[Guidance Overview] IRS Wants to Offer RMD Relief for Longevity Annuity Contracts in 403(b)/457, Other Retirement Plans
"Based upon [comments received], Treasury and the IRS concluded that 'substantial advantages' exist to modifying the RMD rules to make it easier for a participant to purchase a deferred annuity that is scheduled to commence at an advanced age -- such as age 80 or 85 -- using a portion of his or her account. Accordingly, the proposed regulations . . . would provide that before annuitization, a participant could exclude the value of a longevity annuity contract that meets certain requirements from the account balance used to determine RMDs." (Thompson)
[Guidance Overview] Final ERISA Section 408(b)(2) Regulations Include Significant Differences from Interim Rules
"These regulations make several significant changes . . . including: [1] Excluding certain frozen IRC Section 403(b) plans issued before January 1, 2009 from coverage under the regulations; [2] Enhancing the information relating to 'indirect compensation' required to be disclosed; [3] Adding certain investment-related disclosures to facilitate compliance with DOL regulations under ERISA Section 404(a); [4] Extending the effective date to July 1, 2012. This has the effect of delaying the effective date of most participant-level disclosures under ERISA Section 404(a) to August 30, 2012." (Practical Law Company)
[Official Guidance] Proposed IRS Regs on Longevity Annuity Contracts
"This document contains proposed regulations relating to the purchase of longevity annuity contracts under tax-qualified defined contribution plans under section 401(a) of the Internal Revenue Code (Code), section 403(b) plans, individual retirement annuities and accounts (IRAs) under section 408, and eligible governmental section 457 plans. These regulations will provide the public with guidance necessary to comply with the required minimum distribution rules under section 401(a)(9). The regulations will affect individuals for whom a longevity annuity contract is purchased under these plans and IRAs (and their beneficiaries), sponsors and administrators of these plans, trustees and custodians of these IRAs, and insurance companies that issue longevity annuity contracts under these plans and IRAs." (U.S. Internal Revenue Service)
Expected 457(f) Plan Guidance to Address Long-Unanswered Questions
"In a recent webcast, Bob Architect, vice president, Compliance and Market Strategy, VALIC, listed new proposed 457(f) regulations among the items coming in 2012." (PLANSPONSOR.COM)
IRS May Resolve 457 Plan Questions
"On Nov. 8, the IRS released an Advance Notice of Proposed Rulemaking announcing that it would be issuing proposed regulations which would define the term 'governmental plan' under Section 414(d) of the code. The IRS pointed out that the principles set out in the 414(d) regulations would generally also apply for purposes of section 457." (Credit Union Times)
[Guidance Overview] 2012 Regulatory Limits: Poster and Compliance Calendar
"[The poster] is a convenient way to remind you of important regulatory limits and dates for retirement plans. Note that there are increases in regulatory limits for 2012. [The calendar] lists recurring compliance and notice requirements for qualified defined contribution plans." (The Vanguard Group, Inc.)
[Guidance Overview] Updated Chart of IRS and Social Security Limits Reflects 2012 Limits
For the first time since 2009, the limitations on retirement plans and Social Security contributions have been raised. Chart shows the new limits for 2012. (Calhoun Law Group, P.C.)
2011 NAGDCA Survey of DC Plans II
"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." (NAGDCA)
[Guidance Overview] Former Tax-Exempt Organizations May Salvage Status and Continue Sponsoring Tax-Favored Retirement Plans (PDF)
"On June 8, 2011, the IRS announced that approximately 275,000 organizations had lost their tax-exempt status because they did not file legally required annual reports for three consecutive years. The IRS also announced special steps to help these organizations apply for reinstatement of their tax-exempt status. This status is particularly important for entities that sponsor 403(b) plans or non-governmental section 457(b) plans." (Prudential Retirement)
California 403(b)/457(b) Information Portal Goes Live
More than 100 school districts are included. (California State Teachers' Retirement System)
Non-Profit Organizations And Government Entities Prepare for New Regs for 'Golden Handcuff' Plans Under Code Section 457(f)
"The IRS has stated that the new Section 457(f) regulations anticipate issuing guidance for substantial risk of forfeiture in line with those published under Section 409A. . . . There is precedent from the IRS's implementation of the 409A regulations, in which employers were provided a safe harbor period for corrections to bring their plans into compliance. However, the safe harbor period may not be very long, and may end as soon as December 31, 2011." (Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C.)
