Compliance September 28, 2005

New US House Bill Pushes Annuities

September 28, 2005 (PLANSPONSOR.com) - Two US House of Representatives lawmakers have introduced a bill encouraging the use of annuities as retirement savings vehicles.
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A news release from Representative Stephanie Tubbs Jones (D-Ohio) said the Flexible Retirement Savings Act, co-sponsored by Representative Nancy Johnson (R-CT), helps people to annuitize a portion of their savings as a way to protect against longevity or outliving their savings. In addition, it also breaks down barriers that discourage people from coupling a life insurance policy or an annuity with a long-term care policy, the announcement said.

“As the American population ages, it is important that we begin to address the various public policy changes that will need to take place to accommodate the estimated 87 million Americans over the age of 65 that will be living in our society by the middle of this century,” Tubbs Jones, asserted in the news release. “This legislation proposes common sense solutions to the problems posed by an aging society such as long-term care and lifetime savings through Annuities.”

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The bill includes these provisions, according to the announcement:

  • Creates a tax incentive for people to use lifetime annuities.  The proposal would exclude from federal income taxes half of the payments from a non-qualified, lifetime annuity up to an annual limit of $20,000 .(A non-qualified annuity is purchased with after tax dollars and is not part of an employer-sponsored retirement plan).
  • Grants the same tax-free treatment that already exists for stand-alone long-term care to combination insurance. In addition, the bill provides more flexibility by allowing people to exchange their life insurance or annuity for a long-term care policy tax free.
Benefits September 27, 2005

EEOC Sues AZ Paving Firm over Sex Harassment

September 27, 2005 (PLANSPONSOR.com) - An Arizona firm has been slapped with a federal lawsuit over charges that a supervisor harassed male workers by grabbing their genitals, simulating sex acts, and attempting to kiss them.
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The US Equal Employment Opportunity Commission (EEOC), which filed the suit in US District Court in Tucson against the Phoenix-based Sunland Asphalt, charged that another employee exposed himself while still another worker urinated on his co-workers, according to the Arizona Daily Star. The company is a paving contractor.

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The alleged harassment and retaliation began in 1999 and continued through at least 2002, said Michelle Marshall, an EEOC lawyer who filed the lawsuit. The incidents, which involved Tucson-based employees, happened mostly in Tucson but may have also occurred at a job site in Nevada, she told the Star.

The allegations are overstated, Sunland vice president Mike McWenie told the newspaper. He said the allegations stem from just one incident that occurred in 1999. “I can’t comment on any of the details or the personalities involved. All I can tell you is that we feel like we have complied with all federal and state laws on this,” McWenie told the newspaper. “This is something that happened well over two years ago. I’m at a loss. I’m baffled it has come to this.”

The EEOC has asserted that employees who filed complaints were forced to quit because the harassment was severe and supervisors were unwilling to correct improper behavior. When one employee, also seeking a promotion, complained about the harassment, a supervisor told him “you can forget about becoming foreman,” according to the lawsuit.

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