May 2008 Update

SJC Rules on Auto's/Regular Compensation

The SJC today unanimously voted to vacate a lower court ruling that had ruled the auto's should be calculated as regular compensation and thus be included in pension calculations. This puts an end to questions that have persisted amongst retirees and retirement systems as how to handle the issue. This ruling could result in a lower calculations for those few individuals and systems that have chosen to include this some recent retiree calculations.

February 2008 Update

Form 1040 - Line 16b change

The IRS recently released on its website new tax forms, instructions and publications for the 2007 tax year. Of interest to all governmental plans with public safety membrs are the changes to line 16 on Form 1040.

Beginning with the 2007 tax year, public safety officers should report their total pension distributions on line 16a of Form 1040. Assuming that the officer qualifies for the insurance premium exclusion, the $3,000 exclusion should be recognized in line 16b of the Form 1040, where the public cafety officer should writhe the initials "PSO" next to the taxable amount received.