In 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act increased the Required Minimum Distribution (RMD) age for retirement plan participants from age 70 1/2 to 72. Additionally, it introduced opportunities for Long Term Part Time (LTPT) employees to make deferral contributions to retirement plans in situations where they have not yet met the plan’s eligibility...
When Plan Sponsors are asked to provide company and employee census information for a recent plan year, the details being collected affect the contributions that must be calculated and funded as well as which compliance tests the plan must satisfy. The same questions are asked year after year because changes in the company affect the plan a great deal. Information collected may include: Employee...
Within 18 months: Effectiveness of notice provided for eligible rollover distributions: A 402(f) notice, often referred to as a Special Tax Notice, must be provided to the recipient of a distribution that is eligible for rollover. The notice must contain required language regarding rollover options and the tax implications that may apply. The Government Accountability Office must issue a...
February 2023 28th: IRS Form 1099-R Copy A – Deadline to submit 1099-R Copy A to the IRS for participants and beneficiaries who received a distribution or a deemed distribution during the prior plan year. March 2023 15th: ADP/ACP Corrections – Deadline for processing corrective distributions for failed ADP/ACP tests without a 10% excise tax for plans without an Eligible...
Global financial markets saw a rebound early in the fourth quarter as inflation pressures eased and U.S dollar weakness helped spark a strong rally in November in both fixed income and equites. However, continued hawkish global central bank policy and rising global bond yields continued to be a headwind for the market, and as a result, the market began to wane towards the tail end of the...
Being the bearer of bad news isn’t fun. When the third-party administration firm relays that aspects of the annual compliance testing have failed causing many of the company’s executives to receive taxable distributions from the plan, it isn’t a great day for the HR manager. The administrator explains that the regulations require testing to prevent highly paid employees from receiving...
On Sept. 23rd, the IRS published a final rule that relaxes several existing restrictions on participant hardship distributions from defined contribution plans. Some of these changes are mandatory, requiring employers to make the changes by Jan. 1st, 2020, while others are optional. Though the IRS had issued the proposed regulations in 2018, the final regulations clarify a few key provisions: The...
December 2019 1st: Participant Notices – Annual notices due for Safe Harbor elections, Qualified Default Contributions (QDIA), and Automatic Contribution Arrangements (EACA or QACA). 31st: Participant Notices – Annual notices due for ERISA 404(c) and Fee Disclosure. 31st: Discretionary Amendments – Deadline to adopt discretionary plan amendments for calendar-year plans. If changes have been made...
On November 6th, 2019, the IRS announced the cost of living adjustments affecting the dollar limitations for retirement plans. Contribution and benefit increases are based on a calculated change in the Consumer Price Index and are intended to allow participant contributions and benefits to keep up with the “cost of living” from year to year. Here are some highlights from the 2020 changes: The...
Domestic Equity markets posted modest gains during the third quarter of 2019 with the S&P 500 Index increasing 1.7%. Market volatility persisted throughout the quarter with major domestic indices reaching all-time highs in July before reversing in August on the back of geopolitical issues and escalating trade tensions. Trade pressures eased in September and equities rebounded, leaving the...
During the second quarter of 2019 domestic equity markets built on the solid gains experienced in the first quarter. The S&P 500 Index overcame a sharp mid-quarter decline resulting from increased trade tensions, reaching a new record high and ending the quarter with its best start to a year in over two decades. Large-cap stocks outperformed their small-cap counterparts during the quarter,...
The economy continues at its strong pace, keeping unemployment at its lowest rate in nearly 50 years. While this is usually good news, employee financial vulnerability is clouding this sunny forecast. The repercussions are impacting their ability to save for retirement. Millennials are the most stressed by their financial situations, followed by Gen X and Baby Boomers according to PWC’s...
All 401(k) plan contributions have deposit deadlines, and it’s up to 401(k) fiduciaries to meet them. Yet, many are unclear about the deadlines applicable to their 401(k) plan. That confusion can easily lead to late contributions. Most of the confusion surrounds the deadline to deposit amounts withheld from employee wages, i.e., 401(k) pre-tax, 401(k) Roth, and/or participant loan repayments....
Permitted Disparity Other than the desire to provide a retirement plan to benefit all employees, a very common question is asked, “What can be done for the owners or highly compensated group (HCE)?” Since Social Security limits the amount of compensation that is used to calculate benefits (called the wage base), those that earn over the wage base can expect that their benefit in retirement will...
September 2019 15th: Money Purchase Pension, Target Benefit Pension, and Defined Benefit Plans — Required contribution to Money Purchase Pension, Target Benefit Pension, and Defined Benefit Plans (8-1/2 months after plan year-end) and 2018 employer profit sharing and match contributions for those sponsors who filed a corporate tax extension. 30th: Summer Annual Report — Summary Annual Report due...
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