Vol. 6, No. 12 – June 4, 2007

 

 

RISK MANAGEMENT WORKSHOPS – Sign up now!

 

Plan now to attend one of the MLA Risk Management Workshops on Wednesday, August 15 in Wichita, or Thursday, August 16 in St. Louis. This is an opportunity for business owners and their designated risk managers to gain valuable insight into causes and solutions for workplace risk – helping you improve your every day practices to close the loopholes in hiring, vehicle usage and other areas that can cost you big.

 

The workshops will be filled with valuable information designed to increase profitability and improve employee safety. This program will show you how to reduce operating costs and control insurance increases. Here’s a sampling of what you’ll learn:

 

?         Industry and Individual Loss Analysis

?         Motor Vehicle Records

?         Hiring Practices – Human Resources

?         Controlling Workers Compensation Costs

?         Employment-related Practices Liability

?         Business Planning

 

The workshops will be held from 8 a.m. to 4 p.m. and attendance will be limited. The registration fee is just $50 per person.

 

Sign up right away to assure your place: Federated Insurance risk experts will prepare a loss history analysis and action plans designed specifically for your company. This benefit is available regardless of whether or not you are currently a Federated Insurance policyholder. While results will vary, statistics show that companies participating in this training have reduced losses as much as 30 percent and improved their insurance expense accordingly.

 

To register, please complete and return a registration form today. (Either call MLA at 800-747-6529 – or go to http://www.themla.com/MLA-DRM2007.pdf.  Don’t pass up this opportunity to learn tried-and-true ways to effect savings in your business.

 

Minimum Wage Increase Signed into Law

 

President Bush signed the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery & Iraq Accountability Appropriations Act on May 25, 2007. Attached as riders to this law are the Fair Minimum Wage Act and the Small Business & Work Opportunity Act.

 

The Fair Minimum Wage Act increases the federal minimum wage from $5.15 an hour to $7.25 an hour in three increments:

 

§  To $5.85 an hour on July 24, 2007.

§  To $6.55 an hour on July 24, 2008.

§  To $7.25 an hour on July 24, 2009.

 

The Small Business & Work Opportunity Act includes:

• An increase in the tax code Section 179 equipment expensing limit to $125,000 a year and the phase-out threshold to $500,000 through 2008 with indexing to inflation through 2010.

• A three-and-a-half year extension of the work opportunity tax credit and waiver of alternative minimum tax limits on the credit.

• Six changes to subchapter S corporation rules including eliminating capital gains from sales or exchanges of stock as passive investment income.

• Allowing unincorporated businesses owned jointly by married couples to pay taxes as sole proprietorships.

 The Small Business & Work Opportunity Act includes cost offsets as follows:

• Increasing from under 18 to under 19 the age at which a child’s unearned income in excess of $1,700 is taxed at the parents’ rate.

• Doubling to 36 months the time before the Internal Revenue Service (IRS) must stop imposing fees and penalties on taxpayers who have not been notified of a deficiency.

• Eliminating the requirement that the IRS conduct a collection due process hearing before issuing a levy on delinquent employment taxes.

• Changing the timing on corporate estimated tax payments.

• Permanently extending IRS user fees.

• Expanding tax preparer penalties.

For the text of the law, go online to thomas.loc.gov (no www) and search for HR 2206 in the 110^th Congress.

  

 

 

 

LUMBER NEWS – QUICK GLIMPSES

 

Housing Slump Continued in April… Home building posted a small gain in April, but permits for future construction plunged by the largest amount in 17 years, a sign the nation's housing industry is still in a deep slump.

 

Construction of new homes and apartments rose to a seasonally adjusted annual rate of 1.528 million units in April, an increase of 2.5 percent from the March level.

 

Even with the improvement, housing construction is 25.9 percent lower than a year ago, reflecting the amount of the slide since a five-year boom in housing ended last year.

 

In a troubling sign for the future, builders cut their requests for new construction permits by 8.9 percent in April. That was the sharpest drop since a 24-percent fall in February 1990, another period when housing was going through a significant downturn. The slide pushed the annual rate for permits down to 1.429 million units, the lowest level in nearly 10 years.

 

Source: Builder Business Update, May 22, 2007 from AP Online, May 16, 2007

 

Yet Another Canadian Sawmill Closed Indefinitely… Canfor Corporation announced on Tuesday that it would indefinitely close its Mackenzie, British Columbia sawmill once current inventory has been processed. Canfor blamed the closure on poor market conditions.

 

Source: LBM Daily, May 23, 2007

 

Lowe's Posts Lower Quarterly Profit… Lowe's Cos., the No. 2 U.S. home improvement chain, said Monday that its first-quarter profit fell 12.1 percent due to a slowing home improvement market amid a continued slump in the housing sector. The Mooresville, N.C.-based retailer said it earned $739 million, or 48 cents a share, for the three months ended May 4, down from $841 million, or 53 cents a share, a year earlier. Revenue rose to $12.2 billion from $11.9 billion a year earlier. Same-store sales, or sales in stores open at least one year, a key measure of industry performance, fell 6.3 percent.

