Business Insights — Articles

New Guidance Released on Matching Contributions for Qualified Student Loan Payments

Recent legislation passed by Congress includes several provisions that enhance the ability of workers to increase their retirement savings. One of these provisions, Section 110 of the SECURE 2.0 Act of 2022 (SECURE 2.0), also enhances the ability of employers that sponsor a 401(k), 403(b), governmental 457(b), or a SIMPLE IRA plan to supplement workers’ retirement savings by providing matching contributions to employees who make qualified student loan payments (QSLPs) in 2024 and later plan years.

Employee Breaks-in-Eligibility Service Are Inevitable. Here's How to Handle Them.

Just as important for an employer choosing plan service requirements is considering when an employee will experience a break in eligibility service. Breaks in service—leaving that employer, in other words—can potentially delay when an employee becomes a participant, or resumes participation if he or she was an eligible participant before incurring breaks in service.

The Importance of Keeping Beneficiary Designations Up to Date

Financial organizations are responsible for paying out IRA assets to beneficiaries after an IRA owner’s death and properly report these distributions to the IRS. Ensuring that an IRA owner’s beneficiary designation is up-to-date and as complete as possible can minimize any distribution issues.

IRAAscensusJuly 18, 2024IRA, Beneficiary, Business Insights

Student Loan Repayments and Matching Contributions

Employers may now treat an employee’s qualified student loan payments like elective deferrals or after-tax contributions for purposes of providing an employer matching contribution.

How to Report Late IRA/HSA Contributions in Federally Declared Disaster Areas

You may have noticed an increase in clients making late IRA transactions because they live or work in a federally declared disaster zone. This disaster relief can affect your financial organization and how you report certain IRA transactions.

IRA, HSAAscensusJune 20, 2024IRA, Disaster, Distribution, IRS, Business Insights

DOL Releases Final Investment Advice Fiduciary Rule

The Department of Labor (DOL) recently released a regulatory package that includes a final amendment (the Retirement Security Rule) to the regulations that define what constitutes an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) Title I and Title II (codified in the Internal Revenue Code).

Post-Severance Compensation vs. Severance Pay

A widely discussed but frequently misunderstood topic that is critical to a qualified plan’s operations and compliance is post-severance compensation.

A Brush Up on EPCRS’s Self-Correction Program: Reviewing updates made to EPCRS following the passage of SECURE 2.0

Plan sponsors may generally correct eligible inadvertent failures under the EPCR’s Self-Correction Program. Exceptions to this rule include failures in which the plan or plan sponsor is under examination by the IRS or for failures that have been identified by the plan or plan sponsor but have not been corrected within a reasonable period of time after identification.

Reduce Form 5498 Reporting Errors with this Simple Step

As you’re preparing to send your Form 5498 files to your vendor for printing, you’ve probably caught some reporting errors as you audit the files. But mistakes happen. And those errors that inevitably slip through are likely those that keep you up at night. It’s not fun getting a phone call or visits from upset clients after they received an incorrect Form 5498.

IRAAscensusApril 18, 2024IRA, Business Insights, Reporting, Regulations, Traditional IRA, Roth IRA, Form 5498

Ascensus 800 Consulting Extended Hours

To assist Ascensus clients during the busy contribution and tax season, the 800 Consulting telephone lines will be open for extended hours.

SECURE 2.0 Provides New Financial Incentive Option for Encouraging Employee Participation

Today, many employers offer long-term incentives, such as employer matching contributions, to boost participation in their retirement plans. But, as of plan years beginning after December 29, 2022, a small immediate financial incentive can also be offered to entice those not deferring in their employer’s 401(k) or 403(b) plan to start contributing to the plan. Inevitably, this has generated questions—the most popular of which we will answer here.

IRS Releases Final Guidance on Penalty Exceptions for Failure to File Correct Information Returns or Furnish Payee Statements

The Internal Revenue Service (IRS) has released final regulations that provide de minimis error safe harbor exceptions to penalties for failure to file correct information returns or furnish correct payee statements.

SECURE 2.0 Expands Roth Options for SEP and SIMPLE Plans

Before SECURE 2.0’s enactment, SEP and SIMPLE IRA plan contributions had to be made as pre-tax contributions, but now employers may allow employees to elect to have contributions into a SEP or SIMPLE IRA made as Roth contributions.

IRA, News BriefAscensusMarch 21, 2024SEP Plan, SIMPLE IRA Plan, Withholding, Roth IRA, IRA, IRS, Business Insights

SECURE 2.0 Expands Roth Options for Employer-Sponsored Retirement Plans

The SECURE 2.0 Act contains provisions that allow individuals to place more of their assets into Roth accounts. Implementing these provisions requires significant retooling for employers, third-party providers, and financial organizations.

Mid-Year Termination of SIMPLE IRA

Employers may now terminate a SIMPLE IRA and replace it with a safe harbor plan.

IRAAscensusMarch 21, 2024SIMPLE IRA Plan, IRA, Business Insights

Contribution Limits Increased for SIMPLE Plans

Employers that sponsor a SIMPLE plan may allow increased salary deferral limits for their employees, starting in tax year 2024.

IRAAscensusMarch 21, 2024SIMPLE IRA Plan, IRA, Business Insights, Contribution, Compliance & Operations

IRS Releases Guidance on SECURE 2.0 Provisions

The Internal Revenue Service (IRS) has released Notice 2024-02, which provides guidance in a question and answer format regarding several provisions of the SECURE 2.0 Act of 2022 (SECURE 2.0). This article summarizes the guidance contained in Notice 2024-02.

Reporting Escheated IRAs

Escheat, which is the transference of unclaimed property to a government entity, is primarily governed by state laws. So each state has its own laws that set procedures and timelines for reporting and reverting unclaimed or abandoned property to the state. Each financial organization should determine and set its own procedures to properly report and pay out unclaimed accounts.