The American Taxpayer Relief Act of 2012 amends the requirement that employees wait until a distributable event (i.e., age 59½, termination, death or disability) for an in-plan Roth conversion. With the release of  Notice 2013-74 , the Internal Revenue Service (IRS) provides additional guidance on in-plan Roth conversions. The Small Business Jobs Act of 2010 permitted retirement plans that provided for Roth contributions to allow employees to roll over amounts (other than designated Roth contributions) from their retirement plans to their Roth account in the plan. However, the amounts that could be rolled over were limited to amounts that were otherwise distributable under the plan. Thus, unless an employee had met a distributable event, a rollover was not possible. Section 902 of the American Taxpayer Relief Act of 2012 expanded the type of amounts that are eligible for an in-plan Roth rollover.  IRS  Notice 2013-74  provides that the following contributions (and an...

The Internal Revenue Service (IRS) has recently released the contribution limits on Qualified Retirement Plans for 2014. HANYS Benefit Services created the  attached chart   that details these contribution limit increases. If you have any questions about the COLA Limits, or would like to speak with an advisor about reviewing or establishing a plan, please contact us at (800) 388-1963 or via e-mail at  hbs@hanys.org .

Defined contribution plans are and will continue to be a mainstay in the market. But, are they working? Improving Participant Outcomes: An Action Plan for Plan Sponsors  looks at some of the factors that plan sponsors should consider when assessing the value of the retirement plan offered to their employees. It also considers steps they can take to provide greater assurance that employees will be able to generate sufficient income on which to retire. According to the Investment Company Institute’s 2013 Investment Company Fact Book, at year end 2012, there was approximately $5.1 trillion invested in defined contribution retirement plans in the United States. Recent regulatory changes have placed even greater responsibility on plan sponsors, including heightened fiduciary responsibilities, fee disclosures, and expanded audit and reporting requirements. However, little has been done to ensure participants are any more prepared to retire. Are these defined contribution retirement plans...

Defined contribution plans are and will continue to be a mainstay in the market. But, are they working? Improving Participant Outcomes: An Action Plan for Plan Sponsors  looks at some of the factors that plan sponsors should consider when assessing the value of the retirement plan offered to their employees. It also considers steps they can take to provide greater assurance that employees will be able to generate sufficient income on which to retire. According to the Investment Company Institute’s 2013 Investment Company Fact Book, at year end 2012, there was approximately $5.1 trillion invested in defined contribution retirement plans in the United States. Recent regulatory changes have placed even greater responsibility on plan sponsors, including heightened fiduciary responsibilities, fee disclosures, and expanded audit and reporting requirements. However, little has been done to ensure participants are any more prepared to retire. Are these defined contribution retirement plans...

Earlier this year, the Internal Revenue Service (IRS) announced that its Employee Plans Compliance Unit (EPCU) would begin a compliance check of certain 457(b) plans maintained by non-governmental, tax-exempt entities. These plans, commonly referred to as “Top Hat” plans, are frequently offered by tax-exempt organizations in addition to other qualified retirement plans. The good news is that the extent of the compliance check is fairly limited. Letters and a questionnaire will be sent to 200 tax-exempt organizations in fiscal year 2013, and another 200 will be sent in fiscal year 2014. Employers will be selected for review based on information contained on 2011 Form W-2 and Form 990. If you receive a compliance check letter from the IRS, it is important that you respond in a timely fashion (15 days from the date of the letter) and provide the requested information. Although responding to the questionnaire is voluntary, failure to do so may result in the IRS initiating an audit of...

Earlier this year, the Internal Revenue Service (IRS) announced that its Employee Plans Compliance Unit (EPCU) would begin a compliance check of certain 457(b) plans maintained by non-governmental, tax-exempt entities. These plans, commonly referred to as “Top Hat” plans, are frequently offered by tax-exempt organizations in addition to other qualified retirement plans. The good news is that the extent of the compliance check is fairly limited. Letters and a questionnaire will be sent to 200 tax-exempt organizations in fiscal year 2013, and another 200 will be sent in fiscal year 2014. Employers will be selected for review based on information contained on 2011 Form W-2 and Form 990. If you receive a compliance check letter from the IRS, it is important that you respond in a timely fashion (15 days from the date of the letter) and provide the requested information. Although responding to the questionnaire is voluntary, failure to do so may result in the IRS initiating an audit of...

The Employee Retirement Income Security Act of 1974 (ERISA) sets the minimum standards for pension plans in the private industry. ERISA also requires accountability of plan fiduciaries which generally would include plan trustees, plan administrators, and members of the plan’s investment committee. The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan’s investments in order to avoid large losses. Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Recent court cases, most notably Tibble v Edison and Tussey v ABB, Inc. have made clear that plan fiduciaries will be held liable when they fail to meet their fiduciary responsibilities. In the Tussey case the plan...