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Senate approves immigration bill. On May 25, 2006, the US Senate approved its Comprehensive Immigration Reform Act (S. 2611) that would offer millions of illegal immigrants a path to US citizenship. In a bipartisan 62 to 36 vote, the Senate also voted to: (1) increase border security; (2) boost sanctions for employers who hire illegal immigrants; and (3) start a guestworker program. Further, illegal immigrants that qualify for amnesty would have a chance at citizenship if they take steps, such as pay a fine and back taxes. An amendment by Senate Finance Committee Chairman Charles Grassley (R-Iowa) that is part of the final bill requires illegal immigrants who qualify for amnesty through the provisions of the underlying bill to pay all outstanding tax liabilities. The underlying bill currently says that an illegal immigrant only has to pay taxes for the past three of the five years that they have worked. It also makes technical corrections so that the Internal Revenue Service can establish rules and procedures to determine if an illegal immigrant has paid the taxes they owe. Despite voting “no” to the Senate’s Comprehensive Immigration Reform Act , other amendments from Grassley, which included: (1) requiring employers to use an electronic verification system to validate that any new hire is legally in the United States to work; and (2) codifying existing offices at the Citizenship and Immigration Services that investigate internal corruption and benefits fraud and create a new worker verification system for employers to determine if their workers are eligible to work in the United States were accepted into the final bill. In addition, other amendments to the original bill would:
With the bill nearing passage, Senate Minority Leader Harry Reid (D-Nev) stated the following on the Senate Floor, “As a result of this bipartisan cooperation, we have good, comprehensive immigration reform legislation before us today.” He continued, “We should all take note that dark clouds are forming on the horizon. Influential Republicans in the House are still pushing the draconian bill they passed – a bill that will make felons out of millions of immigrants and those who assist them. The House Majority Leader John Boehner yesterday was quoted as saying “trying to find a pathway that is acceptable to the House and Senate is going to be very difficult.” President Bush, in a written statement, commended “the Senate for passing bipartisan comprehensive immigration reform before the Memorial Day deadline set by its Leaders.” He emphasized that an effective immigration reform bill will protect U.S. borders, hold employers accountable for their hiring practices, create a temporary worker program and “address the issue of millions of illegal immigrants already in the country.” White House Press Secretary Tony Snow disagreed with criticism that the president is supporting amnesty. “People who, at the end of this process, stand up, put their hands up and take the oath will have spent more money and waited longer than any group in American history for the right to become American citizens,” Snow asserted at a press briefing on May 25th. The House of Representatives and Senate still need to hammer out wide differences between their respective bills after they return from the Memorial Day recess. The House bill (H.R. 4437) largely focuses on border security and employer sanctions for employing illegal immigrants (i.e., maximum penalty for employers employing illegal immigrants would increase from $10,000 to $40,000 per violation), but does not contain a guest worker program. The House bill also does not provide a pathway to legal residency or citizenship. Alternatively, the Senate bill would increase maximum penalties for hiring illegal immigrants to $20,000 for each worker and does contain a guest worker program (providing for 200,000 new temporary visas). In addition, the Senate bill allows illegal immigrants who have resided in the United States for five years or longer to attain permanent legal status if certain conditions are met (i.e., paying fines, taxes and learning English). Illegal immigrants residing in the United States between two and five years would have to leave the United States, but would have three years to reenter at a US port of entry as an H-2C nonimmigrant worker. “The House and Senate bills are so far apart that it’s difficult to foresee a compromise in the near future,” said Senator Grassley, who is expected to be a member of the conference committee reconciling the two bills. A May 11th accord between Senate Majority Leader Bill Frist, R-Tenn, and Reid would send 12 Senate Democrats and 14 Republicans as conferees to reconcile the House and Senate Bills. No House conferees have been named. In a statement on the passage of the Senate’s bill, House Majority Leader John Boehner (R-OH), commented “Now that the Senate has passed a bill, we owe it to the American people to seek common ground on responsible solutions, while always stressing our most important priority is to secure our borders and stop illegal immigration.” New EEOC fact sheet addresses reasonable accommodation for attorneys with disabilities. The US Equal Employment Opportunity Commission (EEOC) has issued a new fact sheet addressing the application of the reasonable accommodation obligation under the Americans with Disabilities Act (ADA) to attorneys with disabilities and their employers. The new publication is available on the agency's website at http://www.eeoc.gov/facts/accommodations-attorneys.html. EEOC Chair Cari M. Dominguez unveiled the new fact sheet during the First National Conference on Employment of Lawyers with Disabilities. The unprecedented conference, cosponsored by the EEOC and the American Bar Association, highlighted best practices for hiring lawyers with disabilities and provided practical advice on how to accommodate them. "Many legal employers recognize the importance of flexibility to remain competitive in hiring the best attorneys. Providing reasonable accommodation is an extension of this successful strategy," said Chair Dominguez. "With employers competing fiercely for talent, those who win use recruitment strategies that reach out to attorneys with disabilities." One goal of the fact sheet is to dispel the myth that attorneys with disabilities who need reasonable accommodation are less competent or less productive than attorneys without disabilities. Reasonable accommodation refers to any change in the work environment or in the way things are customarily done that enables an applicant or employee with a disability to enjoy equal employment opportunities. The fact sheet discusses the rights and responsibilities of both legal employers and attorneys with disabilities in addressing reasonable accommodation issues. It uses many real-life examples to provide all kinds of legal employers – including law firms, government agencies, corporations, law schools and nonprofit organizations – with specific ideas on the wide range of accommodations available for lawyers with various disabilities. EEO data posted by EEOC pursuant to No Fear Act. The EEOC has posted its summary statistical EEO data for the agency's internal complaint activity and for government-wide hearings and appeals for the fiscal year 2005 through the second quarter of 2006. Section 301 of the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No Fear Act) (See CCH EMPLOYMENT PRACTICES GUIDE ¶3408), requires each federal agency to post summary statistical data pertaining to complaints of employment discrimination filed against it by employees, former employees and applicants for employment under 29 CFR Part 1614. The specific data to be posted is described in Section 301(b) of the No Fear Act and 29 CFR 1614.704. Additionally, Section 302 of the No Fear Act requires the EEOC to post government-wide, summary statistical data pertaining to hearings requested under 29 CFR Part 1614 and appeals filed with the EEOC. The specific data to be posted is described in Section 302(a) of the No Fear Act and 29 CFR 1614.706. The posting of EEO data on agency public websites is intended to assist Congress, federal agencies and the public to assess whether and the extent to which agencies are living up to their equal employment opportunity responsibilities. The EEOC's No Fear Act data is available on the agency's website: http://www.eeoc.gov/stats/nofear/index.html.
Assistant General Counsel, Deputy Regional Attorney appointed by NLRB General Counsel. General Counsel Ronald Meisburg of the National Labor Relations Board (NLRB) announced the appointment of career attorney Nancy Recko as Deputy Regional Attorney in the Agency's Cleveland, Ohio Regional Office (Region 8). The Cleveland Regional Office services the state of Ohio north of Columbus, including Toledo, Akron and Cleveland. In her new position, Recko will assist Regional Director Frederick Calatrello in the enforcement and administration of the National Labor Relations Act in Region 8. The NLRB conducts secret-ballot elections to determine whether employees desire union representation, and investigates and remedies unfair labor practices. Commenting on the appointment, Meisburg stated: “Nancy Recko has compiled an exemplary record in her over 26 years of service as an attorney with the NLRB. Her strong legal skills, professionalism and dedication will continue to serve the Agency well in her new capacity.” A native of the Cleveland area, Recko received a B.A. degree in mass media communications from Cleveland State University. In 1978, she earned a J.D. degree from Cleveland Marshall College of Law, Cleveland State University. She is a member of the Ohio bar. Recko joined the NLRB as a field attorney in the Cleveland