 

Source:  ProSales Business Update, May 24, 2007

 

Scientists Worldwide Want Canada's Boreal Forest Protected… 1,500 scientists representing more than 50 countries worldwide released a letter to Canadian provincial, territorial and federal governments on Monday calling for full protection of Canada's 1.4 billion acre Boreal Forest. The scientists want a minimum of half the forest protected, while the other half would allow for "carefully managed development." Currently, 10 percent of the Boreal Forest is protected.

 

"The extraordinary level of support expressed in this letter demonstrates the global ecological importance of Canada's boreal forest and the urgent need for Canada to protect it," said David Schindler, Killam Memorial Chair and professor of ecology at the University of Alberta, Edmonton. "We are losing so many of the world's great forests, despite the best efforts of conservationists. Canada's boreal forest offers what may be our last, best chance to do things right, but only if our leaders act decisively and act now."

 

Source: LBM Daily, May 29, 2007

 

Timber Industry Hits Hard Knocks… Shrinking interest in oak hardwood for building material and growing foreign competition have West Virginia's $4 billion timber industry in a knot, officials say. The average price of red oak lumber, the state's most prevalent species, has dropped by at least 50 percent over the last year, said Greg Cook, deputy state forester. Cook said state sawmills are cutting back on production but hope to hang on to nearly 30,000 employees. Timber owners are hanging on to their stands of red oak until the prices go up a little, limiting the supply to the sawmills.

 

Source: ProSales Business Update, May 31, 2007

 

Testimony Before Congress Sounds Off on Chinese Plywood… This week, American cabinetry and furniture manufacturers, many of whom rely on plywood as a component in their manufacture, testified regarding the stiff competition facing them from Chinese sources. Chinese plywood costs less, but may often be made using toxic glue and harvested from illegal sources.

 

"The continued survival of our industry is at risk," warned Joseph H. Gonyea III, chief operating officer of Timber Products Co., in testimony before the U.S. Senate Subcommittee on Public Lands and Forests.

 

Source: LBM Daily, June 1, 2007

 

J.D. Power Releases Home Improvement Rankings… J.D. Power and Associates released its 2007 satisfaction survey on home improvement retailers, giving Ace Hardware high marks for satisfaction among consumers.

 

In the major retailers category, Ace Hardware received a satisfaction index score of 812 on J.D. Power's 1,000-point scale. Menards followed, with a score of 801, followed by Lowe’s with a score of 798.

 

Ace performed best in the areas of sales staff, store facility and checkout. Menards earned higher ratings for price competitiveness and sales/promotions. Lowe’s scored well in the merchandise category.

 

Source: Home Channel News, May 31, 2007

 

BlueLinx to Present at Spring Investment Conference… BlueLinx Holdings Inc., a leading distributor of building products in North America, will present at the Stephens Inc. Spring Investment Conference in New York on Wednesday, June 6, 2007, at 11:40 a.m. EDT.

 

The presentation will be audio broadcast live on the BlueLinx web site, www.bluelinxco.com. To access the broadcast, go to the Investor Relations section of the BlueLinx web site, where slides of the presentation also will be available. A replay of the webcast can be accessed on the web site for 90 days.

 

Source: Prime Newswire, May 31, 2007

 

Treasury Economic Update… "The economy is on track to rebound in the second quarter and beyond following a slowdown of late-2006 and early this year. The strong labor market will support household spending, and this in turn will drive a continued upturn in business investment."

  

Source: Assistant Secretary Phillip Swagel, U.S. Treasury, June 1, 2007 (This Department of Treasury press release may be viewed at: http://www.treas.gov/press/releases/hp438.htm)

 

 

A paycheck for life   

 

During retirement, you will face a variety of living, medical and discretionary expenses.

 

Ideally, your retirement nest egg should replace at least 75 percent of your current income. According to a recent study by the Federal Reserve Bank, savers are on track to replace only 57 percent of their current income, and an astonishing 20 million households have no intentions of saving at all!

 

Don’t outlive your assets

 

Establish a Single Premium Immediate Annuity (SPIA). An SPIA is one way to produce retirement income by converting a single lump sum payment into a guaranteed series of payments over your lifetime and/or a guaranteed period.

 

The single lump sum payment for an SPIA can be obtained through savings and investments, selling a business, or payouts from a retirement plan.

 

The advantages of a Federated SPIA:

 

·         Safe – Backed by a company rated A+ Superior by the A.M. Best Company

·         Streamline of Income – Maximized cash flow since each payment constitutes both the interest payment and a return of principal

·         Security – Guaranteed income with no investment risk and payments that do not change in amount or frequency

·         Flexibility – Payment plan options

·         Stability – A guaranteed income for the rest of your life, even if you live well beyond your normal life expectancy (when you choose the “period certain” payment option)

 

At today’s current rates, a $200,000 Federated SPIA for a 65-year-old male can produce a monthly income of $1,094 for lifetime and a guarantee of 20 years. After 20 years the total payout would be $262,560*.

 

Contact your local Federated marketing representative to discuss the SPIA options that you can choose from to best meet your needs.

 

*Payment amount assumes a 4% interest rate and uses the Annuity 2000 Mortality Table for a 65-year-old male.

 

 

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.

MLA is proud to endorse….