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2022 Cost of Living Adjustments

The IRS has released additional cost of living adjustments which affect the dollar limits for both retirement and health & welfare plans. Many of the limits have increased for 2022. Please refer to the table below. 2021 2022 Retirement Limitations 401(k) / 403(b) / 457 Plan Maximum Elective Deferral $19,500 $20,500 Qualified Plan Compensation Limit $290,000 $3...

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Congress Passes Bill Providing Additional Coronavirus Relief

In response to the ongoing need of Americans as the Coronavirus continues, Congress passed the Consolidated Appropriations Act, 2021 (the “CAA”). The Act was signed by the President December 27, 2020. While its primary purpose was to provide funds for the federal government, it also contains relief for employer-sponsored plans. Defined Contribution plans Coronavirus-related dist...

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2021 Cost of Living Adjustments

The IRS has released additional cost of living adjustments which affect the dollar limits for both retirement and health & welfare plans. Many of the limits have not increased for 2021. Please refer to the table below. 2020 2021 Retirement Limitations 401(k) / 403(b) / 457 Plan Maximum Elective Deferral $19,500 No change Qualified Plan Compensation Limit $285,0...

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IRS Issues CARES Act Guidance and Expands Distribution Eligibility

On June 19, 2020, the Internal Revenue Service (“IRS”) published Notice 2020-50 (“Notice”), expanding the definition of a Qualified Individual (“QI”) as well as providing helpful guidance on Coronavirus-Related Distributions (“CRDs”) and plan loans under the CARES Act. Below are some key takeaways from the Notice. Qualified Individuals The Notice expands the definition of a QI to include the ...

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IRS Issues Guidance on 2020 Required Minimum Distributions

The Internal Revenue Service (“IRS”) has published Notice 2020-51 (“Notice”) providing much needed guidance on the waiver of required minimum distributions (“RMDs”) for defined contribution plans under the CARES Act. The Notice is modeled after guidance issued under the Worker, Retiree, and Employer Recovery Act of 2008 ("WRERA"), which was in response to the 2008 financial recession. Rollover...

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Temporary Relief for Plans Reducing Safe Harbor Contributions Mid-Year

In response to the economic downturn caused by the COVID-19 public health crises, the IRS published Notice 2020-52, providing temporary relief for plan sponsors of 401(k) and 403(b) safe harbor plans that reduce or suspend safe harbor contributions mid-year. Generally, in order to cease or suspend safe harbor contributions mid-year, a plan sponsor must either be suffering an “economic loss” or ...

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Nyhart Names Carter Angell as New CEO

Nyhart announced on May 26 that it has named Carter Angell as the company’s Chief Executive Officer. “Carter is the right person to take Nyhart into the future,” says Jerry Bramlett, President of FuturePlan by Ascensus. “His background uniquely positions him to represent the company as it continues its expansion as a leading employee benefit firm. He is results-driven, client-focused, and pa...

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IRS Grants Temporary Relief from the Physical Presence Requirement

On June 3, 2020, in response to COVID-19 social distancing measures, the Internal Revenue Service (“IRS”) published Notice 2020-42 (“Notice”), relaxing the witness requirements of a plan representative or notary public for retirement plan elections. The temporary relief applies to all participant elections made between January 1, 2020 and December 31, 2020. The Notice provides for remote electr...

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Nyhart releases 2020 Indiana Healthcare Benefit Survey Results

June 1, 2020 (Indianapolis) – Nyhart, Indiana’s premier actuarial and employee benefits consulting firm, has released the results of its 11th annual Indiana Healthcare Benefit Survey. The 2020 survey reached 287 companies across the state and reflects data from approximately 530 benefit plans. This study was conducted in partnership with First Person Benefit Advisors, Gregory & Appel Insurance,...

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DOL Finalizes Electronic Disclosure Rules

On May 21, 2020, the Department of Labor (“DOL”) released the final electronic disclosure rules, allowing retirement plan sponsors to electronically disclose information required under ERISA, as long as they satisfy certain conditions. Below is a highlight of some of the key provisions of the new rule. New Voluntary Safe Harbor. Plan sponsors can choose to distribute covered documents to cover...

