Newsletter Articles

The end of the year is fast approaching which signals important assignments for plan administrators. First are the items that must be completed by year-end, such as establishing a new plan or making required minimum distributions. There is also a new in-plan Roth conversion option that requires action before year-end if participants want to take advantage of this special rule.

The continuing popularity of the 401(k) plan has made it the most widely used savings plan in the country. As employers have had to shift limited resources to cover the ever-increasing cost of other benefits, the ability for employees to contribute to their retirement savings helped to ensure the continuation of these plans.

Designated Roth contributions (a/k/a Roth 401(k) or Roth deferrals) have been available since 2006, but a change in the tax laws governing Roth IRAs has reenergized discussions about this feature. This article is in Q&A format and addresses some of the more common questions about Roth 401(k) contributions. But first, a brief overview…

Every qualified retirement plan has a specific deadline by which employer contributions must be deposited to the plan for each plan year. However, the rules concerning participants’ contributions have not been as clear. For example, in 401(k) plans, employees typically defer a portion of their weekly or biweekly paychecks. How soon should these contributions be deposited into the plan?

It seems that every time you turn around, you are required to provide yet another notice to the participants in your company’s retirement plan. While plan-related notices are not a new phenomenon, the Pension Protection Act (PPA) took the concept to a different level by mandating a host of new notices.

Maximum compensation limit, Defined contribution plan maximum contribution, Defined benefit plan maximum benefit, etc.

When Congress passed the Pension Protection Act of 2006 (PPA), it enacted several provisions that affect your Form 5500 filing. The first provision requires that you file Form 5500 electronically, thereby eliminating the expensive paper processing system currently in use by the government.

One of the primary objectives of the qualified plan rules is to make the tax advantages contingent upon covering a significant number of the nonhighly compensated employees. As this goal could be thwarted by creating separate legal entities for the highly compensated and nonhighly compensated employees, a complex set of rules has evolved concerning the aggregation of related employers for purposes of the minimum coverage rules and other qualified plan requirements.

The Pension Protection Act of 2006 (PPA), which fundamentally changed the funding of defined benefit plans, was signed into law about three years ago. Guidance needed to interpret this new law has trickled in over these three years.

The primary goal of a retirement plan is to accumulate savings to provide income after retirement. Most plans also allow distributions before retirement age for a number of circumstances, including termination of employment and financial hardship. Non-taxable participant loans may also be an option.