Training and Retirement
"This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years." (Social Science Research Network)
IRS's Updated Version of Taxable Fringe Benefit Guide
"This publication offers helpful insight into the IRS's views regarding the taxation, withholding, and reporting requirements for many fringe benefits. And unlike many other IRS summaries, it includes citations to statutes, regulations, cases, and guidance that make it useful as a gateway reference." (Thomson Reuters/EBIA)
Determining ROI for Employer-Based Tuition-Assistance Programs
"The latest Benefits USA study, from Kansas City, Kan.-based Compdata, found the number of companies that offer tuition reimbursement to all of their employees has grown significantly in the past three years." (Human Resource Executive Online)
Employers Find Value in Offering Tuition Assistance Programs
"More than 96% of the respondents reported that the education they received through their tuition assistance programs was valuable and a good use of their organizations' resources." (PLANSPONSOR.COM)
More Employers Offer Employee Tuition Reimbursement
"In 2009, only 34.9% of employers offered tuition reimbursement to all employees. This increased to 45.3% in 2010, and again in 2011 to 51.7%." (PLANSPONSOR.COM)
Aspiring M.B.A. Candidates May Find Tuition Programs at Work
"A September 2010 survey of 1,084 U.S. companies from Business and Legal Reports . . . showed a large increase in the percentage of companies that had a tuition-funding program, to 85 percent, up from 52 percent in 2007." (The New York Times; free registration required)
[Guidance Overview] Tax Law Extension of Expiring Benefit Provisions
"The extensions affect employer-sponsored benefit programs, including educational assistance programs and qualified transportation benefits." (Towers Watson)
[Guidance Overview] Tax Bill Includes Employment-Related Provisions
Excerpt: "The headline-grabbing provisions of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 . . . include extending current marginal income tax rates through 2012 and providing another year of unemployment benefits for the long-term unemployed. But the bill, which President Obama signed into law on December 17, also includes a number of important employment-related provisions." (Deloitte via BenefitsLink.com)
Tax Legislation Affect on Employee Benefits, Social Security Taxes and Individual Retirement Accounts
Excerpt: "Section 127 of the Internal Revenue Code of 1986 . . . permits an employee to exclude from income up to $5,250 annually for educational assistance benefits (such as tuition, fees, books and supplies) incurred by the employer on behalf of the employee." (McGuireWoods LLP)
[Guidance Overview] Tax Break Extension Legislation Includes Employee Benefits Provisions; IRS Delays Compliance with Nondiscrimination Rules for Insured Group Health Plans
Excerpt: "The Tax Relief Act extends the application of Code Section 127 through December 31, 2012, allowing employers to continue to provide tax-free educational assistance to their qualifying employees for an additional two years." (Bond)
Summary of the Principal Provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
Addressed in the summary are various employment-based benefits such as the child care credit, Employer Provided Educational Assistance, and Adoption Credit and Exclusion from Income for Employer Provided Assistance. (Baker, Donelson, Bearman, Caldwell & Berkowitz, PC)
[Guidance Overview] Temporary Payroll and Benefit Relief Under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (PDF)
3 pages. Excerpt: "The Act extends various tax benefits that were to expire. For example, (i) An adoption credit under EGTRRA is extended through 2012; (ii) Child care credit is extended for 2011 and 2012; (iii) EGTRRA employer provided education assistance exclusion is extended through 2011 and 2012; (iv) Coverdell Educational IRAs continue the EGTRRA $2000 maximum and the availability of for elementary and secondary school expenses through 2011 and 2012; (v) Tax-free distributions from IRAs for charity are extended through 2011." (Charles C. Shulman, Esq.)