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IRS Issues Retirement and Health and Welfare Plan Deadline Relief in Response to COVID-19

Earlier this year the Internal Revenue Service (“IRS”) extended April 15, 2020 tax filing deadlines in an effort to help individuals and businesses adversely affected by the COVID-19 public health crisis. Recently, the extension was expanded to deadlines associated with retirement plans. IRS Notice 2020-23 (“Notice”) extends several plan-related deadlines ordinarily occurring between April 1, 2020...

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Recent IRS Guidance Clarifies CARES Act Questions

The Internal Revenue Service (“IRS”) recently released a set of much anticipated FAQs, answering some of the questions that have arisen since the CARES Act was signed into law. The following are brief highlights of the FAQs: Future Guidance. Both the IRS and Treasury Department anticipate releasing further CARES Act guidance in the near future. In the meantime, the IRS has specifically indica...

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Employer Health Plans and the Impact of COVID-19

In light of the COVID-19 pandemic, Nyhart’s Healthcare Actuarial team has received many questions about how this may impact an employer’s health plan. Some common questions include: How will the pandemic impact my immediate costs and how should I budget for them? What will be the long-term impact and how should we prepare? What should I expect for upcoming rate renewals? Should I consid...

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Congress Passes Legislation to Help Americans with COVID-19

In quick response to the ever-changing impact of the COVID-19 virus, Congress has passed and President Trump has signed the Coronavirus, Aid, Relief and Economic Security (CARES) Act, a two trillion dollar aid package to provide relief from the financial impact of the virus, including relief to retirement plans, health and welfare plans, and their participants. Defined Contribution plans The CA...

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IRS Extends Restatement Deadlines

In response to the COVID-19 crisis and the impact it has had on conducting everyday business, the IRS has announced that it is extending the remedial amendment period for both Section 403(b) plans and for defined benefit plans. The deadline for adopting a Section 403(b) plan for the initial remedial amendment period, has been extended from the original deadline of March 31, 2020 to June 30, 2020....

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IRS issues Guidance on COVID-19

The IRS has issued Notices due to the unprecedented public health emergency posed by COVID-19, and the need to eliminate potential administrative and financial barriers affecting many Americans. IRS Notice 2020-15 HDHPs and HSAs In Notice 2020-15, the IRS indicates that health plans that are High Deductible Health Plans (“HDHPs” ) will not lose that status just because they cover the cost...

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Nyhart Pandemic Preparedness Statement

Nyhart maintains a Pandemic Preparedness plan as part of our larger Business Continuity planning process....

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SECURE Act: The Wait is Finally Over

For the past three years, Congress has attempted to pass major retirement reform legislation. It has finally succeeded with the year-end passage of two spending packages meant to avert a government shutdown. One of the packages, the Further Consolidated Appropriations Act, 2020 (FCAA), includes multiple bills—including the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which c...

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Votaire Partners with First Internet Bank to Encourage Healthy Savings Habits

FISHERS, IN – December 17, 2019 – First Internet Bank, a pioneer in branchless banking, today announced its partnership with Votaire, a financial wellness solutions platform, to make emergency savings attainable for more Americans. “With a majority of full-time workers living paycheck-to-paycheck, many individuals have not built an emergency fund for unexpected events,” said David Becker Preside...

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Nyhart Joins Ascensus

Nationally Renowned Employee Benefits Consulting Firm to Become Part of FuturePlan by Ascensus Dresher, PA—November 25, 2019—Ascensus—whose technology and expertise help millions of people save for retirement, education, and healthcare—has entered into an agreement to acquire Nyhart, an employee benefits consulting firm that provides retirement (defined contribution, defined benefit, and actuar...

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DOL Releases Modern Electronic Disclosure Rules

Recently, the Department of Labor (“DOL”) released a proposed rule that would enhance the current electronic disclosure rules that have not been updated since 2002. In short, the proposal would allow plan sponsors to distribute disclosures for retirement plans via a website. Although this is a welcome addition, there are several important details to consider. The proposed rule allows any document...