Regional Office in 1979. In 2004, Recko received a promotion to the position of supervisory field attorney. Linda Dreeben. Meisburg has also announced the permanent appointment of career NLRB attorney Linda Dreeben as Assistant General Counsel of the Supreme Court Branch in the Division of Enforcement Litigation. Dreeben has been serving as Acting Branch Chief since May 2004. In addition to being the new Branch Chief, Ms. Dreeben will remain the Deputy Branch Chief of the Appellate Court Branch. The Supreme Court Branch is responsible for the NLRB's litigation in the Supreme Court of the United States and advises the General Counsel and the Members of the Board concerning the litigating positions that the Agency should take in Supreme Court cases. The Branch works closely with the U.S. Department of Justice Office of the Solicitor General in formulating the government's position before the Supreme Court. The Branch also assists the Divisions and Offices supervised by the General Counsel in litigating important legal issues. Remarking on the appointment, Meisburg stated: “Linda Dreeben is well-deserving of this promotion. She has wide-ranging experience in managing complex appellate litigation which involves crafting and mounting the strongest possible defense of the Board's decisions in court. During her tenure as Acting Branch Chief, she has earned the Agency's trust for the soundness of her judgments and the respect of the Solicitor General's Office for the high quality of her work. We are fortunate to have a person of her skills and experience to serve in this important position.” Dreeben began her NLRB career working in the Division of Enforcement Litigation, Appellate Court Branch, in 1976. She was promoted to Supervisory Attorney in 1983. In 1997, she was appointed Deputy Assistant General Counsel, Managing Supervisor for the Branch. Following her appointment in 2000 as Assistant General Counsel, she became Deputy Branch Chief of the Appellate Court Branch in 2001. A native of Princeton, New Jersey, Ms. Dreeben received an A.B. degree with distinction in sociology from the University of Michigan in 1973, and a J.D. degree from Boston University School of Law in 1976. OPM finalizes regulations implementing Title II of No FEAR Act. The Office of Personnel Management (OPM) has issued final regulations to carry out the agency reimbursement provisions of Title II of the Notification and Federal Employee Antidiscrimination and Retaliation Act of 2002 (No FEAR Act). Notice of the finalized regulations was published in the Federal Register on May 10, 2006 (71 FR 27185). The rule is effective as of October 1, 2003 (the effective date of the reimbursement provision of the No FEAR Act). An interim final rules covering these obligations was published on January 22, 2004 (69 FR 2997), and became effective on October 1, 2003. The OPM asserts the revisions in the final rule are retroactive to October 1, 2003. The No FEAR Act requires federal agencies to pay for any discrimination or whistleblower judgment, award, or settlement. The OPM, under authority delegated by the President, has issued the regulations to implement agency reimbursement of the Judgment Fund (the Fund) for payments made to employees, former employees, or applicants for federal employment because of actual or alleged violations of federal antidiscrimination laws, federal whistleblower protection laws, and/or retaliation claims arising from the assertion of rights under those laws. Background. Following publication of the interim final rule on January 22, 2004, the OPM, on March 31, 2004 (69 FR 16769), extended the original 60-day comment period to April 26, 2004. The OPM received 13 comments from federal agencies or departments, five comments from civil rights organizations, and more than a hundred comments from individuals. Definition of "agency." The regulation's definition of agency mirrors the statutory definition contained in Section 103 of the No FEAR Act. The OPM has concluded that military departments are covered by the No FEAR Act because they are part of the Department of Defense. The statute at 5 USC Section 105 defines "executive agency" as including executive departments, one of which under 5 USC Section 101 is the Department of Defense. Definition of "payment." Under the regulations, if a payment is made from the Fund on or after October 1, 2003 based on a judgment, award, or settlement in any federal discrimination or whistleblower proceeding, the agency is obligated to reimburse the Fund. In the preamble to the final rule, the OPM noted that the term payment is a broad concept and may include a number of separate payments. For example, a judgment, award or settlement may call for separate payments over an extended period of time, subsequent payments may be based on some future condition, separate payments may be made to individual members of a class