Obama Signs Bill Extending Benefits Tax Breaks
Excerpt: "[The tax-favored status of several employer-provided benefits was passed: 1. allowing] employers to reimburse employees for up to $5,250 in annual undergraduate and graduate educational costs without the reimbursement being included in employees' taxable income . . . . [2. E]mployers are eligible to receive a tax credit equal to 25% of expenses for developing and operating child care centers as well as a tax credit of 10% on expenses for child care and referral services. [3. allowing] employers to provide tax-free reimbursement to employees of about $13,000 of adoption-related expenses[; and, allowing] employees to reduce their salaries and make pretax contributions of up to $230 a month to pay for mass transit expenses." (Business Insurance)
Senate Backs Vote on Tax Bill Affecting Employer-Provided Benefits
Excerpt: "Legislation that would extend the tax-favored status of several employer-provided benefits, including educational assistance and child care facilities, survived a key test Monday when the Senate agreed to stop debate, setting the stage for a final vote, most likely on Tuesday or Wednesday." (Business Insurance)
A Study of Employee Education Assistance Provided Under Section 127 of the Internal Revenue Code (PDF)
Excerpt: "This report updates the findings of [a] 1995 report by examining full-time employees who enrolled as students in 2007-08 and benefited from the Section 127 provision." (Society for Human Resource Management via The Coalition To Preserve Employer Provided Education Assistance)
Audio and Text: Walmart Will Cover Up to 15 Percent of Tuition Toward College Degrees for Employees
Excerpt: "The world's largest retailer is now offering its 1.4 million employees a college education. Through a partnership with American Public University, employees can take online courses toward a bachelor's or master's degree." (National Public Radio)
Tax Break on Tuition Benefits Remains Up in the Air
Excerpt: "Favorable tax treatment on tuition benefits expires at midnight on Dec. 31, 2010, unless Congress passes legislation aimed at making Section 127 of the Internal Revenue Code permanent." (Employee Benefit News; free registration required)
Survey Finds More Employers Offering Tuition Reimbursement
Excerpt: "Eighty-five percent of employers in a recent survey report that their organization offers tuition assistance to their employees, compared to 52% that said so in late 2007." (PLANSPONSOR.com)
Wal-Mart to Offer Its Workers a College Program
Excerpt: "The purveyor of inexpensive jeans and lawnmowers is dipping its toe into the online-education waters, working with a Web-based university to offer its employees in the United States affordable college degrees. The partnership with American Public University, a for-profit school with about 70,000 online students, will allow some Wal-Mart and Sam's Club employees to earn credits in areas like retail management and logistics for performing their regular jobs." (The New York Times; free registration required)
Qualified Tuition Reductions for School Employees
Excerpt: "The IRS recently clarified the availability of the income exclusion under IRC ? 117(d) for qualified tuition reduction in the case of joint-degree programs, and where graduate-level courses are taken other than to fulfill a graduate degree." (Deloitte via BenefitsLink.com)
[Guidance Overview] IRS Explaination of Rule Limiting Qualified Tuition Reductions to Education Below the Graduate Level
Excerpt: "EBIA Comment: Although this letter cannot be relied on as precedent, it offers a helpful and succinct summary of the criteria that determine when courses qualify for nontaxable tuition discounts under Code Section 117(d). The discussion of joint-degree programs is particularly interesting in light of the growing interest in these programs. Educational organizations that are frustrated by their inability to use the qualified tuition reduction rules for graduate-level education unfortunately will have few alternatives. Code Section 132(l) generally prevents them from providing courses as nontaxable fringe benefits under Code Section 132 (e.g., as no-additional-cost services or as qualified employee discounts)." (Employee Benefits Institute of America)
IRS Set To Begin Comprehensive Employment Tax Audits
