Retirement | AccountingWEB

Retirement

State and Local Governments to Report Future Health Care Benefits Costs

For years governments have promised retirees hefty health care benefits to control current labor costs, experts say, according to a Crain’s Chicago Business report. “No one has thought about it as a long term liability, says Fitch Ratings analyst Joseph D. Mason.
A&A

Proposed Pension Rules May Threaten Defined Benefit Plans

The Financial Accounting Standards Board (FASB) announced late last year that it planned to make significant changes in the way companies report pension liabilities, the Associated Press reports. The first step will be to require companies to show on their balance sheets the total assets of their plans in comparison to what is owed to workers.
A&A

CCH Issues Small Business Retirement Plan Guidance

During the last week of December, CCH, a Wolters Kluwer company and leading provider of tax, pension and human resource information and software, introduced Retirement Plans for Individuals and Small Business. This new resource was developed to help professionals advise their clients on choosing the right retirement vehicle, setting up and maintaining the plan and complying with relevant laws and regulations.“Retirement Plans for Individuals and Small Business is useful for both the novice and seasoned professional to help cut through the numerous options and related complex
A&A

Estate Planning is Important for Farmers, Too

Much has been said about the federal estate tax, but the myths are not especially the truth. Careful estate planning is the key to unraveling the myths and truths of the “death” tax. Dr. Marsha Goetting, professor and family-economics specialist in the Department of Agriculture and Economics at Montana State University, told the Missoula Independent that seven out of ten Americans die without a will. Goetting continued, “There’s almost a stick-the-head-in-the-sand approach.

Company Drug Prescription Plans Vary

The Kaiser Family Foundation has released a new retiree health benefits survey showing that almost 80 percent of employers that currently offer retiree health benefits will take government subsidies to maintain prescription coverage in 2006. The Pittsburgh Post-Gazette reports that the basic Medicare coverage of more than 12 million retirees is supplemented by company health plans. The annual survey was released last week in Washington.
Community News

AICPA Supports Bill on Non-Resident Retirement Income

The American Institute of CPAs has supported a House bill that would ensure that certain deferred compensation plans would not be eligible for non-resident state income tax.The AICPA said that it opposes the position that states can tax the nonqualified retirement benefits paid by a partnership to its retired non-resident partners.States are prohibited from taxing the retirement income of non-residents under Public Law 104-95, passed in 1996.

Retiree Drug Coverage; Competition Intense Among Medicare Insurers, Employers

Four in five employers that pay for retirees’ drug costs will accept government subsidies to continue coverage, according to a survey conducted by the Kaiser Family Foundation and Hewitt Associates, of 300 companies with 1,000 employees each, the Seattle Post-Intelligencer reports. When it drafted the program, Congress created a tax-free subsidy to encourage companies to continue offering retiree drug coverage. The subsidy, for 2006, will be equal to 28 percent of a retiree’s drug costs between $250 and $5,000, the Intelligencer states.

What Is My "Drop Dead" Date When Setting Up a New Retirement Plan?

Are you a tax or financial advisor working with a self employed individual or a small business owner who wants to set up a new retirement plan for 2005? If you are, you’ve probably asked this question of your qualified plan provider.
Community News

New Jersey Task Force Releases Plan for Underfunded Pension System

New Jersey’s pension system needs $12.1 billion to meet its current pension obligations to teachers, police officers and local government workers, according to the report of the governor’s Benefits Review Task Force released last week.The Task Force, appointed by Acting Governor Richard Codey and headed by retired Goldman Sachs executive, Philip Murphy, concluded that the current system could not be maintained without large tax increases or severe cuts in state services, Bloomberg.com reports.

