Articles — Ascensus

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.

401(k) Actual Deferral Percentage Compliance Test Basics

The ADP test measures or determines whether elective deferrals that are made in the plan are disproportionate between two groups of employees: the highly compensated employees (HCEs) and the non-highly compensated employees (NHCEs). This status is determined by such things as compensation and company ownership.

expert, Employer PlanAscensusSeptember 19, 2024Qualified Retirement Plan, Retirement Plan, 401(k) Plan

Removing Excess IRA Contributions

Here is a refresher for IRA excess contributions and how to remove them.

IRAAscensusAugust 15, 2024Excess Contribution, IRA, IRS, Reporting, Traditional IRA, Roth IRA

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 Not-So-Simple Changes to SIMPLE IRAs

Employers may now offer an increased SIMPLE IRA plan elective deferral limit, even though plan documents do not reflect the new provision. In fact, it may be required for some companies to allow these increased limits now, depending upon the size of the company.

IRA, expertAscensusAugust 15, 2024SIMPLE IRA Plan, IRA, Roth IRA, Qualified Retirement Plan

Now that Cycle 3 is Over, What's Next?

The IRS requires that all qualified retirement plans be established and supported by a formal written document that complies with the Internal Revenue Code. Employers may choose to use a pre-approved document offered by a document sponsor, like Ascensus.

DOL Launches Online Filing Option for Abandoned Plans

The 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.

Employer Plan, News BriefAscensusAugust 15, 2024Qualified Retirement Plan, Retirement Plan, Regulations, DOL

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

IRS Releases Guidance on Certain SECURE 2.0 Penalty Tax Exceptions

The IRS has issued Notice 2024-55, providing guidance on emergency personal expense distributions and domestic abuse victim distributions that are effective after December 31, 2023, under SECURE 2.0.

IRA, Employer Plan, News BriefAscensusJuly 18, 2024IRA, SIMPLE IRA Plan, SEP Plan, IRS, Traditional IRA, Roth IRA

Choosing Service Requirements for 401(k) Plan Eligibility Purposes

Employers that establish 401(k) or similar qualified retirement plans often have definite ideas on how, and when, employees become eligible to participate. Choosing eligibility requirements is one of many important decisions that employers must make when they establish such plans.

Removing and Recharacterizing Excess IRA Contributions

The deadline to remove excess contributions and avoid the penalty—removed with the net income attributable (NIA)—is the IRA owner’s tax return due date, plus extensions.

IRA, expertAscensusJuly 18, 2024IRA, Recharacterization, Excess Contribution, Traditional IRA, Roth IRA

Handling Cashout Distributions

If 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.

expert, Employer PlanAscensusJuly 18, 2024Qualified Retirement Plan, Q&A, Regulations, Retirement Plan

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.

Interim Final Rule for Abandoned Plans Released

The Department of Labor (DOL) has issued an interim final rule, expanding the Abandoned Plan Program regulations to also include plans of employers who are in liquidation under Chapter 7 of the U.S. Bankruptcy Code.

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.

Untangling Those Tricky IRA Withholding Rules

Financial organizations must offer federal withholding on all IRA distributions that may be subject to income tax.

expert, IRAAscensusJune 20, 2024Withholding, Beneficiary, Distribution, IRA, IRS