Articles
Read the summary of the US Small Business Administration's Pension Roundtable from their December Newsletter . Many of our major issues were discussed and we were fortunate to be able to present many of the topics. In addition to the SBCA, other groups such as ASPPA (American Society of Pension Professionals and Actuaries), the US Chamber of Commerce and NFIB were present. This Roundtable was a real opportunity for us to address many of our major problems/issues with a number of key members from Treasury and IRS. We call on Congress to act now to provide estate tax planning “peace of mind” for all small business owners by enacting permanent estate tax relief. Specifically, Congress should adopt a permanent individual “exemption” of $3.5 million (indexed for inflation) from the estate tax and a top marginal estate tax rate of 45 percent. The Small Business Council of America (SBCA) applauds the members of Congress who are in favor of repealing estate taxes for small businesses by permanently extending the current 2009 estate tax this year. SBCA Calls for an Immediate Moratorium on Tax Code Section 6707A Listed Transaction Penalties. The SBCA is working to bring certainty to the current Estate Tax system now. The 2001 Tax Act created a legal landscape that makes it impossible for small business owners and other taxpayers to plan their estates with any predictability. Our 2009 issue paper calls for maintaining the $3.5 million estate tax exemption and the step up in basis for inherited assets, a reunification of the gift and estate tax system, allowing the surviving spouse's estate to use any credit from the first spouse's estate that was not used and a new substantial estate tax exemption for retirement plan assets to induce Americans to save in their retirement plans. The SBCA urges Congress to limit the application of Internal Revenue Code Section 409A to publicly traded companies. This onerous code section is applicable to small businesses even though there is no abuse in the small business context. Most small businesses do not even know it applies to them and are totally unaware of the substantial penalties that currently apply. 403(b) Compliance - Read this article by Gary B. Kushner or the Kushner & Company (Portage, MI) to learn about the new world of 403(b) compliance. Note that right at the end of December 2008 at the last moment, IRS extended the deadline for written 403(b) plans to December 31, 2009. Problems with small accounts of former employees - Greg Matthews of the Matthews Benefit Group, Inc. (St. Petersburg, Florida) explains when a plan may impose reasonable expenses only to former employees. This can be an effective way for former employees to share in the expenses of the plan and may serve as an inducement for them to roll over these accounts to IRAs or to their new employers' plans. A more sophisticated look at the benefits of Roth contributions - Greg Matthews of Matthews Benefit Group, Inc., (St. Petersburg, Florida), analyzes the question of whether it is better to save in a Roth versus saving in a regular IRA or 401(k). Distressing savings report from Hewitt - Hewitt has determined that retirees will have to replace an average of 126 percent of their salaries when they retire to meet their post-retirement income needs. Greg Matthews of Matthews Benefit Group, Inc., (St. Petersburg, Florida), explains the latest distressing statistics from Hewitt. India Outsourcing Comes Home - Read this article by employee benefits expert, Greg Matthews, to find out about a new trend in outsourcing TPA work to India. Greg Matthews, Matthews Benefit Group, Inc., St. Petersburg, Florida Click here to see SBCA's comments submitted to the Senate Finance Committee for it’s April 3, 2008, hearing on the federal estate tax system entitled “Thinking Outside the Box." Creditor protection for tax qualified plans and IRAs. How safe is your pension? The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 brought much-needed clarity to debtor and creditor rights relative to retirement assets in a federal bankruptcy proceeding. Read this article by ERISA experts, Richard A. Naegele and Mark P. Altieri, for an indepth analysis of the new bankruptcy bill and how it protects retirement plan assets. Both are with the firm Wickens, Herzer, Panza, Cook & Batista Co. in Avon, Ohio. Fewer 401(k) Savers Would be Facing Inadequate Nest Eggs if Advisers Defined Their Contribution Rate. This article authored by SBCA Director, James E. Turpin, MSPA, was recently published in The ASPPA Journal. James is the president of