Category Archives: Cash Balance Plans

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What Employers Need to Know About the Required Pension Plan Restatement: A Plain Language Explanation

Employers who have adopted a pre-approved Pension Plan – either traditional Defined Benefit or Cash Balance – must restate their plans by March 31, 2025 to stay in compliance with the Internal Revenue Code (“Code”) and Internal Revenue Service (“IRS”) regulations. If you’re not part of our retirement plan world, both the law and regulations … Continue Reading

“Compensation” for Sole Proprietors, Partners, and LLP Members … It’s complicated.

“Compensation” is a timely topic now for employers with retirement plans. It’s that time of the year when decisions are made about retirement plan contributions. The starting point for those decisions is “compensation”. That starting point is a straightforward matter when employees are involved. It’s some variation of taxable wages reported on Form W-2. But … Continue Reading

ERISA Record Retention: How long is long enough?

  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

Form 5500: The Body Language of ERISA Compliance

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

SECURE Act: How to take credit (tax, that is) for your retirement plan

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 in over 10 years. These law changes designed to encourage retirement savings are bundled up in one of those Congressional legislative … Continue Reading

The Restatement Requirement for Defined Benefit Plans: FAQs for Employers Adopting a Pre-Approved Plan

If you’re an employer who has adopted a pre-approved defined benefit pension plan, it’s time to amend and restate your plan. All defined benefit plans using pre-approved plan documents must restate their plan before April 30, 2020. It’s important that you understand why your plan document must be restated. What follows is a non-technical explanation … Continue Reading

How not to hire an ERISA auditor

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

The elephant in the room for retirement plan purposes could be that “other” company

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 entities. … Continue Reading

Take Advantage of ERISA Safe Harbors: They can help penetrate the ERISA fog.

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 Sole Proprietors, Partners, and LLC Members…It’s complicated.

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

Will 2016 Form 5500 reveal outdated fidelity bonds or none at all?

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

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

Pension Plans Continue to Enjoy Double Digit Annual Growth – Cash Balance Plans That Is

Cash Balance plans continue their impressive growth rate. Accordingly to the 2016 Cash Balance Research Report recently published by Kravitz, Inc., the number of new Cash Balance plans increased by 19% with assets increasing to $1 Trillion. Historical Background The actual number of Cash Balance Plan, 15,178,  may not sound like much in the universe … Continue Reading

The cost of ERISA non-compliance just got more expensive

The Department of Labor (“DOL”) will be increasing penalties, in some cases substantially, for violations of ERISA. Here’s why and how it will impact ERISA plans that are not in compliance. Background In 2015, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of  2015 as part of the Bipartisan Budget Act of … Continue Reading
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