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PBGC Updates Premium Rates with no Scheduled Increases after 2019

The Pension Benefit Guarantee Corporation (PBGC) recently updated its premium rates for defined benefit plans for 2020 and beyond. The PBGC is responsible for the continuation and maintenance of voluntary private benefit pension plans and keeping pension insurance premiums at the lowest levels necessary to carry out the plans operations. The new premium rates are as follows: Plan years...

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IRS Finalizes Hardship Regulations

Almost a year after releasing proposed changes to the hardship distribution regulations, the IRS recently finalized the proposed rules. Although there were no major changes between the proposed rules and the final rules, the IRS responded to several public comments made on the proposed rules that are worth mentioning. The IRS noted that the final regulations allow nonqualified deferred com...

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IRS Issues New 403(b) Guidance

Recently, the IRS released new 403(b) guidance which updates the remedial amendment period (“RAP”) rules for 403(b) Plans. RAPs allow employers to correct errors in their 403(b) plan document. In addition, Revenue Procedure 2019-39 provides amendment deadlines, a system of pre-approved 403(b) restatement cycles, and a limited extension to the initial RAP March 31, 2020 deadline. Individually...

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DOL Clarifies Application of USERRA

The Uniform Services Employment and Reemployment Rights Act (“USERRA”) was enacted to require retirement plans to protect military service members that return to civilian employment from a break in service for purposes of retirement plan benefits, vesting service, eligibility, and contributions. USERRA does this by requiring an employer to use the employee’s compensation rate and service history p...

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Nondiscrimination Relief Extended For “Closed” Defined Benefit Plans

The Internal Revenue Service (“IRS”) has again extended nondiscrimination relief by issuing Notice 2019-49 for defined benefit plans that are currently “closed” or sometimes referred to as “frozen”. In order for a defined benefit plan to maintain its tax-deferred status, the IRS requires, among other things, a plan to satisfy the nondiscrimination testing rules by showing that it does not discrimi...

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IRS Clarifies Taxation of Uncashed Checks

Retirement plan participants sometimes forget to cash their distribution checks, which gives rise to the question of what to do about tax withholding. The Internal Revenue Service (“IRS”) recently addressed in Notice 2019-19 what a plan sponsor should do when a distribution was required to be made. Plan sponsors and participants should be aware that the amount of an uncashed check is still incl...

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DOL Sends to White House Electronic Disclosure Proposal

Defined contribution retirement plans, specifically 401(k) retirement plans, require plan sponsors to send several required disclosures each year. The disclosures are lengthy, confusing to plan participants, and costly to plan sponsors. Recognizing the burden that the required disclosures place on retirement plan sponsors and their confusing nature, President Trump issued an Executive Order in...

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Votaire Adds Benefit Offerings

In today’s tight labor market, employers are looking for new ways to recruit and retain employees. But they find that adding benefits can be both costly and burdensome. Fortunately, Votaire has a solution. Votaire wraps expanded benefit options into its financial wellness platform. This means employers offering Votaire are able to provide their employees new and personalized benefits at...

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DOL Finalizes MEP Regulations

DOL Final Regulations give guidance on closed MEP sponsors....

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Form 5500 Filing Relief for MEP Sponsors

DOL issues temporary relief to MEP plan sponsors who are out of compliance with some of the Form 5500 reporting requirements ...

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Collaboration Creates Powerful Financial Wellness Solution

The Foundation for Financial Wellness has teamed up with Votaire by Nyhart....

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IRS Changes Position on Retiree Lump-Sums

In a move that reverses its previous stance on retiree lump sum windows, the Internal Revenue Service (“IRS”) recently published Notice 2019-18 announcing that it will allow defined benefit pension plans to offer a lump sum payment to retirees in pay status. This is a reversal of the stance the IRS took in 2015 effectively shutting down retiree lump sum windows. For many years, pension p...

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Nyhart Drives Increased Retirement Savings

In 2017, Nyhart launched Votaire as a solution to the retirement income problem by using a data-driven approach to give guidance that is dynamic, holistic and personalized. Born out of actuarial expertise in the healthcare and pension worlds, Votaire helps defined contribution plan participants develop a decumulation plan and even understand what healthcare might cost them in retirement. ...

