Thursday, January 6, 2011

California and the UC System

I'm sure that all of you have heard about the handful of UC employees who want a raise in their pension. If not, here is a link to the article that was in the San Diego Union Tribune:

Basically, in 2007, a waiver was granted to the UC System lifting the pension limits on its highly compensated employees. According to, The University’s pension plan is currently unfunded in the amount of $21.6 billion, and officials have been rushing to boost tuition payments, reduce benefits for future employees and requiring them to pay more of their salaries into the plan. The University System has a Task Force that created a report that gives the system options for fixing their broken plan.

The UC System does have a plan in place to help the highly compensated fund their pensions more fully. This plan is a non-qualified plan, and is discretionary, so I'm not sure if its currently being funded.
The UC Regular employees have voiced their opposition to the proposed increases in the pensions for the highly compensated, and even have a petition going around to stop it, and the top leaders of the system are opposed to it as well, so chances are it will get little traction at the UC level.

However, the 36 employees who signed the petition have threatened to sue and the UC system has retained lawyers just in case, according to the LA Times article.

Assemblyman Jerry Hill has even threatened to bring Legislation that will prevent the UC system from increasing the pensions for the highly compensated.

UC is not the only University with pension problems, and the WSJ reported in April of 2010 that the liability for the three systems, CalPers, CalSTRS, and UC, was over 500 Billion Dollars.

The reality is that with or without the additional pensions that these employees want, California Taxpayers will be on the hook for these pensions, like it or not.

Friday, March 26, 2010

How the Health-care Bill affects you

I can't believe that it's been almost a week since the Health-care Bill passed. My Facebook and Twitter friends were all buzzing with either delight or concern depending on their political affiliations. I tried to stay out of it publicly, but my husband and I talked privately about how the new bill would affect our lives.

The SBA put out a posting on how the Bill affects small business, and the Los Angeles Times put out an article on how the bill affects individuals. To see the bill, go here:,0,3934537.htmlstory

What do you think?

Thursday, March 11, 2010

Review of Carmen Nobel's Four Types of Insurance

I read this post at: Talking about the four types of insurance that every business owner needs. Basically, Carmen Nobel writes that the four types of insurance you need are:

Worker's Compensation
Home Business Insurance
Key Person Insurance
Product Liability Insurance

For Worker's Compensation Insurance, this is, of course, the law in California. However, in my work as a PEO (Professional Employer Organization) broker, I've come across businesses that were operating for more than a year and didn't have it. It's shocking but true. Businesses that hire mainly white collar employees don't really have to worry abut WC costs, because it is so minor. But get into a business like construction or manufacturing, and your WC costs go through the roof. Many times a PEO can assist you by actually charging you 20-30% less because they become the employer of record, and can negotiate the costs with the WC carrier. In some cases, they actually self insure.

Home Business Insurance: According to the blog post, this covers business property, lost documents and loss of income due to lost accounts receivables or emergency relocation. Sometimes this means upgrading a homeowners policy to include the home business, too. Since I've never heard of this type of insurance (just a "rider" on your home owners policy) I'm going to have to check with my insurance agent to find out more about it. I'll let you know what I find out.

Key Person Insurance, commonly known as "Key Man Insurance", is a life insurance policy in which the company is the beneficiary, so if the key person dies or is incapacitated for a long time, the company receives enough coverage to keep it afloat during the transition, whether that means finding and training a replacement or paying off investors before turning the company over to new owners. This kind of insurance is definitely worth looking into if you have a business with key employees.

Finally, Product Liability Insurance: This of course would only apply if you are manufacturing and selling a product. I liked her reference to the movie, The Jerk. "Anyone who doesn't understand the importance of product liability insurance need only watch the movie "The Jerk" -- a riches-to-rags story in which an entrepreneur loses all his money after his invention, a nose grip for eyeglasses, causes thousands of customers to go cross-eyed."

So if you run a business and you don't have any insurance, look into these four types. To read more of Carmen Nobel, go to:

Tuesday, March 9, 2010

Cash Prize for Young Entreprenuers...$50,000

I received this letter last week and wanted to share it:

Dear Small Business Supporters,

The Hitachi Foundation Seeks Young Social Entrepreneurs

The Hitachi Foundation is searching the country for the first-ever Yoshiyama Young Entrepreneurs. They are 18 to 29-year olds, and they are operating viable businesses that create jobs, supply goods or services, or use internal management practices that offer low-wealth individuals in America a leg up. Successful applicants will receive a cash prize of up to $50,000 over two years to support their business as well as technical resources.

We know they are out there: young entrepreneurs who, through their innovative products or practices, help move people out of poverty and into the mainstream of American society.

It’s a great opportunity for a young entrepreneur – up to six will be honored. And it’s an opportunity for us to learn what it takes to run a financially sustainable business that gives a boost to people who feel stuck in place.

But we need help searching. Could you forward this to anybody you know who might want to apply, or who might know America’s first-ever Yoshiyama Young Entrepreneurs, or post it on your website or blog?

You will find a short video featuring Barbara Dyer, the Foundation’s president and CEO, discussing the program and all the information about how to apply at The first round application deadline is March 22.

