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Michael F. Yates & Company, Inc.
 HELPING MANAGE YOUR COMPANY'S MOST PRECIOUS RESOURCE |
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| ...from the HR Perspective |
| Human Resource Update |
May 2009 |
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WHAT ABOUT THE SURVIVIORS OF THE DOWNTURN
Preparing for the Good Times.
- What will your company do when the economy improves?
- How will you address hiring practices?
- What to do with pays that have been reduced or frozen vs. the rates that may be needed to attract new hires, i.e. all the problems with new hires being paid the same or more than the employees who got you through the mess?
- How about Benefit considerations, i.e. vacations, holidays, medical/dental/vision, disability, retirement, etc?
Our staff of professionals are on call to assist with every detail of being prepared to deal with these and many other topics of vital importance to your company's growth and future.
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IRS confirms no information-reporting requirement for COBRA subsidy.
IRS Reporting of the COBRA Subsidy as it relates to the
American Recovery and Reinvestment Act of 2009 (See archived article, Economic
Stimulus Package and its COBRA Impact, March 2009)
The IRS confirmed no information reporting requirement for
COBRA subsidy. Employers will not need to
report temporary COBRA premium assistance to eligible individuals on an
information return or Form W-2. The IRS
intends to update it's frequently asked questions (FAQs) on its website to
reflect this treatment.
Employers will recover their share of the premium through a
credit against payroll taxes. The IRS
has instructed employers to use Form 941, Employer's Quarterly Federal Tax
Return, which is the only means to claim a credit and be reimbursed for the
COBRA subsidy.
If an individual is denied COBRA premium assistance, he/she
can appeal to the U.S. Department of Labor (DOL). The DOL is required to make a determination
within 15 days
The DOL will process appeals related to private-sector
employer plans subject to ERISA's COBRA provisions while the U.S. Department of
Health and Human Services will handle appeals for federal, state and local
government employees, as well as appeals related to group health insurance
coverage provided under state continuation coverage laws.
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Plan Reporting Calendar
ALL PLANS
2nd QUARTER 2009 FILING DUE DATES FOR
CALENDAR YEAR PLANS
This calendar is not intended to be an exhaustive listing of every due date under the Code or ERISA, but rather reflects some of the most common due dates.
View Calendar |
Nearly
60 percent of those surveyed said that 'if needed'
to rehire retirees they should be able to do so without a reduction in retirees' pensions.
What do you say?
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Our staff
and firm are proud
members of the
following professional
organizations.
Society of Actuaries
American Society of Pension Professionals Actuaries
Society for Human Resource Management
American Management Association
National
Federation of Independent
Business
Better
Business Bureau
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The site ("from the HR perspective" hence herein referred to as MFYCO.com) is made available by Michael F. Yates & Company Incorporated. All content, information and software provided on and through 'from the HR perspective' and MFYCO.com ("Content") may be used solely under the following terms and conditions ("Terms of Use"). YOUR USE OF THIS WEBSITE CONSTITUTES YOUR AGREEMENT TO BE BOUND BY THESE TERMS AND CONDITIONS. IF YOU DO NOT AGREE TO THESE TERMS, YOU SHOULD IMMEDIATELY DISCONTINUE YOUR USE OF THIS SITE.
More information ... |
MFYCO PRIVACY POLICYMichael
F. Yates & Company Inc. believes strongly in protecting the privacy
of its users. By
using our web site you consent to the collection, transfer and use of
your personal information in the manner set out within.
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- Due to the nature of the Internet, MFYCO does not warrant that access to MFYCO web sites or any of their pages will be uninterrupted or error free.
- MFYCO does not warrant or make any representations regarding the usefulness of or the expected results of the material contained on MFYCO web sites.
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Is the economic tide about to turn?
Do you feel the turnaround in the economy yet? Your HR department better be prepared for whatever the road ahead brings!
I sincerely hope that our newsletter will be of help. We will try to cover as much of the vital changes we are all experiencing in our monthly commentaries.Please feel free to comment and/or ask a question at any time. We offer this timely information as another benefit of your relationship with our company. If you feel a friend or colleague would benefit from receiving our newsletter, please feel free to forward a copy.
Best Regards,
Michael F. Yates
President
PS: You can view all of our newsletters by clicking the 'newsletter archives' link at our company website (www.mfyco.com). |
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Plan loans to be exempt from truth-in-lending
disclosures beginning July 2010
The Truth in Lending Act
("TILA") was established for two main reasons: 1) to provide meaningful
disclosures so consumers would be able to compare available credit terms and minimize
uniformed use of credit; and 2) to protect consumers against inaccurate and
unfair credit card practices and credit billing. Currently, TILA requires that
plans making 25 or more participant loans (or five or more loans secured by a
dwelling) in a current or prior calendar year must make truth-in-lending
disclosures under TILA and governing Regulation Z. As "creditors" under
Regulation Z, plans are required to disclose to participants: the finance
charge, the amount financed, the annual percentage rate, procedures for
repayment, etc.