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Creating Lifetime Income in Your 401(k) Plan

Planning for retirement often focuses on the accumulation of funds before actual retirement. However, there is a concern about whether a retiree will outlive their retirement funds, and retirees wonder how they can lessen the likelihood of this happening. This concern was heard by the IRS and has resulted in the creation of a qualified longevity annuity contribution (QLAC) in order to hel...

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DOL Increases Civil Penalty Amounts for Employee Benefit Plans

The Department of Labor (DOL) released its annual adjustments for civil monetary penalties affecting various benefit plan related violations. The higher penalties apply for assessments after January 23, 2019. Below are highlights of the more common penalties. Form 5500: Required to be filed by most ERISA plans, the maximum fee for filing a late Form 5500 is $2,194 each day the Form is lat...

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Legislation Introduced To Help Combat Student Debt Issue

A bill introduced in Congress may help employees with student loan debt pay off loans while still saving towards retirement. ...

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IRS Issues Proposed Regulations on New Hardship Rules

Proposed regulations give plans guidance on how to tackle new hardship rules....

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403(b) Plans Given Clarification on “Once In, Always In” Rule

The IRS has clarified the “once in, always in” rule as well as granted relief to employers. ...

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DOL Responds To Trump Executive Order on MEPs

In response to the Executive Order issued by Trump a few months ago, the DOL has issued proposed regulations addressing MEPs. ...

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An "Easy Button" for Employee Benefit Selection & Financial Wellness

How do your employees choose their benefits? How do they know which healthcare plan is best? How do they determine what they should contribute to their 401k or HSA? What about issues like 529 plans and long-term care? Where can they find help with those? Enter Votaire. Votaire, Nyhart’s holistic financial wellness platform, now offers its 100,000 participants personalized decisi...

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Trump Issues Executive Order to Strengthen Retirement

President Trump recently signed an Executive Order (“Order”) that could make several changes to retirement plans with the hope of making retirement plans more accessible to even more Americans. The Order directed the Department of Labor (“DOL”) and the Treasury to look at the following items: Multiple Employer Plans (MEPs): The President has asked the DOL and Treasury to make changes to th...

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Nondiscrimination Relief Extended For “Closed” Defined Benefit Plans

In order for a defined benefit plan to maintain its qualified tax-deferred status, one of the things that the Internal Revenue Service (“IRS”) requires is that the plan satisfy nondiscrimination testing rules, showing that it does not discriminate in favor of highly-compensated employees (“HCE’s”). Plans typically become “frozen” or “closed” when HCE’s, prior to a certain date, are still part...

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Student Loan Debt Help May Attract & Retain Employees

With over 10,000 Baby Boomers turning 65 each day, the workforce is undergoing a significant transition....

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Nyhart Appoints New CEO Lisa Hague

Nyhart has announced the appointment of Lisa Hague as their first female CEO....

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Disability Claim Regulations Effect on Employee Benefit Plans

DOL has issued final rules on disability claims procedures pertaining to employee benefit plans....

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Don’t Forget the Special Catch-up Limit for 403(b) Plans

Called a catch-up contribution, employees age 50 or older may be able to contribute an extra $6,000 to their 403(b) account, with a maximum of $24,000 for 2018. A lesser known provision is that employees who have been with the same eligible employer for 15 years may be able to further increase their limit on deferrals into their 403(b) account by up to $3,000 in any taxable year (lifetime employer...

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Required Minimum Distribution Guidance for Missing Participants Extended to 403(b) Plans

The Internal Revenue Service (“IRS”) previously issued guidance concerning “missing participants” in qualified retirement plans attempting to process a required minimum distribution (“RMD”). In short, the IRS directed its examiners to cease challenging the qualified status of plans that failed to distribute an RMD, if the plan sponsor made a good faith effort to locate the missing participant. ...

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Budget Act Affects Retirement Plans

While the Bipartisan Budget Act of 2018 (“Budget Act”) may have sounded like just a law to end the government shutdown, there were some retirement plan provisions included. Hardship withdrawals In an effort to simplify the hardship distribution process, the Budget Act makes the following changes to the hardship distribution rules: Removes the rule that all available loans must be taken be...

