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Top 10 Employee Benefits New Year’s Resolutions for 2017

January 11, 2017

Authors

Chris Rylands and Lisa Van Fleet

Top 10 Employee Benefits New Year’s Resolutions for 2017

January 11, 2017

by: Chris Rylands and Lisa Van Fleet

new-years-resolutionsIf statistics are any guide, by now a significant number of you have already broken your New Year’s resolutions.  However, there’s still plenty of time to make new ones that you can break, er, keep.  If you sponsor or work with an employee benefit plan (and odds are, if you’re reading this, that you do), then here are some ideas to keep in mind in the upcoming year:

  • Fiduciary, Know Thyself. It important to know your fiduciaries (or know if you are one). Reviewing plan documents, charters, and delegations, among other possible documents, are key to determining who is an ERISA fiduciary. You should make sure that any individuals who have been designated are still willing and able to serve and, if not, they should be removed. While not as much of an
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  • 2017 Qualified Plan Limits Released

    October 31, 2016

    Authors

    Julie Wagner and Chris Rylands

    2017 Qualified Plan Limits Released

    October 31, 2016

    by: Julie Wagner and Chris Rylands

    The IRS recently released updated limits for retirement plans.  Our summary of those limits (along with the limits from the last few years) is below.

    Type of Limitation 2017 2016 2015 2014 Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1)) $18,000 $18,000 $18,000 $17,500 Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate) $6,000 $6,000 $6,000 $5,500 SIMPLE 401(k) or regular SIMPLE plans, Catch-Up Deferrals $3,000 $3,000 $3,000 $2,500 415 limit for Defined Benefit Plans $215,000 $210,000 $210,000 $210,000 415 limit for Defined Contribution Plans $54,000 $53,000 $53,000 $52,000 Annual Compensation Limit $270,000 $265,000 $265,000 $260,000 Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $400,000 $395,000 $395,000 $385,000 Highly Compensated Employee 414(q)(1)(B) $120,000 $120,000 $120,000 $115,000 Key employee in top heavy plan (officer) $175,000

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    Cautionary Observations from the Proposed 457 Regulations

    July 14, 2016

    Authors

    Richard Arenburg and Lisa Van Fleet

    Cautionary Observations from the Proposed 457 Regulations

    July 14, 2016

    by: Richard Arenburg and Lisa Van Fleet

    Governmental Buildings and MoneyAfter more than nine years of deliberations, the IRS has finally released proposed regulations governing all types of deferred compensation plans maintained by non-profit organizations and governmental entities.

    In issuing these regulations, the IRS reiterates its long-standing theme that these regulations are intended to work in harmony with, and be supplemental to, the 409A regulations. However, the IRS provides little guidance on how these regulations interact with each other.  The following discussion focuses on 3 key aspects of the new guidance: the severance exemption, the substantial risk of forfeiture requirement, and leave programs.

    As with the 409A regulations, the 457 regulations exempt severance pay plans from the rules and taxes applicable to deferred compensation. The 457

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    Retirement Plans Post-DOMA: Is IRS Guidance on Amendments Really Imminent?

    April 3, 2014

    Authors

    benefitsbclp

    Retirement Plans Post-DOMA: Is IRS Guidance on Amendments Really Imminent?

    April 3, 2014

    by: benefitsbclp

    Update (4/11): See our post here on the recently released guidance.

    The employee benefits community continues to wait with baited breath on IRS guidance regarding the amendments necessary to qualified retirement plans in the wake of last Summer’s Windsor decision determining that Section 3 of the Defense of Marriage Act is unconstitutional.  (Recall that Section 3 of DOMA defines “spouse” and “marriage” to exclude same sex spouses and marriages.)  The IRS 2013-2014 Priority Guidance Plan for the period running through June 2014 includes issuance of this guidance as a top priority.   In December 2013, a Treasury Department official said that guidance was expected “fairly imminently.”  In February, such guidance seemed very imminent.  Yet, here we sit in the second quarter of 2014 with no guidance yet issued….

    Notwithstanding the absence of guidance, to administer retirement plans in operational compliance with the Windsor decision, employers must currently treat same sex

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    2014 Qualified Plan Limits – Now in Tabular Form!

    January 22, 2014

    Authors

    benefitsbclp

    2014 Qualified Plan Limits – Now in Tabular Form!

    January 22, 2014

    by: benefitsbclp

    As a follow up to our post on November 1, 2013, regarding changes to the qualified plan limits for 2014, we’ve issued a Client Alert providing the qualified plan limits for 2014 (as well as 2011 – 2013) in tabular form.

