Headlines about "457 plans"

Gathered from the web by the editors at BenefitsLink.com.
Section 457A Plan Sponsors Face June 30 Deferred Compensation Vesting Decision
Excerpt: "Sponsors of nonqualified deferred compensation (NQDC) plans subject to Section 457A must act by June 30 to take advantage of a transition rule for certain NQDC amounts vesting after Dec. 31, 2008. When 457A applies, NQDC provided to US taxpayers employed by foreign companies is taxable at vesting -- or later in some cases, with even harsher results. Sponsors can soften the blow for some NQDC recipients by retroactively accelerating vesting to a date before Jan. 1, 2009. Employers opting to do so must amend plans by June 30 and apply the changes consistently to all employees in similar plans." (Mercer LLC)

[Official Guidance] Text of 'IRS Retirement News for Employers' -- Spring 2009 Edition (PDF)
14 pages. Excerpt: "The EP Team Audit (Large Case Program) web pages have been updated to include: EPTA Trends and Tips (now organized according to plan type): Common Trends Across All Plan Types; Multiemployer Plan Trends; 401(k) Plan Trends; Defined Benefit Plan Trends; 403(b) Tax-Sheltered Annuity Plan, 457 Plan and Governmental Plan Trends; 'EPTA Trends and Tips' includes links to videos on the EPTA program and on finding, fixing and avoiding plan errors; Internal Controls Questionnaire - Examples of questions asked by EP examiners to understand the system procedures and internal controls; Taxpayer Documentation Guide - This guide, developed by EPTA agents and outside practitioners, provides a comprehensive list of documents that need to be made available for examination." (Internal Revenue Service)

[Guidance Overview] IRS Revision of Self-Correction Procedures for Nonqualified Deferred Compensation Plans (PDF)
4 pages. Excerpt: "These correction procedures are available to plan sponsors of and participants in nonqualified defined benefit or defined contribution plans that provide for the deferral of compensation (section 409A plans), including section 457(f) plans." (Prudential Retirement)

[Guidance Overview] Final Guidance on Automatic Enrollment Plan Designs (PDF)
7 pages. Excerpt: "These developments affect sponsors of 401(k) plans, 403(b) plans, and governmental section 457(b) plans. Background and summary: The Pension Protection Act of 2006 (PPA) included provisions to encourage sponsors of 401(k) plans, 403(b) plans, and governmental section 457(b) plans to adopt automatic enrollment plan designs. These provisions included the creation of: Eligible Automatic Contribution Arrangements (EACAs), to permit the penalty-free distribution of 'accidental' automatic deferrals and provide a six-month period to distribute excess contributions and excess aggregate contributions without imposition of the 10% excise tax; and Qualified Automatic Contribution Arrangements (QACAs), to provide a safe harbor plan design that exempts plans from certain nondiscrimination tests." (Prudential Retirement)

NAGDCA 2009 Survey of Defined Contribution Plans
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators)

[Guidance Overview] IRS Interim Guidance on Certain Nonqualified Deferred Compensation Programs
Excerpt: "Last fall, the Emergency Economic Stabilization Act, also known as the Bailout Bill, became law. Among other things, it closed what some viewed as loophole in Code Section 409A by providing for similar tax penalties for tax indifferent parties. In this article, we review the IRS's first guidance under new Code Section 457A." (JPMorgan Chase & Co.)

[Guidance Overview] Worker, Retiree, and Employer Recovery Act Provision of Relief for Defined Contribution Plans (PDF)
4 pages. Excerpt: "This new law applies to sponsors of and participants in qualified defined benefit and defined contribution plans, including multiemployer plans, governmental plans, and church plans that do not elect to be covered by ERISA ('non-electing church plans'). It also applies to ERISA and Non-ERISA 403(b) plans and governmental section 457(b) plans." (Prudential Retirement)

[Guidance Overview] Bringing Elective Deferral Plans Into Compliance with Final 401(k) Auto-Enrollment Regulations
Excerpt: "Given the current economic climate it is unlikely there will be a rush to implement new QACAs or EACAs for the 2010 plan year. However, the issuance of final regulations will provide greater certainty for plan sponsors choosing to do so. For QACAs already in existence, plan sponsors and administrator will want to bring the features in line with the final regulations as soon as possible given the retroactive effective date. In particular, they will want to: . . . ." (Deloitte)

