Understanding fiduciary responsibilities is important for the security of a retirement plan and compliance with the law. If you answer “no” to any of the following questions, you may not be complying with federal regulations. Have you identified your plan fiduciaries, and are they clear about the extent of their fiduciary responsibilities? ERISA defines a retirement plan fiduciary as a person or entity that does any of the following with respect to a retirement plan: Exercises discretionary control or authority over the management of the plan or its assets; Provides investment advice or manages the plan assets for a fee; Has discretionary responsibility in the administration of the plan; and Is specifically identified in the written plan documents as a fiduciary. Fiduciary responsibilities include: Acting solely in the interest of plan participants and their beneficiaries, and with the exclusive purpose of providing benefits to them and paying plan expenses; Carrying out their duties p...

On April 4, 2014, the IRS issued  Notice 2014-19  which provides additional guidance on how qualified retirement plans should treat the marriages of same-sex couples following the June 26, 2013 Supreme Court’s ruling in United States v. Windsor. The Windsor decision invalidated Section 3 of the 1996 Defense of Marriage Act (DOMA) that barred same-sex couples from being treated as married under federal law. Subsequent to the Windsor decision, the IRS issued  Revenue Ruling 2013-17  which stated that a couple would be considered married for federal tax purposes if their marriage certificate was issued by a jurisdiction having the legal authority to sanction marriages. Moreover, once married, the IRS would consider the couple to be married, even if domiciled in a state that does not recognize same-sex marriages. Notice 2014-19 provides guidance on how to comply with the provisions of the Revenue Ruling. Specifically, the Notice provides guidance on the following: Plan o...

HANYS Benefit Services wants to help you stay compliant in 2014 with our  2014 Compliance Calendar . Compliance is just one of many services HBS provides, including Plan Design,Plan Provider Management, and Co-Fiduciary Services. If you have any questions regarding compliance requirements or their application to your plan, contact us at (800) 388-1963 or at hbs@ hanys.org .

HANYS Benefit Services’ Ten New Year’s Resolutions for Plan Fiduciaries: 1) Keep all plan documents and related records. HANYS Benefit Services recommends that you review the most recent version of your plan documents. Documents are often misplaced as human resource personnel change and computer systems are upgraded. Complete a document checklist to make sure that all applicable documents are available and maintained. These include the Internal Revenue Service determination letter, plan amendments and notices, automatic enrollment notifications, and the summary annual report. Service agreements and vendor contracts should be reviewed periodically to ensure all required services are being provided and agreed upon. Service agreements, such as the plan document, should be kept in both electronic and paper form. 2) Review ERISA bond and fiduciary liability insurance. ERISA-covered retirement plans must maintain an ERISA bond to protect assets from theft and fraud. Maintain written proof of...

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...