The Turpin Consulting Group Inc., of Albuquerque, NM. The Time We Saved The City describes the behind the scene efforts to bail out NYC from its payroll budget crisis of 1975 written by SBCA Special Counsel, Alvin D. Lurie. The Small Business Council of America (SBCA) urges Congress to pass the SIMPLE Cafeteria Plan Act of 2007 – S. 555. Impact of Tax Reform on the Small Business - Everybody in Washington is talking about the “tax gap.” This is the new buzz word for the difference between the amount of tax revenue the federal government would receive if all Americans paid their taxes compared to what it actually receives. In 2006, IRS estimated the tax gap to be $290 billion for tax year 2001. Thus, if everybody paid their fair share of taxes, the government’s deficit would be significantly reduced. No wonder Congress and the Administration are exploring ways to close the tax gap. Read this white paper to find out SBCA's ideas for closing the tax gap. "Pension Parity: Addressing the Inequities Between Retirement Plan Options for Small and Large Businesses- How Can We Increase Small Business Employee Converage?" Statement of Paula A. Calimafde on Behalf of SBCA before The Subcommittee on Finance and Tax of The Committee on Small Business of The United States House of Representatives Impact of Tax Reform on the Small Business Retirement Plan System - More than 19 million American workers are covered by the small business retirement plan system. These small business employees enjoy very generous annual retirement plan contributions from their employers, often in the range of five to ten percent of compensation. If some of the tax reform proposals being discussed by the Administration, Treasury and the Congress become law, it is highly probable that these company contributions will come to a halt and these small business employees will be at risk of losing this valuable retirement plan coverage in the future. This article by Paula Calimafde, Paley Rothman, Bethesda, MD, shows how dependent the small business retirement plan system is on tax incentives and how an unintended result of the move to reduce taxation on savings will be the demise of the very successful voluntary retirement plan system. Post-Retirement Health Insurance as an Employee-Provided Benefit - Michael P. Coyne - From time to time we are asked about post-retirement health insurance as a fringe benefit in a closely held business. Can it be provided on a discriminatory basis? Is there any problem if the employee pays for the benefit? Can of the benefit to be modified or terminated after someone retires? The answer to these questions may surprise you. Read this article by benefits expert, Mike Coyne to find out whether this benefit can be provided in a closely held business. Mike Coyne also reviews the "newest" retirement plan idea, the Section 412(i) Plan. Read this article to understand why the IRS is looking at this retirement plan product that is actually decades old. Michael Coyne, Esq. Waldheger Coyne Cleveland, Ohio Cafeteria Plans - Cafeteria plans allow employees to select from a variety of benefits and to use pre-tax dollars to acquire the benefits most useful to them. The cafeteria plan encourages health care coverage and dependent care coverage, (hopefully, in the future, long term care insurance).. Existing statutes and regulations, however, discourage small business from offering cafeteria plans to their employees. Read this reprint of a chapter from the NYU Review of Employee Benefits and Executive Compensation by Paula Calimafde and Deborah Cohn from Paley, Rothman to find out how Section 125 can be modified to increase sponsorship of cafeteria plans by small business. 401(k) Safe Harbor Retirement Plan Options. Read about one of the most exciting retirement plan designs available today - the 401(k) safe harbor plan. Learn how to eliminate the complicated anti-discrimination testing and allow all employees - highly compensated and non-highly compensated to contribute up to $11,000 ($12,000 for employees over 50) to a 401(k) plan. One of the biggest headaches of a 401(k) plan is the extra testing that needs to be done each year to compare the amounts allocated to the highly paid versus other employees. A 401(k) plan can automatically satisfy the ADP and ACP tests without any annual testing, unlike a regular 401(k) plan, if the plan satisfies one of the new 401(k) safe harbors. Leading tax attorney, Al Martin, explains the new rules and requirements of the 401(k) safe harbor plan. Al Martin, Esq., Lathrop & Gage, of Overland Park, Kansas.

