Posts Tagged ‘finance’

A New Take on New Year’s Resolutions: Planning Ahead for Year-End Payroll Processing

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The Mother of All Year-End Payroll Processing Checklists

Today’s we will cover a checklist-level methodology to better plan and organize year-end activities. This information pretty  much mirrors what I presented in my webinar last month. I’ve had some requests to get all this information in a checklist format, so here’s my attempt at that.

Year-end has two phases:

  • BEFORE your LAST PAYROLL of the calendar year
  • AFTER your LAST PAYROLL, but BEFORE the FIRST PAYROLL of the NEW calendar year

BEFORE the LAST PAYROLL of the calendar year, in addition to your normal verification procedures, do the following:

Validate employee and employer indicative data.

  • Verify the employer and employee data that will be used for processing your quarterly tax reports and W-2s
  • Verify which employees will be impacted by the “retirement plan” indicator for Box 13 of Form W-2
  • Verify which employees are classified as Statutory employees for Box 13 reporting
  • Confirm  employee name, address and Social Security numbers are in the correct format
  • The IRS may impose a penalty for each Form W-2 with a missing or incorrect Social Security number or employee name
  • Ensure that deceased employees are properly coded for reporting on the W2

Validate wage, tax and benefits data.

  • Confirm that deferred compensation plan types are correct and verify employee contribution amounts
  • Verify Group-Term Life Insurance adjustments have been updated
  • Ensure special reporting situations for Form W2 have been updated, such as:
    • Adoption benefits
    • Deceased employee’s wages
    • Golden parachute payments
    • Group-term life insurance
    • Heath Savings Account (HSA)
    • Third-party sick pay
    • Employee business expense reimbursements
    • Taxable fringe benefits
    • Trip allocation information
    • Dependent benefits from one of the best dentist in Chattanooga
    • Income from the exercise of nonstatutory stock options
    • Designated Roth contributions
    • Salary deferral plans (401k, 403b, 408k, 408p, 409a, 457b)
    • Educational assistance programs
    • Employee’s social security and Medicare taxes paid by employer
    • Moving expenses
    • Uncollected Social Security tax
    • Nontaxable combat pay
    • Employer contributions to an Archer MSA
    • Cost of employer-sponsored health coverage
    • Personal use of company car
  • Verify the employer state unemployment insurance tax rate and taxable wage limit for each state
  • Compute uncollected Social Security and Medicare taxes for retirees and former employees
  • Verify accuracy of withholding for taxable fringe benefits. These may include:
    • Group-term life insurance in excess of $50,000
    • Third-party sick pay (is the third party issuing the W-2)
    • Personal use of company vehicle or plane
    • Non-qualified moving expense reimbursements
    • Company-provided transportation or parking
    • Employer-paid education not related to the employee’s job
    • Non-accountable business expense reimbursements or allowances
    • Non-cash payments
  • Check for required backup withholding; verify amounts

Additional considerations:

  • Verify year-end system updates are applied in a timely manner. Test, test and re-test before applied to production environment
  • Request  special reports/files that may be required for year-end
  • Ensure adequate payroll supplies are complete for year end and to begin the new year, including (1) check stock, (2) payroll forms and envelopes and (3) year-end forms (W-2, W2C, 1099R)
  • Remind employees to fill out a new Form W-4 if their situation has changed
  • Publish a reminder for employees to validate their mailing address – preferably a check message before the final check of the year
  • Be sure all adjustments are applied:
    • Confirm all “manual” checks created outside the payroll system have been entered
    • Verify voided or reversed paychecks have been accounted for in the system
  • Create a processing schedule/project plan to meet year end filing deadlines
  • Payroll bank reconciliations should be completed successfully

So. Whew. That’s the first (and longest) part of this checklist.

Now, AFTER the LAST PAYROLL, but BEFORE the FIRST PAYROLL of the NEW calendar year, do the following:

Validate employee and employer indicative data.