Excerpt: "This month, the IRS will launch a new employment tax National Research Program . . . . [T]he IRS will randomly select 6,000 taxpayers (2,000 taxpayers in 2010 for the 2008 tax year and 2,000 taxpayers each in 2011 and 2012 for the 2009 and 2010 tax years, respectively) and conduct in-depth audits of those taxpayers' employment tax issues . . . . In addition to identifying organizations that fail to file employment tax returns at all, the comprehensive audits will focus on at least four major employment tax issues: * Classification of workers as employees or independent contractors; * Reasonableness of executive compensation; * Tax treatment and reporting of fringe benefits as tax-free or as taxable compensation; and * Tax treatment and reporting of employee reimbursements." (Ballard Spahr)
What To Expect from the IRS 'NRP' Fringe Benefits Audit Initiative
Excerpt: "[A]s of December 2009, the IRS was targeting a much narrower (but still fairly broad) list of the more generic broad-based employee fringes including the following: * Employer-provided automobiles; * De minimis fringe awards such as gift cards; * Discounted property or services; * Education assistance offered as (1) educational assistance plans, (2) working condition fringes and (3) scholarships; * Meal reimbursements and travel per diem plans . . . ." (Employer's Guide to Fringe Benefit Rules, published by Thompson)
[Guidance Overview] Book Excerpt: Contingent Workers & Employee Benefits (PDF)
57 pages. Excerpt: "This chapter discusses how the courts have dealt with the Code and ERISA in ascertaining: whether and under what circumstances contingent workers have been found eligible to participate in a service recipient's benefit plans; and whether a service recipient is in fact the actual employer in cases where the contingent worker was employed by a [Professional Employer Organization]." (Daniel N. Janich, Esq. of Greensfelder law firm; from BNA's book, 'ERISA Litigation,' copyright 2008)
[Official Guidance] Text of IRS Notice 2010-15: Guidance Under HEART Act, Including Qualified Reservist Distributions Before Age 59-1/2 (PDF)
27 pages. Excerpt: "The sections of the HEART Act addressed in this notice are section 104 (relating to survivor and disability payments with respect to qualified military service), section 105 (relating to treatment of differential military pay as wages), section 107 (relating to distributions from retirement plans to individuals called to active duty), section 109 (relating to contributions of military death gratuities to Roth IRAs and Coverdell education savings accounts), and section 111 (relating to an employer credit for differential wage payments to employees who are active duty members of the uniformed services)." (Internal Revenue Service)
Boeing to Stop Paying for Many Employees' Education
Excerpt: "Boeing employees are about to lose a fabulous perk, and the cost-cutting move could mean a significant financial hit for some local colleges and universities as well. Until now, when a Boeing employee enrolled for any class at any accredited college, the company picked up the tuition -- with no restrictions. Boeing currently pays for the classes of about 6,000 employees in the Puget Sound region and 21,000 companywide. But many of those enjoying free classes will lose that benefit at year-end, when Boeing starts limiting its subsidy to cover only courses that further an employee's career at the company." (The Seattle Times)
Recovery Act Tax Benefits Include Work-Related Education Deduction
Excerpt: "The Internal Revenue Service (IRS) has established an information center describing the various tax credits, deductions, and savings plans available under the American Recovery and Reinvestment Act (ARRA) to assist with higher education expenses. The tax benefits include a business deduction for work-related education expenses. Individuals who are employees and can itemize deductions, may be able to claim a deduction for the expenses paid for work-related education." (PLANSPONSOR.com; free registration required)
Recent Modifications of Employee Benefits Data in the National Compensation Survey
Excerpt: "The first part of the article provides a general overview of BLS benefits surveys over time, and the second part focuses on the five benefits that were recently dropped from the NCS [namely, educational assistance, recreational benefits, adoption assistance, employer-provided home computers, and travel accident insurance]." (U.S. Bureau of Labor Statistics)
[Guidance Overview] Bureau of Labor Statistics Data on Employee Access to 'Other Types of Benefits,' 1979-2008
Excerpt: "Table 3 also shows the percent of workers with access to 'other benefits' in 2008. . . . The benefits with the highest rate of worker access were work-related education assistance (50 percent) and employee assistance programs (42 percent). Among the benefits with lower access rates, 2 percent of workers in private industry had access to employer-provided personal computers for home use, and 3 percent of workers had access to employer provided child-care funds." (U.S. Bureau of Labor Statistics)