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Tax Reform Extends Rollover Period for Loan Offset

As we mentioned in our prior article regarding the passing of the Tax Cuts and Jobs Act (“Act”), retirement plans were affected by the new law, particularly the period to repay a plan loan offset. The new rule only applies in the case of an individual who severs employment or when a retirement plan is terminated. For employees unable to pay off any outstanding loan balance right away, the loan ...

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Hardship Distributions May Be Affected by Tax Cuts and Jobs Act

In an indirect manner, and possibly unintended by Congress, the Tax Cuts and Jobs Act (“Act”) may affect the ability for a participant to receive a hardship distribution from their retirement plan. Under the Act, the definition of a casualty loss is changed under the Internal Revenue Code (“Code”) and limits the ability to get a casualty loss deduction to a loss that is caused by a federally de...

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Missing Participant Program for Terminating 401(k) Plans Finalized

The Pension Benefit Guaranty Corporation (PBGC) has expanded its missing participants program to terminated 401(k) plans in an effort to make it easier for people to locate their retirement benefits. This new option is only available for plans terminating after January 1, 2018. Under this voluntary program, instead of establishing an IRA on the missing participant’s behalf, an account balance t...

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Disaster Relief Distributions Available from Retirement Plans

Historically, Congress has allowed retirement plans to offer loans and distributions to give relief to employees and certain members of their families that live in disaster areas. Due to the devastation of Hurricanes Harvey, Irma and Maria, Congress has granted relief from some of the retirement plan distribution rules to victims of these disasters. The highlights of the relief are: Qualified H...

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IRS Gives Guidance on Required Minimum Distributions for Missing Participants

The Internal Revenue Service (“IRS”) has made it easier on plan sponsors processing required minimum distributions (“RMD”) for retirement plans with “missing participants”. These missing participants make it difficult to distribute the RMD timely and therefore jeopardize the qualified status of the plan. In an effort to address this issue, the IRS has directed IRS examiners not to challenge the...

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2018 Brings Increased DOL Penalties for Employee Benefit Plans

The Department of Labor (DOL) released its annual adjustments for civil monetary penalties affecting various benefit plan related violations. Below are highlights of the more common penalties. Form 5500 Required to be filed by most ERISA plans, the maximum fee for filing a late Form 5500 is $2,140 each day the Form is late. Previously the fee was $2,097. Reports and Recordkeeping A failure...

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IRS Changes Fee Structure for Correction Program

In an effort to encourage larger employers to voluntarily correct errors in their plan, the IRS has revised the fees charged to employers for using the IRS Voluntary Correction Program (“VCP”). VCP is a program the IRS offers to allow an employer who sponsors a retirement plan to correct a variety of operational and document errors, as long as the plan is not under audit by the IRS. Previously ...

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President Signs New Tax Bill

On December 22nd, President Trump signed into law the Tax Cuts and Jobs Act, which is being hailed as one of the biggest tax reform bills in recent history. There are many tax changes in the bill; however, retirement plans were not majorly affected. What was not included in the law is the proposed “Rothification” of contributions, as well as the reduction of contribution limits. This means tha...

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2018 Cost of Living Adjustments

The IRS has released the cost of living adjustments that affect the dollar limits for various retirement plans and health & welfare plans for the 2018 tax year. Many of the limits have increased from 2017 to 2018 due to an increase in the Consumer Price Index on which these limits are based. Please contact your Nyhart consultant for additional information or questions. ...

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IRS Finalizes New Mortality Table

In order to reflect the increased longevity of today’s society, the IRS has finalized regulations that adopt a new mortality table for use with pension plans. This increased longevity has several impacts on defined benefit plans - minimum funding requirements, lump sum payments and Pension Benefit Guaranty Corporation (PBGC) premiums. Minimum Funding A portion of the minimum contr...

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Holistic Financial Planning for Employees

Votaire is a personalized and comprehensive financial planning platform that provides help to employees at all stages of their lives. Whether the person has questions about retirement income, life insurance, healthcare, investing, budgeting or debt management, Votaire can help....

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Fiduciary Rule Moving Forward

The Department of Labor (DOL) recently confirmed that, barring any action by the courts or Congress, the effective date of the DOL’s fiduciary rule will not be delayed further.  The rule will take effect in part on June 9, 2017 with the full implementation of the rule taking effect on January 1, 2018. Originally, the rule was scheduled to take effect April 10, 2017.  However, the Trump ...

