During the Great Depression, a common practice among contractors bidding for federal contracts was reducing workers’ wages; and thereby, their labor costs, to win bids. While prevailing wage laws had existed on a state and local government level for more than three decades at this time, the first and most significant federal law–protecting the workers’ and their families’ welfare–was the Davis-Bacon Act of 1931.
Read MoreIRS final required minimum distribution (RMD) regulations were published on July 19, 2024, more than four years after enactment of relevant statutory changes in the SECURE Act of 2019. Especially noteworthy are provisions affecting those who inherit an IRA whose owner had not yet satisfied the RMD for the year in which they died. Ironically, these provisions have the potential to both simplify and to complicate the process by which beneficiaries meet year-of-death RMD obligations.
Read MoreThe Internal Revenue Service (IRS) recently issued Notice 2024-77, providing interim guidance on the treatment of “inadvertent benefit overpayments” from defined benefit and defined contribution plans as provided by Section 301 of the SECURE 2.0 Act of 2022 (SECURE 2.0).
Read MoreWhile vesting standards have long existed to retain and reward employees, a financial literacy gap can prevent participants from maximizing their vesting opportunities and employers from reusing the nonvested (or forfeited) contributions when an employee terminates employment.
Read MoreThe Internal Revenue Service (IRS) recently issued Notice 2024-73, providing guidance regarding the participation of long-term, part-time (LTPT) employees in 403(b) plans subject to Title I of the Employee Retirement Income Security Act (ERISA).
Read MoreThe new RMD regulations are not without at least one limitation for spouse beneficiaries, in the form of the “hypothetical RMD.” This could affect a spouse beneficiary who inherits an IRA or qualified retirement plan account before the deceased’s RMDs are required to begin—generally age 73—and who elects the new 10-year beneficiary payout rule in order to delay the onset of required distributions.
Read MoreAutomatic enrollment features are attractive to employers that wish to increase the plan participation rate and encourage employees to begin saving for their own retirement. Automatic enrollment is designed to improve retirement preparedness and improve overall financial wellness.
Read MoreUnlike breaks-in-eligibility service that can delay an employee’s ability to participate in an employer’s retirement plan, breaks-in-vesting service can delay or even prevent a participant’s ability to fully vest and become entitled to employer contributions if she is subject to a vesting schedule.
Read MoreJust 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.
Read MoreThe Department of Labor has launched an online filing system for termination administrators to be able to submit required information for abandoned plans to the DOL, in addition to existing email and paper-based methods.
Read MoreIf elected in the plan document, a plan sponsor can cash out a terminated participant’s account if the balance in the account does not exceed the threshold identified in the plan document, following appropriate notification to the terminated participant.
Read MorePlan 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.
Read MoreIn January 2024, the Internal Revenue Service (IRS) released Notice 2024-22, providing guidance with respect to anti-abuse rules for Pension-Linked Emergency Savings Accounts (PLESAs), a new provision created by the SECURE 2.0 Act of 2022 (SECURE 2.0).
Read MoreEmployers with qualified retirement plans cannot disproportionately favor highly compensated employees (HCEs). This basic principle may lead to a misconception that no issues would result from implementing changes that negatively affect only HCEs.
Read MoreOn April 16, 2024, the IRS issued Notice 2024-35 to provide additional transition relief for certain specified RMDs for 2024.
Read MoreAs 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.
Read MoreThe Department of Labor (DOL) has released proposed regulations related to the implementation of section 120 of the SECURE 2.0 Act (SECURE 2.0).
Read MoreOver the past five years Congress has passed extensive legislation to encourage more people to save for their retirement. One obstacle many people face in this endeavor is not meeting eligibility requirements to participate in an employer-sponsored 401(k) plan. This hurdle is now easier to overcome for people who have worked on a part-time basis for their long-term employer.
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