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Defined contribution plan
Industry & Regulatory News
Retroactive First-Year Elective Deferrals for Sole Proprietors
The SECURE 2.0 Act makes it easier for individuals who own the entire interest in an unincorporated trade or business to make elective deferrals to a 401(k) plan for their first plan year.
Industry & Regulatory News
Military Spouse Retirement Plan Eligibility Credit for Small Employers
The SECURE 2.0 Act gives certain employers a general business tax credit for immediately including military spouses in their defined contribution plan.
Industry & Regulatory News
Retirement Spotlight – EBSA Proposes VFCP Amendments
The Department of Labor’s Employee Benefits and Security Administration (EBSA) recently released a proposed amendment to the Voluntary Fiduciary Correction Program (VFCP) to include a Self-Correction Component (SCC) for transactions eligible for correction under the program.
Industry & Regulatory News
Employer Tax Credits
This credit applies to qualified plans (defined contribution and defined benefit plans under IRC Sec. 401(a) and 403(a)), and SEP and SIMPLE plans.
Industry & Regulatory News
IRS Issues Yield Curves and Segment Rates for DB Plan Calculations
The IRS has issued Notice 2023-12, which contains updated guidance on factors used in certain defined benefit (DB) pension plan minimum funding and present value calculations. Updates include the corporate bond monthly yield curve, the corresponding spot segment rates for January used under Internal Revenue Code Section (IRC Sec.) 417(e)(3), and the 24-month average segment rates under IRC Sec. 430(h)(2). IRC Sec. 417 contains definitions and special rules for minimum survivor annuity requirements in DB plans. IRC Sec. 430 addresses minimum funding standards for single-employer DB plans.
Industry & Regulatory News
IRS Announces Applicable Federal Rates for February
The IRS has issued Revenue Ruling 2023-03, which contains the applicable federal rates (AFR) for February 2023. These rates are used for such purposes as calculating distributions from retirement savings arrangements that meet the requirements for substantially equal periodic payments (a 10 percent early distribution penalty tax exception), also referred to as "72(t) payments."
Industry & Regulatory News
Washington Pulse: SECURE 2.0 is Congress’s Retirement Enhancement Encore
Retirement legislation has been a welcome area of bipartisan cooperation in the U.S. Congress, marked by a history of Republican and Democratic bill co-sponsorship and support. A recent example is the Setting Every Community Up for Retirement Enhancement Act—the SECURE Act—passed and signed into law in 2019. The SECURE Act has been hailed as the most important retirement enhancement legislation in more than a decade.
Industry & Regulatory News
Washington Pulse: New Retirement Payment Withholding Procedure is (Finally) Final
The IRS released a new withholding form on January 4, 2022: Form W-4R, Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions. The IRS also issued a revised Form W-4P, Withholding Certificate for Pension or Annuity Payments. As a result, payers and individuals will have a new process for calculating and electing federal income tax withholding on retirement distributions. Although the IRS will not require payers to use the new and revised forms until January 1, 2023, payers may start using them in 2022.
Industry & Regulatory News
DOL Releases Form 5500 Revisions for Multiple-Employer Plans
December 28, 2021 – The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued a notice with final forms revisions for Form 5500, Annual Return/Report of Employee Benefit Plan, and Form 5500-SF, Annual Return/Report of Small Employee Benefit Plan, relating to annual reporting changes for multiple-employer plans (MEPs) and pooled employer plans (PEPs). It specifically revises the Form 5500 and Form 5500-SF instructions for the 2021 reporting year for multiple-employer plans. It is effective for plan years beginning on or after January 1, 2021.
Industry & Regulatory News
Washington Pulse: IRS Releases Final QPLO Regulations
Plan participants have more time to roll over certain plan loan offsets under the Tax Cuts & Jobs Act of 2017 (TCJA). These are known as qualified plan loan offsets (QPLOs). In response to this legislative change, the IRS released proposed regulations in August 2020. The IRS finalized the regulations in December 2020, with only one modification: the applicability date.