[Guidance Overview] Designing Deferred Compensation Plans for Governmental Employers and Tax-Exempt Organizations (PDF)
At page 3 of target newsletter. Excerpt: '[T]he inclusion of an amount into income under Section 457(f) can be structured so that it is treated as a payment for purposes of the short-term deferral exemption, even if the amount continues to be set aside and credited with earnings. In addition, the prospect of stricter regulations under Section 457(f) may make it more advantageous for companies to correct their 457(f) plans now, to the extent that they contain provisions that run afoul of 409A, than after the new guidance is issued." (Pillsbury)
[Guidance Overview] NAGDCA.Brochure on New Roth Contributions Feature for Governmental 457(B) Plans (PDF)
"Because [the law creating this feature] is a newly enacted law, additional rules and guidelines may be issued that may affect the content of this article." (National Association of Government Defined Contribution Administrators, Inc.)
[Guidance Overview] IRS Guidance on Public Sector Defined Contribution Plans
"Over the past several months, the [IRS] has published helpful guidance on two important issues for governmental plans: Revenue Ruling 2011-7 clarifies certain issues related to the termination of ?403(b) plans. Revenue Ruling 2010-27 provides additional examples of permissible 'unforeseeable emergency' distributions from a ?457(b) plan." (The Segal Group, Inc.)
[Guidance Overview] Update on 403(b) and 457(f) Plans
The target page has links to the presentation; a supplement titled: The Anticipated 457(f) Regulations and how they Affect Deferred Compensation for Tax Exempts;' and a supplement titled: 403(b) Plans: The IRS as Friend and Foe. (Morgan, Lewis & Bockius LLP)
Guidance on Section 457(f) Plans in Clearance, IRS Official Says
"The Section 457(f) guidance will cover various nonqualified plans, including severance and vacation pay plans, whose salary deferral limits exceed the $16,500 or $22,500 catch-up limits of tax code Section 457 plans . . . ." (Tax Management Inc.)
Ohio Deferred Comp Program Launches New Web Site
"Ohio DC provides retirement savings to more than 190,000 active and retired public employees and currently has assets of more than $8.4 billion." (PLANSPONSOR.COM)
NAGDCA 2011 Survey of DC Plans (PDF)
"[A]ccording to NAGDCA, as of December 31, 2010, the average participant account balance for the responding state and local government plans was $41,243 . . . ." (National Association of Government Defined Contribution Administrators, Inc.)
[Guidance Overview] IRS Modification of Correction Guidance for Nonqualified Deferred Compensation Plans (PDF)
"These correction procedures are available to 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)
2011 Survey of Defined Contribution Plans
"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, Inc.)
[Guidance Overview] A New Plan Design Feature: The 'In-Plan' Roth Conversion (PDF)
"A summary of the prior law is set forth . . ., along with a summaryof the new provision and implementation steps in order to add the feature. Lastly, we discuss the impact of Roth conversion on governmental 457(b) plans." (Taxes?The Tax Magazine via Groom Law Group)
[Guidance Overview] IRS Insight Into Unforeseeable Emergencies Under Section 457(b) Plans and Section 409A Nonqualified Deferred Compensation Plans (PDF)
Excerpt: "Sponsors of section 457(b) plans and section 409A nonqualified deferred compensation plans that permit unforeseeable emergency distributions should take note of these new examples. While they are only examples, they do illustrate the process that the IRS expects plan administrators to undertake when evaluating specific facts and circumstances in determining whether to permit a distribution under these provisions." (Prudential Retirement)
[Guidance Overview] IRS Guidance on Unforeseeable Emergency Distributions from 409A and 457(b) Plans
Excerpt: "IRS has released Revenue Ruling 2010-27, which contains examples of expenses that may be eligible for an unforeseeable emergency distribution from deferred compensation plans that are subject to Section 409A or Section 457(b) of the Internal Revenue Code." (McGuireWoods LLP)
[Guidance Overview] 2010 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." (Prudential Retirement)
[Guidance Overview] 401(k), 403(b), and 457(b) Plans: Key Features and Contribution Limits for 2011 (PDF)
1 page. The chart offers a comparison of the plans. (Milliman, Inc.)
