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Text of IRS Employee Plans News, November 26, 2010 (PDF)
10 pages. Articles include Funding Relief for Multiemployer Defined Benefit Plans, Governmental Retirement Plans -- Determination Letters, Pre-Approved IRAs, and Form 5500 Notices Sent in Error Need a Response.
(U.S. Internal Revenue Service)
Text of IRS Notice 2010-84: Guidance on In-Plan Roth Rollovers; Extended Deadline for Amendments (PDF)
12 pages; Q&A format, including examples. Excerpt: "[T]o give [401(k)] plan sponsors sufficient time to adopt plan amendments and thereby enable plan participants to make in-plan Roth rollovers before the end of the 2010 plan year, the Service is extending the deadline for adopting a plan amendment described in Q&A-17 . . . . to the later of the last day of the plan year in which the amendment is effective or December 31, 2011, provided that the amendment is effective as of the date the plan first operates in accordance with the amendment. . . . . [Q&A 17:] The extension of time . . . . applies to any plan amendment that is adopted pursuant to § 2112 of SBJA. Thus, for example, if a . . . . plan is amended to permit in-plan Roth rollovers, the [extension] applies to a plan amendment that permits elective deferrals under the plan to be designated as Roth contributions, a plan amendment that provides for the acceptance of rollover contributions by the designated Roth account, and the plan amendment that permits in-plan Roth rollovers . . . . ."
(Internal Revenue Service)
2011 Retirement Funds Rollover Chart (PDF)
1 page. Excerpt: "This is a chart of what the Internal Revenue Service regards as permissible when rolling funds over from one type of retirement account to another."
Are You an ERISA Fiduciary? It May Become More Likely if You Give Investment Advice
Excerpt: "Under the DOL's proposal: More Activities Will Be Covered: Under the new rules, the type of advice potentially leading to fiduciary status would be expanded. Appraisers of plan assets, including real estate, and those who give fairness opinions, would be fiduciaries, as would advisers on proxy voting or other aspects of securities management and those who advise about the selection of investment options from available menus."
(Osler, Hoskin & Harcourt LLP)
First Round of Guidance on Roth 'In-Plan' Conversions (PDF)
2 pages. Excerpt: "[T]he guidance provides rules for when the converted funds are distributed from the plan. As with any designated Roth account, a separate Form 1099-R is used to report the distribution and all of the same rules apply as with any designated Roth account distribution. However, in the blank box to the left of box 10, the amount of the distribution allocable to the in-plan Roth conversion must be entered."
(Groom Law Group)
Child Loses Battle over 401(k) Distribution Taxes
Excerpt: "A federal court has upheld a lower court ruling that the minor child of a woman who pleaded guilty to killing the child's father is liable for federal income tax on a 401(k) distribution from his father's account."
IRS Provides Multiemployer Plan Funding Relief
Excerpt: "In Notice 2010-83 the IRS offered guidance on funding relief for multiemployer plans under new Code § 431(b)(8), as added by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010), § 211(a)(2)."
Here Is What Retirement with a Seven-Figure Portfolio Looks Like
Excerpt: "[S]aving $1 mil.lion doesn't necessarily mean you are ready to retire or that you will be able to afford a lavish retirement lifestyle. Here's what it takes to save that amount over a working career and how much income you can expect a $1 mil.lion nest egg to provide in retirement."
(U.S. News & World Report)
Think Tank Wants to Cut Tax-Deferred Plan Contributions
Excerpt: "Under the proposal -- included in the [Bipartisan Policy Center's] 'Restoring America's Future' report -- the total combined tax-deferred contributions that employees and employers could make would be limited to 20% of an employee's annual earnings, or $20,000, whichever is smaller. The current combined employer/employee cap is $49,000 a year."
(Pensions & Investments)
For Many Companies, Major Benefits from ESOPs (PDF)
3 pages. Excerpt: "This article will describe some of the more interesting characteristics and uses of an incentive compensation tool known as an ESOP, specifically in the context of a privately-held corporation."
(Executive Counsel via Holland & Hart LLP)
Pennsylvania Governor Signs Pension Reform Bill
Excerpt: "The bill (House Bill 2497, now known as Act 120 of 2010), essentially rolls back pension enhancements approved in 2001. It increases from five to 10 years the time it takes for newly hired employees to become vested and delays the retirement age to 65 from 60 for state employees and 62 for school employees. It rolls back the multiplier used to calculate pension benefits to 2% from 2.5%, according to PennLive.com."
Fixing Social Security Could Be Painless, Given Enough Time
Excerpt: "Retirement-finance experts say a gradual shift in benefits -- less to well-off retirees, more to those of modest means -- plus a small tax increase for upper-income Americans would keep the program afloat for generations. While those may not be popular choices, the challenge is far less daunting than cutting government spending or containing the costs of Medicare and Medicaid."
(The Seattle Times)
Talking Turkey About Privatizing Social Security
Excerpt: "Why is privatizing Social Security such a turkey? Because retirees shouldn't have to depend on the market's vagaries for survival money."
(The Washington Post; free registration required)
Good Reasons to Be Uneasy About Retirement Security
Excerpt: "The late 20th century saw a great shift in risk, in which uncertainty that had been borne by employers and the government was shunted onto individuals. And in our efforts to solve our deficit and economic problems, we must be careful not to make our retirement problem worse."
(The Washington Post; free registration required)
It's a whole new world at the 2011 NTSAA Annual Conference, the premier 403(b) and 457 forum for educating producers, providers, agents, broker/dealers, sales and marketing managers, office staff, plan sponsors and other business officials. Register now and join your colleagues in Orlando February 2-5, 2011.
For more information and a brochure, go to www.asppa.org/ntsaaconference
Benefits in General; Executive Compensation
DOL Online Database of Form 5500 Filings
Excerpt: "Now that many plan sponsors have completed their 2009 Form 5500 filings for their retirement and welfare plans, they may be wondering about the status of the proposed online posting of these filings. We hadn't heard much about this requirement lately, but buried in the new proposed DOL Annual Funding Notice regulations is a reference that the system is now live."
(Van Iwaarden Associates)
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