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” 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 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
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
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 $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
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
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 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
Defined benefit plans may have markedly declined (44% since 1975 according to the Department of Labor), but they haven’t become any more understandable to employers. Indeed, the IRS continues to find the same type of mistakes during audit examinations. Here are the ones that made the IRS Top Ten list:… 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
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
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
It occurred to me after my last post, October 1 401(k) Safe Harbor deadline gets closer, that the White Rabbit could relate to ERISA.… Continue Reading
To no one’s surprise, the recent Kravitz Cash Balance Research Report indicates that the number of new Cash Balance plans increased 17% in 2016, outpacing the 3% growth of 401(k) plans. And also no surprise that 92% of the cash balance plans are sponsored by companies with less than 100 participants.… Continue Reading
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
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
Or six alliterative reasons why waiting until the last minute to establish a retirement plan can be costly. And by last minute, I mean year-end.… Continue Reading
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
In the world of science and engineering, a black box is a device, system or object which can be viewed solely in terms of its input and output without the user knowing how it works. In our ERISA world, a Cash Balance plan be a black box into which employer contributions are made on a … Continue Reading
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 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
