Pension Plan Terminations
Pension Plan Terminations (2d ed., BNA Books, 1998), co-authored by Edward R. Mackiewicz (former General Counsel of the Pension Benefit Guaranty Corporation) and myself, is a treatise on the legal, tax and practical aspects of terminating qualified retirement plans. The bulk of the text deals with standard terminations of defined benefit pension plans, which are the most difficult aspect of the subject, but it also covers terminations of defined contribution plans in some detail. In case anyone is interested, here is further information.
"Following the Terms of the Plan": What Does It Mean? What If You Don't? Many practitioners assume, and the IRS has occasionally asserted, that strict adherence to plan provisions is a condition for qualification under section 401(a). Is that position supported by the statute and regulations? If not, what are the real consequences of operational deviations that do not violate any explicit qualification rule?
Sales of Stock Options to Family Limited Partnerships: Caveats raises questions about the viability of obtaining capital gain treatment for stock option profits through an intervening sale to a family limited partnership. This strategy is currently popular in some quarters but is, in my view, unduly risky (and, as readers of other materials here will infer, I am not one of the pension world's leading Nervous Nellies). (N.B.: Since this article was written, the IRS has imposed tax shelter listing and reporting requirements on these transactions.)
Light Through the Glass: More on Discounted Options and the Tax-Exempt Executive, written in collaboration with A. Thomas Brisendine, discusses the use of options (usually on mutual funds) with an exercise price below the fair market value of the optioned property as a compensation technique for executives of tax-exempt organizations. Deloitte & Touche pioneered this strategy. (N.B.: This article is now of mostly historical interest. The final regulations under section 457 dealt a blow to discounted options by treating them as deferred compensation, a position later written into the statute by section 409A.)
Once in a while, I comment on pension issues in the Public Policy section of this site or on Stromata Blog. Here are direct links to items that may be of interest:
The Social Security Un-Fund (6/24/04)
Media Bias and Cash Balance Plans (6/23/04)
Cash balance pension plans: Are they legal? (8/21/03)
The pension funding semi-crisis (6/29/03)
The Bush Administration's retirement savings proposals (2/9/03)
Stock option accounting: fact and fancy (7/15/02)
Ninth Circuit pension follies (6/26/02)
A cash balance plan paradox (5/23/02)
Paying for the Enron plans' independent fiduciary (4/20/02)
The virtues of not diversifying (3/26/02)
Ellen Schultz's Wall Street Journal falsifications (2/27/02 and 1/24/02)
Enron's split-dollar life insurance (2/7/02, 2nd item)
401(k) plans: bad cures for nonexistent diseases (2/2/02)
Baby steps toward Social Security reform (12/10/01)
Letters of Comment:
G. Wachtel asks for views on the application of section 414(b) and (c) controlled group principles to tax exempt employers (8/9/02).