[Opinion] Written Testimony: Promoting Economic Security at Older Ages through Workforce Development
Sent to U.S. Senate Special Committee on Aging for February 25, 2009, hearing. Excerpt: "The 2008-2009 collapse in the stock market wiped out trillions of dollars in retirement account wealth and forced millions of boomers to rethink their retirement plans. Working longer is commonly seen as the key solution to the retirement financing dilemma. However, poor job prospects prevent many older people with limited education from working into later life. This testimony for the Senate Special Committee on Aging argues that Congress could improve the economic security of these older adults in retirement and in the years leading up to retirement by increasing government-funded employment and training services." (The Urban Institute)
Towers Perrin U.S. Legislative Tracking Chart: Health & Welfare (PDF)
25 pages. Excerpt: "These charts summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors." (Towers Perrin)
Many Employers Offering Financial Education Programs for Their Employees
Excerpt: "A recent survey of employers conducted by the International Foundation of Employee Benefit Plans found that 43 percent of U.S. respondents offer financial education/literacy programs for their workers." (Chiropractic Economics)
Tuition Reimbursement Becoming an Important Recruitment and Retention Tool
Excerpt: "Even in a cash-strapped economy, tuition benefits offer employers and employees a relatively low-cost, feel-good benefit that will keep giving long after the payouts end." (Employee Benefit News; free registration required)
Tuition Payment Programs Widespread
Excerpt: "Nearly all executives in a recent poll said their employer helps pay employees' continuing education expenses. An Accountemps news release said 94% of respondents reimburse employees for university tuition while 95% pay employees' expenses for other kinds of professional development." (PLANSPONSOR.com; free registration required)
Law Firms Offering College 'Coaching' as a Benefit
Excerpt: "Law firms credit family-friendly benefits like day care with drawing the best and the brightest to their firms, and now they're offering college-admissions consulting to help lawyers and staff navigate their children's college placement process." (The National Law Journal via LawJobs.com)
'Learning 401(k)s' an Innovative Way to Encourage Employees to Increase Their Knowledge
Excerpt: "[A]nnouncing a corporate learning program is hardly earth-shattering news. But in this case, IBM created its new learning initiative to give employees who have been with Big Blue more than five years a 50 percent match of up to $1,000 contributed -- to do whatever they want with the money, as long as it's used for learning. In the extreme, if an IBM employee wanted to use his or her matching dollars to take cooking lessons or learn to speak Chinese, that's perfectly fine under the program's guidelines." (Human Resource Executive Online)
Unum Will Make 529 Plan Contribution for Employees' Children
Excerpt: "Employee benefit provider Unum has announced that it will now kick in $700 towards a 529 college fund for the children of its employees." (PLANSPONSOR.com; free registration required)
Educational Tax Credits Need Simplification, Lawmakers Told
Excerpt: "Educational tax credits are too complex to benefit low income families and students, according to government and industry witnesses testifying at a hearing of the House Ways and Means Select Revenue Measures Subcommittee on May 1." (CCH Incorporated)
[Official Guidance] IRS Announcement 2008-44: No Penalty for Withdrawing Stimulus Payment That Was Deposited Directly Into IRA, HSA or Similar Accounts (PDF)
4 pages. Excerpt: "The account specified by the taxpayer could be a checking or saving account, or an account that is given favorable tax treatment under the Code, such as an IRA, a health savings account (HSA), an Archer MSA, a Coverdell education savings account (CESA), or a qualified tuition program account (QTP or section 529 program) . . . . An individual may withdraw from a tax-favored account an amount less than or equal to the amount of the Economic Stimulus Payment directly deposited into such account, notwithstanding any restrictions in the Code. To the extent that the withdrawal is made no later than the time for filing the taxpayer's income tax return for 2008, plus extensions (or in the case of a CESA, the later of May 31, 2009, or the time for filing the taxpayer's income tax return for 2008, plus extensions), the amount withdrawn is treated as neither contributed to nor distributed from the account. Thus, the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code." (Internal Revenue Service)
