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Retirement Plan Disaster Relief Under SECURE 2.0

"SECURE 2.0 grants retirement plan sponsors the discretion to allow plan participants greater access to their retirement plan savings in the event of a federally recognized disaster.... A plan sponsor has the discretion to allow qualified individuals to receive 'qualified disaster recovery distributions' of up to $22,000 per disaster. Further, any such distribution is exempt from the 10% early distribution penalty tax that often applies to retirement plan distributions if the recipient is under age 59-1/2."

Mandatory Roth Catch-Up Contributions for 2026

"This new development has the potential to directly impact the operation of practically every 401(k) plan in existence.... [A]ny plan sponsor that fails to prepare for this rule change is likely to end up with compliance problems that could have easily been avoided."

Employing the Proper Definition of Compensation (PDF)

"The [DOL] and the [IRS] routinely report common operational failures ... [detected] in the context of retirement plan audits and investigations. One of the operational failures that is always at or near the top of that list concerns plan sponsors failing to employ the correct definition of compensation for purposes of performing necessary compliance testing and/or determining benefit allocations. [This] article is intended to briefly highlight some of the issues that can occur when the incorrect definition of compensation is employed as well as to provide an explanation of some of the differences between the most commonly employed definitions of compensation."

ERISA Bond: What Is It and Do I Need One?

"Although the bonding requirements generally apply to most ERISA retirement plans (and many funded welfare benefit plans), the ERISA bonding requirements do not apply to plans ... which are owner only, 'solo k', plans or to employee benefit plans that are completely unfunded ... [E]very person who 'handles funds or other property' of an employee benefit plan is required to be bonded unless covered by an ERISA exemption.... A person is deemed to be 'handling' funds or other property of a plan whenever his or her duties or activities could cause a loss of plan funds or property due to fraud or dishonesty, whether acting alone or in collusion with others.... [T]here is no conflict created if the plan pays for the ERISA Bond."

Tax Credit for Small-Employer Start-Up Plans

"Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan.... [T]here are several very important 'defined terms' included within the authorizing language for the credit that are critical to determining its availability to any particular plan sponsor.... [T]he credit is only available with respect to the establishment of an 'eligible employer plan'.... [T]he credit may only be applied in connection with 'qualified plan start-up costs'."

A Reminder of the Rules for Timely Remittance of Participant Contributions

"[DOL] regulations require that all retirement plans deposit participant contributions to the trust account of such plan as soon as the money can reasonably be segregated from the employer's assets, but not later than the 15th business day of the following month. Many employers mistakenly believe that the rule means the later of those two events but, in fact, the DOL has always interpreted this rule to require that such amounts be contributed as of the earlier of the two possibilities.... Penalties for noncompliance are severe, and do not require an audit by the IRS or DOL to be detected."

Don't Overlook the Tax Credit for Small Employer Start-Up Plans

"Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan.... The credit is equal to up to 50 percent of the 'qualified plan start-up costs' incurred for a period of up to three years.... An employer may elect to initially apply the credit to the year the permissible plan is established or to the year before establishment."

A Plan Administrator's 'Due Diligence' Obligations for Rollover Contributions

"The IRS recently released Rev. Rul. 2014-9 which essentially describes certain new factual situations under which it is appropriate for a plan administrator to assume that a rollover contribution amount it receives is tax-qualified and, therefore, will not result in a compliance defect for the recipient plan.... The Guidance focuses on two specific factual situations ... In one situation, the rollover emanates from another employer's retirement plan while, in the other, the rollover emanates from an IRA."

Required Minimum Distributions: Overview and Decision Tree (PDF)

"Upon attainment of age 70-1/2, certain participants of a tax-qualified retirement plan may be required by federal tax law to withdraw a minimum amount from such plan each year.... [A] Required Minimum Distribution Decision Tree chart is provided ... to assist you in determining whether a specific set of circumstances requires the withdrawal of RMDs."

Long Term Part-Time Eligibility Provisions: 2025 Edition

"[W]hile the SECURE Act established the LTPT rules that became required for most plan sponsors on January 1, 2024 ... 'SECURE 2.0' modified and expanded the LTPT rules. This article discusses those changes to the LTPT rules as imposed by SECURE 2.0. Such changes generally are effective for most plan sponsors on January 1, 2025 so now is the time to take action in order to be prepared for the change."