The Internal Revenue Service (IRS) has released a proposed regulation reflecting statutory changes related to long-term, part-time (LTPT) employees made by the SECURE Act of 2019 (SECURE Act) and the SECURE 2.0 Act of 2022 (SECURE 2.0).
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Eligible employees must be given the opportunity to contribute deferrals or after-tax contributions, including catch up, for the period of military service.
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The IRS has issued Notice 2023-75, which contains the 2024 cost-of-living increases for qualified retirement plan dollar limitations on benefits and contributions under the Internal Revenue Code (IRC).
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The Department of Labor (DOL) recently released a regulatory package that includes a proposed amendment to the regulations that define what constitutes an investment advice fiduciary under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (the “Retirement Security Rule”).
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The top-heavy test in Internal Revenue Code Section (IRC Sec.) 416 compares the benefits that have accrued under the plan for key employees to those of nonkey employees.
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A safe harbor 401(k) is a specific 401(k) retirement plan design that allows sponsoring employers to avoid certain compliance testing. Many aspects of 401(k) plans are subject to compliance testing to ensure that higher paid employees and owners don’t benefit from the plan disproportionately in comparison with the rank-and-file employees. Put another way, the plan’s provisions must not unduly discriminate in favor of owners and the highly paid.
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If deferrals are not deposited into participants’ accounts by the Department of Labor’s (DOL’s) deposit deadline, the deposits are considered late. This failure may result in a prohibited transaction.
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You’ve established your retirement plan. Contributions are coming in and distributions are going out. Everything seems to be running smoothly . . . until your recordkeeper sends an alert indicating that you may not be operating your plan according to all the terms of the document.
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With the passing of key retirement legislation in the last few years, there are many incentives for employers to adopt a qualified retirement plan that can provide meaningful benefits to employees. While there are numerous factors to consider during the establishment process, employers should consider certain effective dates that will significantly affect the success of their plan’s initial year of operation.
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When individuals retire or leave their employer, they must decide what to do with the accumulated savings in their retirement plan. Typically, they will roll over the assets to another qualified retirement plan or an IRA in order to keep the assets in a tax-deferred account. If they decide to withdraw the assets, they may end up having to include the distribution amount in their taxable income for the year.
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Certain events in the life of a retirement plan may lead to some assets being temporarily allocated to special unallocated accounts, rather than being credited to a specific plan participant. This is the case with both forfeiture accounts and suspense accounts, which—perhaps not surprisingly—are sometimes confused with one another.
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The IRS on July 14, 2023, issued Notice 2023-54 to provide transition relief for required minimum distributions (RMDs) in connection with the change in required beginning date (RBD) to age 73 under SECURE 2.0, and guidance for certain specified RMDs for 2023.
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The SECURE 2.0 Act of 2022 (SECURE 2.0) provisions affecting the Employee Plans Compliance Resolution System (EPCRS) support the IRS trend toward shifting certain types of retirement account corrections to the Self Correction Program (SCP).
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The coronavirus pandemic resulted in restrictions on where and how people could meet. These limitations—including remote work requirements—made it harder for some participants to take distributions from employer-sponsored retirement plans. In response, the IRS issued temporary relief allowing spousal consent to be obtained using remote notary services.
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SECURE 2.0 is the hot topic in the retirement industry right now and has been hailed as the most important retirement enhancement legislation in more than a decade. One of the changes effective for plan years beginning after December 31, 2023, reforms the family attribution rules by redefining “employer” for qualified retirement plan (QRP) purposes.
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The SECURE 2.0 Act has added several more penalty-free distribution options—including one that helps individuals pay for certain emergency expenses.
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The SECURE 2.0 Act provides more ways for individuals to access their retirement savings and creates new exceptions to the 10 percent early distribution penalty tax.
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Not everyone who participates in the workforce serves an employer on a permanent full-time basis. Most qualified retirement plan documents allow an employer to tailor a plan to meet its specific needs, including defining the eligibility requirements for employees to enter and participate in the plan.
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