Question

An article entitled "Changes to the Creole Menu" written by Carla Méndez Martí was recently published. It summarizes the new dietary guidelines issued by the United States Department of Agriculture and the Department of Health. These guidelines prohibit excess sugar and salt, suggest limiting fat intake, and increasing consumption of fruits and vegetables, fiber, and low-fat dairy products. It is also recommended to eat whole wheat and not white bread, and exercise regularly. The new guidelines attempt to tackle the increase in obesity in our population, including young adults and the elderly.

Some researchers have associated a healthy diet with fewer health problems and greater longevity. Suppose that Puerto Ricans change our lifestyle and diet to follow the recommendations of the United States Department of Agriculture and the Department of Health.

Under current accounting standards, how could the new lifestyle of Puerto Rican society affect the accounting of a defined benefit pension plan of a local company? Specifically, which components of pension expense could be affected?

Answer 1

As with the environmental and health indicators discussed in earlier chapters, most social and economic outcomes reflect complex causal processes, and they can vary widely based on time period, spatial organization, market conditions, regulatory forces, and adaptive mechanisms of actors in the system. In this section, we outline major classes of social and economic effects that can be linked to characteristics of the U.S. food system and present summary information about the overall performance of the system. We focus on three broad classes of social and economic effects:

• Levels of income, wealth, and distributional equity;

• Broader indicators of quality of life, such as working conditions, job satisfaction, and freedom of choice to pursue taste and lifestyle preferences; and

• Associated impacts on worker health and well-being.

Affected individuals fall into three groups: (1) people involved directly in agricultural food production (e.g., farmers); (2) people involved in the rest of the food system (e.g., processing, manufacturing, food service, and retailing); and (3) consumers. Food production, processing, and availability also can affect community-level measures, such as economic growth and social infrastructure.

Although social and economic dimensions of effects are distinct, they are more closely interrelated than other dimensions. For this reason, we are presenting them in one chapter. This chapter begins with an overview of the social and economic impacts of the food system on key sectors of the food system. To discuss these impacts, select data sources and metrics are described. Tables B-1 through B-4 in Appendix B provide more details on these data sources. The committee has focused in this chapter on market-based economic effects, including measurable changes in the financial well-being of key actors in the food system and broader indicators of market performance by sector (e.g., output, efficiency), but it did not attempt to estimate non-market economic values for social impacts. However, a discussion of non-market valuation methods for environmental effects is included in Chapter 4. In addition, while the chapter identifies the importance of capturing differential impacts on distinct social groups (e.g., women, minorities, immigrants), the committee did not review the moral and ethical or legal aspects of different outcomes. Consideration of whether particular types of social and economic effects are better than others should be guided by the best available information about those effects and by the cultural, political, and ethical views of stakeholders and decision makers.

, International Pension Planning — Puerto Rico, No. 324, provides a detailed discussion of the legal rules, practices, and principles governing the establishment, qualification, operation, and termination of retirement plans in Puerto Rico (“P.R.”) and the taxation of retirement benefits from qualified and nonqualified plans and equity-based compensation arrangements. Topics addressed include whether, when, and how to qualify a retirement plan in Puerto Rico, the operational requirements that a plan needs to satisfy to retain its local qualified status, a comparison of the various alternatives an employer may use for offering retirement benefits to its P.R. employees, the application of U.S. laws in the operation of retirement plans in Puerto Rico, the deduction of employer and employee contributions to qualified and nonqualified plans, and the P.R. and U.S. taxation of benefits from retirement plans in Puerto Rico.

he Worksheets to this Portfolio contain, among other things, sample plan and trust documents for the establishment of a profit-sharing plan with a cash or deferred arrangement qualified only in Puerto Rico, and samples of the requests to be filed with the P.R. Department of the Treasury for such plan’s initial qualification in Puerto Rico and for the administrative approval of subsequent plan amendments and the termination and liquidation of the plan.

This Portfolio, which is addressed primarily to employee benefits practitioners servicing U.S. and international companies with operations in Puerto Rico, assumes a basic knowledge of U.S. employee benefit rules. Readers of this Portfolio will note that, for the most part, retirement plans and compensation arrangements may be operated in P.R. in the same or similar fashion as they are operated in the United States. Areas where that is not the case are identified and discussed.