Senate Pension Reform Bill Approved

The Senate passed a bill aimed to strengthen U.S. company pension plans although warned that President Bush intends to veto the legislation. The White House labeled the bill inadequate according to the New York Times. The House may reconcile two bills that were approved by separate committees next month.In a prepared statement, Bill Thomas, Chairman of the House Ways and Means Committee said, “Pensions obviously are a critical component of retirement security for millions of Americans, providing an important source of income for retirees.
Practice Management

More Retired CEOs Being Tapped for Corporate Boards

The average age of directors at U.S. businesses is increasing, partly because current CEOs, who were typically asked to serve on multiple boards, are paring back.Reuters reported that the average age of independent directors at companies in the Standard & Poor's 500 index stands at 60.8, up from 60 in 1998.

New Medicare Drug Benefit Open for Enrollment Today

Seniors can begin enrolling in the new Medicare prescription drug plan starting today, but many are finding the wealth of options confusing.Selecting the best plan may be difficult, but President Bush touted it in his weekly radio address as “the greatest advance in health care for seniors and Americans with disabilities since the creation of Medicare 40 years ago.”Some of the country's 40 million Medicare beneficiaries have felt stymied by the system in the past.

An Updated Look at Canadian Pension Plans

The Certified General Accountants Association of Canada (CGA-Canada) this month published an update to their seminal report on defined benefit pensions plans in Canada.
A&A

FASB Adds Pension and Postretirement Benefit Project

The Financial Accounting Standards Board (FASB) is initiating a new project to reconsider guidance given in two statements concerning pensions and post retirement benefits. The goal is to improve the reporting of these plans and increasing the use and transparency of this information on financial statements. Reuters reports that the FASB’s review should be completed by the end of 2006.
Tax

Federal Tax Reform Panel Makes Recommendations

The President’s Advisory Panel on Federal Tax Reform presented its recommendations this week. Convened to find simpler and economically effective ways to streamline the nation’s current tax code, the nine members have completed their task well but the controversy has only started. The panel was co-chaired by former senators Connie Mack (R-Florida) and John Breaux (D-Louisiana). In a letter to Treasury Secretary John Snow, the panel wrote, “The effort to reform the tax code is noble in its purpose, but it requires political will power.
Community News

San Diego Officials Struggle with Throwing More Money at Accounting Problems

San Diego’s City Attorney, Michael Aguirre, on Friday asked the City Council to reject additional funding for the independent risk firm, Kroll, Inc. and law firm Wilkie, Farr & Gallagher, who are investigating the City’s finances, including disclosure practices relating to the $1.4 billion shortfall in the City’s pension fund. The two firms have said they will be unable to conclude their work by December as scheduled, because the City’s data search has not produced all of the records they need, the San Diego Union-Tribune reports.
Tax

IRS Grants Tax Favored Treatment for Early Distribution of Retirement Funds

Taxpayers who suffered losses resulting from Hurricane Katrina are being advised by the Internal Revenue Service (IRS) to be aware of recent changes in tax law providing for tax-favored withdrawals, reconstitutions and loans from certain retirement plans.Advertisement
Tax

Social Security Increase Runs Short

The Social Security Administration announced a 4.1 percent cost of living adjustment for more than 52 million retired and disabled recipients last week. Checks will increase an average of $39 starting in January. This is the largest increase since the 5.4 percent advance in 1991. Last year’s increase was 2.7 percent.

Mark Your Calendar: National Symposium on Self-Directed IRAs

Self-directed Individual Retirement Accounts (IRAs) are the fastest growing segment of the $3.7 trillion IRA market according to a statement from PENSCO Trust Company. The company reports that approximately 75 percent of new retirees roll retirement funds from 401(k) accounts into IRA accounts they control and can diversify beyond traditional equities and mutual funds.

Pension Deficits Will Continue To Grow Fed Agency Says

The Pension Benefit Guaranty Corporation (PBGC) reports that its claims covering private pension plans could increase the federal deficit over the next decade according to the Associated Press. Senate and House members have proposed bills intended to reinforce this nation’s pension system, however, the agency is concerned about its mounting obligations as it takes over more collapsed plans.

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