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[Opinion] Is the MyRA Worth All the Fuss?
"In the end, the MyRA does not offer many differences from Traditional and Roth IRAs, except for the Treasury investment. However, the low growth rate will prevent many employees from successfully saving for retirement. The greater danger comes from those employers who will be tempted to scrap their expensive, complicated 401(k) plans for a cheaper alternative that leaves them out of it. That approach will not serve employers or their employees well." (Frenkel Benefits)
[Official Guidance] Text of IRS Announcement 2015-13: Reporting Airline Payment Amount Rollovers Under Public Law 113-243 (PDF)
"Qualified airline employees who received airline payment amounts should include the full amount on Form 1040 for the year of receipt. Up to 90 percent of the aggregate airline payment amounts may be excluded from income if rolled over to a traditional IRA within 180 days of receipt. To exclude these amounts for 2014, a qualified airline employee must file a paper Form 1040 and include the amount rolled over on line 21 of Form 1040 as a negative amount and write 'airline payment' on the dotted line next to line 2." (Internal Revenue Service [IRS])
Qualified Charitable Distributions from IRAs Have Lapsed Again for 2015 But May Be Reinstated Again: Do Them Anyway!
"[T]he best strategy to handle the uncertainty of whether QCDs will be extended or not is just to do them anyway! At worst, if the rules are not reinstated, the outcome will be no worse than just being forced to take an RMD and making a charitable contribution anyway. However, if the rules are brought back once again, those who make direct charitable distributions from their IRAs will enjoy all the benefits of QCDs... even if the rules are only 'fixed' after the fact!" (Michael Kitces in Nerd's Eye View)
How the Current Regulatory Framework Provides Effective Investor Protections
30 pages. "This white paper describes the framework of regulatory protections currently in place for all investors, including those saving through IRAs, with a particular focus on the securities laws. It also highlights key aspects of the securities laws designed to address the concerns identified in the [Council of Economic Advisors] Report, how the securities laws are calibrated to address particular advice models, and initiatives of the SEC and FINRA to address concerns specific to retirement savings." (Morgan Lewis)
The Growing Divide Between the Retirement Elite and Everyone Else
"[M]ost workers end up retiring well before age 65, and few have enough saved by that point. The least prepared workers, some 32% of those surveyed, were on track to receive just 38% of their income in retirement, which would be largely Social Security benefits. By contrast, an elite group of workers, some 20%, are on track to replace 143% of their current income ... And it's not just those pulling down high salaries. 'The key success factors were access to a 401(k) and consistently saving 10% of pay, not income,' [Empower president Ed Murphy] says." (TIME)
[Guidance Overview] Clarifying the Rules on Distributions from Qualified Plans
"For plans currently offering after-tax contributions, or that have significant legacy after-tax dollars, [Notice 2014-54] may provide participants with the ability to maximize planning opportunities related to rollovers. But there are potential downsides for participants who roll money out of the qualified plan. For example, participants under age 55 would lose the ability to avoid the early withdrawal penalty on 401(k) plan distributions when separating from service after age 55 (but before age 59-1/2), or lose the opportunity to take advantage of net unrealized appreciation rules for company stock. Though these scenarios may not be common, they have significant potential impact for those who are eligible, and should at least be coordinated with the overall Roth conversion strategy." (Vanguard)
[Guidance Overview] IRS News Release 2015-55: Many Retirees Face April 1 Deadline to Take Required Retirement Plan Distributions (PDF)
"The Internal Revenue Service today reminded taxpayers who turned 70-1/2 during 2014 that in most cases they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Wednesday, April 1, 2015. The April 1 deadline applies to owners of traditional IRAs but not Roth IRAs. Normally, it also applies to participants in various workplace retirement plans, including 401(k), 403(b) and 457 plans." (Internal Revenue Service [IRS])
There's $27 Trillion in the U.S. Retirement Savings System: Don't Expect Legislators to Leave It Alone
"At least $9 trillion of the $27 trillion total represents public sector workers ... Public sector retirement assets are heavily concentrated in [DB] plans, while the majority of private sector assets is in [DC] plans.... [B]udgetary considerations, a growing focus on coverage, questions of efficiency, and several other pressure points are leading to a growing likelihood of change in the retirement system. A number of proposals are circulating at the Federal and the States level." (Russell Investments)
Retirement Plan Assets Grow
"[T]otal assets held in employer-sponsored retirement plans were $11.3 trillion at the end of 2014, an increase of 11.5 percent from the $10.1 trillion one year earlier. Individual retirement accounts (IRAs) hold another $5.4 trillion of retirement savings. Total assets, including public, private, 403(b) plans and IRAs is $21.5 trillion.... [M]ore than $3.5 trillion ($3.537 trillion) is in defined benefit accounts among the public sector, while there is $458 billion in defined contribution accounts and $241 billion in 457 Plans[.]" (Spectrem Group)
Saving for Vacation Is a Priority for Three Times as Many as Saving in an IRA
"24 percent of Americans said short-term savings, such as for a vacation or household appliances, is their first priority when deciding how to allocate savings. That's three times the number (8 percent) who said contributing to an [IRA] is their first priority, and in parity with the number (25 percent) who said they would prioritize contributing to an employer-sponsored retirement plan, such as a 401(k) or 403(b) plan.... [A] significantly low number of respondents (only 18 percent) report that they are currently contributing to an IRA. Another 14 percent say they have an IRA, but they are not currently contributing anything to it.... Of those Americans who do not currently have an IRA, 56 percent of Americans said they would consider an IRA as part of their retirement strategy, an increase from 47 percent in 2014." [Executive summary also available (PDF).] (TIAA-CREF)
[Guidance Overview] IRS News Release 2015-50: Still Time to Contribute to an IRA for 2014 (PDF)
"Most taxpayers with qualifying income are either eligible to set up a traditional or Roth IRA or add money to an existing account. To count for 2014, contributions must be made by April 15, 2015. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the saver's credit w hen they fill out their 2014 return.... The deduction for contributions to a traditional IRA is generally phased out for taxpayers covered by a workplace retirement plan whose incomes are above certain level." (Internal Revenue Service [IRS])
State Auto-IRAs and Federal Law: 'We've Already Stepped on That Rake'
"The ERISA issues related to state-auto-IRAs are ... similar to 403(b) plans: how do you establish a payroll-based auto-IRA without causing the arrangement to be governed by ERISA? Like 403(b)s, there is a regulatory safe harbor to prevent the application of ERISA. But, like 403(b)s, the safe harbor was not exactly designed with thee current state of affairs in mind.... Unlike participant investments in 401(k) plans which enjoy extensive securities law exemptions, providing investments and investment advice to individual related to their IRA investments enjoy no such exemptions. Attention needs to be paid to such matters within the SEC's and FINRAs purview, such as suitability, pooling of assets, the nature of asset allocation models, and other like-regulated matters." (Business of Benefits)
A Checklist for IRA Rollovers
"Remember to account for aftertax money in the plan, plan loans, life insurance, spousal consent, and more as part of the transaction considerations.... Taking your distribution in cash seems to be a trigger for catastrophe -- the participant or a family member suffers serious medical problems, a building burns down, or a typhoon sweeps through. It is very easy to miss the 60-day deadline. Avoid the risk by using a direct rollover instead!" (Natalie Choate, in Morningstar)
My IRA Custodian Won't Let Me Do What?!
"IRA custodians and employer plans can sometimes limit your options. One reason they might do this is to make it easier for them to manage and process your transactions.... Stretch IRAs and spousal rollovers are basic IRA planning options. Make sure your custodian allows them. It is easy to move your funds during your lifetime; it may be difficult or impossible for your beneficiaries to accomplish a move after your death." (Slott Report)
Five Facts About the Current Retirement Market
"Americans have an estimated $24.2 trillion in retirement assets ... IRAs make up the largest single share of the retirement market with an estimated $7.3 trillion ... An estimated $324 billion was rolled from plans to IRAs in 2013 ... There are more than 600,000 people with $1 million in an IRA ... More than 300 people are thought to hold more than $25 million in IRAs." (Slott Report)
NYC Public Advocate Pushes Private Sector Plan
"It's no longer just states that are looking at the notion of expanding private sector retirement plan coverage. New York City Public Advocate Letitia James on Feb. 26 introduced legislation creating a commission of experts to study the establishment of a pension fund for private sector workers in New York City. The 11-member advisory board would have a year to present a report to the mayor and other elected officials about the feasibility of a centrally pooled retirement fund, and to provide recommendations on how such a fund would be structured and managed." (American Society of Pension Professionals & Actuaries [ASPPA])
[Guidance Overview] IRS Publication 4587: Payroll Deduction IRAs for Small Businesses (PDF)
8 pages. "A payroll deduction individual retirement account (IRA) is an easy way for businesses to give employees an opportunity to save for retirement. The employer sets up the payroll deduction IRA program with a bank, insurance company or other financial institution, and then the employees choose whether to participate and if so, how much they want deducted from their paychecks and deposited into the IRA. Employees may also have a choice of investments depending on the IRA provider.... A payroll deduction IRA program is easy to set up and operate." [Dated Oct. 2014; published online Feb. 27, 2015.] (Internal Revenue Service [IRS])
Fidelity to Match a Percentage of IRA Contributions for Some New Depositors
"Fidelity's matching program will last for three years, and it's limited to certain customers. Those who transfer a Roth, traditional or rollover IRA to Fidelity with a balance of at least $10,000 and register for the program will get the match. The amount of the match will depend on how much money an investor is bringing to Fidelity. Someone transferring $10,000 would get a match worth 1 per cent of their annual contributions. The percentage rises for people bringing more money: Someone transferring $500,000 would get a 10 per cent match on new contributions." (Brandon Sun)
Traditional and Roth Individual Retirement Accounts (IRAs): A Primer (PDF)
"This report explains the eligibility requirements, contribution limits, tax deductibility of contributions, and rules for withdrawing funds from the accounts. It also describes the Saver's Credit and provisions enacted after the Gulf of Mexico hurricanes in 2005 and the Midwestern storms in 2008 to exempt distributions to those affected by the disasters from the 10% early withdrawal penalty." [CRS Report RL34397, Feb. 12, 2015] (Congressional Research Service [CRS])
The Problem with Naming a Trust as the Beneficiary of an Annuity, and Using a Beneficiary Designation with Restricted Payout Form as an Alternative
"In the case of retirement accounts, the IRS and Treasury have created the 'see-through' trust rules that allow post-death required minimum distributions to occur based on the life expectancy of the underlying trust beneficiaries. However, in the case of annuities, no see-through trust rules exist, compelling trusts to instead liquidate inherited annuities over the far-less-favorable 5-year rule! As a result, consideration of whether to use a trust as the beneficiary of an annuity must weigh the adverse tax consequences against the favorable/desired non-tax provisions of the trust." (Michael Kitces in Nerd's Eye View)
Conflicts Proposal Sent to OMB, Many Investment Roles May Be Affected
"Contrary to widespread rhetoric, it is important to keep in mind that this rule will not only affect broker-dealers; it could impact any RIA affiliated with a broker-dealer or retirement plan service provider. Even fee-only RIAs may have to adapt their business models -- particularly to the extent if they serve as or rely upon solicitors for investment managers.... It is also expected that the DOL will seek to modify its position on IRA rollovers.... Given that the SEC and FINRA have already thrown their hats into the IRA rollover arena, we anticipate that it will not get any easier to assist plan participants in this regard." (Pension Resource Institute, via LinkedIn)
[Opinion] Pension Rights Center Applauds DOL's Release to OMB of Proposed Rule on Conflicted Investment Advice
"[We] hope and expect that, after five years of deliberations, the [DOL] has made much-needed and sensible improvements to ensure that those who give professional investment advice about retirement assets will do so in the employees' best interests. With 401(k) plans and IRAs increasingly the only retirement plan option available to workers, there is a dire need to ensure that all professional advisers and brokers who recommend investments for retirement money put their clients' interests first." (Pension Rights Center)
[Opinion] Using PTEs to Define a Fiduciary Under ERISA: Threading the Needle with Rope (PDF)
11 pages. "The [DOL] has indicated that it intends to address concerns with its proposal to broaden the definition of fiduciary 'investment advice' by utilizing prohibited transaction exemptions (PTEs) to carve back the rule so that it is appropriate in scope.... [The authors] are very concerned that the DOL -- in the name of investor protection -- is actually taking an approach that will harm the very people it is trying to protect. By definition, a regulatory regime that prohibits every transaction unless it is specifically allowed through a PTE may unnecessarily eliminate choices and make it difficult to find new ways to better serve investors. Despite best efforts by the DOL, we remain concerned that no matter how well-crafted the PTEs are, they will prove to be insufficiently narrow and inflexible to accommodate the many beneficial ways that financial professionals serve the needs of investors today and in the future.... This paper provides several examples where the exemptive process has failed to appropriately limit expansive rules." (U.S. Chamber of Commerce)
[Opinion] White House Rule Could Block 401(k) Participants from Advice
"Today the White House launched an attack on advisors and so-called 'hidden fees' and 'backdoor payments' by moving forward with a regulation that has its own hidden backdoor effect -- keeping many Americans from working with the trusted advisor of their choice, even in the critical decision regarding rollovers from their 401(k) and 403(b) plans.... 'The best way to address concerns about 'hidden' fees is through better transparency, not by blocking 401(k) participants from working with the advisor of their choice,' [said Brian Graff, Executive Director of the National Association of Plan Advisors (NAPA)]. 'If the administration moves forward with this proposed rule, American savers will be forced to pay out-of-pocket for their financial advice, or be limited to financial products with identical fees.' " (American Society of Pension Professionals & Actuaries [ASPPA])
Obama Administration to Move Fiduciary Rule Forward
"President Barack Obama is expected to announce the Department of Labor's proposed fiduciary rule is officially under review at the Office of Budget Management on Monday afternoon.... Monday's announcement by the President marks the first step to re-proposing the DOL's rule, which the agency first put forward in 2010. Agencies must first submit to a review by the OMB, a process that could prove lengthy. In the first six months of 2013, it took the OMB an average of 140 days to complete a review ... While no one is certain of what the new rule will look like until after OMB review, it's expected to expand the definition of a fiduciary to anyone who provides advice to retirement plans, including individual retirement accounts and 401(k)s." (
[Guidance Overview] DOL Publishes Materials on Upcoming Fiduciary Rule
The web page, entitled Are Your Retirement Savings at Risk?, includes a video entitled Conflicts of Interest and links to other retirement plan-related materials, including [1] FAQs: Conflicts of Interest Rulemaking; [2] Fact Sheet: Updating our Retirement Protections; and [3] A Look at 401(k) Plan Fees. Excerpt: "With 401(k)s and IRAs, individual investors are more responsible than ever for making important investment decisions, and most don't have the training they need. That means investors are increasingly reliant on the advice they receive. Ideally, your adviser will have your best interest at heart -- but that's not always the case." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
The Effects of Conflicted Investment Advice on Retirement Savings (PDF)
"Savers receiving conflicted advice earn returns roughly 1 percentage point lower each year ... An estimated $1.7 trillion of IRA assets are invested in products that generally provide payments that generate conflicts of interest. Thus, we estimate the aggregate annual cost of conflicted advice is about $17 billion each year. A retiree who receives conflicted advice when rolling over a 401(k) balance to an IRA at retirement will lose an estimated 12 percent of the value of his or her savings if drawn down over 30 years. If a retiree receiving conflicted advice takes withdrawals at the rate possible absent conflicted advice, his or her savings would run out more than 5 years earlier. The average IRA rollover for individuals 55 to 64 in 2012 was more than $100,000; losing 12 percent from conflicted advice has the same effect on feasible future withdrawals as if $12,000 [were] lost in the transfer." (White House Council of Economic Advisors)
When NOT to Convert to a Roth IRA
"Ultimately the decision of whether to bequest a Roth or traditional IRA should be driven by a comparison of the original IRA owner's marginal tax rate and the expected marginal tax rate of the beneficiary in the future. If the beneficiary's tax rates will be higher, it's better for the current IRA owner to go ahead and convert the IRA, paying the taxes now at current rates and leaving the higher-income beneficiary a tax-free account. But if the beneficiary's tax rates will be lower -- for any number of reasons -- then the best thing a wealthy IRA owner can do is leave a traditional IRA, and let the beneficiary pay the taxes at his own lower tax rate." (On Wall Street)
[Opinion] MyRA or the Highway?
"[T]he MyRA has several significant drawbacks: Because the MyRA only invests in government debt (bonds), it is not the wisest choice for workers who have decades before retirement. The MyRA is only available to workers whose employers are set up to make automatic payroll deductions. The MyRA account is limited to 30 years or a $15,000 balance, at which time the account must be rolled over into a private IRA." (National Center for Policy Analysis)
In the FY2016 Treasury Greenbook: Proposals for Eliminating Stretch IRAs, Repealing NUA, and the $3.4M Retirement Account Cap
"Every year, the proposed changes to the tax laws encapsulated in the President's budget request for the Federal Government are recorded in the Treasury Greenbook, which is then taken under advisement by Congress to create its own budget resolution.... While some tax proposals in the Greenbook are relatively minor, or pertain to issues not directly relevant to our work as financial planners, this year's FY2016 budget request had several proposals that would represent major changes in the world of planning for retirement accounts, both during clients' lives and after they pass away." (Michael Kitces in Nerd's Eye View)
A Plan Participant's Checklist for Leaving Employment: Consider All Angles Before Selecting 'Rollover to IRA'
"Usually, but not always, the best course is to roll those benefits over to an IRA. For most people, the IRA offers wider investment choices, potentially lower expenses, and better post-death options for beneficiaries than they can get in their qualified plan. But stop, look, and listen: You need to consider all angles of this particular retirement plan and this individual, plus all applicable tax considerations, before you press that 'rollover to IRA' button." (Morningstar Advisor)
Inheriting a Previously-Inherited IRA: A Most Confusing Scenario
"Inherited IRA accounts are becoming more common, and advisors have learned the differences between the options a spouse has versus the options available to a non-spouse who inherits a retirement account. But do you know how to treat an IRA that was inherited from someone who inherited it from someone else? This is where the rules really get complex." (Morningstar Advisor)
Eliminating Small RMDs and Killing the 'Backdoor Roth' -- Key Retirement Proposals Under the Administration's FY2016 Budget
"While the tax proposals in this year's budget span a wide range of categories and topics, the proposed retirement changes are significant, and include some good, some bad, and some that are downright ugly. This [article reviews] some of the good (eliminating RMDs for those with less than $100,000 of retirement assets and allowing inherited IRA rollovers for non-spouse beneficiaries) and the bad (Roth crackdowns including no more backdoor Roth contributions and new Roth RMDs after age 70-1/2)." (Michael Kitces in Nerd's Eye View)
[Opinion] Five Ways to Improve the President's Retirement Initiative
"Obama's proposal is a good start, but with a few tweaks by either the federal government or the states implementing these programs, it could be even better. [1] Auto escalation.... [2] Removal of the income limit on Roth IRA contributions.... [3] Consider mandating auto enrollment in 401(k) plans, with an employee opt-out.... [4] Limiting access to account balances except in emergencies.... [5] Higher IRA contribution limits." (Scott Cooley, in Morningstar)
Bill Introduced to Make IRA Charitable Distributions Permanent
"H.R. 637, legislation that would make permanent the IRA qualified charitable distribution (QCD) option, has been approved by the House Ways and Means Committee. It will now advance to the House floor for debate and an expected vote.... This option was extended only for the 2014 tax year by the Tax Increase Prevention Act of 2014 (H.R. 5771), which was enacted in December 2014." (Ascensus)
President Obama's 2016 Budget Takes Aim at Your Retirement Savings
"[T]his year's budget featured over a dozen provisions that, if they were to become law, could directly impact your retirement savings. [These include:] Limit Roth conversions to pre-tax Dollars... 'Harmonize' the RMD rules for Roth IRAs with the RMD rules for other retirement accounts... Eliminate RMDs if your total savings in tax-favored retirement accounts is $100,000 or less... Create a 28% maximum tax benefit for contributions to retirement accounts... Establish a 'Cap' on retirement savings prohibiting additional contributions... Mandatory 5-year rule for non-spouse beneficiaries... Require retirement plans to allow participation from long-term part-time workers... Mandatory auto-enrollment IRAs for certain small businesses." (Slott Report)
Overview of Retirement Savings Provisions in 2016 Proposed Federal Budget
"[This article] is a general overview of the budget items that would, if enacted, have an impact on tax-preferred savings vehicles, including IRAs and employer-sponsored retirement plans. These and other provisions of the administration's 2016 budget are only proposals at this time. It is yet to be seen if any of the proposals find their way into legislation." (Ascensus)
[Opinion] President's 2016 Budget Sends Mixed Messages on Retirement Planning
"[W]hat is surprising about President Obama's Fiscal Year 2016 Budget is the lack of a cohesive position on retirement planning.... [T]he 2016 Budget includes language supporting the enhancement and protection of Social Security retirement benefits, broader retirement plan coverage, and increased savings opportunities, but at the same time takes aim at limiting savings opportunities through IRAs, Roth IRAs, and qualified plans, such as your employer-provided 401(k) plan." (Jamie Hopkins, in Forbes)
When Does the Roth IRA 5-Year Clock Begin?
"For anyone who did a Roth IRA conversion in 2010 -- and there were a lot of you because of the 'deal,' the two-year spread for the taxes due -- you have now fulfilled the 5-year waiting period for taking penalty-free distributions from your 2010 Roth conversion. You have also passed one test for taking a qualified distribution, the other being attainment of age 59-1/2, death, disability, or a distribution for a first-time home purchase. A qualified distribution means there is no tax or penalty on any funds withdrawn from your Roth IRA -- ever -- for the rest of your life." (Slott Report)
The Role of IRAs in U.S. Households' Saving for Retirement, 2014 (PDF)
"About half of traditional IRA-owning households indicated their IRAs contained rollovers from employer-sponsored retirement plans. Among households with rollovers in their traditional IRAs, 81 percent indicated they had rolled over the entire retirement account balance in their most recent rollover." [Editor's note: see also the Appendix of additional data on IRA ownership.] (Investment Company Institute [ICI])
[Guidance Overview] Will the Illinois Payroll Deduction IRA Plan Be Pre-empted by ERISA?
"[T]here is an open question whether a state law requiring employers to participate in a state-run payroll deduction IRA program is preempted by Section 514(a) of ERISA, which generally overrides state laws that 'relate' to employee benefit plans.... Section 95 of the Act requires the board to request in writing an opinion or ruling from the DOL regarding the applicability of ERISA.... [P]ayroll deduction IRAs established by employers under the program may fall under a regulatory safe harbor that applies to certain individual account plans in which an employer's participation is minimal.... There is a substantial question whether employers who establish payroll deduction IRAs in compliance with the Act can also satisfy the requirements of the Safe Harbor and thereby avoid the application of ERISA.... The Act contains some internal inconsistencies and ambiguities." (Steptoe & Johnson LLP)
When a Roth IRA May Be a Terrible Asset to Inherit
"If the beneficiary's tax rates are higher, it's clearly beneficial for the current IRA owner to go ahead and convert the IRA, paying the taxes now at current rates, and leaving the (high income) beneficiary a tax-free account. However, if the reality is that the beneficiary's tax rates are actually lower -- perhaps because the original IRA owner's wealth is being spread across multiple beneficiaries, because the beneficiary simply has less income and assets, or maybe just due to the fact that the beneficiary lives in a different state that has a lower tax rate -- then the best thing a (higher-income) IRA owner can do is simply to leave a traditional IRA to the beneficiary and let the beneficiary pay the taxes at his/her own lower tax rates!" (Michael Kitces in Nerd's Eye View)
Retirement Plans for Young People: Know Your Choices
"The first choice to consider is an employer-sponsored cash-or-deferred plan (such as a 401(k) plan) where the employer matches some or all of the employee's contribution.... The next best retirement plan for younger people is undoubtedly the Roth IRA.... The worst type of plan for the young person is the traditional IRA." (Morningstar)
[Official Guidance] Text of IRS 2014 Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs) (PDF)
62 pages. Revised January 13, 2015, for use in preparing 2014 returns. "What's New for 2014: Publication 590 split ... Modified AGI limit for traditional IRA contributions increased.... Modified AGI limit for Roth IRA contributions increased.... What's New for 2015: Modified AGI limit for traditional IRA contributions increased.... Modified AGI limit for Roth IRA contributions increased.... Application of one-rollover-per-year limitation.... Airline Payments." (Internal Revenue Service [IRS])
[Official Guidance] Text of IRS Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs), for Use in Preparing 2014 Returns (PDF)
60 pages. "Publication 590 has been split into two separate publications ... Publication 590-A covers contributions to traditional IRAs as well as Roth IRAs. This publication will include the rules for rollover and conversion contributions. Publication 590-B covers distributions from traditional IRAs as well as Roth IRAs. This publication will include the rules for required minimum distributions and IRA beneficiaries.... What's New for 2015: Application of one-rollover-per-year limitation." (Internal Revenue Service [IRS])
