Lump Sum Treatment for Distributions to Key Employees Working Beyond Normal Retirement Age

Article Abstract:

Certain employers may want to encourage employees to continue working beyond the normal age of retirement. Strategies for incentives in this area should be formed according to the impact of existing retirement plans under section 401 of the Internal Revenue Code. A private letter ruling reveals much of the government's position regarding lump-sum treatment for distribution from qualified plans for such older employees. Section 402 (a) (2) and (e) or 402 (a) (5) provides advantageous provisions for lump-sum distributions and tax free rollovers. Certain kinds of election can be adverse; these are explained.

Officials and employees, Compensation and benefits, Distribution of goods, Distribution (Commerce), Planning

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Taxation of employer-provided health coverage: inclusion, timing, and policy issues

Article Abstract:

Public policy considerations and consistency with other tax laws need to be addressed by those wishing to repeal the income tax exclusion of employer-provided health care benefits. Under income recognition rules, health benefits appear not to be income because the expenditures are not actually or constructively received by employees. If IRC section 106 were to be changed, other health-related tax exclusions would have to be changed as well. Public policy considerations include the social benefit of broad insurance coverage and the social costs of overconsumption of medical services.

United States, Economic aspects, Health insurance, Health care reform

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