ERISA record retention may not be of those sizzling retirement plan topics for some folks. But please don’t stop reading. It’s an important issue in today’s ERISA’s environment in which Plan Administrators and other fiduciaries must meet complicated compliance reporting requirements, oversight from regulatory agencies, and sometimes litigation. So here is some basic information … Continue Reading
“Definitely Determinable” is one of those pre-ERISA concepts that are still applicable. It means that in order for a retirement plan to be considered “qualified” (eligible for favorable tax treatment), a participant’s retirement benefit had to be determined in accordance with a stipulated formula that is not subject to the discretion of the employer. The … Continue Reading
If you’re an employer who has adopted an IRS pre-approved defined contribution plan such as 401(k) or profit-sharing, you’ll need to have the Compliant box checked no later than July 31, 2022. Plan document compliance to be specific. It’s the IRS requirement that a retirement plan document must be up to date to qualify for … Continue Reading
Last month, the Department of Labor (DOL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC) released advance copies of the 2020 Form 5500 Series. When filed, they will join those of prior years’ morphing into the body language of ERISA compliance. Here’s how:… Continue Reading
On August 6 President Donald Trump signed a series of executive orders that expanded economic relief to taxpayers. One of those orders calls for employee payroll tax deferrals from September 1 through December 31, 2020. It includes the 6.2% of the employee’s share of Social Security taxes but not the 1.45% employee’s share of Medicare … Continue Reading
Grappling with COVIT-19 issues has certainly been difficult, but retirement plan filings and payments are still required. The Internal Revenue Service has provided relief for some of them by granting extensions. Here is a summary of those extensions:… Continue Reading
The Coronavirus Aid, Relief, and Economic Security Act known as the “CARES Act” passed on March 27, 2020 provides $2 trillion in financial relief to individual taxpayers and loans and other concessions to businesses. The Act also includes several provisions affecting retirement plans which we will cover in later blog posts. For now, we’ll focus … Continue Reading
This is the first in a series of articles on the retirement plan changes that are part of the SECURE Act. The $1.4 trillion appropriations package signed into law by President Trump on December 20, 2019 designed to fund federal agencies through September of this year contained the most significant legislative enhancements to retirement plans … Continue Reading
Service providers for 401(k) and other retirement plans require access to personal data on participants including name, age, address, date of hire, compensation and possibly social security number to provide recordkeeping services. Are these plan service providers simply taking advantage of a business opportunity or are they improperly exploiting information that is a plan asset … Continue Reading
Selecting an auditor for an ERISA plan is one of those fiduciary responsibilities which has been a continuing concern of the Department of Labor (“DOL”). At a June 25, 2019 meeting of the DOL’s ERISA Advisory Council, James Haubrock of the American Institute of CPAs responded to the Council’s request for recommendations on how the … Continue Reading
Here’s a not unusual scenario for Baby Boomers who have reached their company’s retirement age but are not quite ready to retire. Why not start a business or even buy a franchise? That can require a large personal investment, but he or she has a sizable 401(k) account. Why not use those funds to start … Continue Reading
The passage of the Tax Reform and Jobs Act (“TRJA”) in 2018 made entity selection an important part of tax planning. The TRJA made fundamental changes affecting individual and entity tax rates. Combined with corporate transactions for strategic reasons and business owners acquiring interests in other companies, we’re seeing businesses and owners using multiple … Continue Reading
Attorneys would define a Safe Harbor as a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. In our ERISA world, a Safe Harbor is a provision of the retirement plan law that can cut through the sometimes fog of ERISA and provide … Continue Reading
Compensation for employees is some variation of taxable wages reported on Form W-2. For allocation purposes, the employer or payroll provider downloads the census and compensation data based on the plan’s definition of compensation into a spreadsheet at the end of the year. It’s a little more complicated, of course, but let’s leave it at … Continue Reading
Kids can certainly outgrow their clothes, and so can employers with their retirement plans. A SIMPLE-IRA may have worked in the beginning, but if you want to change to a 401(k) plan in 2019, November 2 is the deadline to take action. Employers must provide notice to their employees by that date that 2018 will … Continue Reading
If you’re in the retirement plan business, you’ve heard the term “audit roulette”. It refers to the belief by some employers that the odds of their retirement plan getting audited by the IRS are in their favor. Well, those odds are getting worse. The IRS is taking technology to the next level using “data driven … Continue Reading
The conventional wisdom is that you can wait until the end of the year to put a retirement plan in place since you can still get the tax benefits for the whole year. Maybe for some purposes, but not for setting up a Safe Harbor 401(k) plan. If you want to set up a new Safe … Continue Reading
The July 31 due date (unless extended) to file Form 5500 for 2017 calendar year ERISA plans is creeping up on us. And if history be our guide, there will be many plan sponsors who don’t have a fidelity bond or one that is insufficient. It’s one of those check the boxes that can easily … Continue Reading
Say what you will about 401(k) loans – and we have over the years – they are a fact of 401(k) life and were addressed in the recently passed Tax Cuts and Jobs Act (the “Act”). Before we get to the new rules, let’s start with the state of 401(k) plans. Recent data is difficult … Continue Reading
The 2016 Form 5500 deadline has come and gone for calendar year taxpayers, and a number of them revealed outdated fidelity bonds or retirement plans without bonds at all. The fidelity bond requirement is high up on the Department of Labor’s compliance priorities so it’s not a stretch to assume that the Department of Labor monitors this … Continue Reading
If you are a business owner/employer with a calendar fiscal year, you still have time to adopt a qualified retirement plan for 2017. Here’s what you have to do: Before December 31, 2017: Sign adopting resolutions and a plan document, and Deposit a de minimis amount, e.g., $1,000 in a trust account to establish corpus. … Continue Reading
“Decumulation” is a word that has now entered the lexicon of those individuals approaching retirement. The definition of which is the conversion of retirement plan assets accumulated during an employee’s working life into pension income to be spent during retired life. It’s a new risk for the record number of those moving from the accumulation phase … Continue Reading
It’s a familiar story: you or your retirement plan’s third party administrator (TPA) need to make a benefit distribution to an ex-employee. But the employer’s records are out of date and the former employee cannot be located. Worse yet, the missing participant has attained age 70½ so the plan is required to make minimum distributions … Continue Reading
Tax planning as in life can be a series of trade-offs. Whether to have a SIMPLE-IRA vs. a 401(k) plan is one of those trade-offs. And if you currently have a SIMPLE-IRA and want to change to 401(k), then you’ve got a November 1, 2017 deadline approaching. That’s the date by which employers have to provide … Continue Reading