Qualified plans that make loans to participants will,
effective July 1, 2010, no longer be required to make detailed disclosures
under TILA. An extension of credit in an employer-sponsored retirement plan
qualified under the Internal Revenue Code ("Code"), will no longer subject to
the disclosure rules as of July 1, 2010. In order for the exemption to apply,
the plan-issued loan must comply with the Code and be issued from vested funds
from the participant's account. The exemption will apply regardless of whether
the plan is subject to ERISA and regardless of the number of loans. Loans
issued for amounts in excess of a participant's vested account balance, or that
violate the Code, will be subject to the requirements of the amended Regulation
Z.
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The following is the latest update on the H1N1 (swine flu) virus:
The world's swine flu death toll reached 100 as two more New Yorkers died while infected with a virus that has sickened more than 12,000 people.
Pennsylvania has 58 confirmed cases and 15 probable cases that are awaiting final test results. Probable cases refer to individuals who have an influenza-like illness (ILI) along with results from the State Public Health Laboratory that suggest infection with 2009 novel influenza A/H1N1 virus. At present, cases can only be confirmed through testing conducted at the U.S. Centers for Disease Control and Prevention (CDC) in Atlanta. If confirmed at the CDC, cases move from the probable to the confirmed category. If the laboratory tests at the CDC do not indicate infection with this virus, the individual is no longer considered a probable case and is removed from the case counts.
The CDC has already shipped medications to each state, so local health departments can test for and diagnose the virus. And while it's not spreading as quickly as some had feared, experts say it's still important to stay vigilant and monitor any further infections.
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Domestic Relations Orders
Of course you have heard of QDROs, but the
qualified retirement plan that your company sponsors just received it's first court
order directing you to pay certain amounts to the former spouse (or dependent) of
a plan participant. As the Plan's
Administrator the first thing you want to know is "what am I supposed to do
now".
Well first let's discuss what it is that you
received. Since you have been asked, based on the order that you received, to
pay certain amounts to someone other than a plan participant, the order should
be a Qualified Domestic Relations Order (QDRO). Perhaps we should start by defining a few terms:
A Domestic Relations Order (DRO) is any judgment, decree, or
order (including approval of a property settlement agreement) that relates to
the provisions of child support, alimony payments, or marital property rights
to a spouse, former spouse, child or other dependent of a participant, and is
made pursuant to a State domestic relations law (including a community property
law).
A QDRO
is a DRO that creates or recognizes the existence of an alternate payee's right
to, or assigns to an alternate payee the right to, receive all or a portion of
the benefits payable with respect to a participant under a qualified retirement
plan and that complies with certain special requirements.
An Alternate Payee is any spouse, former spouse, child or other
dependent of a participant who is recognized by a DRO as having a right to
receive all, or a portion of, the benefits payable under a plan with respect to
such participant.
Now that you know what it is, and possible is
not, what do you do? As the plan
administrator, you must promptly notify the participant and any Alternate Payee
that you have received the order and you must provide each of them with the
plan's procedures for determining whether or not the judgment or decree is
qualified. The required notices are to be sent to the addresses specified in
the order or, if the order fails to specify an address, to the last known
address of the participant or Alternate Payee.
The failure of a
plan administrator to communicate the plan's QDRO procedures to an ex-spouse
constitutes a breach of fiduciary duty. Such a failure would, accordingly,
empower the ex-spouse with standing to bring suit against you as the plan's the
administrator. Every
plan is required to have written procedures for determining the qualified
status of domestic relations orders and for administering the payment of
benefits under such orders. These procedures must provide for notification of
the interested parties promptly following receipt of the order and must permit
an Alternate Payee to designate a representative for receipt of copies of notices
sent to the Alternate Payee. [Note: If
you don't have a written procedure in place, MFYCO can prepare one for you.]
Once you have notified both the participant and
any Alternate Payee, you now have to:
(1) make sure that no benefits, that are the subject
of the order, are paid to the participant while you are determining whether or
not the order is a QDRO. While the
qualified status of the order is being determined, you must separately account
for the benefits that would otherwise be payable
during that period. However, you do not
have to set up an escrow account for such amounts. If an order is determined to
be qualified within 18 months after the date on which the first payment would
be required to be made under the order, you must pay the separated amounts
(including any interest on those amounts) to the person or persons entitled to
them. If, within that period, it is
determined that the order is not qualified or if the matter remains unresolved,
you must pay the separated amounts (and any interest thereon) to the person or
persons who would have received them if the order had not been issued. Any
determination that an order is qualified after expiration of the 18-month
period will have prospective effect only;
(2) determine whether the court order is a
DRO. In making this determination, you
must look to ensure that the order relates to the provision of child support,
alimony payments, or marital property rights to a spouse, former spouse, child,
or other dependent of the participants, and whether it is made pursuant to a
state domestic relations law by a state authority with jurisdiction. As plan administrator you are not required to
review the determination by a state court as to whether an individual is a
spouse, former spouse, child, other dependent, or surviving spouse of the
participant under state domestic relations law. Similarly, you are not required
to review the correctness of decision by a competent state authority pursuant
to state domestic relations law that the parties are entitled to a judgment of
divorce. According to the Employee Benefits Security Administration (EBSA),
such determinations are subjects of state law;
(3) determine if the DRO is indeed a QDRO. As the plan's administrator you may determine
the qualified status of an order only on the basis of the statutory
requirements specified under Internal Revenue Code Sec.
