The Hidden Pension Trap – The Aggregation Rules December 2008 Newsletter One of the primary objectives of the qualified plan rules is to make the tax advantages contingent upon covering a significant number of the nonhighly compensated employees. As this goal could be thwarted by creating separate legal entities for the highly compensated and nonhighly…
DetailsTimely Deposit of Plan Contributions October 2008 Newsletter The Department of Labor (DOL) has finally provided much anticipated guidance for the timely deposit of elective deferrals in qualified 401(k) plans. The proposed regulation keeps the same basic framework for determining if contributions are timely deposited but adds a safe harbor rule that many plans can…
DetailsEGTRRA Restatements…The time has come August 2008 Newsletter It’s that time again! Time for what, you ask? To participate in that never ending ritual of qualified retirement plan restatements! As legislation affecting retirement plans is enacted, the Internal Revenue Service (IRS) requires all plan sponsors to restate or “rewrite” their plans to conform to current…
DetailsSolving 401(k) Testing Problems With New Design Options June 2008 Newsletter One of the more frustrating aspects for the small business maintaining a 401(k) plan is satisfying the special nondiscrimination requirements. The tests require adequate participation by “non-highly compensated employees” (NHCEs) in order for the “highly compensated employees” (HCEs) to maximize their own salary deferrals.…
DetailsTop Heavy Rules May Impact Plan Design April 2008 Newsletter Retirement plans have been subject to “top heavy” rules for about 25 years. By now you’d think that their application would be fairly straightforward. But lately these provisions have affected some plans in unexpected ways, surprising plan sponsors who thought top heavy was a non-issue…
DetailsThe Impact of the Pension Protection Act on Defined Benefit Plans March 2008 Newsletter In August of 2006 President Bush signed the Pension Protection Act of 2006 (PPA) into law primarily to address the financial security of the defined benefit plan system. Generally, the changes to the funding requirements for defined benefit plans brought about…
DetailsUnderstanding 401(k) ADP and ACP Testing February 2008 Newsletter The 401(k) plan has emerged as the most popular form of retirement plan in the United States. This trend will likely continue for some time for a number of reasons. One is the cost savings to employers, since deferral contributions are paid by employees. Another is…
DetailsDefault Investment Rules Facilitate Auto Enrollment December 2007 Newsletter The increasing popularity of salary deferral plans has led to a rise in the number of retirement accounts that allow participants to self-direct their investments. Participants like it because it gives them control over their accounts which are at least partially funded by their own contributions.…
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