action, and separate payments may be made for attorney fees. Therefore, in the final rule, the OPM modified the definition to clarify that "payment" means the first disbursement in a particular proceeding. For example, if the Fund made a disbursement in a proceeding before October 1, 2003, any subsequent disbursement made in that same proceeding on or after October 1, 2003, would not be considered payments that would obligate the agency involved to reimburse the Fund. However, if a proceeding was pending before October 1, 2003, and the first disbursement from the Fund in that proceeding occurred on or after October 1, 2003, the agency would be obligated to reimburse the Fund. In order to eliminate any confusion about which payments are covered by the No FEAR Act, the OPM also modified the definition in Section 724.102 of the regulations by inserting additional statutory references and using the phrase "or retaliatory conduct" as appropriate. The No FEAR Act does not authorize agencies to make payments directly to employees, former employees, or applicants for federal employment that, prior to the No FEAR Act, would have been made from the Fund. Judgments, awards, or settlements that were eligible for payment from the Fund before the No FEAR Act became effective will continue to be paid by the Fund. Agency obligations. By inserting a parenthetical phrase in Section 724.103, the OPM confirms that the obligation to reimburse the Fund extends to successor agencies. Due to financial concerns, an agency may need to complete its reimbursement of the Fund over a period of years to avoid reductions in force, furloughs, other reductions in compensation or benefits for the workforce of the agency or to avoid an adverse effect on the mission of the agency. Accordingly, the No FEAR Act requires agencies to report on any adjustments in their budgets made in order to comply with reimbursement obligations. Procedures. Procedural modifications in the final rule include:
Compliance. Section 724.105 requires the FMS to record on an annual basis and post on the FMS Web site information about agencies that fail to meet their Fund reimbursement obligations. In the final rule, the OPM has amended Section 724.105 so that postings will be removed during the annual posting following the date when the agency comes into compliance with the No FEAR Act. The following bills introduced over the month would:
High Court affirms health plan's right to recover medical expenses from beneficiaries' third-party. A health care plan's claim seeking reimbursement of medical expenses paid on behalf of two beneficiaries out of their personal injury settlement with a third party was equitable in nature, a unanimous Supreme Court ruled in Sereboff v Mid Atlantic Medical Services, Inc (Dkt No 05-260). As such, the plan properly sought equitable relief under ERISA Sec. 502(a)(3), the Court found, affirming the judgment of the Fourth Circuit in relevant part. Background. Joel and Marlene Sereboff were participants in a PPO plan offered by Mid Atlantic Medical Services (MAMSI). The plan contained an "Acts of Third Parties" subrogation provision, which specified that MAMSI had the right to recover any payments made to beneficiaries by third parties for costs associated with an injury resulting from the acts of another party. Under the plan, any recovery by MAMSI from such payments was subject to a deduction for reasonable attorneys' fees and court costs incurred by the beneficiaries in securing the third-party payments. On June 22, 2000, the Sereboffs were injured in an automobile accident, and the PPO plan paid their medical expenses in the amount of $74,869. On August 11, 2000, in California state court, the Sereboffs filed a lawsuit against the other driver involved in the accident. On January 23, 2003, the Sereboffs settled their lawsuit against the other driver for $750,000. Upon receipt of the settlement funds, the Sereboffs refused to reimburse MAMSI for the benefits it had paid on their behalf. Subsequently, MAMSI filed suit against the Sereboffs in the US District Court for the District of Maryland under ERISA Sec. 502(a)(3). That section authorizes a fiduciary to bring an action to obtain "appropriate equitable relief" to enforce the provisions of an employee benefit plan. The Sereboffs agreed to set aside from their settlement a sum equal to the amount MAMSI claimed, and preserve this sum in an investment account pending the outcome of the suit. Court addressed single issue. The only issue before the Supreme Court was whether the relief MAMSI requested from the district court was equitable under ERISA Sec. 502(a)(3). In finding that it was, the Court distinguished the facts in this case from those in its prior cases that had addressed this issue. The Court noted that in this case, MAMSI sought identifiable funds within the Sereboffs' possession and control – that part of the tort settlement due MAMSI under the ERISA plan and set aside in the investment account. The Court also relied on its decision in Barnes v Alexander (232 US 117). The Court wrote that the "Acts of Third Parties" provision in the Sereboffs' plan – like Barnes' promise to two other attorneys to share a contingent fee he expected in a case – specifically identified a particular fund distinct from the Sereboffs' general assets, and a particular share of that fund to which MAMSI was entitled. Further, the Court rejected the Sereboffs' contention that the lower courts erred in allowing enforcement of the "Acts of Third Parties" provision without imposing limitations that would apply to an equitable subrogation action. MAMSI's claim is not considered equitable because it is a subrogation claim, the Court wrote. Rather, it is considered equitable because it is indistinguishable from an action to enforce an equitable lien established by agreement, like the one in Barnes. Senate fails to advance small business health insurance bill. By a vote of 55-43, the Senate on May 11 failed to end debate on the Health Insurance Marketplace Modernization and Affordability Act (S. 1955). The bill, which is sponsored by HELP Committee Chairman Michael Enzi, R-Wyo, would allow small businesses to band together across state lines through professional and trade associations to offer their members health coverage. The measure would make it easier for businesses to provide health insurance by exempting state coverage requirements. According to Enzi, S. 1955 will allow associations to gain leverage when negotiating the price of insurance. It will result in lower costs for policy holders and reduce the number of uninsured people by 1 million. Although health insurance plans would be required to provide a minimum level of coverage, Democrats say Enzi's bill would result in inferior coverage. It would allow health plans to bypass state mandates, including mandates on cancer screening, mental health care and diabetes treatment. Democrats also contend the bill would allow plans to charge higher rates to businesses with older, less healthy workers. Enzi addressed that concern by adding to the bill a provision that would allow states to regulate insurance companies to ensure they charge higher risk groups no more than five times the lowest rate they offer to other groups. The Bush administration supports the Enzi bill. "The administration looks forward to working with Congress to ensure that the Nation's eight million small businesses are able to provide quality, affordable health care to their tens-of-millions of employees and their families," the Office of Management and Budget said in a May 9 statement. The House of Representatives has passed association health plan legislation a number of times in the past years, including a bill (H.R. 525) in July 2005. The Senate has been unable to advance any similar measure. IRS Releases Revised Employee Plans Compliance Resolution System. The Internal Revenue Service (IRS) has issued an updated and expanded revision of a revenue procedure governing its popular voluntary correction program for employee retirement plans – the Employee Plans Compliance Resolution System, or EPCRS. Under EPCRS, plan sponsors and other plan professionals can correct certain errors in employee retirement plans, in some cases without even having to notify the IRS. Correcting plans in this way allows participants to continue receiving tax-favored retirement benefits and protects the retirement benefits of employees and retirees. "We know that employers and plan administrators want to comply with the tax laws and regulations. But the law is constantly changing and has become fairly complex, so even tax professionals can sometimes make mistakes in this area," said Carol Gold, director of IRS's Employee Plans Division. In revising Revenue Procedure 2006-27, the IRS incorporated comments from the retirement plans community by adding flexibility and increasing correction methods. "There were two emerging issues, in particular, that were causing problems - excluded employees - particularly in 401(k) plans - and bad loans," Gold said. "In this revenue procedure, we have added what we believe are workable solutions. We believe these improvements will advance our goal of increased plan participation." EPCRS includes three levels of correction programs:
