Compliance January 4, 2007

NY Clarifies Stock Option Allocation Rules

January 4, 2007 (PLANSPONSOR.com) - The State of New York Department of Taxation and Finance has amended New York State Personal Income Tax Regulations to clarify rules for allocation of income from stock options, stock appreciation rights, and restricted stock for non-residents and part-year residents.
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The amendments establish an allocation period from the grant date to the option vesting date. The capital gain realized on such options should be multiplied by a factor equal to the number days the individual worked in the state for the grantor during the allocation period divided by the total number of days worked within or out of state during the allocation period.

The publication generally says non-residents have New York source income from these stock awards if they performed services in the state for the corporation granting such options. The income is realized at the same time it is realized for federal income tax purposes. For part-year residents, the statute was amended to say the New York source income from such stock compensation depends on the individual’s residence status at the time the compensation is recognized for federal income tax purposes.

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The amendment calls for all income to be recognized in the state if the individual was a resident of New York at the time compensation was recognized for federal income tax purposes. If the individual was not a resident of the state at that time, the amount includable as New York source income should be calculated using the grant-to-vesting allocation period and the factor used for non-residents for allocating income from these sources.

The publication includes examples of various scenarios, and can be found here .

Administration January 3, 2007

Individual Asset Performance Factors Studied

March 13, 2006 (PLANSPONSOR.com) - A new survey of investment managers found that most believe globalization and corporate governance are relevant to judging a company's asset performance.
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A news release from Mercer Investment Consulting said that 65% believe the effects of globalization significantly impact asset performance, while a similar proportion (62%) think corporate governance is a relevant issue. Environmental issues like climate change feature less prominently now (15%) but are forecast to grow in consideration within five years.

Survey results indicate that the environmental, social and corporate governance (ESG) issues considered most relevant to performance at the individual asset level – corporate governance and globalization – are not expected to be primary drivers of overall capital markets. Instead, interest rates and corporate profits are forecasted to have the greatest impact. Oil prices are also expected to play a role in every region’s capital markets.

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“The environmental and social effects of globalization are being experienced by governments, local communities and businesses across all regions, as pressures on resources grow,” asserted Jane Ambachtsheer, Global Head of Mercer IC’s Responsible Investment business, in the news release. “Similarly, corporate scandals have hit the headlines in almost all regions, so it is not surprising that these two issues are viewed as the most important responsible investment factors by investment managers.”

According to the survey, over the next five years, environmental issues overall (climate change, environmental management and access to clean water) are expected to have a larger impact on asset performance, and in many regions environmental management is likely to become one of the top three issues affecting asset performance.

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This year, 13% of investment managers anticipate increased client demand for specialist investment strategies built on environmental, social and corporate governance (ESG) analysis. This expectation is greatest in Europe where 39% of managers predict growing demand, followed by the UK and Canada. Singapore is the only place where demand is not anticipated to grow.

Looking forward, expectations rise dramatically, with 31% of managers globally expecting to see more requests for specialist products built on ESG analysis. US managers remain least convinced, with just 19% expecting that such demand will materialize.

The survey reflects the views of 157 investment management firms from around the world, which manage aggregate assets in excess of $20 trillion. Respondents were asked how significant environmental, social and corporate governance (ESG) issues were to investment performance, and what expectations of future client demand are for related investment services.

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