  • Review discrepancies such as missing addresses, and missing or invalid Social Security numbers

Validate wage, tax and benefits data.

  • Review discrepancies such as negative quarter and/or year-to-date fields, and qualified pension-coding discrepancies
  • Verify the employer’s new state unemployment insurance tax rate and taxable wage limit for each state where the employer has workers
  • Verify new state disability insurance rate and taxable wage limit, where applicable
  • Test reasonableness of Social Security tax withholding for both employee and employer amounts
  • Test the reasonableness of state unemployment insurance tax (verify taxable wages and multiply by the employer experience rate)
  • Verify that employee requests for fringe benefit deduction changes for the new year have been applied

Verify for special procedures.

  • Schedule any special bonus payrolls
  • Verify that the payroll new year month-end closeout dates are accurate
  • Verify that management reports for the new year are scheduled, and will include the correct weeks and process
  • Confirm that for the new year the schedule of pay dates, period ending dates and quarter closing dates, are as intended and do not fall on holidays or weekends

Year-end balancing.

  • Compare W-2 report totals to Form W-3 totals
  • Compare Forms W-2 to State and local report and totals
    • Ensure reported taxes from Form W-3 equal tax deposits
  • Check for excess contributions to qualified plans, including 401(k), 403(b) and SIMPLE plans, especially for highly-compensated employees
  • Check for required tip allocations for tipped employees

Finally (!!!), here are a few basic tips to follow to confirm that your quarterly reports are in balance with your annual reports.

The IRS matches amounts reported on your four quarterly Forms 941 with Form W-2 amounts totaled on your yearly Form W-3, Transmittal of Wage and Tax Statements. If the amounts do not agree, the IRS or the Social Security Administration (SSA) may contact you. The following amounts are reconciled:

  • Federal income tax withholding
  • Social Security wages
  • Social Security tips
  • Medicare wages and tips

If you want to outsource your accounting process to a trusted company, then check out these hmrc compliant umbrella companies which are verified and can take care of your complete accounting process accurately.

I know this has been a ton to digest, and it is long checklist. But trust me when I say this is a collection of best practices I’ve culled over the years. If you have any questions about any of this, please feel free to reach out to MIPRO or try Goodwin Barrett. We’re happy to help clarify this process if need be.

Casual Friday: Amazon’s Upcoming, Full-Bore Retail Disruption

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I do a lot of thinking about Amazon, because I feel it’s on the verge of massively disrupting Google and, on a much, much larger scale, retail as a whole.

Today, let’s talk about retail. Here I mean retail across the board, save specialty stores (Apple, Bose, etc.) and emergency sundry retailers (pharmacies, some grocery stores, etc.). If I’m right, a large swath of retail as we know it might be quite well dead in five years, with a few exceptions.

What makes Amazon tick isn’t prices – unless you’re a Prime member, in which you get free two-day shipping on everything. But if you’re not a Prime member, you pay for shipping. And once you pay for shipping on Amazon, you’re roughly at mainline retail prices.

So for many folks, price isn’t a major incentive to shop at Amazon.

So, then: Why are people choosing Amazon in increasing numbers, from quick everyday jaunts to full-on holiday shopping sprees? I have three things I always come back to when I’m on the road and kicking this topic around:

  1. Convenience
  2. Insanely quick and accurate shipping
  3. Brand image/trust


Let’s be honest: getting in the car and burning fossil fuel to drive on construction-riddled roads to go to a store and buy something is becoming – has become? – a massive pain in the keister. As the holidays draw near, the mere idea of going out and battling legions of stressed shoppers is enough to give any determined taskmaster the howling fantods. Assuming you’re OK with Internet commerce, it’s massively, exponentially, galactically easier to log into Amazon, run a quick search, and buy something with 1-click shopping. Total elapsed time, assuming you know what you’re shopping for: maybe two minutes – if you didn’t get hijacked by one of Amazon’s scary-accurate and compelling ‘customers also bought!’ suggestions. A day or two later, your stuff shows up at your door, and boom, done. You never left the house. It’s the slightly time-lapsed reverse teleportation game. Fun!