The IRS noted that plan sponsors who fail to take advantage EPCRS will not receive the favorable tax treatment available in EPCRS programs if the problems are discovered upon examination. The revised revenue procedure also makes it clear that EPCRS remains unavailable in cases where either the plan or the plan sponsor has been a party to an abusive tax avoidance transaction and the plan failure is directly or indirectly related to the abusive tax avoidance transaction. "EPCRS is a valuable program for plan sponsors who need to make corrections that result from inadvertent errors," said Gold. "It is definitely not available to those who deliberately engage in abusive tax transactions that jeopardize the integrity of the plan and take advantage of the participants." For information on "abusive tax transactions," see IRS.gov. "We think the changes to EPCRS will further encourage employers and plan sponsors to voluntarily correct problems associated with their plans and continue the success of our voluntary correction programs," said Joyce Kahn, who directs IRS's voluntary compliance program for employee retirement plans. "EPCRS is a popular program, and it has greatly helped many plan participants retain tax-favored retirement benefits." Gold added, "We hope plan sponsors will take advantage of the features of EPCRS. But even if they don't, the IRS strongly encourages plan sponsors to regularly monitor and evaluate their retirement plans to ensure compliance with the law." EBSA releases semiannual agenda. The Employee Benefits Security Administration (EBSA) has released its semiannual regulatory agenda, which outlines regulations that have been selected for review or development during the next year, as well as any regulations that have been finalized during the last six months. Items in the proposed rule stage are actions for which EBSA intends to publish a notice of proposed rulemaking (NPRM) or for which the closing date for an NPRM is the next step. These proposed rules include the following pension and welfare benefit topics:
Items in the final rule stage are actions for which EBSA plans to publish a final or interim rule as the next step in the rulemaking process. Final rules generally affecting both pension and welfare plans include regulations involving:
Completed actions are those regulatory actions that EBSA has completed or withdrawn since the publication of its last agenda. Within the last six months, EBSA has completed actions involving prohibited transaction exemption procedures and the annual funding notice for multiemployer plans. Still in the prerule stage are regulatory actions involving the independence of accountants for purposes of auditing and rendering an opinion on the financial information required to be included in an annual report under ERISA Sec. 103(a)(3)(A). Also still in the prerule stage are regulatory actions involving prohibited transaction exemption procedures and the plan assets - participant contributions regulation in accordance with the requirements of section 610 of the Regulatory Flexibility Act. Long-term actions on EBSA's agenda include a regulation that would set forth standards for determining "adequate consideration" as defined by ERISA, for assets other than securities for which there is a generally recognized market, as well as regulations implementing the health care access, portability, and renewability provisions of the Health Insurance Portability and Accountability Act (HIPAA). SOURCE: 71 FR 22896, April 24, 2006.
IRS requests comments on Forms 6466 and 6467. The IRS is soliciting comments concerning Form 6466, Transmittal of Forms W-4 Reported Magnetically/Electronically, and Form 6467, Transmittal of Forms W-4 Reported Magnetically/Electronically (Continuation). Written comments should be received on or before July 11, 2006, and should be sent to Glenn P. Kirkland, Internal Revenue Service, Room 6516, 1111 Constitution Ave. NW, Washington, DC 20224. IRS issues specifications for Form 941 substitutes. The IRS has provided the general rules for producing paper and computer-generated substitutes for the 2006 versions of Form 941, Employer's Quarterly Federal Tax Return, and Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors. What’s new. The 2006 revisions of Form 941 and Schedule B have six digit Form ID codes instead of the four-digit codes used in 2005. Also, the 2006 versions now include a calendar year designation area near the top of the form. There are also new 6 x10 grid layouts for the 2006 revisions. General requirements.
House passes bill to allow combat pay to be treated as compensation for IRA contributions. The House has passed an amended version of H.R. 1499 (Heroes Earned Retirement Opportunities Bill), which would allow members of the military who receive combat pay as their only source of compensation to contribute to an individual retirement account (IRA). Under current law, contributions to an IRA are limited to the lesser of a statutory amount ($4,000 in 2006) or the individual's taxable income. Since combat pay is tax-free, members of the military who receive combat pay as their only source of compensation are not allowed to contribute to an IRA. The bill adopted by the House would change the law so that combat pay would be treated as eligible compensation for the purpose of making IRA contributions. The bill will now go to the Senate for consideration.