414(p)). In making this determination, you may consult
with legal counsel and others. In
order to be qualified, the DRO must create or recognize the existence of an Alternate
Payee's right to, or assign to an Alternate Payee the right to, receive all or
a portion of the benefits payable with respect to a plan participant. In
addition, a QDRO must clearly specify:
(a) the name and the last known mailing address
(if any) of the participant and the name and mailing address of each
"alternate payee" (i.e., the spouse, former spouse, child or
dependent who is recognized by the order as having a right to benefits);
(b) the amount or percentage of the participant's
benefits to be paid to each alternate payee or the manner in which the amount
or percentage is to be determined;
(c) the number of payments or the period to which
the order applies; and
(d) each
plan to which the order applies.
A DRO is not a qualified order if --
(i) it
requires a plan to provide any type or form of benefit, or any option, not
otherwise provided by the plan;
(ii) it requires the plan to provide increased
benefits (determined on the basis of actuarial value); or
(iii) it
requires the payment of benefits to an alternate payee that are required to be
paid to another alternate payee under a previous qualified order.
(4) notify
the participant and the Alternate Payee(s) whether or not you have determined
that the court order is a QDRO; and
(5) administer distributions under the QDRO,
pursuant to reasonable plan procedures.
As
with most other qualified plan issues, the process described above is
simplified, there can be complications.
Just a few of the things that may complicate the process are common law
marriage; the death of either the participant or the Alternate Payee; the
participant flies personal bankruptcy or your duty to consider any evidence of fraud. If you encounter complications before, during,
or after the determination process you should seek assistance from your plan's
legal counsel or consultant.
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about our company ...
- Michael F. Yates & Company, Inc. can help you with a variety of services ranging from retirement plans to providing results-oriented survey instruments, training and development programs for your employees. Our products and services are intended to help you maximize the effectiveness of your Human Resources function.
- These products and services incorporate our years of experience so that you receive rapid results and exceptional value. From onsite consulting, to strategic business integration, to Web enablement, we understand how Human Resources can be applied to solve your problems and achieve your goals. As a result, we can help you get the most out of your investment and turn your most precious resource into a competitive advantage.
- We offer Consulting, Retirement Planning, Pension and 401(K) both qualified and non qualified Plans, Welfare Plans, Communications, Computer Systems, Executive Plans, Compensation, Mergers, Acquisitions, Divestitures and Other Services.
We offer a true and honest, Client Partnership.
Take the Michael F. Yates & Company, Inc. challenge!
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Smart companies will focus on improving processes during slowdown
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Michael F. Yates & Company, Inc.
__________
101 Belvidere Avenue
P.O.Box 7
Washington, NJ 07882
908-689-4200
fax: 908-689-6300
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Quotes Taken
from actual performance evaluations: "Since my last report, this employee has reached rock bottom and has
started to dig."
"His men would follow him anywhere, but only out of morbid
curiosity."
"This associate is really not so much of a has-been, but more of a
definitely won't be."
"Works well when under constant supervision and cornered like a rat in a
trap."
"When she opens her mouth, it seems that this is only to change whichever
foot was previously in there."
"He would be out of his depth in a parking lot puddle."
"This person has delusions of adequacy."
"He sets low personal standards and then consistently fails to achieve
them."
"This employee should go far - and the sooner he starts, the better."
"This employee is depriving a village somewhere of an idiot." |
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H.R.Cat say's this news is all wet!
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From PBS news:
"Managers should encourage 'showerstorming' breaks", reports a press release that drops into H.R. Cat's inbox.
Apparently, having a shower is the answer to all your workplace problems, according to shower maker Mira.
It conducted some 'research' which claims to have found employees who
break for showers during the working day are 42% more productive.
Roger
Crabb, Marketing Manager, says (presumably while trying to supress a
smile): "As lots of workers are also feeling stressed or de-motivated
at the moment due to the credit crunch, we were interested to see if
showering could be a simple inexpensive antidote."
The firm recommends replacing a coffee or "internet break" with a shower break.
H.R. Cat can just imagine legions of workers telling their bosses they are off
for a quick shower, leaving the phones ringing or emails unanswered.
H.R. Cat waits in anticipation for a press release from a company to say they
are the first to adopt shower breaks as a policy. |
Michael F. Yates & Company, Inc. Call 908.689.4200
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