Insanely quick and accurate shipping

To me, this is the cornerstone. This is Amazon’s iPhone, its halo, its addictive magic.

No other company on earth ships as quickly or accurately as Amazon. Despite everything I’ve bought on Amazon, never once have I had a shipping issue. Not one. And sometimes, an item will actually show up earlier than it should. Earlier. When that happens, I just shake my head and wonder how ‘regular’ retail will ever compete.

And then I think: it won’t. It can’t. The model has almost been disrupted entirely. We just haven’t seen the full picture yet.

But we will.

Brand image

There is nothing shady or scary or untrustworthy about Amazon. They sell things and get them to you more efficiently than anything on Earth. Their security is top-notch, their commenting system is a fantastic research tool, and returns are almost as easy as Zappos. They do what they say. They never miss on logistics. You can shop the way you want, with no annoying salesperson who’s vying for a spiff to harass you. If you want to buy a camera and read all 500+ reviews while drinking raspberry hot chocolate in your underwear, go for it.

(Purely hypothetical scenario, of course.)

In a nutshell, people trust Amazon. That’s the ultimate brand goal of any company: pure, gleaming, frictionless trust. Amazon has it in spades.

Amazon’s nuclear warhead

There’s some talk out there about Amazon working towards same-day delivery. That is, if you order a coffee grinder at 11 AM, you will have it by, say, 3 PM. You won’t have gotten in your car. You won’t have gone to pick anything up. Heck, you might not have even gotten dressed. Sure, you might have paid a nominal fee for such convenience, but that is offset buy the gas and time and shower water you saved.

In short, you will have just experienced the zenith of retailing: trustworthy web commerce coupled with instant gratification.

If this comes to pass, this will put the icing on the doom cake for retail. In fact, if something like this is even close to being real, the pox of empty strip malls will only get worse as the market implodes violently.

Does this cast a shadow?

Is there a downside to what seems to be this utopian scenario for consumers? Of course:

  1. The economic and social impact of a physical industry literally dying before our eyes, and the artifacts (jobs, buildings, etc.) it leaves behind, and
  2. The ascension of Amazon as The Big Retailer, a credit card-devouring Skynet, that runs everyone’s commerce everything and has millions of credit card numbers and is literally so big and powerful that nobody can compete with it. Logistics is hard and expensive. Building a merchant base isn’t done overnight. Keeping your brand squeaky-clean is studied every other month by HBR.

For consumers, it will be a revolutionary step forward, but at a macro level, I don’t think we realize the full set of consequences something like this will have.

Still, it’s coming. I would bet money on it.

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Federal Healthcare Regulations and … Oil Changes

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A Parable of Recommendations and Decisions

So, how often do you really change the oil in your car, truck, or SUV?  Do you follow manufacturers’ recommendations?

You know, the last three cars I owned had completely different advice: one owner’s manual said every 6,000 miles, one said every 7,500 miles, and one has a snazzy computer that analyzes how I drive and tells me when an oil change is due.  Those are car manufacturers’ recommendations, right?  But wait!  Do you heed the oil manufacturers’ advice to change every 3,000 miles?  Or, do you follow your daddy’s advice and change every so-and-so miles?  Do you replace the oil filter every time (some recommendations) or every other time (other recommendations)?  One repair shop told me that not replacing the oil filter every time was like taking a shower without taking off your socks … But, I was always told the filter should be on an every-other oil change cycle.

Now, MIPRO is in the computerized maintenance management business.  We are the North American experts on implementing, tuning, upgrading, and optimizing PeopleSoft Asset Lifecycle Management (ALM) systems, especially PeopleSoft Maintenance Management.  You might think, “…If it’s computerized, it should be easy to follow proper procedures, right?”

Related: How to choose good knee walker?