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403(b) Remedial Amendment Period – IRS Guidance

March 31, 2020 will be the last day of the initial remedial amendment period (RAP) for 403(b) plans. The remedial amendment period is the time allowed for employers to correct operational functions or language errors in their plan(s). A look back – and what was missing: You may recall, in 2007 the IRS put out regulations requiring 403(b) plans to have a written plan document. Gaining a tax-favor...

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DLGF Reporting Requirement

Since 2014, the Indiana Department of Local Government Finance (DLGF) has required political subdivisions to report by March 1st of each year their Other Post-Employment Benefits (OPEB) liabilities online through the DLGF website using their Gateway portal. Benefits defined as OPEB include healthcare and other non-pension benefits provided to employees at retirement, which may include medical, pre...

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Partnership & C-Corporation Reminder: Tax Return Filing Date Changes

Beginning with fiscal years ending after December 31, 2015 (the 2016 tax season), the filing deadlines have changed, which is good news. The changes are a result of years of activism by tax preparers. The new deadlines create more logical flow for businesses with pass-through income. However, beware these changes are imbedded in a law that gives the Internal Revenue Service (IRS) an increased au...

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21st Century Cures Act – A Welcome Gift to Small Employers!

On December 13, 2016, President Obama signed the 21st Century Cures Act (“Act”). Tucked deep away, towards the end of the law, is a welcome gift to small employers! The law makes it possible for small employers to use Health Reimbursement Arrangements (“HRA”s) to pay back employees who buy their own health insurance. Beginning January 1, 2017, companies with less than 50 employees wil...

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IRS Announces Regulations For Lump Sum Distributions

Some defined benefit plans offer no lump sum payment option. For the many that do, the choice is an “all or nothing” lump sum payment or annuity payments (fixed payments for a period). The IRS recently announced great news to those participants wanting or needing more flexibility when facing how their retirement plan payments come to them. New IRS rules clarify and simplify the rules for d...

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IRS Extends Temporary Nondiscrimination Relief

Many employers have closed their defined benefit (DB) plans to new participants. This has been done to reduce costs and lower future funding duties. These closures are often called “soft-frozen” or “closed” plans, where participants prior to a certain date are still active. Now employers are finding they cannot afford to meet any of the nondiscrimination testing alternatives and fund the DB plans ...

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IRS Updates Employee Plans Compliance Resolution System (EPCRS)

We do not live in an error-free world. While it would be great if all retirement plans could be amended one time, and one time only, it is not reality. The IRS recognizes this and designed the Employee Plans Compliance Resolution System (EPCRS) to address plan correction issues. EPCRS lets plan sponsors correct some common plan failures to satisfy the plan qualification requireme...

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IRS Relief for Missed Rollover Deadline

The IRS just made what many experts are calling a surprise move. Savers who miss a 60-day deadline for rolling over their IRA or workplace retirement savings plan, like a 401(k), are getting a second chance. This comes as a relief to plan sponsors often facing issues with participants who, by accident, don’t get their rollover funds deposited timely. The 60-day limit has l...

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Deadline for PPA Restatements

On April 6, 2016, the Department of Labor (DOL) announced the final fiduciary rule which has meaningful implications for the definition of a fiduciary as it applies to investment advice. The final rule, which is the result of a nearly six-year process, describes the circumstances under which a person providing investment advice would be considered a fiduciary under the Employee Retir...

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Department of Labor Finalizes “Fiduciary Rule”

On April 6, 2016, the Department of Labor (DOL) announced the final fiduciary rule which has meaningful implications for the definition of a fiduciary as it applies to investment advice. The final rule, which is the result of a nearly six-year process, describes the circumstances under which a person providing investment advice would be considered a fiduciary under the Employee Retir...

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Impact of Obergefell v. Hodges on Health and Welfare Plans

The IRS recently issued Notice 2015-86, providing initial guidance on the impact of the U.S. Supreme Court’s decision in Obergefell v. Hodges on health and welfare plans, and further guidance on the application to retirement plans. The Notice confirms that the Obergefell decision does not require any changes to the terms of a health and welfare plan, noting that if the plan offers benefits to same...