Tuition-Reimbursement Programs - A Case Study of a Company That Does It Right
Excerpt: "Tuition-reimbursement plans are often justified by their value in enhancing employee retention and recruitment, but few companies have put that hypothesis to the test. A recent survey of 180 companies conducted by the Corporate University Xchange (CUX) found that nearly half neither measure the impact of such programs on retention and recruitment nor follow up with employees and managers to learn how the programs affect job performance." (CFO.com)
[Guidance Overview] IRS Issues 2008 Version of Taxable Fringe Benefit Guide
Excerpt: "This publication offers helpful insight into the IRS's positions regarding the taxation, withholding, and reporting requirements for certain employee fringe benefits. However, employers and administrators looking for an IRS publication on the tax treatment of a broader variety of fringe benefits (including cafeteria plans, adoption assistance, and HSAs) may wish to consult IRS Publication 15-B . . . ." (Employee Benefits Institute of America (EBIA))
[Guidance Overview] Overview: IRS Issues 2007 Version of Publication 970, Tax Benefits for Education
Excerpt: "EBIA Comment: Qualified educational assistance programs allow employers to provide assistance to employees for a broad range of educational expenses, including expenses for graduate-level courses and for courses that are not job-related (subject to certain limitations). Under Code Section 127, amounts paid or incurred by an employer under a qualified educational assistance program are deductible by the employer and are excludable from the employees' taxable income." (Employee Benefits Institute of America)
IBM Designs 401(k)-Type Plan for Tuition Reimbursement Payments
Excerpt: "IBM's proposed 'learning accounts' would allow U.S.-based employees with five years of service to contribute up to $1,000 a year, with IBM matching 50 cents on the dollar. The program doesn't begin until next July, which will give IBM time to pursue another wrinkle: getting the government to pony up a tax break by making contributions exempt from income taxes . . . . " (CFO.com)
Formula 401(k) for Education Costs?
Excerpt: "[F]or the first time, a corporation is planning to provide a 401(k)-type program whereby employees could contribute to an interest-bearing education account. The account, which would be supplemented by company-paid matches, would be used for any professional skill development not related to the employees' existing job. And it's not just any corporation, but the one whose human-capital strategies arguably draw more attention than any other: IBM." (CFO.com)
Employers Offer Help on College Admissions
Excerpt: "Companies are rolling out a new benefit that aims to alleviate a big source of stress for many middle-aged employees: help getting their kids into college.' (The Wall Street Journal Online)
Tuition Reimbursement by Union Educational Program Would Not Constitute Prohibited Transaction
Excerpt: "Tuition reimbursement payments made by a union-sponsored trust to provide reimbursement to affiliated local unions for the expenses incurred by members in completing a welding program would not constitute a prohibited transaction if the reimbursement was pursuant to a clear agreement and the trust was not charged any interest or required to make other payments, according to an Employee Benefits Security Administration (EBSA) opinion letter." (Wolters Kluwer Law & Business)
DOL Advisory Opinion 2007-04A of July 18, 2007, on ERISA Sec. 406
Excerpt: "This is in response to your request for an advisory opinion, on behalf of the National Elevator Industry Educational Program (the NEIEP), regarding whether the proposed reimbursements of certain monies by the NEIEP to affiliated local unions of the International Union of Elevator Constructors constitute prohibited transactions under section 406 of the Employee Retirement Income Security Act of 1974, as amended (ERISA)." (U.S. Employee Benefits Security Administration)
Educational Reimbursement for College Degrees May Be Worst-Managed or Least-Beneficial HR Program