Articles

Read the summary of the US Small Business Administration's Pension Roundtable from their December Newsletter . Many of our major issues were discussed and we were fortunate to be able to present many of the topics. In addition to the SBCA, other groups such as ASPPA (American Society of Pension Professionals and Actuaries), the US Chamber of Commerce and NFIB were present. This Roundtable was a real opportunity for us to address many of our major problems/issues with a number of key members from Treasury and IRS.

We call on Congress to act now to provide estate tax planning “peace of mind” for all small business owners by enacting permanent estate tax relief. Specifically, Congress should adopt a permanent individual “exemption” of $3.5 million (indexed for inflation) from the estate tax and a top marginal estate tax rate of 45 percent. The Small Business Council of America (SBCA) applauds the members of Congress who are in favor of repealing estate taxes for small businesses by permanently extending the current 2009 estate tax this year.

SBCA Calls for an Immediate Moratorium on Tax Code Section 6707A Listed Transaction Penalties.

The SBCA is working to bring certainty to the current Estate Tax system now. The 2001 Tax Act created a legal landscape that makes it impossible for small business owners and other taxpayers to plan their estates with any predictability. Our 2009 issue paper calls for maintaining the $3.5 million estate tax exemption and the step up in basis for inherited assets, a reunification of the gift and estate tax system, allowing the surviving spouse's estate to use any credit from the first spouse's estate that was not used and a new substantial estate tax exemption for retirement plan assets to induce Americans to save in their retirement plans.

The SBCA urges Congress to limit the application of Internal Revenue Code Section 409A to publicly traded companies. This onerous code section is applicable to small businesses even though there is no abuse in the small business context. Most small businesses do not even know it applies to them and are totally unaware of the substantial penalties that currently apply.

403(b) Compliance - Read this article by Gary B. Kushner or the Kushner & Company (Portage, MI) to learn about the new world of 403(b) compliance. Note that right at the end of December 2008 at the last moment, IRS extended the deadline for written 403(b) plans to December 31, 2009.

Problems with small accounts of former employees - Greg Matthews of the Matthews Benefit Group, Inc. (St. Petersburg, Florida) explains when a plan may impose reasonable expenses only to former employees. This can be an effective way for former employees to share in the expenses of the plan and may serve as an inducement for them to roll over these accounts to IRAs or to their new employers' plans.

A more sophisticated look at the benefits of Roth contributions - Greg Matthews of Matthews Benefit Group, Inc., (St. Petersburg, Florida), analyzes the question of whether it is better to save in a Roth versus saving in a regular IRA or 401(k).

Distressing savings report from Hewitt - Hewitt has determined that retirees will have to replace an average of 126 percent of their salaries when they retire to meet their post-retirement income needs. Greg Matthews of Matthews Benefit Group, Inc., (St. Petersburg, Florida), explains the latest distressing statistics from Hewitt.

India Outsourcing Comes Home - Read this article by employee benefits expert, Greg Matthews, to find out about a new trend in outsourcing TPA work to India. Greg Matthews, Matthews Benefit Group, Inc., St. Petersburg, Florida

Click here to see SBCA's comments submitted to the Senate Finance Committee for it’s April 3, 2008, hearing on the federal estate tax system entitled “Thinking Outside the Box."

Creditor protection for tax qualified plans and IRAs. How safe is your pension? The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 brought much-needed clarity to debtor and creditor rights relative to retirement assets in a federal bankruptcy proceeding. Read this article by ERISA experts, Richard A. Naegele and Mark P. Altieri, for an indepth analysis of the new bankruptcy bill and how it protects retirement plan assets. Both are with the firm Wickens, Herzer, Panza, Cook & Batista Co. in Avon, Ohio.

Fewer 401(k) Savers Would be Facing Inadequate Nest Eggs if Advisers Defined Their Contribution Rate. This article authored by SBCA Director, James E. Turpin, MSPA, was recently published in The ASPPA Journal. James is the president of The Turpin Consulting Group Inc., of Albuquerque, NM.

