Stock Options and SARs Under the New 409A Regime
The regulations recently proposed under section 409A have broadened the definition of
nonqualified deferred compensation (NQDC) to encompass virtually all equity or equity-based
grants not covered by a specific exception. Fortunately, most NQDC can be crafted to either
qualify for an exception or comply with section 409A. In some situations, however, seemingly
innocuous designs or design changes could unwittingly run afoul of the new rules, with
unfavorable tax results. Pension Reform: New Mandates for Hybrid Plans
Pending pension reform would attempt to clear up the legal ambiguity surrounding hybrid plans
and would impose new restrictions on conversions of traditional defined benefit plans to hybrid
plans. But the new rules may leave existing plans in legal limbo. PBGC Premium Hikes Move Ahead, Funding Reform Stumbles
As Congress entered the final stretch of the 2005 legislative session, broad pension reform was
moving, but slowly. The Senate approved its pension bill — the Pension Security and
Transparency Act. The House Ways and Means Committee approved the Pension Protection Act,
which the Education and the Workforce Committee approved in June. How Would the Proposed Changes to Mortality Standards Affect Plan Sponsors?
Pending pension reform would require defined benefit plan sponsors to change the mortality
assumptions they use to value their plan liabilities, so Watson Wyatt analyzed the impact of the
proposed changes. We find that the new mortality assumptions would increase liabilities
somewhat for most plan sponsors, especially for plans in which men outnumber women. A Balanced Look at the Case for Defined Benefit Pensions
A media frenzy has surrounded the pension woes of several airlines and the resultant potential
financial hit on the Pension Benefit Guaranty Corporation (PBGC). This, along with the increasing number of large defined benefit (DB) pension sponsors that have either frozen or closed their plans to new hires, has led many analysts to conclude that the traditional DB pension system is in a tailspin. Tax Reform Panel Final Report Recommends Significant Changes for Employer-Sponsored Programs
In January 2005, President Bush tasked the President's Advisory Panel on Federal Tax Reform
with reforming the U.S. tax code. Former U.S. Senators Connie Mack (R-Florida) and John
Breaux (D-Louisiana), the panel's chair and vice-chair, recently presented the panel's final report
to Treasury Secretary John Snow.
|
