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Retirement Plans Newsletter

October 25, 2024

 

[Official Guidance]

2024 IRS Form 4972: Tax on Lump-Sum Distributions (From Qualified Plans of Participants Born Before January 2, 1936) (PDF)

"Use Form 4972 to figure the tax on a qualified lump-sum distribution ... you received in 2024 using the 20% capital gain election, the 10-year tax option, or both. These are special formulas used to figure a separate tax on the distribution that may result in a smaller tax than if you reported the taxable amount of the distribution as ordinary income."  MORE >>

Internal Revenue Service [IRS]

[Sponsor]

Retirement at a Crossroads: Navigating Policy in a Changing Political Landscape During a Challenging Year for Tax Legislation

Join us November 19 for an enlightening discussion on critical retirement legislative issues in the wake of the 2024 presidential election. Preston Rutledge, expert on retirement policy and former Assistant Secretary of Labor for EBSA, will share his insights.

Sponsored by WEB Network

[Guidance Overview]

IRS Issues Guidance on Matching Contributions for Qualified Student Loan Payments

"Matching contributions made on behalf of QSLPs still must satisfy non-discrimination testing, just like employer matching contributions based on elective deferrals into a plan. When determining whether a plan passes the [ADP] test, the plan can either apply a single ADP test for all participants or apply separate ADP tests for those who receive QSLP matching contributions and those who do not."  MORE >>

Slevin & Hart, P.C.

[Guidance Overview]

SECURE 2.0 Provisions for Implementation in 2025

"[1] Increased catch-up contribution limits for ages 60-63 ... [2] Mandatory automatic enrollment for new plans ... [3] Part-time worker eligibility expansion ... [4] Terminally ill individual distributions ... [5] Domestic abuse distributions ... [6] Federal disaster distributions ... [7] Student loan matching ... [8] Roth catch-up contributions."  MORE >>

Retirement Management Services, LLC

SECURE 2.0 Optional Provisions Plan Sponsors Are Most Likely to Add

"[T]he top-four ranked optional provisions that plan sponsors are interested in offering to participants ... include: [1] the increased catch-up contribution limit for participants ages 60 to 63; [2] self-certification of hardships and unforeseeable emergency distributions options; [3] withdrawals for federally declared disasters; and [4] eligible distributions for domestic abuse victims."  MORE >>

Retirement Management Services, LLC

Savings Boost from Auto-Enrollment Wanes Over Time

"[A recent study] shows that numerous dynamics significantly reduce how much is being saved in 401(k)s. Workers often leave the firms before their employer matching contributions have fully vested, withdraw money from savings, or opt out of the automatic increases in contributions designed to accelerate their savings incrementally.... 'Medium- and long-run dynamics,' the researchers concluded, 'undermine the effect of automatic enrollment and default savings-rate auto-escalation on retirement savings.' "  MORE >>

Center for Retirement Research [CRR] at Boston College

Revisiting the WEP and GPO

"The WEP reduces the earned Social Security benefit for workers who receive pensions from work not covered by Social Security ... The GPO reduces the entitlement to spousal or widows benefits of CSRS retirees, in many cases eliminating entitlement to these benefits.... The CSRS retirement system is a 'single benefit' system, where the government retirement benefit is the 'complete' retirement. This contrasts with the FERS three-tiered system that includes a government retirement benefit, Thrift Savings Plan, and Social Security, where all three benefits are needed to provide a 'complete' retirement. "  MORE >>

Government Executive

At Boeing, Pension Plan Is Up in the Air, and 401(k) Is Grounded

"Workers on strike at Boeing really want a traditional pension plan reinstated -- so much so that on Wednesday they rejected an offer from the company to contribute up to 12 percent a year to their 401(k) plans. That proposition also shows how far big companies are willing to go to avoid reinstating or starting new pensions."  MORE >>

InvestmentNews; subscription may be required

Keys to Retirement Planning and Peace of Mind

"[1] A thorough appraisal of expenses and budgeting ... [2] The 4% rule and alternative withdrawal strategies ... [3] Extra sources of retirement income ... [4] Health care and long-term care planning ... [5] Maintaining emergency funds."  MORE >>

Kiplinger

Benefits in General

CRS Legal Sidebar: Corner Post and the Statute of Limitations for Administrative Procedure Act Claims

"This Sidebar begins by providing a brief legal background of the relevant statutes and case law prior to Corner Post. It then discusses the procedural history of Corner Post and summarizes the opinion and separate statements in that case. The Sidebar concludes with several considerations for Congress." [Corner Post v. Bd. of Gov. of the Federal Reserve System, No. 22-1008 (S. Ct. Jul. 1, 2024)] [LAB11197; Oct. 24, 2024]  MORE >>

Congressional Research Service [CRS]

Selected New Discussions

Church DB Plan Funding Requirement

"I have been told by a long-time church plan actuary that church plans are subject to the pre-ERISA minimum funding requirements which they summarized as 'contributions must be made such that the plan's unfunded liability doesn't increase'. Despite several hours of research, I can't find any confirmation that [1] church plans are subject to the pre-ERISA minimum, or [2] that the pre-ERISA minimum is in fact a contribution to at least maintain the funded position of the plan. All I can find is that the plan must be funded (Rev Rul 71-91). Is anyone able or willing to confirm (preferably with some form of documentation) what I was told?"

BenefitsLink Message Boards

Vesting Service Exclusion

"Plan in existence for 10+ years. Initially only has 401k+SH. In 2020 added PS subject to 2/20 vesting. Can service prior to 1/1/2020 be excluded for vesting service for PS portion?"

BenefitsLink Message Boards

Press Releases

Agilis Unveils PensionBuilderâ„¢: A Comprehensive Solution for Lifetime Retirement Income

Agilis

Pension Planning Consultants Joins U.S. Retirement & Benefits Partners

U.S. Retirement & Benefits Partners [USRBP]

Last Issue's Most Popular Items

Inadvertent Benefit Overpayments Get First Round of IRS Guidance

Groom Law Group

IRS Final RMD Rules: Key Takeaways

Kilpatrick Townsend

Retirement Plan Philosophy Can Guide Plan Design

Faegre Drinker

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BenefitsLink® Retirement Plans Newsletter, ISSN no. 1536-9587.

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