[Guidance Overview] 'Unforeseeable Emergency' Distributions Expanded for 457(b) Plans
Excerpt: "A recent Revenue Ruling interprets the Code ? 457(b) provisions, which allow distribution in the case of an 'unforeseeable emergency,' to allow a distribution to pay for the repair of a participant's principle residence damaged by a water leak, and for the funeral expenses of a participant's non-dependent adult child." (Deloitte via BenefitsLink.com)
[Guidance Overview] IRS Guidance on 457 Plan Emergency Distributions
Excerpt: "The key element is that the circumstance must be 'beyond the control of the participant,' CCH notes in a summary of the guidance." (PLANSPONSOR.com)
[Guidance Overview] 'Beyond the Control of the Participant' Is Key in Emergency Distribution Requests
Excerpt: "An unforeseeable emergency is not the purchase of a home or payment of college tuition, the IRS noted. However, the distribution can include amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution." (Wolters Kluwer)
The Role of Roth in Defined Contribution Plans
Excerpt: "With recent legislative enhancements and proven success among participants, Roth is expected to be a standard part of defined contribution plans in the coming years, including among 457(b) plans." (National Association of Government Defined Contribution Administrators, Inc.)
[Official Guidance] IRS Revenue Ruling 2010-27: Addressing Qualifying 'Unforeseeable Emergencies' for Distributions (PDF)
Excerpt: "The revenue ruling provides guidance, in the form of examples, on what constitutes an unforeseeable emergency distribution under section 457(b) of the Code and section 1.457?6(c) of the regulations. The revenue ruling also applies the same standards to distributions from a nonqualified deferred compensation plan subject to section 409A." (U.S. Internal Revenue Service via American Benefits Council)
[Guidance Overview] Elective Deferral Limits for 2011 for Employees of Non-Proft and Governmental Employers (PDF)
2 pages. Excerpt: "Generally, contributions made to 403(b) and 401(k) plans are aggregated when applying the contribution limits . . . ." (Prudential Retirement)
[Guidance Overview] Nationwide Settles Alabama Lawsuit over 457 Plan Fees
Excerpt: "The Associated Press reports that the settlement will cover civil suits filed over fees that were paid to a lobbying group for state workers. Last year, the Alabama Securities Commission reported that its probe into 'endorsement fee' payments by Nationwide to the Alabama State Employees Association (ASEA) and Public Employees Benefits Corporation (PEBCO), the union's for-profit subsidiary, found the payments began in 2001 and reduced the amount of interest paid on the fixed option of the plan by 20 basis points." (PLANSPONSOR.com)
[Guidance Overview] New Roth Features for ?401(k), ?403(b) and Governmental ?457(b) Plans
Excerpt: "[B]eginning in 2011, sponsors of governmental ?457(b) plans can for the first time allow participants to make designated Roth contributions and also can allow in-plan Roth conversions if they wish to do so." (The Segal Group, Inc.)
[Guidance Overview] IRS announces 2011 limits on contributions and benefits
The limits were not increased for 2011 over the 2010 limits. Chart shows limits from 1996 through 2011. (Calhoun Law Group, P.C.)