[Guidance Overview] IRS Issues Final Rules on Automatic Contribution Arrangements
Excerpt: "In the final regulations, the IRS addressed a question on whether employers should start rehired employees subject to qualified automatic contribution arrangements at the deferral percentage at which they were deferring when they terminated, or at the minimum deferral percentage under the arrangement. The IRS said that if the employee has been terminated for one year or more, then the plan sponsor can automatically enroll the employee in the plan at the minimum deferral percentage under the arrangement upon rehire." (PLANSPONSOR.com; free registration required)

[Official Guidance] Text of Final IRS Regulations on Automatic Contribution Arrangements (Federal Register reprint) (PDF)
15 pages. Revises the proposed regulations issued on November 8, 2007. Rules applicable to Qualified Automatic Contribution Arrangements apply to plan years beginning on or after January 1, 2008. Rules applicable to Eligible Automatic Contribution Arrangements apply to plan years beginning on or after January 1, 2010. Makes several changes; also takes into account the Worker, Retiree and Employee Recovery Act of 2008 (WRERA). (Internal Revenue Service)

[Official Guidance] Final IRS Regs on Automatic Contribution Arrangements Under Section 401(k) and Other Eligible Retirement Plans (PDF)
61 page advance copy; revises the proposed regulations issued on November 8, 2007. Rules applicable to Qualified Automatic Contribution Arrangements apply to plan years beginning on or after January 1, 2008. Rules applicable to Eligible Automatic Contribution Arrangements apply to plan years beginning on or after January 1, 2010. Makes several changes; also takes into account the Worker, Retiree and Employee Recovery Act of 2008 (WRERA). Scheduled for publication in the Federal Register on February 24, 2009. (Internal Revenue Service)

401(k) Participants May See Plain-English Summary Prospectus Under New SEC Rule
Excerpt: "Mutual funds may give investors a plain-English summary prospectus, rather than a full prospectus, under a final SEC rule effective March 31, 2009. The rule ultimately may change the form and content of fund information passed through to participants in many 401(k), 403(b) and 457 plans. Once summary prospectuses become available, plan sponsors will need to re-evaluate 'pass-through' disclosure obligations under ERISA." (Mercer LLC)

[Guidance Overview] New IRC Section 457A: Unanswered Questions Abound
Excerpt: "New IRC ? 457A imposes more restrictive income timing rules on nonqualified deferred compensation from 'tax indifferent' entities, effective for amounts deferred that are attributable to services rendered after December 31, 2008. This article discusses some of the issues that employers face as they try to understand how IRC ? 457A will apply to their own particular compensation arrangements." (Deloitte LLP via BenefitsLink.com)

[Guidance Overview] IRS Guidance on Section 457A Foreign Deferred Compensation Rules (PDF)
5 pages. Excerpt: "New Code section 457A, which imposes substantial restrictions on the use of nonqualified deferred compensation arrangements sponsored by certain foreign entities, was included as part of the financial bailout legislation (Pub. L. No. 110-343) enacted last fall. . . . Under the new provision, compensation deferred under a nonqualified plan of certain nonqualified foreign entities is taxed at the time of vesting ? i.e., the deferred amounts are includable in income when such amounts are no longer subject to a 'substantial risk of forfeiture' ? even if they are not yet payable. The Treasury Department and Internal Revenue Service recently released Notice 2009-8 (the 'Notice,' Jan. 26 IRS Bulletin), which provides interim guidance interpreting Code section 457A." (Groom Law Group)

[Guidance Overview] IRS's Interim Guidance on Taxation of Deferred Compensation Maintained by Certain Partnerships and Foreign Corporations (PDF)
6 pages. Excerpt: "This month, the IRS issued Notice 2009-8 as interim guidance on Section 457A of the Internal Revenue Code ('457A'), which imposes immediate taxation, and in certain circumstances a 20-percent penalty plus interest, on deferred compensation arrangements maintained by certain partnerships and foreign corporations. The interim guidance basically elaborates on 457A's statutory scheme, in much the same manner as IRS Notice 2005-1 established guidelines for interpreting Code Section 409A ('409A') after its enactment. Taxpayers may rely on the interim 457A guidance until the IRS issues further guidance, with the IRS promising not to expand 457A's scope other than prospectively after future guidance." (Paul, Hastings, Janofsky & Walker LLP)