President signs tax bill eliminating income limits on Roth IRA conversions. President Bush on May 17, 2006, signed the Tax Increase Prevention and Reconciliation Act of 2005 (H.R. 4297), tax reconciliation legislation that contains a provision repealing the income limits on conversions of traditional IRAs to Roth IRAs, starting in 2010. The bill passed the House on May 10, 2006 and passed the Senate on May 11, 2006. Income limits on Roth conversions eliminated after 2009. Under current law, in order to be able to convert from a traditional to a Roth IRA, the taxpayer's adjusted gross income (AGI) for the year must not exceed $100,000. The $100,000 limit applies to the combined income of a married couple filing jointly. Under the tax bill, the income limit would be eliminated, effective for tax years beginning after December 31, 2009. Thus, taxpayers would be permitted to make such conversions without regard to their AGI. Under the bill, taxpayers could elect to pay tax on amounts converted in 2010 in equal installments in 2011 and 2012. However, income inclusion would be accelerated if converted amounts were distributed before 2012. Taxpayers who convert their IRAs in 2011 and beyond would have one year to pay the resulting tax. This provision does not sunset. Proposal would not increase long-term deficit, Grassley said. The Joint Committee on Taxation estimates that the elimination of the income limits on Roth IRA conversions would generate $6.4 billion in federal revenues over the next 10 years because higher-income taxpayers would be eligible to convert during that period and would incur taxation upon the conversion, rather than at a later time when the IRA funds are distributed. Critics, however, contend that this provision will increase the budget deficit over a longer term, when retirees withdraw Roth IRA funds that have grown tax-free. For example, the Center on Budget and Policy Priorities, said that the proposal "would raise revenue initially but lose larger amounts of revenue in later years." According to the Center, the temporary increases in revenue would be used to help "offset" the cost of the capital gains and dividend tax cuts in the bill in 2011-2013, but the eventual revenue losses, which would start in 2014, would continue to grow in the years after 2015, when the official cost estimate ends. As a result, the Center concludes, the conference agreement would increase long-term deficits. Staffers to Senator Chuck Grassley (R-IA), chairman of the Senate Finance Committee, issued a statement disputing these conclusions. According to the statement, released on May 10, 2006, the conversion proposal would not increase the federal deficit over the long-term. Roth IRA conversions "merely change the timing of when individuals must pay tax on their retirement savings, accelerating tax payments in the case of those who convert." In addition, said Sen. Grassley's staff, "critics choose to ignore a reverse effect of various retirement savings tax incentives. Because congressional budget estimates are done on a 10-year basis, these estimates ignore distant revenue gains as well as losses. Because tax incentives for retirement savings typically are "front-loaded," the ten-year budget estimates generally reflect only large losses of federal revenue, while ignoring the fact that the federal government will recoup the tax on that money (and the associated investment gains) when it is distributed later in retirement." House accepts motion to restrict executive pension increases when plans are underfunded. The House of Representatives has approved a motion, offered by Rep. George Miller (D-CA), designed to extend to corporate executives the same restrictions on benefit increases from underfunded plans that would apply to rank-and-file employees. The motion was passed by the House on May 3, 2006, by a 299 to 125 vote. "We need pension rules that are fair to all workers," said Miller, the senior Democrat on the House Education and the Workforce Committee. "Insisting that America's executives play by the same rules is just basic fairness," he contended. PBGC issues semiannual regulatory agenda. The Pension Benefit Guaranty Corporation (PBGC) has issued its semiannual regulatory agenda, which lists regulations that are currently under development or review, or which will be under development or review within the next twelve months. In its latest issuance, the PBGC has indicated that it proposes to amend current regulations to do the following: (1) make the funding status of underfunded plans more transparent to participants; (2) strengthen multiemployer plan reporting requirements; (3) amend its benefit valuation and asset allocation regulations by improving its valuation assumptions and methods; and (4) add two new reportable events. One of the reportable events is a decline in the credit rating of a controlled group member below investment grade, and the other is the filing of Form 8-K with the SEC. In addition, the PBGC is still exploring how to improve its benefit payment rules, with regard to terminated pension plans. Such a regulation would fill in gaps in the rules, clarify matters that have previously been handled on a case-by-case basis, and address issues relative to the determination of guarantee limits, as well as the time, form, and manner of payments. Final rule stage. Finally, the PBGC is replacing policy statements about penalties with an updated and expanded set of premium penalty and information penalty policies codified in its regulations, and is amending its regulations to provide a rule for computing liability under ERISA Sec. 4063(b) when there is a substantial cessation of operations by an employer described in ERISA Sec. 4062(e). Further, the PBGC is considering requiring electronic filing of premium declarations. Source: 71 FR 23476, April 24, 2006.
