Marking to Market: A Preliminary Look at Proposed Changes to FASB Accounting Standards for Pensions and Postretirement Benefit Plans
Sentiment has been rising among financial market participants that pension accounting standards are confusing and lack a solid grounding in economic principles. New Legislation, Litigation in Cash Balance Debate
Hybrid plans remained a key pension reform issue as the 2005 legislative session drew to a close. Both the House and the Senate pension reform bills address hybrid plans, but important differences between the two bills remain to be worked out. Defined Contribution Provisions Gain Traction as Pension Reform Moves Ahead
Defined benefit reform has dominated the 2005 legislative agenda, but defined contribution issues started gaining traction as pension reform moved through the House and the Senate. GAO’s Report on Cash Balance Plans: Flawed and Misleading
The Government Accountability Office (GAO) recently released a study on how participants fare in cash balance plan conversions. In a sharp departure from earlier studies, the GAO report concludes that such conversions significantly reduce most participants’ retirement benefits. HSA/FSA Grace Period Guidance Restricts Employer Options but Provides Limited Transition Relief
In Notice 2005-86, the IRS clarifies the effect of a health flexible spending account (FSA) grace period on health savings accounts (HSAs). Employees who participate in a health FSA with a grace period may not participate in an HSA until the first day of the first month after the grace period ends. IRS Corrects Dependent Definition and Allows for Grace Period Amounts on DCAP Form
The IRS’s 2005 Form 2441, Child and Dependent Care Instructions, quietly fixes a discrepancy for taxpayers claiming child and dependent care expenses for the care of a disabled dependent adult. 2006 Welfare Benefit Limits
The IRS has released the 2006 cost-of-living adjustments to limits for the adoption credit, child tax credit, qualified transportation benefits, adoption assistance programs, medical savings accounts and health savings accounts.
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