[Guidance Overview] Offshore Hedge Funds, and Others, in the Cross-Hairs as IRS Issues Interim Guidance Implementing Code ? 457A
Excerpt: "Section 801(a) of the Tax Extenders and Alternative Minimum Tax Relief Act of 20081 added to the Internal Revenue Code (the 'Code') new Section 457A. Code ? 457A changes the tax rules that apply to deferred compensation arrangements maintained by certain foreign corporations and domestic and foreign partnerships. On January 9, 2009, the IRS issued Notice 2009-8, which provides interim rules implementing Code ? 457A and invites comments on certain aspects of the new law. This client advisory explains the key features of Notice 2009-8." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)

[Guidance Overview] Initial Guidance and Limited Transition Relief for Nonqualified Deferred Compensation Plans Subject to New Section 457A
Excerpt: "The U.S. Treasury Department and the IRS anticipate issuing additional guidance under Section 457A and have requested comments regarding Notice 2009-08 and Section 457A. Until further guidance is issued, taxpayers may rely on this guidance for purposes of Section 457A. Any further guidance that would expand the coverage of Section 457A will be prospective." (McDermott Will & Emery)

IRS Publishes Interim Guidance on ? 457A
Excerpt: "In Notice 2009-8, the Internal Revenue Service has published guidance on the application of ? 457A to nonqualified deferred compensation plans of nonqualified entities. The IRS notes that Section 457A applies to amounts deferred that are attributable to services performed after December 31, 2008." (PLANSPONSOR.com; free registration required)

[Official Guidance] Text of Notice 2009-08: Guidance on 457A; Deferred Compensation by Foreign Corporations and Partnerships (PDF)
38 pages. Excerpt: "Notice 2009-08 [which is scheduled to appear in IRB 2009-4, dated January 26, 2009] provides interim guidance on recently enacted ? 457A which became effective January 1, 2009. Section 457A generally provides that compensation deferred under a nonqualified deferred compensation plan of a nonqualified entity is includible in gross income when there is no substantial risk of forfeiture of the right to such compensation. For this purpose, the term nonqualified deferred compensation plan has the meaning provided under ? 409A(d), subject to some modifications, and the term nonqualified entity means (a) any foreign corporation unless substantially all of its income is (i) effectively connected with the conduct of a trade or business in the U.S., or (ii) subject to a comprehensive foreign income tax, and (b) any partnership unless substantially all of its income is allocated to persons other than (i) foreign persons with respect to whom such income is not subject to a comprehensive foreign income tax, and (ii) tax-exempt organizations. The guidance focuses on identifying which plans are covered by ? 457A, including identifying the plan sponsor and whether the sponsor is a nonqualified entity." (Internal Revenue Service)

IRS Semiannual Regulatory Agenda Includes Further Guidance on 409A
Excerpt: "The IRS has released its semiannual regulatory agenda for Fall 2008, which includes pension and benefit regulations that are currently under development or review." (Wolters Kluwer)

[Guidance Overview] New 409A Guidance Issued and 457A Guidance Expected Shortly
Excerpt: "Employers must ensure that all of their compensatory arrangements are reviewed for 409A compliance and amended as necessary prior to December 31, 2008." (McDermott Will & Emery)

[Guidance Overview] 2008 Year-End Compliance Reminders - for Defined Contribution Plans Not Subject to ERISA (PDF)
2 pages. Excerpt: "This information applies to defined contribution plans, such as qualified governmental plans (including 'grandfathered' 401(k) plans), qualified church plans that do not elect to be covered by ERISA ('non-electing church plans'), 403(b) programs, and section 457 plans that are not subject to Title I of ERISA. Every year, defined contribution plan sponsors should make sure their plans meet certain compliance requirements, including those listed . . . . This publication identifies the materials you need to review and will help you prepare for year-end." (Prudential Retirement)

[Guidance Overview] 2008 Year-End Benefits Planning
5 pages. Excerpt: "Section 409A Compliance . . . Special Rules for 457(f) Plans . . . Qualified Retirement Plans . . . 403(b) Plans . . . Proposed Cafeteria Plan Regulations . . . Medicare Secondary Payer Reporting Requirements" (von Briesen & Roper)

[Guidance Overview] 2008 Year-End Plan Sponsor 'To Do' Lists (PDF)
22 pages; at pages 1-14; bravo! Excerpt: "Attached are seven 'to do' lists that may require you to take action before the end of 2008 or in early 2009. Many of the action items are a result of the Pension Protection Act of 2006 (the 'PPA'). For your convenience we have broken the 'to do' lists into the following seven categories: All Qualified Plans; Section 401(k) Plans; Defined Contribution Plans (other than Section 401(k) Plans); Defined Benefit Plans; Section 403(b) and Section 457(b) Plans; Health and Welfare Plans; [and] Executive Compensation." (Snell & Wilmer)

The IRS Pays a Call on Public Retirement Plans (PDF)
2 pages. Excerpt: "To better understand the difficulties these plans face complying with federal tax requirements, the IRS is going to survey a select group, fewer than 40 government plans. A more comprehensive survey is scheduled to go out later this fall to approximately 200 plans, based on results obtained in the pilot survey. A public report is to be issued by year end. Survey respondents are being assured that any noncompliance issues identified will not result in an IRS examination; instead, respondents will be given directions on how to correct any issues that exist." (Milliman)

[Guidance Overview] Year-End Deadlines for Certain Tax-Exempt Plan Sponsors (PDF)
4 pages. Excerpt: "[Dec.] 31, 2008, is an important date for many sponsors of Internal Revenue Code (IRC) Section 403(b) programs and sponsors of nonqualified deferred compensation arrangements under IRC Section 457(f). With the year-end fast approaching, now is the time for sponsors of IRC Section 403(b) programs and IRC Section 457(f) plans to ensure that their programs and plans are in compliance." (Drinker Biddle & Reath LLP)

[Official Guidance] Text of IRS Notice 2008-102: Pension Plan Limitations for 2009 (Same as October 16 IRS News Release) (PDF)
Appears to be word-for-word identical to the IRS News Release IR-2008-18 of October 16, 2008, which sets for various cost-of-living-adjusted pension plan limitations for 2009. Scheduled for publication in Internal Revenue Bulletin 2008-45, to be dated November 10, 2008. (Internal Revenue Service)

[Guidance Overview] New Section 457A Limits Tax Deferral for Certain Compensation Paid by Tax Indifferent Parties
Excerpt: "The new rules apply in addition to the requirements of existing Code Section 409A and any other provisions with respect to nonqualified deferred compensation, and are effective for amounts deferred that are attributable to services performed after December 31, 2008. For existing deferrals, the deferral amounts will be includible in the later of a) the year 2017, or b) the tax year in which no substantial risk of forfeiture exists concerning the rights to the deferred compensation." (Perkins Coie LLP)

[Guidance Overview] Chart of 415, Etc., Limits Updated for News Release IR-2008-118
The chart of maximum limits subject to inflation indexing at Carol V. Calhoun's employee benefits site has now been amended to include the newly announced 2009 limits. Among other things, the chart shows limits under sections 415, 403(b), 401(k), and 457, as well as the Social Security wage base and Social Security and Medicare tax rates, for 1996-2009. (Calhoun Law Group, P.C.)

[Official Guidance] Text of IRS-Released Pension Plan Limitations for 2009 (PDF)
3 pages. Excerpt: "Effective January 1, 2009, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) is increased from $185,000 to $195,000. . . . The limitation for defined contribution plans under Section 415(c)(1)(A) is increased from $46,000 to $49,000. . . . The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $15,500 to $16,500. The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $230,000 to $245,000." (Internal Revenue Service)

[Guidance Overview] Deferred Compensation Provisions to Help Fund Bailout - the Emergency Economic Stabilization Act of 2008
Excerpt: "In an effort to make the bailout package more palatable for reluctant House Republicans, on October 1, 2008, the Senate added provisions that would extend a number of the credits that expired at the end of 2007 or are scheduled to expire at the end of 2008. In addition to these so-called sweeteners, the Senate included the proposal to currently tax the deferred compensation from certain tax indifferent parties." (Pepper Hamilton LLP)

[Guidance Overview] Summary of Amendments and Due Dates for Defined Contribution Plans, 9/18/2008 (PDF)
6 pages. The chart also includes 457(b) and 403(b) plans and covers EGTRRA to the HEART Act. (Fort William LLC)

[Guidance Overview] IRS Examples of Excluding Recurring Part-Year Compensation in 457 and 409A Deferred Comp Rules
Excerpt: "The possibility of exceeding the 457 and 409A compensation limits occurs when nine or ten months of compensation is paid over a 12-month period and extends into another tax year." (Wolters Kluwer)

[Official Guidance] Text of IRS 2008-2009 Priority Guidance Plan, Including Reg Projects for Retirement Benefits, Executive Comp, Healthcare and Other Benefits (PDF)
31 pages; dated September 10, 2008. (Internal Revenue Service)

[Guidance Overview] IRS Carves Out from Code Sections 457(f) & 409A Certain Arrangements by Public School and Other Employees to Have Salary Paid over 12 Months
Excerpt: "Under a common arrangement, public school and other employees who provide services during only a portion of the year can elect to be paid ratably over 12 months. This 'election to defer' payment can trigger the unwanted application of IRC § 457(f) which governs certain deferred compensation plans of tax-exempt entities and state and local governments, and IRC § 409A which otherwise governs amounts deferred under nonqualified deferred compensation plans. IRS recently issued guidance to preclude the unwanted application of IRC §§ 457(f) & 409A to these and other similar arrangements. IRS Notice 2008-62." (Deloitte)

[Official Guidance] IRS 'Employee Plan News' Discusses Notice 2008-62 Anticipating 457(f) Regs as Applied to Certain School Employees (PDF)
Excerpt: "The use of a 12-month pay period that spans two calendar years for employees that actually only work for 9 or 10 months results in compensation earned in one year being deferred to a second year. [Notice 2008-62, issued in early July,] establishes criteria which, if met, excludes arrangements in which school employees are compensated on a 12-month pay period in lieu of the 9 or 10-month actual work period from being considered as deferred compensation and, therefore, not subject to the rules under Code §§457(f) and 409A. In fact, the notice provides that this arrangement wouldn't result in deferred compensation as long as the employee earns less than $186,000." (Internal Revenue Service)

NAGDCA 2008 Survey of State and Local Government Defined Contribution Plans II
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The Overall Survey Results section, provided as a PDF, offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators, Inc.)

[Guidance Overview] Annualization Agreements Taken Out of 457 and 409A
Excerpt: "The tax planning probably wasn't what the IRS had in mind when the final Code §409A regulations listed income annualization agreements as possible 409A situations. An example will demonstrate what an annualization agreement is and why the IRS would view it as a deferral arrangement." (SunGard)

[Official Guidance] Aug. 14 Special Edition of IRS Employee Plans News: Announcing Rev. Proc. 2008-50, Including Survey to Practitioners (PDF)
2 pages. Excerpt: "[The] Self-Correction Program . . . has been expanded with respect to employers who discover failures in their plans and have begun the correction process. The time by which a plan sponsor substantially corrects a significant operational failure, and is thereby entitled to use SCP, has been liberalized . . . . [Excess annual additions in DC plans under section 415] will be corrected in accordance with the provisions of this revenue procedure . . . . Streamlined Voluntary Correction Program Application Procedures . . . have been significantly expanded to include the following failures: . . . " (Internal Revenue Service)

[Official Guidance] Text of Rev. Proc. 2008-50: Employee Plans Compliance Resolution System, Updating and Expanding Rev. Proc. 2006-27 (PDF)
179 pages; the document's table of contents does not include page numbers, but it is the version released to the public today. See pages 8 through 10 for a summary of the modifications being made to the previous version of EPCRS (Rev. Proc. 2006-27). Excerpt: "This revenue procedure updates the comprehensive system of correction programs for sponsors of retirement plans that are intended to satisfy the requirements of § 401(a), 403(a), 403(b), 408(k), or 408(p) . . . but that have not met these requirements for a period of time. . . . This revenue procedure modifies and supersedes Rev. Proc. 2006-27." (Internal Revenue Service)

[Opinion] Changes to Consider for Your Governmental 457(b) Plan in 2008
Excerpt: "If your public agency currently maintains an eligible deferred compensation plan pursuant to Code section 457(b), [Chang, Ruthenberg & Long recommend you consider the items listed on the target page], in order to comply with, or take advantage of, recent law changes." (Chang, Ruthenberg & Long PC)

[Guidance Overview] IRS's Correction Procedures for Certain Operational Failures by Nonqualified Deferred Compensation Plans (PDF)
4 pages. Excerpt: "These correction procedures are available to plan sponsors of and participants in nonqualified defined benefit or defined contribution plans that provide for the deferral of compensation (section 409A plans), including section 457(f) plans." (Prudential Retirement)

IRS Issues §457 Guidance on Teachers' Part-Year Compensation
Excerpt: "The Internal Revenue Service has issued a notice of the proposed treatment of recurring part-year compensation under §457(f) and §409A of the Internal Revenue Code." (PLANSPONSOR.com; free registration required)

[Official Guidance] Text of IRS Notice 2008-62: Nonapplication of 457(f) and 409A to Certain Recurring Part-Time Compensation Arrangements (PDF)
4 pages. Excerpt: "The [upcoming proposed section 457(f)] regulations to be proposed are expected to address certain types of arrangements involving recurring part-year compensation, including common arrangements involving public school employees who provide services during a 10- month school year and elect to be paid ratably over 12 months. It is expected that the regulations would provide that if certain conditions described below are satisfied, § 457(f) would not apply to such arrangements. It is also expected that a conforming change will be proposed for regulations under § 409A, so that § 409A also will not apply to such arrangements if such conditions are met." (Internal Revenue Service)

[Guidance Overview] A Comparative Look at 401(k), 403(b), and 457(b) Plans (PDF)
Pages 5-8 of 12 pages. (Milliman)

[Guidance Overview] PPA: IRS Provides Guidance on 2008 Distribution Rules (PDF)
Excerpt: "The Pension Protection Act of 2006 (PPA) includes several provisions relating to payments made from various types of pension plans that became effective for distributions made on or after January 1, 2008. On March 5, 2008, the IRS released Notice 2008-30, providing guidance regarding the following provisions: Rollovers to Roth IRAs; Payment of gap period income on excess deferrals; Qualified Optional Survivor Annuities (QOSAs); and Calculation of lump sum benefits in defined benefit plans." (Prudential's Pension Analyst)

Let's Make It Cool to Save
Excerpt: "A coalition of consumer advocates, public policy groups and academics wants to attack our country's dependence on debt by creating a national campaign much like the one used to curb smoking." (Michelle Singletary in the Washington Post; free registration required)

[Guidance Overview] Special Edition of IRS 'Employee Plan News': Overview of Governmental Plans Roundable Held 4/22/2008 (PDF)
Excerpt: "The roundtable was the first step in establishing a dialogue between the IRS and the governmental plans community in an effort to ensure that governmental entities understand the tax qualification requirements applicable to their plans and are aware of the tools and resources available to assist them in ensuring ongoing compliance. IRS representatives acknowledged that there is very little history examining governmental plans. They want to better understand the issues and barriers these plans face in attempting to satisfy tax qualification requirements." (Internal Revenue Service)

[Official Guidance] IRS Solicits Comments: Wages for FICA Purposes Arising from Deferrals and Payments Under Nonqualified Defered Compensation Plans (PDF)
1 page; June 2 deadline. The IRS is soliciting comments concerning an existing final regulation, 'Federal Insurance Contributions Act (FICA) Taxation of Amounts Under Employee Benefit Plans' (Sec. 31.3121(v)(2)-1). Excerpt: "This regulation provides guidance as to when amounts deferred under or paid from a nonqualified deferred compensation plan are taken into account as wages for purposes of the employment taxes imposed by the Federal Insurance Compensation Act (FICA). Current Actions: There is no change to this existing regulation. Type of Review: Extension of currently approved collection." (Internal Revenue Service)

457 Plan Sponsor of the Year - the State of Hawaii
Excerpt: "Participation in the State of Hawaii Deferred Compensation Plan stands at about 35%. That far exceeds the average 21.6% participation rate among state 457 plans, according to data from the National Association of Government Defined Contribution Administrators, Inc. (NAGDCA). Plan officials point to a major education push and a culture that highly values saving as explanations." (PLANSPONSOR.com; free registration required)

With Farm Bill postponed, Future of New Roth 457 Arrangements in 457 Plans Still Uncertain
Excerpt: "The Senate passed a 30-day extension on farm programs legislation, H.R. 2419, commonly known as the Farm Bill, until April 18, 2008. The bill includes a provision that would provide for Roth arrangements in 457 plans – but the future of these new arrangements is uncertain at this time." (ICMA-RC)

[Guidance Overview] IRS Guidance on Automatic Enrollment Plan Designs (PDF)
Excerpt: "These developments affect sponsors of 401(k) plans, 403(b) arrangements, and governmental section 457(b) plans." (Prudential Retirement)

Target-Date and Balanced Funds Are Main Default Options for Plans, But Which One Is Better?
Excerpt: "[During] the 48-year period from 1960 to 2007 . . . [t]he annualized return of the 60/40 balanced fund was 9.26% versus 9.59% for the target-date fund. " (Financial Planning)

Senate Passes Bill on Roth Arrangements in 457 Plans
Excerpt: "Differences between the House and Senate bills will have to be resolved in a conference, which is expected to take place early in 2008. The fact that the Roth 457 provision raises revenue for the Federal Treasury greatly increases its prospects for enactment in this or another bill." (ICMA-RC)

West Virginia Teachers Say They Can't Retire on Balances in Individual Account Plan
Excerpt: "Perry is among the more 19,000 teachers and school officials who rely on 401(k)-style accounts for their retirement. . . . [West Virginia state] officials estimate that the average such account contains less than $34,000. For the 1,100 account holders age 60 or older, only 23 have more than $100,000." (The Times West Virginian)

Fewer 401(k) Savers Would Be Facing Inadequate Nest Eggs if Told Necessary Contribution Rate (PDF)
4 pages. Excerpt: "What participants need is specific numbers on the percentage of their salary they need to save now to achieve their goal -- depending on when they start saving and how well they invest their money. For this purpose, we would like to discuss the concept of retirement sufficiency, which is defined as the nest egg that one needs to accumulate in order to maintain his or her pre-retirement standard of living after retirement." (James E. Turpin, MSPA, and Jane White; reprinted with permission from the ASPPA Journal)

[Guidance Overview] Final Rules for Nonqualified Defined Contribution Deferred Compensation Plans (PDF)
7 pages. Excerpt: "These rules apply to sponsors of and participants in nonqualified defined contribution plans, including section 457(f) plans. These rules do not apply to qualified plans (for example, 401(k) plans), section 403(b) arrangements, or section 457(b) plans." (Prudential Retirement)

Farm Bill Includes Provision for Governmental Roth 457 Plans
Excerpt: "A provision that would allow Governmental Roth 457 plans was included in the Senate Farm Bill approved on Dec. 14, 2007 as part of the Manager's Package of Amendments (Amendment 3855). The House did not move on the Senate version of the farm bill before the holiday recess and the two will have to reconcile the differences in a conference in early 2008." (ICMA-RC)

Updated: Congressional Research Service Fact Sheet on the Retirement Savings Tax Credit (PDF)
2 pages. Excerpt: "The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) authorized a non-refundable tax credit of up to $1,000 for eligible individuals who contribute to an IRA or an employer-sponsored retirement plan. The credit was first available in 2002, and as enacted in 2001, it would have expired after the 2006 tax year. The Pension Protection Act of 2006 (P.L. 109-280) made the retirement savings tax credit permanent." (U.S. Library of Congress, Congressional Research Service)

Changes in Employee Benefits You Should Be Thinking About as 2007 becomes 2008
Discusses change in minimum vesting requirement, single-sum distributions from defined benefit plans, more. Excerpt: "In our field of law, the wonder and anticipation of the holidays are always joined by two other year-end phenomena: effective dates and deadlines. This eBenefits Alert discusses the most significant changes in the employee benefits arena that we should be thinking about as 2007 becomes 2008. Links to more detailed discussions are included for some topics." (Gray Plant Mooty)

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