SSA seeks comments on proposed information gathering activities. The Social Security Administration (SSA) is soliciting comments from the public regarding a number of proposed information gathering activities prior to clearance by the Office of Management and Budget (OMB), as well as for some activities for which clearance has already been sought. Specifically, the SSA wants feedback on the need for the information solicited; its practical utility; the accuracy of the agency's burden estimate; ways to enhance the quality, utility and clarity of the manner in which the information is collected; and ways to minimize the burden on respondents, including the use of automated collection techniques or other forms of information technology. The SSA's notice of comment solicitation details the purpose and what information is collected for each of the informational gathering forms for which comments and OMB approval are sought. Comments due by July 8. Comments on the following proposed data collection requests are due July 8, 2006: Certification by Religious Group (Form SSA-1458); Medical Consultant's Review of Mental Residual Functional Capacity Assessment (Form SSA-392-SUP); Statement of Self-Employment Income (Form SSA-766); Request for Deceased Individual's Social Security Record (Form SSA-711); Request for Business Entity Taxpayer Information (Form SSA-1694); Identifying Information for Possible Direct Payment of Authorized Fees (Form SSA-1695); Request for Appointed Representative's Direct Payment Information (Form SSA-1699); Statement for Determining Continuing Eligibility, Supplemental Security Income Payment (Form SSA-8202-BK); Statement for Determining Continuing Eligibility, Supplemental Security Income Payment(s) (Form SSA-8293); Request for Internet Services--Authentication; Automated Telephone Speech Technology--Knowledge-Based Authentication; Integration Registration Services (IRES) System (registration and authentication of businesses, employers and third parties with SSA, and issuance of Personal Identification Numbers (PIN) for online use). Comments due by June 8. Comments on these data collection activities, which have already been submitted to the OMB for clearance, are due June 8, 2006: Letter to Employer Requesting Wage Information (Form SSA-L4201) and a new Mental Health Treatment Study (MHTS) designed to test the degree to which eliminating programmatic work disincentives, establishing an accurate diagnosis and delivering appropriate mental health and supported employment will lead to improved functioning and competitive employment among Social Security Disability Insurance (SSDI) beneficiaries with a primary impairment of schizophrenia or affective disorder. SSA extends expiration date for digestive system listings. The SSA has announced that it is extending by one year the expiration date of the criteria used to evaluate impairments of the digestive track. These criteria appear in the Listing of Impairments, §5.00 and §105.00, Appendix 1 to Part 404, Subpart P of Title 20 of the Code of Federal Regulations. The listings had been set to expire on July 3, 2006; however, the notice extended the expiration date to July 2, 2007. SSA finalizes minor changes to regulations. The SSA has finalized two regulatory changes that, in one case, updates a regulation pertaining to the protective filing date for benefit applications via the Internet and, in the other case, corrects a drafting error involving the requirements for entitlement of a surviving divorced spouse to widow's or widower's benefits. Regulation §404.630 provides that if all of the requirements for a protective filing date for benefit applications are otherwise met, an applicant's initial contact with the SSA will be considered to be the filing date of the application. Thus, if an applicant contacts the SSA by telephone to inquire about filing an application for benefits, if a completed application is ultimately timely filed, the date of the initial telephone contact will be considered the date of the application. The regulation amendment extends this concept to applications via the Internet. Thus, the SSA will use as the protective filing date for such applications, the date it receives the Personal Identification Information (PIN) data on the Internet Social Security Benefit Application (ISBA), which is usually the date that the ISBA is started. The announcement also corrected Reg. §404.336(e)(3) because it incorrectly states the conditions under which an insured person's surviving divorced spouse is considered "unmarried" for purposes of entitlement to widow's or widower's benefits. The change brings the regulation in conformity with Social Security Act §202(e)(3) and §202(f)(3). In particular, the change will require the surviving divorced spouse to meet both of the conditions in paragraphs (e)(3)(i) and (ii) of the regulation, rather than either one of them. (The clauses require that the individual be between ages 50 and 60, remarried after age 50, and meet the disability requirements of paragraph C of Reg. §404.336 at the time of the remarriage).
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