Oh, if only life were that easy.  Those of you in the healthcare business know that Daddy Warbucks and the IRS (those who giveth and those who taketh away) are really the same organization: CMS (Centers for Medicare and Medicaid Services), within HHS (Department of Health & Human Services), the most important federal agency in your financial life.  If you don’t follow CMS regulations, you risk being adjudged non-compliant, potentially fail your Joint Commission accreditation check, and might not receive reimbursement. (What proportion of your revenues comes from CMS?  40%, 50%, more?)

So, what does CMS say about maintenance?

In December 2011, CMS’ Office of Clinical Standards and Quality/Survey & Certification Group issued new regulations that said healthcare providers must follow manufacturers’ advice:

“…alternative equipment maintenance schedules {are} permitted in some instances….” but “…alternative equipment maintenance methods are not permitted….”

Hmmm, some instances. What might those be?

CMS “clarified” what some instances meant by stating:

frequencies may be adjusted based on assessment by qualified personnel unless 1) the equipment was “…critical to patient health & safety….” or 2) the equipment was “new” and a sufficient amount of maintenance history hadn’t yet been acquired.

When I’m drivin’ down the freeway, I think that darn near every part of that car is critical to my health and safety.

But, you’re the maintenance supervisor in a modern hospital.  Or, of course, you’re the Administrator, where the buck truly stops.  Tell me, what equipment is critical to patient health and safety?  That’s an exact quote from the Feds.  Because, you had better be following the manufacturers’ maintenance procedures and frequency for these pieces of equipment.  Are there either procedure or frequency conflicts for virtually identical pieces of equipment?  Do you follow the maintenance recommendations and change your oil every 3,000, 6,000, 7,500 miles or listen to Dad’s advice or confidently (blindly?) follow the magic maintenance computer?

This is serious stuff in the healthcare business.  Non-compliance can be fiscally fatal.  And, if your accreditation is “delayed” or your reimbursements are “denied” or “reduced”, you may have serious problems.

Negotiations between CMS and national hospital providers are under way to define a bit more closely “critical to patient health & safety” and whether local procedures that exceed manufacturers’ methods are acceptable (and, of course, the corollary discussion of alternative methods that are superior to manufacturers’ methods; currently, these are not allowed).  Organizations such as The Joint Commission (TJC), the American Society for Healthcare Engineering (ASHE), and the Association for the Advancement of Medical Instrumentation (AAMI) are among the interested parties participating in the negotiations, not to mention regional and local providers who have just as much skin in the game.

Where’s MIPRO in all this?  Well, we are the best at implementing PeopleSoft maintenance management systems once the regulators tell our clients what procedures we need to implement.  Right now, what appears to be the safe method is to implement a superset of procedures/frequencies:  at least the manufacturers’ recommendations and your maintenance experience and the most comprehensive/frequent procedures where there are conflicts.

Stay tuned for future blog posts as these critical negotiations continue.  But, don’t expect quick resolution.  Remember the lesson of elephant reproduction:  it’s done at a high level, it’s accompanied by much noise and posturing, and it takes two years for anything to develop.

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DEAR FACEBOOK EMPLOYEES: Here’s The Truth About Your Stock Price

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Henry Blodget for Business Insider:

Facebook’s stock has dropped by half since the IPO three months ago.

And the stock price is now well below the level at which most employees have been granted stock in the past 18 months.

This means that most current and former Facebook employees are worth far less than they were a few months ago.

Facebook’s stock crash is also hurting morale at the company, and damaging perception of the company’s business and brand. The impact is big enough that Facebook CEO Mark Zuckerberg, who has been crystal clear about his desire to ignore the stock price, admitted at a company meeting that the stock crash has been “painful” for everyone.

Is Facebook The Next Google? With the Facebook employee lock-up releases coming in October and November, this isn’t just an issue of morale and “paper net worth.” Current and former Facebook employees have been counting on the stock to buy things (houses, for example). So it’s a matter of near-term financial planning.

