In response to the impact of COVID-19 Congress placed into law the Coronavirus Aid, Relief and Economic Security Act or the “CARES Act”. What does this 883-page law mean for retirement plans and their participants? The CARES Act includes provisions that expand the availability of retirement funds to those who have been impacted by COVID-19. …
The tax law places limits on the dollar amount of contributions to retirement plans and IRAs. IRC Section 415 requires the limits to be adjusted annually for cost of living adjustments. Don’t miss: Important information when changing plan administrators The below table shows a three-year comparison (starting in 2020) of certain retirement plan limits. Plan …
For many employers, finding lost 401k plan participants can seem an impossible task. Nevertheless, employers are required to take all reasonable actions to locate a missing participant. Employers have a fiduciary obligation under ERISA to locate or “make a reasonable effort” to find a missing participant of a terminated defined contribution plan. Failing to do …
When you have a business that requires an audit of its 401k or retirement plan, the DOL and the IRS both accept what is known as a “DOL limited-scope audit”. But what does this mean and why would you want limited-scope audits instead of a normal audit? Don’t miss: Important information when changing plan administrators …
From time-to-time employers deem it necessary to change administrators for their employee benefit plan. This may affect the election choices of the employees. A Third-Party Administrator (TPA) is hired by an employer to deal with the behind the scenes events that occur while handling the retirement plan. They assist with the plan design and are …
401(k) bonding requirements, while uncommonly known, are arguably one of the most important details regarding your plan. Dating back to 1974, the passage of the Employee Retirement Income Security Act of 1974 mandated that qualified plans under IRC section 401(k) be insured against losses caused by fraud or dishonesty. What is a Fidelity Bond? A …
On November 14, 2018, the Internal Revenue Service (IRS) released proposed regulations that will essentially relax certain hardship distribution rules. Though the effective date of these provisions was January 1, 2019, changes were not required during 2018 or 2019. Once the final regulations are issued, certain changes are required, effective January 1, 2020. Below, we …
As the saying goes, some things get sweeter with time and your 401k is no different. Starting with the year that a retirement plan account owner reaches 70 ½, or, if later, the year in which they retire, they are required to withdraw a minimum amount of money from their account every year. This is …
When administering their 401(k) plan, one of the most common mistakes that employers make is allocating plan contributions to a participant account using the incorrect employee compensation. The most common occurrence is when an employer mistakenly excludes forms of compensation such as bonuses, overtime, or commissions that are defined as eligible compensation in the company’s …
Choosing a beneficiary for your 401k is a task that should not be taken lightly. Failing to name a beneficiary could cause a nightmare for your loved ones. It is important to consider who you want the beneficiary and to make sure it is updated whenever significant life events happen. Don’t miss: 5 tips to …
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