Tag Archives: US

U.S. Budget Act and Retirement Plans

When Congress passed and President Trump signed the Bipartisan Budget Act of 2018 earlier this month, the folks monitoring developments in Washington, D.C. knew, among other things, that it ended a very brief government shutdown, dramatically increased government spending, and raised the debt ceiling.  But few knew that the Budget Act will affect tax-qualified retirement … Continue Reading

U.S. Supreme Court grants writ of certiorari on Railroad Retirement Tax Act issue

  The U.S. Supreme Court is poised to resolve a split between the Seventh and Eighth Circuits related to a federal program that is a well-kept secret. Nothing as intriguing as Russian spies or hacked emails… but, I think, interesting nonetheless. Of course, you have heard about the Social Security system. And you probably know … Continue Reading

U.S. tax reform – retirement plan provisions finalized

The tax reform bill is done.  President Trump signed the bill on December 22, meeting his deadline for completion by Christmas. While there is much to be said about the Tax Cuts and Jobs Act (the “Act”), the update on the retirement plan provisions is relatively unexciting.  Recall that when the tax reform process started, … Continue Reading

Tax reform progress – retirement plans still safe?

The U.S. House of Representatives passed the “Tax Cut and Jobs Act” (H.R. 1) last Thursday without, unsurprisingly, any Democratic support.  The retirement plan provisions in the bill haven’t changed. No eleventh-hour revenue-grabbing effort to convert all 401(k) plan contributions to Roth contributions or to place substantial limits on pre-tax plan contributions.  But there are … Continue Reading

Senate proposes changes to retirement savings programs

Just as they appeared to survive round one of the House tax reform bill released last week, retirement savings programs, such as 401(k) plans and Individual Retirement Accounts, seem to emerge relatively unscathed from the Senate’s tax reform deliberations.  Nonetheless, the Senate Finance Committee’s proposal does include a few changes to these programs.… Continue Reading

U.S. tax reform – 401(k) plans saved from the chopping block?

For the last few weeks, U.S. tax reform deliberations put 401(k) retirement plans on a roller coaster ride. Rumors abounded, including, for example, whether legislators would impose new contribution caps, or eliminate pre-tax contributions altogether.  Legislators often have targeted the tax-advantaged status of retirement savings plans as a revenue raiser to pay for federal programs … Continue Reading

U.S. Tax Reform – Death to Nonqualified Deferred Compensation?

The recently released Republican tax reform proposal (H.R. 1 – Tax Cuts and Jobs Act) has a provision that would effectively be a death knell for many common types of nonqualified deferred compensation plans. Under the Bill, nonqualified deferred compensation will be subject to income tax when there is “no substantial risk of forfeiture”.  In … Continue Reading

Threat to 401(k) plans?

With U.S. tax reform on the horizon, there are some reports that lawmakers are considering limiting annual pretax contribution limits to 401(k) plans to $2,400.  The current tax code allows most workers to contribute up to $18,000 on a pretax basis to 401(k) plans.  At this time, it is uncertain whether there will be any … Continue Reading

“Show Time!” for the US Labor Department’s Fiduciary Rule

It may be show time for the U.S. Department of Labor’s (DOL’s) Fiduciary Rule (the “Rule”), but don’t expect an elaborate production.  Think frustrated, reluctant actors on a bare stage with no lights or scenery implementing the previous Administration’s regulatory approach to protecting retirees and retirement savings from conflicted investment advice. After a long and … Continue Reading

U.S. Supreme Court rules in favor of ERISA exemption for church affiliated organizations

The U.S. Supreme Court has ruled in three cases that pension plans established by church affiliated organizations are “church plans” that are exempt from ERISA (the Employee Retirement Income Security Act of 1974).  The cases are Advocate Health Care Network v. Stapleton, U.S., 6/5/17; Saint Peter’s Healthcare Sys. v. Kaplan, U.S., No. 16-86, 6/5/17; and … Continue Reading

Welcome tinkering in U.S. Code section 409A proposed regulations

U.S. Internal Revenue Code §409A provides a wide range of very restrictive rules pertaining to “nonqualified” deferred compensation plans and many other types of compensation arrangements that may defer compensation. On June 22, 2016, the Internal Revenue Service issued proposed changes to the regulations under IRC §409A. This post reviews a few highlights of the proposal … Continue Reading

Highlights of the proposed regulations under section 457(f)

U.S. Internal Revenue Code §457(f) addresses federal income taxation of certain types of “nonqualified” deferred compensation plans and arrangements of entities that are either state and local governments or tax-exempt organizations (under IRC §501(c)). Most of those deferred compensation arrangements also must comply with IRC §409A to avoid tax penalties. For state and local governments … Continue Reading

IRS complicates health plan waivers of coverage

Many employers provide a cash payment to an employee who waives employee medical plan coverage.  Contrary to popular belief, this practice is not “illegal” under U.S. law.  However, because of new guidance contained in IRS Notice, 2015-87 (December 16, 2015), employers may want to provide “waiver payments” to U.S. employees, only if they can show … Continue Reading

Where in the world? New ISS policies

Institutional Shareholder Services (ISS) has recently published its summary of 2016 policy updates.  The executive summary explains both how ISS has undertaken its review of global policies but more importantly summarises the key policy updates that will apply to companies from 1 February 2016.  ISS will publish the full (or possibly summary!) additions, revisions and updates to the … Continue Reading

ISS proposes changes to guidelines in France, Canada and Brazil

Institutional Shareholder Services Inc (ISS), the US-based international corporate governance provider, has released its draft 2016 benchmark policy changes for consultation.  There are only three countries where compensation-related changes are proposed: France:   Recent legislative changes in France have reduced to two years the previous requirement for a four-year combined vesting and holding period for performance … Continue Reading

Stock Compensation – Updated IRS Guidance

The IRS recently published an updated Equity (Stock) – Based Compensation Audit Techniques Guide (the “ATG”).  The August 2015 ATG has been substantially expanded compared to the prior Stock Based Compensation Audit Techniques Guide (the “prior ATG”). The ATG generally remains organized in the same fashion as the prior ATG. It begins by defining Equity-Based … Continue Reading

Clawback – What’s your flavour of who, when and why?

The recent clawback laws being discussed and introduced in the UK and the US differ quite markedly and represent two almost entirely different approaches to recovering “erroneously” awarded incentive-based compensation.  So which flavour do you prefer? One shouldn’t forget, of course, that the PRA’s provisions regarding clawback are only one half of a two pronged … Continue Reading
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