With this in mind, here’s what Facebook employees should understand about their stock price:

Smart list — not only for Facebook employees, but also potential investors. Give it a read.


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Why Women Make Boardrooms Better

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Lisa Jansen, writing for

Companies with at least one woman on the board over the past six years show better average growth, with an average of 14 percent over the past six years compared to 10 percent for those with no female board representation. They also have a 4 percent higher return on equity, according to the research.

“Most of that performance comes from the post-credit crisis period: introducing women to the board gives better decision making and better vigilance in terms of what’s going on the in company,” O’Sullivan said.

A mixed-gender board allows for a better mix of leadership skills and access to a wider pool of talent. It improves corporate governance, and tends to be more risk-adverse than companies with male-only boards, the report showed.

Dr. Terry Whipple does and offers services about skin care and other skin regimen. Give him a call for a price quotation.

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Reality Check: You Can’t Build With Your Hands Tied

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Stop me if you heard something similar before. Ready?

Kentucky limits on debt issuance have hindered high-priority university construction/renovation projects.  Detailing this is a great piece over at Inside Higher Ed, by Kevin Kiley. To wit:

Even though the university would fund its new debt through non-state revenues, lawmakers in the Kentucky state legislature, which wrapped up its budget process earlier this month, denied the state’s universities the authority to issue any bonds for the next two years, fearing that more debt by state institutions could hurt the state’s credit ratings.

Now the state’s universities will likely not be able to finance projects through debt until the legislature reconvenes in two years, and there is no guarantee that it lawmakers will approve bonds then. For the University of Kentucky, that means the university will put off several projects, and the already old infrastructure will continue to age, which administrators say could hinder student and faculty recruitment.

Clearly, the theme of the article is the challenges the University of Kentucky is facing with financing capital projects and expansion. But here’s the rub: it’s not just the University of Kentucky.  It’s every state and nearly every institution, both private and public, that are being asked to do more with less. We hear it literally every week. It’s such a common constriction that it’s almost assumed at this point.

PeopleSoft presents solutions for Capital Planning along with Asset Lifecycle Management.  Chances are, your role spans more than just figuring out how to get it done.  You must also figure out how to keep it running, for a long time, at a reasonable cost.  Construction is just a small piece of the puzzle and extending the life of an asset is just a small part of the answer.  The reality is that you cannot allow your hands to be tied if you are going to succeed.

It’s fun to think it’s a workable constraint, but it’s not. Reality is reality.

We work with organizations every day that are forced to engage this dilemma head on.  If you are curious and want to talk (or just vent), drop me an e-mail.


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Apple’s Dominance, In Context

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We all read the headlines today that position Apple as one of the most powerful companies on earth. Most everyone understands the magnitude of Apple’s ascent from the doldrums of the late 1990s and early 2000s. But do you really understand Apple’s power in the market? If you’re not a hopeless Apple nerd like me, allow me to provide you some context:

Last Thursday, Apple’s stock hit $494/share, making Apple worth more than Microsoft and Google — combined. When you look at what Apple purportedly has lined up for this year, you realize they still have tons of upside. How successful will the iPad 3, iPhone 5, and rumored Apple TV/iTV be? I wouldn’t bet against them.

And then there are the observations from David Leonhard over at the NYTimes Economix blog:

• With a market value of about $460 billion, Apple is worth more than Google, Goldman Sachs, General Motors, Ford, Starbucks and Boeing combined.

• Apple is now worth almost twice as much as Microsoft (about $258 billion) and more than twice as much as Google ($198 billion).

• It is also worth more than twice as much as General Electric (about $202 billion), I.B.M. (about $224 billion) or Wal-Mart ($212 billion).

• Apple — ranked 35th in the Fortune 500, which is based on annual sales — is worth eight times as much as the company just below it on the Fortune list (Boeing, at about $56.5  billion). Its value is 20 times as much as the company just above it (Medco Health Solutions, about $23.4 billion).

