But wait. It may not be too late to set up a retirement plan for 2019.

By Jerry Kalish on July 8, 2020 Posted in Defined Benefit Pension Plans, SEP-IRA

That plan would be a SEP, the acronym for Simplified Employee Pension, an IRA-based retirement plan. Unlike a “qualified” retirement plan (401[k}, profit-sharing, or defined benefit) which must be in place no later than the last day of the year, a SEP is subject to a different rule.

Generally, a SEP can be set as late as the due date (including extensions) of the taxpayer’s income tax return for the tax year.

That means he or she may be able to establish a SEP for the 2019 tax year in 2020 before the due date including extensions.

Here are the details: Continue Reading

COVID-19: DOL provides filing and disclosure relief

By Jerry Kalish on May 18, 2020 Posted in COVID-19, ERISA, Fiduciary Matters

This is what we have been waiting for. In our earlier post, we reported that the Internal Revenue Service (IRS) extended various deadlines for retirement plan filing and payment obligations. At the time of that publication, the Department of Labor (DOL) had not provided relief for ERISA filings.

On April 28, 2020, the DOL provided guidance issuing three publications that addressed the impact of COVID-19 on ERISA reporting and disclosures responsibilities. For now, we’ll focus on Disaster Relief Notice 2020-1 which provides relief on retirement plan deadlines Here is a summary:

COVID-19 extensions for retirement plan filings and payments

By Jerry Kalish on April 6, 2020 Posted in 401(k) Plans, 403(b) Plans, Cash Balance Plans, COVIT-19, Defined Benefit Pension Plans

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:

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

By Jerry Kalish on January 15, 2020 Posted in 401(k) Plans, Cash Balance Plans, 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 in over 10 years.

These law changes designed to encourage retirement savings are bundled up in one of those Congressional legislative acronyms, the SECURE Act, which is political short hand for the Setting Every Community Up for Retirement Enhancement Act. I’ll be covering the most significant ones in later blog posts, but for now, here’s a summary of two tax credits you may find valuable. Continue Reading

Who owns a 401(k) participant’s personal information?

By Andrew S. Williams, Esq. on December 5, 2019 Posted in 401(k) Plans, 403(b) Plans, 457 Plans, Fiduciary Matters, Guest Post

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 that plan fiduciaries must protect?

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

By Jerry Kalish on October 1, 2019 Posted in Cash Balance Plans, Compliance, Defined Benefit Pension Plans, ERISA, Pension Protection Act of 2006

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 in Question and Answer format.

How not to hire an ERISA auditor

By Jerry Kalish on July 18, 2019 Posted in 401(k) Plans, 403(b) Plans, Cash Balance Plans, Compliance, Defined Benefit Pension Plans, Fiduciary Matters

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 DOL could help Plan Administrators improve the process of selecting an auditor. You can read Mr. Haubrock’s testimony here which provides valuable recommendations.

But I’ll approach the auditor selection process from anther and more basic direction. If you are a plan sponsor with that fiduciary responsibility, here are a few mistakes to avoid:

Retirement Funds and Business Startups: Do “ROBS” Work?

By Andrew S. Williams, Esq. on June 18, 2019 Posted in 401(k) Plans, ERISA

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 a second career?

Here’s how they work.

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

By Jerry Kalish on May 23, 2019 Posted in 401(k) Plans, Cash Balance Plans, Compliance, Defined Benefit Pension Plans, Employee Stock Ownership Plans

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.

And that’s where the elephant in the room gets into the act. The elephant is the complex set of IRS rules that must be considered regarding retirement benefits offered to employees. Consider the following: