Retirement Plans Newsletter |
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| BULLETIN: September 8, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
[Official Guidance]
Text of IRS Notice 2009-65: Model Amendments for Adding Automatic Contribution Features to a 401(k) Plan (PDF)
9 pages. Excerpt: "This notice facilitates automatic enrollment by providing two sample plan amendments for sponsors, practitioners, and employers who want to add certain automatic contribution features to their § 401(k) plans. Sample Amendment 1 can be used to add an automatic contribution arrangement to a § 401(k) plan. Sample Amendment 2 can be used to add an eligible automatic contribution arrangement described in § 414(w) of the Internal Revenue Code (permitting 90-day withdrawals) to a § 401(k) plan." (Internal Revenue Service)
[Official Guidance]
Text of Rev. Rul. 2009-30: How Plans Can Increase 401(k) Contributions Automatically (PDF)
8 pages. Excerpt: "Default contributions to a profit-sharing plan will not fail to be considered elective contributions merely because they are made pursuant to an automatic contribution arrangement under which an eligible employee's default contribution percentage automatically increases in plan years after the first plan year of the eligible employee's participation in the automatic contribution arrangement based in part on increases in the eligible employee's plan compensation. . . . Default contributions under an automatic contribution arrangement will not fail to satisfy the qualified percentage requirement (including uniformity and minimum percentage requirements) relating to a qualified automatic contribution arrangement or the uniformity requirement relating to an eligible automatic contribution arrangement merely because default contributions are made pursuant to an arrangement under which the default contribution percentage for all eligible employees increases on a date other than the first day of a plan year." (Internal Revenue Service)
[Official Guidance]
Text of IRS Rev. Rul. 2009-32: Contributing to a 401(k) Plan the Value of Paid Time Off at Termination of Employment (PDF)
13 pages. Excerpt: "Under the facts presented, the amendments requiring or permitting certain contributions of the dollar equivalent of unused paid time off to a qualified profit-sharing plan do not cause the plan to fail to meet the qualification requirements of § 401(a), provided that the contributions satisfy the applicable requirements of §§ 401(a)(4) and 415(c) and, where applicable, §§ 401(k) and 401(a)(30). . . . Under the facts presented, assuming the applicable qualification requirements are satisfied, a participant does not include in gross income contributions of the dollar equivalent of unused paid time off to the profit sharing plan in accordance with § 402(a) until distributions are made to the participant from the plan and does not include in gross income an amount paid for the dollar equivalent of unused paid time off that is not contributed to the profit-sharing plan until the taxable year in which the amount is paid to the participant." (Internal Revenue Service)
[Official Guidance]
Text of IRS Rev. Rul. 2009-31: Contributing Dollar Value of Unused Vacation Time to a 401(k) Plan on Optional or Mandatory Basis (PDF)
9 pages. Excerpt: "Under the facts presented, the amendments requiring or permitting certain contributions of the dollar equivalent of unused paid time off to a qualified profit-sharing plan do not cause the plan to fail to meet the qualification requirements of § 401(a), provided that the contributions satisfy the applicable requirements of §§ 401(a)(4) and 415(c) and, where applicable, §§ 401(k) and 401(a)(30). . . . Under the facts presented, assuming the applicable qualification requirements are satisfied, a participant does not include in gross income contributions of the dollar equivalent of unused paid time off to the profitsharing plan in accordance with § 402(a) until distributions are made to the participant from the plan and does not include in gross income an amount paid for the dollar equivalent of unused paid time off that is not contributed to the profit-sharing plan until the taxable year in which the amount is paid to the participant." (Internal Revenue Service)
[Official Guidance]
Treasury Document: 'Using Your Income Tax Refund to Save By Buying U.S. Savings Bonds' (PDF)
5 pages. Excerpt: "[Question:] If I get a refund on my federal income tax return, can I direct the IRS, on my tax return, to help me save part or all of it by direct deposit? [Answer:] Yes, you can. When you file your tax return, you can tell the IRS you want to save part (or all) of your refund and have the rest (if any) sent to your checking account. You can save part or all of your refund by checking a box when you file your return telling the IRS to make a direct deposit of the amount you designate to an IRA, to buy U.S. savings bonds, or to a savings account or other savings vehicle" (Internal Revenue Service)
[Official Guidance]
IRS Publication 4674 Directed to Employers: Automatic Enrollment 401(k) Plans for Small Businesses (PDF)
16 pages. Excerpt: "Do you want a retirement plan that provides a high level of participation and makes it easy for you to withhold employee contributions and select the investments for those contributions? Then you may want to consider an automatic enrollment 401(k) plan. Approximately one-third of eligible workers do not participate in their employer's 401(k) plan. Studies suggest that automatic enrollment plans could reduce this rate to less than 10 percent, significantly increasing retirement savings. Whether you already have a 401(k) plan or are considering starting one, automatic enrollment 401(k) plans offer many advantages." (Internal Revenue Service; also Employee Benefits Security Administration, U.S. Department of Labor)
[Official Guidance]
Text of IRS Notice 2009-67: Model Amendments for Adding Automatic Contributions to SIMPLE IRA Plan (PDF)
5 pages. Excerpt: "This notice facilitates automatic enrollment by providing a sample plan amendment that a prototype sponsor of a SIMPLE IRA plan (using a designated financial institution) can use in drafting an amendment to add an automatic contribution arrangement to the SIMPLE IRA plan." (Internal Revenue Service)
[Official Guidance]
Text of IRS Notice 2009-66: Automatic Contribution Feature for SIMPLE IRA Plans (PDF)
11 pages. Excerpt: "This notice provides guidance to facilitate automatic enrollment in SIMPLE IRA plans, including questions and answers relating to the inclusion in a SIMPLE IRA plan of an automatic contribution arrangement." (Internal Revenue Service)
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