House Passes Tax Act
On October 25, House Ways and Means Chairman Charles Rangel (D-New York) introduced the Tax Reduction and Reform Act of 2007, which he describes as the most comprehensive tax legislation since the Tax Reform Act of 1986. The bill would permanently repeal the alternative minimum tax (AMT), treat most tax-carried interest as ordinary income, modify the unrelated-business-income tax rules and reduce the corporate tax bill. House Approves New COBRA Entitlements and Tax Credits for Displaced Workers
The House has approved legislation that could extend continuing health care coverage to trade-displaced workers for 10 years or more. The act also would increase the tax credits available to help such workers pay for COBRA continuation coverage or other health care coverage. End of an Era: The 2007 Schedule B
The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) has released new 5500 forms for 2007 plan years. The new (and last) Schedule B has been updated for certain Pension Protection Act of 2006 (PPA) changes that became effective in 2007. Summary of 409A Compliance Deadline Extensions
During the past few months, the IRS has issued three notices extending the deadlines for complying with various rules under section 409A. Because the guidance has been issued piecemeal and the effective date for the final regulations has been delayed, it is difficult to reconcile all the implications. The Results Are In: FAS 123 Option Assumptions
Fair values as a percentage of underlying stock values dropped from 39 percent in 2004 to 33 percent in 2006 among the FORTUNE 1000, largely because of lower expected volatility. The overwhelming majority of these companies – 85 percent -- used the Black-Scholes formula to value their options – only 14 percent used the more complicated lattice model (1 percent used both). Expected option life assumptions generally have remained very stable from year to year. Legislation to Delay PPA Effective Date Proposed
Representatives Earl Pomeroy (D-North Dakota) and Eric Cantor (R-Virginia) have introduced legislation (H.R.3868) to delay the effective date of certain provisions in the Pension Protection Act of 2006 (PPA). House Ready to Vote on Mental Health Parity
Mental health parity reform has passed the three House committees with jurisdiction, and the House is likely to approve the Paul Wellstone Mental Health and Addiction Equity Act (H.R.1424) within weeks. IRS Releases 2008 Benefit Limits
The IRS has announced the annual cost-of-living and statutory adjustments of various dollar limits for employee benefit plans. A Brave New World for Lump Sum Distributions
The Pension Protection Act of 2006 (PPA) calls for the use of corporate bond yields rather than 30-year Treasury yields to calculate minimum lump sums payable from defined benefit plans that define benefits in terms of annuities.
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