Fee Advisors Network News

Lawmakers Abandon Fee Disclosure for Retirement Plans

A provision to require fee disclosures in defined-contribution plans was stripped from legislation that the Senate considered last month. The provision had been included in a modified version of the tax-extenders bill (HR 4213), but was pulled from the measure before it hit the Senate floor. (The upper chamber subsequently failed to pass the bill.) Published reports say Congress is espected to let the Labor Department address the issue of fee disclosure.

COLI Bill Awaits Subcommittee Action

A bill that would limit corporate-owned life insurance coverage of employees is idling in a subcommittee. Called the Employer Owned Life Insurance Limitation Act, HR 3669 would prohibit employers from taking out life insurance on employees, except those making more than $1 million annually. For those workers, a company would have 30 days to notify the employee of the policy. HR 3669 is similar to HR 251, which would prevent companies from taking out life insurance policies on workers without telling them. Both bills are now in the Subcommittee on Health, Employment, Labor and Pensions.

Financial Overhaul Bill Delayed in Senate

The House last week passed the Compromise Financial Regulatory Overhaul Bill that came out of a conference committee, but the senate will wait until after its July recess to consider the measure. Senate Majority Leader Harry Reid (D-Nev.), is still trying to ensure enough votes exist to avoid a filibuster. Among the many provisions of the legislation is a move toward imposing the same fiduciary duty on broker-dealers and insurance agents that investment advisers already must adhere to; the creation of a consumer protection bureau within the Federal Reserve, and limitations on the use of derivatives. For more information on the bill, HR 4173, visit thomas.loc.gov.

Bills Seek Tax Relief for Annuities

Tax relief for annuity investors would be provided under legislation pending on Capitol Hill. Both S 1297 and HR 2748 would provide a 50% tax exclusion on the annual income from a non-qualified lifetime annuity. The Senate bill would allow an exclusion up to $20,000; the House bill would give a tax break on up to $10,000 in income annually. For a look at either bill and for more details, visit thomas.loc.gov.

FINRA Expels B-D for Marketing Ponzi-Scheme

The financial Industry Regulatory Authority on Thursday said it expelled Dallas-based Provident Asset Management LLC which marketed fraudulent private placements offered by its affiliate, Provident Royalties, linked to a Ponzi scheme. Investors were told the money raised would buy interests in oil and gas exploration activity, along with real estate, oil and gas leases, and mineral rights.

FINRA said that instead, Provident Royalties deposited investor funds into a separate bank account and then - in typical Ponzi-like fashion - commingles that money in various accounts that used it to pay dividends and principal to earlier investors. These offerings were sold through more than 50 retail broker-dealers across the country from September 2006 through January 2009, and raised more than $480 million through about 7,700 individual investments.

Provident Asset Management consented to FINRA's findings, but it neither admitted nor denied the charges.

Health Care plan to be supported by Investment Income Tax

Congressional Budget Office numbers for the latest version of the Democrats' health overhaul would cost $940 Billion over a decade, while at the same time, bringing down the federal budget deficit by $138 billion.

How can this be? As a starter, with new taxes and curbs on Medicare spending.

Here is the gist on their "wealth distribution" scheme: The plan costs include $466 billion to give tax credits to help lower earners buy insurance, $434 billion to expand the Medicaid federal-state insurance program for the poor and $40 billion in tax credits to help small businesses offer coverage (some additional "gotcha's" in this one).

Democrats made deeper spending cuts and added new taxes: taxes on health industries such as drug makers and insurance companies, expansion of Medicare taxes (families earning more than $250,000 a year will pay a 3.8% Medicare tax on unearned income such as dividends and interest), and deeper cuts to privately administered Medicare plans under the Medicare Advantage Program.

Editors Note: We are entering a new era of "tax everything", so plan accordingly. (JWM)

The Fee Advisors Network is pleased to offer a special benefit to our members. If you refer a person or firm, who in turn signs up for FAN membership, you will receive credits for that referral based on the level of membership at which they join ($1 = 1 credit).

If your referral joins as an Independent, Charter, or Firm member – you will receive credits equal to 10% of the cost of the referral’s 1st year membership fee. If your referral joins as a Bronze or Platinum member – you will receive credits equal to 5% of the cost of the referral’s 1st year membership fee.

Your credits can be redeemed at the time of your annual renewal to offset your renewal fee. However, if you should have credits which exceed your renewal fee, you can redeem those ‘extra’ credits in one of two ways – it is your choice. Firstly, you can apply your credits toward ‘upgrading’ your current status to a higher level of membership. Secondly, you can receive a bonus check on the ‘extra’ credits you have earned.

Thank you for encouraging others to join the Fee Advisors Network!

Starting in 2010 we are putting together various webinars to cover a host of topics. Make sure to check your e-mail for announcements and invitations to these Member Events.

“We wish to thank Joe for his presentation to our group of CPAs. He provided our group a very informative presentation from a fiduciary viewpoint concerning the risk management of life insurance. It became quite clear to us that he knows his subject area very well. We learned things about the structure and the mechanics of life insurance that will certainly assist us as we consult our clients. Many of the participants left the presentation with actionable ideas. Thanks again, and we look forward to other future opportunities to learn from his experience.”

“I have relied on Joe Maczuga as a resource for clients with estate and/or business succession planning issues that are more complex than usual. Joe's approach to life insurance planning is, if not unique, very rare. As a fee-only planner, helping clients save thousands of dollars in commissions on a life plan reinforces the value of the advice they pay me for. It would be hard to find anybody more knowledgeable than Joe Maczuga in the field who works this way."