The Time We Saved The City describes the behind the scene efforts to bail out NYC from its payroll budget crisis of 1975 written by SBCA Special Counsel, Alvin D. Lurie.

The Small Business Council of America (SBCA) urges Congress to pass the SIMPLE Cafeteria Plan Act of 2007 – S. 555.

Impact of Tax Reform on the Small Business - Everybody in Washington is talking about the “tax gap.” This is the new buzz word for the difference between the amount of tax revenue the federal government would receive if all Americans paid their taxes compared to what it actually receives. In 2006, IRS estimated the tax gap to be $290 billion for tax year 2001. Thus, if everybody paid their fair share of taxes, the government’s deficit would be significantly reduced. No wonder Congress and the Administration are exploring ways to close the tax gap. Read this white paper to find out SBCA's ideas for closing the tax gap.

"Pension Parity: Addressing the Inequities Between Retirement Plan Options for Small and Large Businesses- How Can We Increase Small Business Employee Converage?" Statement of Paula A. Calimafde on Behalf of SBCA before The Subcommittee on Finance and Tax of The Committee on Small Business of The United States House of Representatives

Impact of Tax Reform on the Small Business Retirement Plan System - More than 19 million American workers are covered by the small business retirement plan system. These small business employees enjoy very generous annual retirement plan contributions from their employers, often in the range of five to ten percent of compensation. If some of the tax reform proposals being discussed by the Administration, Treasury and the Congress become law, it is highly probable that these company contributions will come to a halt and these small business employees will be at risk of losing this valuable retirement plan coverage in the future. This article by Paula Calimafde, Paley Rothman, Bethesda, MD, shows how dependent the small business retirement plan system is on tax incentives and how an unintended result of the move to reduce taxation on savings will be the demise of the very successful voluntary retirement plan system.

Post-Retirement Health Insurance as an Employee-Provided Benefit - Michael P. Coyne - From time to time we are asked about post-retirement health insurance as a fringe benefit in a closely held business. Can it be provided on a discriminatory basis? Is there any problem if the employee pays for the benefit? Can of the benefit to be modified or terminated after someone retires? The answer to these questions may surprise you. Read this article by benefits expert, Mike Coyne to find out whether this benefit can be provided in a closely held business. Mike Coyne also reviews the "newest" retirement plan idea, the Section 412(i) Plan. Read this article to understand why the IRS is looking at this retirement plan product that is actually decades old. Michael Coyne, Esq. Waldheger Coyne Cleveland, Ohio

Cafeteria Plans - Cafeteria plans allow employees to select from a variety of benefits and to use pre-tax dollars to acquire the benefits most useful to them. The cafeteria plan encourages health care coverage and dependent care coverage, (hopefully, in the future, long term care insurance).. Existing statutes and regulations, however, discourage small business from offering cafeteria plans to their employees. Read this reprint of a chapter from the NYU Review of Employee Benefits and Executive Compensation by Paula Calimafde and Deborah Cohn from Paley, Rothman to find out how Section 125 can be modified to increase sponsorship of cafeteria plans by small business.

401(k) Safe Harbor Retirement Plan Options. Read about one of the most exciting retirement plan designs available today - the 401(k) safe harbor plan. Learn how to eliminate the complicated anti-discrimination testing and allow all employees - highly compensated and non-highly compensated to contribute up to $11,000 ($12,000 for employees over 50) to a 401(k) plan. One of the biggest headaches of a 401(k) plan is the extra testing that needs to be done each year to compare the amounts allocated to the highly paid versus other employees. A 401(k) plan can automatically satisfy the ADP and ACP tests without any annual testing, unlike a regular 401(k) plan, if the plan satisfies one of the new 401(k) safe harbors. Leading tax attorney, Al Martin, explains the new rules and requirements of the 401(k) safe harbor plan. Al Martin, Esq., Lathrop & Gage, of Overland Park, Kansas.