[Guidance Overview] In-Plan Roth Conversions Allowed Under 401(k) and 403(b) Plans (PDF)
Excerpt: "Only amounts otherwise eligible for distribution from a defined contribution plan may be converted or rolled over to a Roth account within the plan." (Drinker Biddle & Reath LLP)
[Guidance Overview] In-Plan Conversions to Designated Roth Accounts (PDF)
2 pages. Excerpt: "[The Small Business Jobs and Credit Act of 2010] permits non-Roth amounts in 401(k), 403(b) and governmental 457(b) plans to be converted to Roth amounts within the same plan effective September 27, 2010 for 401(k) and 403(b) plans, and for tax years beginning after December 31, 2010, for governmental 457(b) plans." (Transamerica Center for Retirement Studies)
[Guidance Overview] Roth Conversions for 2010 Require Immediate Action by Plan Sponsors of Defined Contribution Plans
Excerpt: "These new rules are effective immediately, and if the plan is amended now to permit in-plan rollovers, participants can take advantage of the special tax rules which allow tax due on 2010 rollovers to be deferred into 2011 and 2012." (Troutman Sanders LLP)
[Opinion] Why California Is Wrong to Believe That Our Pension Problems Will Be Solved by a Move to Defined Contribution Plans
Excerpt: "[I]n California and many states around the country public employees do not enjoy the same protections that private employees receive when it comes to Defined Contribution plans (403(b) and 457(b)). Government defined contribution plans are not governed by the same laws, namely ERISA that private plans are." (The Teachers Advocate)
[Guidance Overview] Comparison Chart of 457(b) Plans, 401(k) Plans, 403(b) Plans, and Deemed IRAs
Excerpt: "With the passage of [EGTRRA], under which 457(b) plan deferrals no longer have to be coordinated with 401(k) or 403(b) deferrals, more employers may want to consider maintaining more than one type of plan to maximize total permitted deferrals. This is particularly true given that EGTRRA permits 457(b) and 403(b) plan money, as well as 401(k) plan money, to be used to purchase service credit under a defined benefit plan. [This chart was originally created for the '457 Answer Book.']" (Calhoun Law Group, P.C.)
[Guidance Overview] Roth Within Plan Conversion
Excerpt: "In-plan conversion is permitted only where the plan document contains, or is amended to provide, a designated Roth elective deferral feature. Thus, the conversion ability is available only in plans that may offer designated Roth accounts, specifically 401(k)s, 403(b)s and (starting next year) governmental 457(b) plans. A plan sponsor cannot add the designated Roth account feature solely to allow for designated Roth rollover conversions." (McKay Hochman Co.)
[Guidance Overview] Employee Benefits Provisions of the Small Business Jobs Act of 2010 (PDF)
Excerpt: "[For] plan years beginning on or after January 1, 2011, governmental 457(b) plans may permit Roth contributions, as well as [Roth conversions]." (Bryan Cave LLP and Affiliates)
[Guidance Overview] Rollovers to 401(k), 403(b), and 457(b) Designated Roth Accounts Newly Permitted (PDF)
2 pages. Excerpt: "Effective for distributions made after the Sept. 27, 2010 date of the SBJA enactment, 401(k), 403(b), and governmental 457 plans that have a qualified designated Roth contribution component may permit plan participants (or their surviving spouses) to rollover some or all of their pretax account balances into the after-tax account." (Milliman)
Small Business Jobs Act Affect on 401(k), 403(b), and 457(b) Plans
Excerpt: "The [Act] expands the current Roth contribution and conversion rules for 401(k), 403(b), and governmental 457(b) plans. Employers must quickly decide whether they wish to implement these changes in their defined contribution retirement plans." (Ballard Spahr LLP)
Small Business Jobs Act Provisions Affecting Employment Benefits
Excerpt: "President Barack Obama has signed the Small Business Jobs Act of 2010 (H.R. 5297) into law on September 27, 2010. The bill contains . . . benefits-related provisions of interest to employers . . . ." (Jackson Lewis LLP)
[Official Guidance] Technical Explanation of Tax Provisions in Senate Amendment 4594 to H.R. 5297, The 'Small Business Jobs Act of 2010,' Scheduled for Consideration by Senate on September 16, 2010
See pages 37-38 for 457 plan Roth contributions and rollovers from elective deferral plans to Roth designated accounts. (U.S. Congress. Joint Committee on Taxation)
Roth Provisions in the Small Business Jobs Act of 2010 (PDF)
11 pages. This review in Q&A format covers two provisions affecting Roth accounts within retirement plans. (American Benefits Council)
[Guidance Overview] Small Business Stimulus Passes Congress