If you want a glimpse of just what the iPhone hath created, understand that today, Apple’s iPhone business is bigger than Microsoft in its entirety. Let that sink in for a bit. Even if you removed the iPhone business from Apple, what’s left of Apple would still be worth more than Microsoft. 15 years ago, Apple was on the verge of death. And now this? Amazing.

Finally, in 4Q of 2011, Apple took 80% of all profits in the mobile space. Eighty. Percent.

All this from a company that a decade ago was making candy-colored iMacs and this thing called an iPod, which was not met with a favorable popular reaction.

My, how times have changed.


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Linkology: The Best of the Internet for 1/27/11

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Unabashedly Waxing Poetic on Apple From a User’s Standpoint

I started using Macs when they were powered by the Motorola 68000’s and Berkeley Breathed anthropomorphized one in Bloom County. Even back then, in the miasma of the awakening WinTel juggernaut and whiffs of Amigas and Atari STs, Macs were considered niche machines. I wrote my first dozen short stories on that little Mac, and after upgrading to a Mac SE/30 I went through high school with that little beige box on my desk. The Mac, and the Commodore 64 that preceded it, were my first technology proving grounds.

Later, because I was a hopeless gaming nerd, I migrated to Windows PCs for a stint. I built my own rigs. I spec’ed my own motherboards, hard drives, RAM chips, cases, power supply and garish-colored fans. When GPUs were invented, I pored over every polygon each had the potential to push. I had become a full-on hardware nerd.

My stay on the Windows side of thing lasted longer than I expected, because that happened to be the same time Steve Jobs was exiled from Apple and John Sculley began his seemingly-intentional grounding of the company into any rocky shore he could find. The Windows PC era was in full bloom, and nobody outside really dedicated typesetting/design studios ever thought about Macs again. Everyone thought Apple had been relegated into insignificance; Michael Dell even suggested that Apple should sell the stock back to shareholders and ‘shut the company down’.

In the early 2000’s, as real life became more real and I wasn’t spending my nights fragging strangers in Rocket Arena 3, I was looking for a more elegant computing setup. My giant, power-sucking, room-heating beast of  PC was too much, Windows was too boring, and I longed for something new. As it turned out for me, everything old indeed does become new again.

I did something that made everyone laugh at me: I bought an overpriced, shiny, white MacBook. That was back in OSX 10.1 days, when the OS was unquestionably immature and limited to the point of being annoying. It was also during the very beginning of Apple’s real resurgence, a movement that saw the iPod give way to the iPhone, and the introduction of what many argue is the new modern-day portable computer: the iPad. It also heralded a bona fide Mac explosion.

Today, I’m Apple everywhere, for better or worse. I have an iMac, MacBook Air, iPhone 4S, iPad and Apple TV. Everything just works. My days of fiddling with Windows and building my own machines have given way to technology that enables me to do what I want, easily, effortlessly. I  know it’s bad form to gush uncontrollably about a tech bias in public, but Apple has done something amazing with itself over the past 12 years, and I’m proud to say I’ve been along for (most of) the ride, through the doldrums as well as the ascent. To me, and from the perspective of the user, Apple is a brave company, one that stands for higher standards and holds a focus on user experience that is in its DNA, as opposed to watery marketing fodder, they do know how to follow the king kong digital marketing agency reviews through every step.

A few days ago, Apple announced a historic quarterly earnings report. Even by the hyperspazzy standards of Wall Street analyst wonks everywhere, Apple absolutely showed that it is winning pretty much every battle its fighting. Scratch that — it’s not just winning, it’s dominating.

Apple announced sales of $46 billion. Think about that. Here’s a $100-billion-plus company growing at a 73% clip, which simply isn’t supposed to happen. Sales in Apple’s past quarter exceeded its entire 2009. And this year, we’re looking at the iPad 3, the iPhone 5, probably an Apple TV reincarnation, and who knows what else. What’s for sure is that this momentum shows no signs of slowing.