A few highlights of the program include:

• The entrepreneur must have established his or her business with the expressed dual purpose of operating a successful business and accelerating upward economic mobility for low-wealth individuals in America;

• He or she must be at least 18 years old, and must have been 29 years old or younger when the business began generating revenue;

• The business must be 1-5 years old and have been generating revenue for at least the past 12 months;

• The award is open to businesses organized as “for profit” or “nonprofit,” but must depend primarily on an earned-income revenue model.

Thanks so much for joining in the search for the Yoshiyama Young Entrepreneurs.

Monday, March 1, 2010

Great News! Tax Credit Available for Business

Tax-season is here and we have some good news! You or your clients may be eligible for a $500 tax credit. It's true! It's available to employers with new qualified retirement plans.

Who is eligible?
Employers with 100 employees or less, and who have installed a new qualified retirement plan.

How much can I or my client claim?
50% of the first $1,000 (max $500 credit) of administrative costs for each of the first 3 years of the plans existence.

Are there any other qualifications?
There must be at least one non-highly compensated employee (an employee who owns less than 5% of the company or an employee who earned less than $110,000 during the prior year)

The employer must not have maintained a retirement plan in the 3 years prior to establishment of the new plan

The plan must be a qualified employer plan such as 401(k), defined benefit, SIMPLE, and SEP plans. See complete definition on Form 8881

How do I or my client claim this credit?
Complete IRS Form 8881, Credit for Small Employer Pension Plan Startup Costs. You can download the form at the IRS website here:

See, so now tax time might not be so bad.

What do you think?

Sunday, February 28, 2010

Top 10 Reasons Why Businesses are Leaving California

I read a blog post at The article was a little long, but relevant to what's happening here, so I'll summarize it for you and just jump into the top ten: The italicized excerpt below is a quote from the article:

#10 -- Unfair Taxes: The Tax Foundation in their newest report lists California at No. 48 for tax fairness – ahead of only New York and New Jersey.

#9 -- Most Expensive Business Locations: The Rose Institute of State and Local Government reported in the latest "Cost of Doing Business Survey" that California cities continue to be some of the most expensive locations to do business in the United States.

#8 -- Worst Performing Labor: The Pacific Research Institute found that California’s labor performance in a recent five-year period is among the worst performing in the nation.

#7 -- Dreadful Legal Treatment: The Civil Justice Association of California said the state ranks 44th in legal fairness to business. Los Angeles was again named the least fair and reasonable litigation environment in the entire country.

#6 -- Worst Regulatory Burden: A study by the consulting firm Bain & Co. measured the cost, uncertainty and complexity of regulations and in constructing a “regulatory hassle index” found that "California is farworse than any other state by a very significant margin."

#5 -- Harsh Treatment Motivates Exists: Again Bain & Co. (they’re a busy group) found that more than half of California business leaders – an astonishing 60 percent – said they have policies in place to restrict job growth in the state or move jobs to other U.S. locations.

#4 -- Downright Unfriendliness:: The Small Business & Entrepreneurship Council in Virginia found that California ranked 49th overall in terms of business friendliness.

#3 -- High Misery Index: The Associated Press calculates what it calls a monthly "misery index" – California is close to the bottom of the list.

#2 -- Uncontrollable Spending: Extravagant state spending continues and pollsters have found people are much angrier about California government – more than they've ever been in recorded polling history.

#1 Chief Executive magazine recently found California to be the worst state in the nation in which to do business. Texas was found to be the best.

In the worst recession that we've had in decades our legislature is busy trying to pass a global warming bill that will cost businesses plenty. Our businesses already have enough to worry about, which is why I started working with them selling PEO (Professional Employer Organization) services three years ago. It helps lift some of the burden of having employees. But even after they hire me for this service, they still have to pay plenty. The headaches are still there.

When will our legislature wake up and see that we cannot survive without business here?

What do you think?

Sunday, February 14, 2010

Google to add Internet to it's list of services

All I can say is, Wow!

Google announced that they are going to start rolling out 1GB internet over fiber to select communities. Sounds expensive, you say? well, they said that they are going to offer competitive pricing and allow open access to the fiber networks to allow multiple service providers to access the network.

According to the their Blog post "Our goal is to experiment with new ways to help make Internet access better and faster for everyone."

How will your life change with this announcement? Think of how your life would look if you could do everything over the internet instead of on your own computer. Your applications could run with blazing speed. No more waiting. You can run multiple applications and use your computer like a work station.

Why are they doing this? Google makes money when you use the internet. Their goal with YouTube, Gmail, and their new application, Buzz, is to get you to spend as much time on the internet so that they can make money by selling ads.

Because they make their money via ad revenue, their main concern is to get people on the internet. This is why you keep seeing Google come up with new applications to get you to stay on the internet as long as possible.

Google is going to offer blazing fast internet, allow multiple service providers, and keep the network open. In addition, they won't prohibit you from doing things you want to do, like watching TV on the web or talking on your VOIP phone.

Google keeps offering more and more services that are free or very low cost. This is great for consumers, but also bad in a way. After all, Google is quickly becoming the "Big Brother" that many of us worry about our Governments to be.

That being said, if you want to get involved and submit your community for consideration for this new fiber network visit