Excerpt: "In a true world-class organization, HR leaders would track key analytics to determine the ROI of all programs in their purview. In reality, few organizations officially track the best- and worst-managed programs in HR. If they did, educational reimbursements for college degrees would be a serious contender for the worst- managed -- or least beneficial -- program in HR.' (Workforce Management; free registration required)
Paying Worker Tuition Can Help Business
Excerpt: "With the start of the school year not far off, employees of small businesses might have a hankering to take some courses. And company owners might want to think about paying for them to take some classes _ the learning may help their careers and in turn, help the business retain its best workers." (AP via The Washington Post; free registration required)
Overview; Liberalization of Variable Insurance Product Diversification Requirements Proposed (PDF)
Excerpt: "The Internal Revenue Service ('IRS') and Treasury published in [the] Federal Register a proposal to amend the regulations under section 817(h) of the Internal Revenue Code ('Code'), which imposes 'adequate diversification' requirements on insurance company 'segregated asset accounts' (i.e., separate accounts and subaccounts) supporting variable life insurance and annuity contracts ('variable contracts')." (Sutherland Asbill & Brennan LLP)
HR Policy Association Seeks Permanent Tax Exclusion for Employee Education Assistance
Excerpt: "[S]ection 127 is currently set to expire December 31, 2010. HR Policy has joined with a diverse coalition of business, labor and educational organizations in calling upon Congress to permanently extend Section 127. Legislation will be introduced soon by Reps. Sander Levin (D-MI) and Philip English (R-PA)." (HR Policy Association)
I.B.M. Plan Ties Employee Training and Savings Accounts
Excerpt: "I.B.M., at a conference in Washington today, is announcing that it will begin offering its employees in the United States specialized savings accounts for training and education. The 'learning accounts' will be modeled on 401(k) retirement accounts, which began in the late 1970s. Workers will put up to $1,000 a year into the accounts, and I.B.M. will contribute 50 cents for every dollar put in by the employee." (The New York Times; free registration required)
U.S. House Proposal Seeks Employer Education Contributions
Excerpt: "A recent proposal introduced in the U.S. House of Representatives is meant to propel employees to allocate money for education costs and prompt employers to contribute matching funds." (PLANSPONSOR.com; free registration required)
BenefitsLink Named 'Best of the Web' by Human Resource Executive Online
We're the only site in the 'Benefits' category! Thanks for letting us share this news with you. Excerpt: "With that in mind, we considered it fitting to present in this anniversary issue 10 of the best HR Web sites and 10 of the best HR blogs for your browser's Favorites/Bookmarks list. . . . [I]f it's about benefits, you'll find something about it on BenefitsLink. Just a cruise down its left side navigation/links bar, and you quickly get the idea how they chose the site's name back in 1995." (Human Resource Executive Online; free registration required)
Employers Should Beware of Partnering with Colleges
Excerpt: "Costs for higher education are rising every year. Such increases include the costs for employers to provide tuition assistance benefits. In an effort to keep tuition bills low, some companies are partnering with colleges and universities to obtain reduced tuition rates." (Employee Benefit News)
IRS Releases the 2006 Publication 970 on Tax Benefits for Education
Excerpt: "EBIA Comment: Qualified educational assistance programs allow employers to provide assistance to employees for a broad range of educational expenses, including expenses for graduate-level courses and for courses that are not job-related (subject to certain limitations)." (Employee Benefits Institute of America Inc.)
Working Paper Abstract: The Effect of Tuition Reimbursement on Turnover: A Case Study Analysis
Excerpt: "This paper tests empirically whether participation in tuition reimbursement programs increases employee retention using data from a non-profit institution. To document the prevalence of tuition reimbursement programs, the case study analysis is supplemented with findings from the Survey of Employer-Provided Training, 1995 (SEPT95). This paper finds that participation in tuition reimbursement programs reduces employee turnover." (National Bureau of Economic Research; paid subscription or individual purchase required to retrieve fulltext)
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