The Case For and Against Taking Your RMD Early in the Year
"Reasons to Consider Taking Your [2015] RMD Now: [1] You don't have to worry about the 50% penalty ... [2] Don't leave beneficiaries with a tight window ... [3] You can convert or rollover the remainder of the account ... Reasons to Wait Until Later This Year to Take Your RMD: [1] Giving up tax deferral ... [2] No [qualified charitable distribution] provision currently in place ... for 2015(.]" (Slott Report)
[Guidance Overview] Allocating Pretax and After-Tax Amounts to Multiple Destinations; Tracking After-Tax Amounts in Traditional IRAs (PDF)
"[IRS Notice 2014-54] presents a middle-of-the-road approach that incorporates Sections 72(e)(8) and 402(c)(2) and provides new planning opportunities for participants with after-tax amounts who want to arrange a multiple destination distribution.... When a 401(k) participant has after-tax dollars in his or her account, the plan administrator tracks the amounts and, upon distribution, reports them appropriately on Form 1099-R. But when there are after-tax amounts in a traditional individual retirement account (IRA), they are generally not tracked by the institution holding the IRA. Instead, the IRA owner is responsible for keeping track of after-tax amounts." (Pentegra Retirement Services)
Plan Sponsors Need to Take Advantage of Regulators' IRA Rollover Scrutiny (PDF)
"While financial institutions will bear the brunt of expanded regulatory scrutiny of IRAs, it is important that employer plan sponsors be aware of financial institution practices regarding these accounts. Having knowledge of current guidance about IRAs also can be of use when highly compensated employees in the plan seek direction from the benefits office on decisions about their outside retirement savings." (ERISAdiagnostics, Inc. via Thompson Pension Plan Fix-It Handbook)
IRA under SIMPLE Plan Held to Be Protected by State Anti-Garnishment Law
"The state anti-garnishment law would unquestionably protect a run-of-the-mill IRA. The creditor contended that this IRA was different, because; [1] it was the funding vehicle for a SIMPLE (IRC Section 408(p)); [2] SIMPLEs are employee benefit plans subject to ERISA; and [3] the state anti-garnishment law was therefore preempted by ERISA. The court agreed that the SIMPLE funded by the IRA was an ERISA-covered plan.... [T]he reasoning of VFS Financing is open to challenge, although its outcome -- the consistent application of a state anti-garnishment law to all IRAs, regardless of their origin -- has the effect of closing an apparent 'gap' in anti-alienation creditor protection for SEPs and SIMPLEs." [VFS Financing, Inc. v. Elias-Savion-Fox LLC, No. 12-Civ-2853 (S.D.N.Y. Dec. 1, 2014)] (Steptoe & Johnson LLP, via Lexology)
2015 Resolution: Avoid 60-Day Rollovers
"Should clients attempt a second rollover, the problem cannot be fixed. The IRS does not have the authority to help correct the situation. This could end an IRA, for example, if clients were moving their entire IRA balance to a new custodian or a new adviser. It can get worse. If clients do a second 60-day rollover, it's now not only taxable but an excess IRA contribution subject to a 6% penalty each year the ineligible rollover funds remain in the account." (InvestmentNews)
[Guidance Overview] Treasury Softly Launches myRA Program
"While certain employers (reportedly including the U.S. Office of Personnel Management) will formally participate in a pilot initiative, the myRA program apparently is open to any employer that will accommodate payroll direct deposit for employees who open an account. No formal action on the part of the employer appears required, except as necessary for the transmittal of payroll deductions to employees' myRA accounts. Even for employers participating in the pilot initiative, the program appears primarily employee-driven at this time." (Sutherland Asbill & Brennan LLP)
[Official Guidance] Text of IRS 2015 Draft Instructions for Forms 1099-R and 5498: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and IRA Contribution Information (PDF)
24 pages. "What's New: FATCA filing requirements of certain foreign financial institutions (FFIs). Beginning in 2014, an FFI with a chapter 4 requirement to report a cash value insurance contract or annuity contract that is a U.S. account held by a specified U.S. person with the FFI may satisfy this requirement by electing to report the account in a manner similar to that required under section 6047(d). Form 1099-R is to be used for such reporting. See Regulations section 1.1471-4(d)(5)(i)(B) for this election. Also see Regulations section 1.1471-4(d)(2)(iii)(A) for how a U.S. payor may satisfy its chapter 4 reporting requirements by reporting on Form(s) 1099." (Internal Revenue Service [IRS])