Excerpt: "The bill allows participants in government section 457 plans to treat elective deferrals as Roth contributions, effective for tax years beginning after 2010. . . . The bill also allows rollovers from elective deferral plans to Roth-designated accounts." (Journal of Accountancy)
[Guidance Overview] House Approves Bill to Allow in Plan Roth Conversions
Excerpt: "The legislation, approved by a 237 to 187 vote, now goes to the White House and is expected to be signed into law on Monday." (PLANSPONSOR.com)
[Guidance Overview] Summary of Roth Provisions in The Small Business Jobs Act (PDF)
11 pages. (Via American Benefits Counsel; prepared by Kent Mason of Davis & Harman LLP)
[Official Guidance] Small Business Jobs Act (H.R. 5297), As Approved By Senate (PDF)
262 pages. (Via American Benefits Counsel)
[Opinion] Roth In-Plan Conversion Provisions of the Small Business Jobs Act of 2010 Come Up Short (PDF)
2 pages. Excerpt: "The primary shortcoming is that only amounts eligible for distribution can be converted or rolled over to a Roth account, and elective deferral accounts are not distributable while a participant is working, unless the participant has attained age 59 and the plan allows unlimited distribution of elective deferral accounts upon and after attainment of age 59-1/2. . . . People who believe the current draft of the bill is deficient should contact their House of Representative member as soon as possible . . . ." (Allen Buckley, Esq. of The Saylor Law Firm)
[Guidance Overview] Congress Set to Approve In-Plan Roth Conversions in 401(k)-Type Plans
Excerpt: "Employers may like the idea of keeping assets in the plan but could face significant challenges in meeting participants' desire for 2010 conversions. The bill also lets governmental 457(b) plans add Roth features starting in 2011." (Mercer)
[Guidance Overview] Senate Approved Bill Would Allow Roth Accounts in 457 Plans
Excerpt: "[T]he Creating Small Business Jobs Act of 2010 allows participants in 457 plans to treat elective deferrals as Roth contributions, effective for tax years beginning after 2010." (PLANSPONSOR.com)
NAGDCA 2010 Survey of Defined Contribution Plans: Stable Value
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] Relaxed Retirement Plan Loan Disclosures Now Effective
Excerpt: "The exemption applies to an exempt loan to a participant in a qualified plan (e.g., a 401(k) or profit sharing plan), a 403(b) plan or a governmental 457(b) plan." (SunGard Relius)
[Guidance Overview] Secondment, Deferred Compensation, and Subpart F Income: A Potential Trap
Excerpt: "This article points out that while a secondment agreement, that is properly worded and implemented, may act as an effective shield against Code section 457A, it may also inflict a detrimental blow to the US company's subpart F income. Accordingly, any US company that seconds its employees to related foreign-based entities should re-evaluate that arrangement to assure that it is obtaining the desired tax outcome." (Miller & Chevalier Chartered)
[Opinion] With Yields Low and Fees High, 'Safe' Funds Used in Deferred Compensation Plans May Eat Away at Principal.
Excerpt: "Human-resources directors and finance officers need to look into their 457 and 403b deferred compensation plans. They may be using bond funds and money market funds with fees so high that their participants will likely earn negative returns." (Governing)
[Guidance Overview] IRS Document Correction Procedures for Nonqualified Deferred Compensation Plans (PDF)
Excerpt: "These correction procedures are available to 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)
In-Plan Roth Conversions, Roth 457 Accounts Expected to Gain Senate Approval
Excerpt: "The Senate may vote this month to let 401(k) and 403(b) plan participants transfer non-Roth amounts to a Roth account in the same plan. However, these in-plan conversions would be allowed only for participants otherwise eligible for a plan distribution." (Mercer)
Roth 457 Provision Excluded from Latest Version of Tax Extenders Legislation
Excerpt: "The Roth provision would have leveled the playing field for state and local government workers by permitting 457(b) plans to offer the designated Roth accounts already permitted in 401(k) and 403(b) plans." (ICMA-RC)
|
Important word about authorship:
BenefitsLink® (BenefitsLink.com) provides this page for you, containing selected hypertext links to pages on the web that our editors think will be useful or interesting to you. But BenefitsLink is not the author or publisher of those linked pages (except as expressly indicated). You should contact directly the author of any such linked pages for copyright or other information about their contents.
|
Webmaster: Dave Baker (click) · © 2012 BenefitsLink.com, Inc.
(contact the webmaster for reprint permission) ·
Linking: Feel free to link directly to this page, even without specifically crediting BenefitsLink ® as its source. Glad you're here! ·
Privacy Policy
|
|
