Circuit courts split on contribution of property to a qualified plan
Article Abstract:
A circuit court decided a case on whether the contribution of a property to a qualified plan becomes a prohibited transaction. The Court of Appeals for the Fifth Circuit ruled that contribution to satisfy a funding obligation is not a 'sale or exchange' prohibited under Section 4975 of the Internal Revenue Code. In the Woods case, however, the contribution was deemed a prohibited contribution. The disparity in the decisions will force the IRS to collect prohibited transaction excise taxes on employers' contribution in satisfaction of their funding obligations.
Publication Name: Journal of Compensation and Benefits
Subject: Insurance
ISSN: 0893-780X
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
Final regulations on fiduciary liability for participant-directed investments
Article Abstract:
Final regulations were released by the Department of Labor regarding retirement plan fiduciaries' liabilities due to losses from a participant's direction of investments such as a 401(k) or profit sharing plan. Such final regulations revise the proposed regulations released in 1991 which were formulated to answer the several queries made by practitioners. Thus, plan fiduciaries are not granted total protection from liability for investment losses suffered by plan participants if funds, where investments were made, were not carefully chosen.
Publication Name: Journal of Compensation and Benefits
Subject: Insurance
ISSN: 0893-780X
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
Courts review how companies explain benefits plans
Article Abstract:
The case of Coleman v. Nationwide Life Insurance Co is presented and discussed in terms of an insurance company's obligation to honor verbal commitments that conflict with the written policy. A lower court found for the insureds due to the unwritten contract. The case of Donovan v. Dillingham illustrated a need for written plans which describe financing sources and benefit amounts and procedures. The Employee Retirement Income Security Act protects insureds by requiring a written policy.
Publication Name: Journal of Compensation and Benefits
Subject: Insurance
ISSN: 0893-780X
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Supreme Court allows amendment of overfunded contributory defined benefit plan. Employer must notify participants of reduction in future benefit accrual
- Abstracts: Director compensation: balancing economic pressures with the critical need for qualified candidates. Motivating sales channels in an E-business environment
- Abstracts: Commuting by Computer. Deducting the interest on loans to buy policies
- Abstracts: Constructing protection for design professionals. Insurers look to the issues of 1993
- Abstracts: Companies offer career management for couples. Employee assistance programs. What is personnel economics?