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By Jane Meacham The U.S. Department of Labor on July 30 quickly revised its field assistance bulletin on retirement plan fee disclosures to clarify a contested question’s impact on so-called brokerage windows and self-directed accounts, which allow plan participants to select investments beyond those designated by an employer-sponsored plan. In the clarification, a new question […]
By Jane Meacham A plan sponsor’s immunity from financial losses that resulted from its shift of retirement plan participants’ investments into qualified default investment alternatives was upheld by the 6th U.S. Circuit Court of Appeals in its decision in Bidwell v. University Medical Center Inc., Case No. 11-5493 (June 29, 2012). Facts of the Case […]
By Jane Meacham Many employers match a percentage of employees’ contributions to their retirement funds. But what impact does that match have? A new academic study found that participation and contributions in U.S. employer-sponsored retirement plans increase when a matching contribution is offered but that the match’s impact on savings is less significant than other […]
Most of the plans the IRS has checked for compliance with the grandfathering requirements of 401(k) money purchase pension plans had acted appropriately, says the agency’s Employee Plans Compliance Unit. However, some plans made reporting mistakes on their annual Forms 5500. The 401(k) Money Purchase Pension Plan project is a study the EPCU conducted to […]
Plan administrators must distribute funds even when there is a dispute between an estate and an ex-spouse who waived beneficiary rights, says the 3rd U.S. Circuit Court of Appeals. It recently ruled in Kensinger v. URL Pharma, 674 F. 3d 131 (March 20, 2012) that a decedent’s estate could directly sue the recipient of ERISA-governed […]
When an employee’s compensation exceeds the annual limit, how does that affect 401(k) salary deferrals and what employers and plan administrators have to do? In the March 20, 2012 edition of Employee Plans News, the IRS provides an answer. The IRS says that unless plan terms provide otherwise, the 401(k) salary (elective) deferral limit is […]
Government efforts to bring 403(b) retirement plans up to regulatory par with 401(k) plans has resulted in a rough transition for 403(b) plan sponsors, and in recognition of that fact, an ERISA advisory council gave the U.S. Department of Labor (DOL) five recommendations to help ease the compliance burden. Background Over the years, many 403(b) […]
Small businesses that seek to improve their retirement plans should have access to more information from the federal government. That is the recommendation of the Government Accountability Office (GAO), which in a recent report steers clear of advocating bold moves and suggests that the federal government improve what it’s already doing in order to better […]
Employers and plan administrators will be better able to administer plan loans and meet the prohibited transaction exemption, since the IRS has given them a clearer picture of what constitutes a “reasonable rate of interest.” The IRS has provided this assistance in guidance it published in the Winter 2012 edition of its “Retirement News for […]
The IRS and the Department of Treasury is still seeking public input on future standards to determine whether a retirement plan is a governmental plan under Code Section 414(d). According to the IRS, more guidance is needed for Section 414(d), as the statutory rules for governmental plans differ from those for nongovernmental plans. Further, changes […]