INSIDER

Expensing the Cost of Stock Options--What's an Employer to Do?
Winning back investor trust may be a difficult assignment, but the pressure is mounting for employers to do just that. While a few have responded by voluntarily expensing stock options, others mull suggestions to raise ownership targets or require more disclosure around intended sales by executives. Currently debated legislation may provide some guidance but it won't help a company maximize the performance and motivation of its own work force. What’s an employer to do?

Corporate Accountability Law Affects Retirement Plans, Executive Compensation
On July 30, President Bush signed the Sarbanes-Oxley Act of 2002 — a corporate accountability and accounting reform law prompted by the business scandals of recent months.

Executive Compensation Gains Momentum on Capitol Hill
Stock options, deferred compensation and other executive compensation issues are receiving considerable attention on Capitol Hill.

Senate Moves Forward on 401(k) Protections
On July 10, the Senate Finance Committee approved the National Employee Savings Trust and Equity Guarantee (NESTEG) Act (S.1971).

IRS Issues Guidance for New Health Reimbursement Arrangements
On June 26, the IRS issued a Notice and a Revenue Ruling on the tax treatment of Health Reimbursement Arrangements (HRAs).

Treasury Issues New Proposed Regulations for Split Dollar Life Insurance
In a notice released on July 3, 2002, the IRS proposed extensive regulations that, when finalized, will dramatically change the taxation of future split dollar arrangements.

Supreme Court Rules Against ERISA Preemption of State Law
In Rush Prudential HMO, Inc. v. Moran, the Supreme Court recently ruled that a state statute allowing for an independent review of certain denials of benefits is not preempted by ERISA for an insured group health plan.

IRS Extends Employment Taxes on Statutory Stock Options Moratorium
The IRS recently released Notice 2002-47, which continues the IRS moratorium on collecting FICA and FUTA taxes on statutory stock options.

Restorative Payments: Easier Said Than Done
News of a company’s 401(k) plan misfortunes usually hits plan participants hard, often affecting attention to work, quality of work and employee morale.

IRS Requests Comments on Phased Retirement, Eliminating Optional Forms of Distribution
The IRS has separately requested comments on issues relating to phased retirement under qualified defined benefit plans and on eliminating optional forms of distribution from defined benefit plans.