans to investigate issues ranging from improper use of charities for personal gain to tax-exempt organizations’ helping to facilitate tax shelters for wealthy investors and businesses. Internal Revenue Service Commissioner Mark W. Everson recently said “abuses” in this sector are “of increasing concern to the IRS.”

The article quotes staffers as saying that the hearing, which is called “Charity Oversight and Reform: Keeping Bad Things from Happening to Good Charities,” will include two confidential witnesses testifying behind a screen, their voices scrambled electronically to protect their identities. One will talk about “insiders fleecing a charity,” while the other will focus on “problems in the fund-raising arena.”

On the heels of Treasury’s announcement yesterday that it was withdrawing proposed regulations governing cash balance plans, House Workforce Committee leaders announced plans to move forward and look at solutions to solve the cash balance plan quagmire. The announcement is here and provides in part:

“Our Committee is not going to shy away from complex issues and difficult decisions, and that is why we plan to work in a responsible manner to pursue permanent solutions that preserve cash balance pension plans as a viable retirement security option for workers and employers,” Boehner added. “We look forward to working with all parties, including the Treasury Department, in a productive manner to implement responsible solutions and preserve the integrity of the defined benefit system.”

“It’s important we proceed with a careful, deliberative approach that starts with a hearing and bipartisan discussions on our Committee as we draft a comprehensive bill this year to strengthen and reform the defined benefit system,” said Employer-Employee Relations Subcommittee Chairman Sam Johnson (R-TX). “There are plenty of hybrid plans that currently need the certainty we will provide in our legislation and we will work to ensure that defined benefit pensions remain a vital and thriving employee benefit far into the future.”

AccountingWeb.com has an interesting letter from the IRS to the Public Advocate of the United States, Inc., regarding the issue of whether or not same-gender married couples are entitled to file their federal income tax returns jointly. Most of us figured the answer to that was no, due to the Defense of Marriage Act. The letter confirms it here. (Thanks to the TaxGuru for the link.) As the TaxGuru notes here, state income tax filings are a different story.

This is good news–“U.S. hiring plans near boom levels.” (via MSNBC) According to the article:

U.S. companies are gearing up to create jobs at rates not seen since the height of the 1990s boom, a survey released Tuesday showed, adding to evidence that job growth will keep the U.S. economic recovery rolling. . . Thirty percent of polled U.S. employers plan to add to their payrolls in the July to September period, the survey by Manpower Inc. showed. That is up from 20 percent a year earlier and 28 percent in the April to June period. The survey hit its highest level of 35 percent in 2000, powered by the Internet-fueled boom.

The Wall Street Journal (subscription required) is reporting: “House Panel Approves a Bill On Expensing Stock Options.” According to the article:

The House Financial Services Committee on Tuesday approved a watered-down version of an accounting-industry proposal to require public companies to treat stock options as an expense on their balance sheets.

Under the bill, companies would expense only the cost of options offered to their top five executives, rather than the cost of all employee stock options.

Also, the Securities and Exchange Commission would be prohibited from enforcing a proposed Financial Accounting Standards Board rule until the SEC studies its economic impact for a year after the bill becomes law.

The bill was introduced by Rep. Richard Baker (R., La.,) chairman of the House Subcommittee on Capital Markets and now goes to the full House for consideration. According to the article, the House may take up the bill before its August recess.

Thanks to the 401khelpcenter.com for alerting me to this great information published by The Vanguard Group: “Investment Committees: Vanguard’s View of Best Practices” and “Making Investment Committees More Effective.”