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Internal Revenue Service Issues New Guidance on Mid-Year Amendments to Safe Harbor Plans

The Internal Revenue Service (IRS) has historically been very restrictive with respect to what changes could be made mid-year to a safe harbor plan. However, IRS Notice 2016-16 erased most  restrictions that kept employers from adopting mid-year amendments to safe harbor 401(k) and 403(b) plans.  The Notice provides much needed guidance and allows a change to be made mid-year if the following requ...

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Internal Revenue Service Announces Changes to Voluntary Correction Program Compliance Fees

When mistakes are made with respect to a qualified plan, one option that is available to a plan sponsor is the Voluntary Correction Program (VCP) under the Internal Revenue Service (IRS) Employee Plans Compliance Resolution System (EPCRS) to fix the mistakes. To encourage employers who sponsor 401(a) qualified retirement plans and 403(b) plans to correct plan failures, the IRS has announced in R...

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Impact of Obergefell v. Hodges on Employee Benefit Plans

The United States Supreme Court (“Court”) ruled in Obergefell v. Hodges (“Obergefell”) that same-sex marriage bans are unconstitutional. The decision in Obergefell is a continuation of the Court’s expansion of protections of married same-sex couples from United States v. Windsor. Obergefell will primarily impact private employers with respect to state law including state taxes and related withhol...

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Affordable Care Act Cadillac Tax Delayed to 2020

On Friday, December 18, 2015, President Obama signed a $1.1 trillion omnibus spending bill, which included a provision to delay the Affordable Care Act’s (ACA) “Cadillac tax” on high-cost employer sponsored health plans. The Cadillac tax that was originally scheduled to take effect in 2013 and then delayed to 2018, has now been pushed back again to 2020.  The bill also makes the tax a deductible e...

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2016 Cost of Living Adjustments Announced

The IRS has released the cost of living adjustments that affect the dollar limits for both retirement plans and health & welfare plans for the 2016 tax year. Most limits will remain unchanged from 2015 to 2016 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. While health FSAs experience no limit increase, plan sponsors may still allow...

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PPA Restatements for Defined Contribution Plans

The IRS requires all retirement plans to be restated periodically to ensure that a plan accurately reflects current regulations and legislation. The current round of restatements is referred to as the “PPA restatement” and applies to employers using pre-approved 401(k), profit-sharing, or other defined contribution plan documents. These pre-approved plans receive approval in advance from the IRS t...

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Revisions to the IRS Determination Letter Program

Historically, a plan sponsor could get assurance that their retirement plan was in compliance with current laws and regulations by requesting a favorable determination letter from the IRS, which allowed sponsors to be confident in the tax-qualified status of their plan. These requests were made in accordance with a five-year restatement cycle established by the IRS.   However on July 21, 2015 the ...

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Significant Changes to GASB Reporting of OPEB Liabilities

Other Post-Employment Benefit (OPEB) accounting standards are once again in the spot light. The Government Accounting Standards Board (GASB) issued two pronouncements (GASB statement numbers 74 and 75) in June 2015, which significantly changed the financial reporting requirements by state and local governments of their OPEB liabilities. Easily the largest change since the implementation of accrual...

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IRS Limits Lump Sum Distribution Options

In Notice 2015-49 the IRS placed limits on the ability of a plan to offer lump sums to participants that are receiving annuity payments from a defined benefit plan.  The ability to allow participants to change from an annuity to a lump sum payment is a strategy often referred to as “de-risking” whereby the plan tries to manage risk by cashing out retirees and terminated participants and shifting t...

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Monitoring Differing Terms in your SPD vs. the Plan Document

A recent court case out of the Sixth Circuit Court (Pearce v. Chrysler Group LLC Pension Plan) reminds plan sponsors to carefully monitor the terms and provisions used in the retirement plan document versus those used in the summary plan description (SPD).  The court held that a material conflict between an SPD and the plan permits a participant to file a claim....

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Testing Relief for Closed Defined Benefit Plans

The IRS issued Notice 2014-5 which temporarily provides an alternative method for aggregated DB/DC plans to demonstrate compliance....

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