Seven Reasons to Beg Your Employer to Offer a Roth 401(k)
"[1] Tax-Free Withdrawals in Retirement ... [2] Income Tax Diversification ... [3] If You're In a Low Tax Bracket Right Now ... [4] You'll Probably Still Get the Employer Match ... [5] No Required Minimum Distributions ... [6] More Flexibility for Your Life in Retirement ... [7] Advance Protection From Widely Anticipated Income Tax Increases." (DailyFinance)
[Guidance Overview] 2014 Legislative and Regulatory Update (PDF)
49 presentation slides provide an overview of: [1] IRS and DOL guidance; [2] COLA limits and the Bipartisan Budget Act of 2013; [3] HATFA and pension smoothing; [4] Charitable donation of an IRA; [5] Ending of the SSA letter forwarding program; [6] Changes at IRS TE/GE; [7] IRS compliance tools; [8] Qualified Longevity Annuity Contract final regulations; [9] The myRA; [10] U.S. v. Windsor: impact on qualified plans; [11] FAB 2014-1: updated guidance on handling missing participants under a terminating DC plan; and [12] Form 5500 series. (McKay Hochman)
myRAs Are an ERISA-Free Zone
"Now that the federal government has officially rolled out the myRA retirement savings program, has it also left participating employers open to possible fiduciary liability? The answer is no -- employers who decide to help enroll workers in these new accounts need not fear marauding bands of fiduciary-violation-seeking plaintiffs' attorneys." (BenefitsPro)
[Guidance Overview] IRS Releases 2015 Form 5498 With Little Change
"The IRS has released the 2015 Form 5498, IRA Contribution Information. This form is used to report IRA contributions, rollovers, conversions, recharacterizations, fair market value, and certain other information. The only changes from the 2014 version of Form 5498 are year and deadline changes; no box or information changes appear in the updated form." (Ascensus)
Think Your Taxes Will Be Lower in Retirement?
"Since everyone would like to pay less income tax in retirement, the tax-free withdrawals from Roth IRAs are very attractive.... Certain tax years can prove optimal for a Roth conversion ... If you have both kinds of IRAs, you have the option to vary the amount and source of your IRA distributions in light of whether income tax rates have increased or decreased." (North Bay Business Journal)
[Official Guidance] IRS Employee Plans News, December 23, 2014: Rollovers of After-Tax Contributions in Retirement Plans
"The Service has received a number of questions following the issuance of Notice 2014-54. The following FAQs are provided to assist taxpayers in applying the notice. [1] Can I roll over just the after-tax amounts in my account to a Roth IRA and leave the remaining amounts in the plan (i.e., take a partial distribution of just the after-tax amounts)? No.... [2] I want to roll over my after-tax contributions to a Roth IRA and roll over earnings on my after-tax contributions to a traditional IRA. Can I do that? Yes...." (Internal Revenue Service [IRS])
The 2014 Charitable IRA Rollover: Who Might Benefit, and When Must Action Be Taken?
"On the surface, you may think it is a 'wash' if a taxpayer includes an RMD in income, and then deducts it after contributing the same amount to charity. But there are many instances in which this is not so. For example, some taxpayers do not itemize; some are subject to limitations on itemized deductions because they have high income; and some find that increased income causes other adverse tax consequences that cannot be wiped out by a charitable contribution (such as a higher percentage of social security benefits becoming taxable, and a higher threshold for deduction of medical expenses)." (Holland & Knight)
Comerica Chosen as myRA Custodian
"Comerica will serve as custodian for the Treasury Department's upcoming 'myRA' retirement savings bond program, which is being rolled out in phases.... Comerica was chosen through a competitive bid process managed by Treasury's Bureau of the Fiscal Service. Comerica and its partner, Fidelity National Information Services, will administer the accounts, a Treasury spokesman said." (Pensions & Investments)

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