    We’ve also reproduced the limits table below for ease of reference:

    Type of Limitation

    2014

    2013

    2012 

    2011

    Elective Deferrals (401(k), 403(b), 457(b)(2) and 457(c)(1))

    $17,500

    $17,500

    $17,000

    $16,500

    Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans (457(b)(3) and 402(g) provide separate catch-up rules to be considered as appropriate)

    $5,500

    $5,500

    $5,500

    $5,500

    SIMPLE

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    Do Your Plan a Favor: Eschew Escheating

    January 6, 2014

    Authors

    Richard Arenburg and Chris Rylands

    Do Your Plan a Favor: Eschew Escheating

    January 6, 2014

    by: Richard Arenburg and Chris Rylands

    Given the migratory nature of society these days, it is not uncommon for an employee benefit plan to accumulate significant sums of money attributable to the accounts of lost participants.  For a number of States, the assets attributable to lost participants are an attractive revenue source.  Utilizing their unclaimed property statutes, many States attempt to seize these funds so they can add them to the State’s coffers.

    Most employee benefit plans subject to ERISA can sidestep this potential leakage of plan assets through the use of clear plan language that expressly provides for the forfeiture of amounts from the accounts of participants who are determined to be lost after some predetermined period. The language should also provide that those forfeited funds will be utilized either through a reduction of the sponsor’s contribution obligation or their application to reduce plan expenses.  The Department of Labor has unequivocally

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    The President’s Budget Attack on the Supposed “Loophole” of Saving for Retirement

    April 12, 2013

    Authors

    benefitsbclp

    The President’s Budget Attack on the Supposed “Loophole” of Saving for Retirement

    April 12, 2013

    by: benefitsbclp

    The administration views certain savings for retirement to be a tax loophole.  The just released budget, in its Overview, states:  “[The budget] ends a loophole that lets wealthy individuals circumvent contribution limits and accumulate millions in tax-preferred retirement accounts.”  [There is no acknowledgement that these dollars are subject to ordinary income tax when withdrawn nor is there an explanation of how these wealthy folks get around contribution limits which apply regardless of income.]  In the section of the budget that is titled Providing Middle Class Tax Cuts and Rebalancing the Tax Code through Tax Reform, there is a description of the President’s attack on retirement savings that states:

    Prohibit Individuals from Accumulating Over $3 Million in Tax-Preferred Retirement Accounts. Individual Retirement 87767941Accounts and other tax-preferred savings vehicles

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    Qualified Plans at Risk When Jumbled With True Tax Expenditures, Part III

    February 8, 2013

    Authors

    benefitsbclp

    Qualified Plans at Risk When Jumbled With True Tax Expenditures, Part III

    February 8, 2013

    by: benefitsbclp

    In the first article of this series, we discussed the approach described by the Government Accountability Office (GAO) in evaluating tax expenditures and laid out the issues that impact treating the deduction, exclusion and deferral mechanisms for tax-qualified retirement plans the same as “spending” tax expenditures.  In the second article, we focused on two of the critical questions posited by the GAO in the GAO Report that are intended to assist Congress with its seeming effort to revise the Code.  In this last article in the series, we will focus on a few additional questions posited by the GAO in the GAO Report and draw some conclusions.

    Does the Tax Expenditure Generate Net Benefits In the Form of Efficiency Gains for Society as a Whole?

     

    The GAO Report

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    Qualified Plans at Risk When Jumbled with True Tax Expenditures, Part II

    January 28, 2013

    Authors

    benefitsbclp

    Qualified Plans at Risk When Jumbled with True Tax Expenditures, Part II

    January 28, 2013

    by: benefitsbclp

    GAO

    In the first post of this series, we discussed the approach described by the Government Accountability Office (GAO) in evaluating tax expenditures and laid out the issues that impact treating the deduction, exclusion and deferral mechanisms for tax-qualified retirement plans the same as the “spending” tax expenditures.  In this second article, we will focus on two of the critical questions posited by the GAO in the GAO Report that are intended to assist Congress with its upcoming effort to revise the Code.

    What is the Tax Expenditure’s Intended Purpose?

    Examples used in the GAO Report include the following:

    • To encourage taxpayers to engage in particular activities.
    • To adjust for differences in individuals’ ability to pay taxes.
    • To adjust for other provisions of the tax code.
    • To simplify
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