Some other interesting trivia in light of Apple’s performance:

Data shows that shows PC shipments waning — except at Apple.

Farhad Manjoo puts things in perspective for anyone who can’t get their head around what Apple just announced: Apple’s profits ($13 billion) exceeded Google’s entire revenue ($10.6 billion).

At Verizon, 55% of all phone sales for 4Q 2011 came from iPhones. That means two iPhone models (the 4 and 4s) outsold every Android device the carrier offers combined.

Finally, here’s the ultimate framework in which to look at Apple’s data: it just posted the second-most-profitable quarter in any company’s history.

Where’s Charlie Sheen when you need him? Oh, he’s right here.

Have a good weekend, everyone.


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The Battles Over Retirement Accounts

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In case of death, do you know who gets your retirement account?

Before answering, think about it. Do you really know? In many cases, this amounts to a person’s life savings. It’s worth knowing.

As it turns out, the rules are more confusing that you might think. Carolyn Geer, writing for the WSJ, provides one such example:

Take the case of Leonard Kidder, who worked at Cajun Industries, a privately owned construction company in Baton Rouge, La., for nearly 20 years. The carpenter-turned-superintendent named Betty Kidder, his wife of 41 years, the beneficiary of his 401(k) account in the event he died before her.

As fate would have it, Betty died first, so Leonard updated his account paperwork, naming their three adult children the beneficiaries of the 401(k).

Eventually he got remarried, to Beth Bennett Kidder, and was on the verge of retiring. Six weeks later, at the age of 66, he died.

When Mr. Kidder’s children from his first marriage tried to claim the assets, reasoning they were the ones named on the most recent beneficiary form, they were rebuffed by Cajun, which ended up asking a court to determine the rightful owner of the money. Under the terms of the company’s 401(k) plan, if an employee dies, the employee’s spouse has the right to the account assets, unless the spouse waives that right in writing. (That priority for spouses springs from federal law.) Beth Bennett Kidder had never signed such a waiver.

The new Mrs. Kidder filed a motion for summary judgment, and the matter eventually ended up in federal district court in Baton Rouge, which this year awarded the approximately $250,000 in the account to her, disinheriting the children.

Geer’s article should be mandatory reading for just about anyone. Mandatory. Don’t miss it. Geer’s explanation of the labyrinthine rules surrounding retirement account assets is a harsh reminder that we all need to stay on top of these things.


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RightNow Opens Oracle’s SaaS Play; Puts on Alert

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Two days ago, Oracle acquired RightNow for $1.5B, and many analysts immediately said the purchase was, for all intents and purposes, missiles aimed at

But  how? What does this mean? How to decipher this? What does the acquisition do for Oracle? Won’t Oracle’s ‘Public Cloud’ be comprised of technologies already in Oracle’s stack?

Not exactly. According to ZDNet’s Phil Wainewright (and Larry Dignan), Oracle’s purchase of SaaS pioneer RightNow basically signals Oracle’s intent to go cloud shopping and pick up a slew of tier 2 SaaS players.

With the acquisition of early SaaS pioneer RightNow Technologies, Oracle has signalled its intention to build out its Public Cloud offering with what will likely become a string of acquisitions of second-tier SaaS vendors. I’m in total agreement with my ZDNet colleague Larry Dignan that the official press statement was “basically shorthand for ‘Oracle is going cloud shopping’.”

So who might be on the list?

I’d expect the shopping list to include public companies including Taleo and several others in the talent management sphere, along with in the IT service management space and various less well known names from other sectors.

Things are going to get interesting in the next few months. The most interesting part of all of is is the ideological shift that’s taking place: Oracle might not be building out its Public Cloud with primarily in-house technology; it plans on creating it via acquisition. And we all know Oracle’s extremely good at identifying smart acquisition targets.

Popcorn, anyone?


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