Category Archives: Defined Benefit Pension Plans

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Red flags on Form 5500 alert Internal Revenue Service and Department of Labor to plan issues

For calendar year ERISA plans, today is the due date for filing their 2016 Form 5500 unless extended. While the vast majority of employers will meet that deadline, some will have red flags on their returns that could pique the interest of the Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”).… Continue Reading

Timely reminder why an ERISA fidelity bond is necessary

July 31st, is of course, the due date (unless extended) for calendar year ERISA plans required to file Form 5500 for the 2016 plan year. And, as in the past, there will be many plan sponsors who must indicate on the 5500 they have outdated fidelity bonds or none. Here’s a timely reminder why they … Continue Reading

Benefit Plan Regulators Have Been Busy – Very Busy

Benefit plan regulators were active in the period leading up to the Federal government’s June 30 fiscal year-end. Significant new rules and regulations were proposed for retirement plans, deferred compensation plans and group health plans. It’s not a walk on the wild side, but some of the dry regulatory pronouncements will impact most benefit plan … Continue Reading

IRS Announces 2016 Retirement Plan Limits: Most Remain Unchanged

The IRS recently announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. For the third time in six years, most of the limitations were unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment: 401k Elective Deferrals: … Continue Reading

ERISA Plans Do Have Their Limitations

That’s limitations as in “limitation periods”. A recent court case reminds ERISA plans to have such limitation periods and to communicate it to someone claiming a plan benefit. Let’s start with the basics. What’s a “limitation period”? In layman’s terms, it’s a law set forth in a State statute of limitations that sets time limits … Continue Reading

U.S. Steel Freezes Pension Plans: Symbolic Recognition of End of Traditional Defined Benefit Plan Era

It was just a brief note on the Form 8-K filed on August 17, 2015 by U.S. Steel Corporation with the U.S. Securities and Exchange Commission. As described above, on August 17, 2015, the Corporation enacted a hard freeze of benefits accrued under its DB Plan effective December 31, 2015. Participants of the DB Plan … Continue Reading

The Fiduciary Hierarchy

The recent Department of Labor’s re-proposed Fiduciary Rule has generated many opinions on how it will affect fiduciary service models. One constant, however, cuts through all of the debate: the Plan Sponsor still has the fiduciary responsibility to select and monitor those service providers. But as you can see, there is a hierarchy of service … Continue Reading

What We Can Learn From Australia’s Superannuation

Superannuation is what Australia calls its retirement system, and they are doing something right. According to the 2014 Melbourne Mercer Global Pension Index (8o-page report if downloaded), an annual study that ranks national retirement systems based on the relative importance of adequacy, sustainability, and integrity, Australia only trails Denmark graded A, and tied with the … Continue Reading

What Advisors Need to Know About Retirement Plans: Presentation to Illinois CPA Society

I had the opportunity recently to make a presentation on qualified retirement plans to the Illinois CPA Society (ICPAS). Actually, it was using PowerPoint to begin a dialogue with the members of the ICPAS Investment Advisory Services/Personal Financial Planning Forum The ICPAS describes their Forums as being “composed of members with shared interests who interact … Continue Reading

Employee Classification as Part-Time or Full-Time: Not the Same Under the Affordable Care Act and ERISA

Some of the most difficult and contentious provisions of the Affordable Care Act (“ACA”) are the employer mandate and upcoming reporting requirements effective in 2015. “Difficult” because the employer mandate requires applicable large employers, generally those with 50 or more “full-time” employees, to offer coverage to full-time employees and dependents (other than spouses). If the employer … Continue Reading

Taking credit for setting up a retirement plan

As we near the end of the year, many business owners rush to establish retirement plans to capture calendar fiscal year tax deductions. If you’re one of those small business owners, you may also be eligible to receive a tax credit for expenses you incurred to implement your plan. What’s the difference between a tax … Continue Reading

IRS issues updated Rollover Chart

What’s an eligible rollover distribution and what’s not can be a complicated and confusing matter. Here’s a recent and handy rollover chart by the Internal Revenue Service updated for new rules that may be helpful. 1 Qualified plans include, for example, profit-sharing, 401(k), money purchase and defined benefit plans 2 Beginning in 2015, only one … Continue Reading

Retirement Plan Limits for 2015

On October 23, 2014 the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. The chart below highlights the new limits for 401(k) and other defined  contribution plans. The rest of the new limits and the fine print can be downloaded here.… Continue Reading

How safe is your retirement nest egg from creditors?

So, you’ve transferred your 401(k) retirement nest egg into an individual retirement account (IRA). This gives you more control over management and distribution of IRA assets. But, you may have concerns about creditors and their ability to attack your retirement assets, which are now conveniently consolidated from several employer plans into one convenient IRA. Will … Continue Reading

IRS opens window for Pension Protection Act Restatements

If you’re an employer who sponsors a 401(k) or profit sharing plan, it’s time to amend and restate your plan. Qualified retirement plans must operate in accordance with their plan documents. Ongoing legal and regulatory changes in retirement plan rules frequently require plan sponsors to amend and restate their plans to keep their documents compliant … Continue Reading

IRS Establishes Pilot Penalty Relief Program for Late Form 5500 – EZ Filings

That’s the collective sigh of relief by those business owners who, for whatever reason, haven’t filed Form 5500-EZ for their retirement plans. It’s a big deal especially for those business owners with so-called Solo-K plans. 401(k) plans were introduced in 1978, but it took a tax change starting in 2002 to allow business owners to … Continue Reading
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