Headlines about "IRAs"

Gathered from the web by the editors at BenefitsLink.com.
[Guidance Overview] Question on Nondeductible IRA Contributions Converted to Roth IRA
Excerpt: "An individual has a traditional IRA that's been funded with both deductible and nondeductible contributions. He wants to establish a new nondeductible traditional IRA, make contributions through 2010, and convert it to a Roth IRA. If he converts only the new nondeductible IRA, will he have to pay tax only on the earnings in the new one, or will he have to consider the deductible contributions and earnings in the old traditional IRA?" (Wolters Kluwer)

[Guidance Overview] Heroes Earning Assistance and Relief Tax Act Adds Benefits for Those in Military Service (PDF)
Pages 3- of 8 pages. Excerpt: "The HEART Act deals principally with the tax treatment of military personnel, with provisions applying to a wide range of Internal Revenue Code ('Code') provisions. This article will deal primarily with those provisions which have an effect on qualified retirement or Section 125 plans, and IRAs." (Trucker Huss)

[Guidance Overview] IRS Private Letter Ruling Allows IRA Beneficiary to Take Distributions Over Her Lifetime
Excerpt: "In the private letter ruling, the IRS stated that 'the issue to be addressed is whether the failure to timely take certain required distributions requires that distributions from either IRA X or IRA Y (or both) be made in accordance with the five-year rule of Code section 401(a)(9)(B)(ii).' IRS ruled that the answer was no." (Financial Planning)

Testimony: The Role of Individual Retirement Accounts in the U.S. Retirement System (PDF)
10 pages. Statement for the House Ways and Means Committee Select Revenue Measures Subcommittee hearing on The Role of Individual Retirement Accounts (IRAs) in the U.S. Retirement System, June 26, 2008. (Employee Benefit Research Institute)

When Changing Jobs, What Should You Do with Your Old 401k?
Excerpt: "While leaving your retirement account with a former employer is a better decision than cashing out your account and splurging on a boat, it may be more beneficial to consolidate your retirement savings by rolling your old 401k or similar employer-sponsored retirement plan into an IRA." (Linda Horn via 401khelpcenter.com)

Hearing on Individual Retirement Accounts and Their Role in Our Retirement System
The target page presents the witness list and links to testimony. (U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Select Revenue Measures)

Government Actions Could Encourage More Employers to Offer IRAs to Employees (PDF)
Excerpt: "GAO was asked to report on (1) the role of IRAs in retirement savings, (2) the prevalence of employer-sponsored and payroll-deduction IRAs and barriers discouraging employers from offering these IRAs, and (3) changes that are needed to improve IRA information and oversight." (U.S. Government Accountability Office)

Present Law and Analysis Relating to Individual Retirement Arrangements (PDF)
56 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation, includes a description of present law and analysis relating to IRAs." (Joint Committee on Taxation)

IRS Benefits Tax Counsel Reeder Testimony on Individual Retirement Arrangements
Excerpt: "[W]e should not lose sight of the fact that IRAs generally are not as powerful of a retirement savings tool as other tax-qualified retirement plans, such as 401(k), 403(b) and other defined contribution plans and defined benefit plans. This is primarily because the restriction on pre-retirement distributions in such plans avoids much of the pre-retirement leakage that occurs in IRAs. We should not encourage employers to adopt IRA programs if they are instead willing and able to adopt these more sophisticated and flexible retirement plans to benefit their employees." (U.S. Department of the Treasury)

[Guidance Overview] New IRS Guidance on Transfers from IRAs to HSAs
Excerpt: "The guidance is effective retroactively for taxable years beginning after December 31, 2006." (Faegre & Benson LLP)

Advisers Should Help Investors Decide Whether to Move 401(k) Money Into an IRA
Excerpt: "Retirement plan rollovers are reshaping the business of financial advice. In 2008 alone, $536 billion is expected to roll out of 401(k) plans into individual retirement accounts, according to Boston-based Cerulli Associates Inc." (Investment News; free registration required)

[Guidance Overview] IRS Guidance on Treatment of Qualified HSA Funding Distributions
Excerpt: "The IRS guidance reflects the rules provided in Code Sec. 408(d)(9), as added by the Tax Relief and Health Care Act of 2006 (P.L. 109-432), and includes numerous examples that illustrate how these rules should be applied." (Wolters Kluwer)

[Guidance Overview] Can One Take a Qualified Health Savings Account Funding Distribution from More Than One IRA?
Excerpt: "No. According to IRS Notice 2008-51, a qualified HSA funding distribution must come from a single IRA." (Wolters Kluwer)

The Number of Individual Account Retirement Plans Owned by American Families (PDF)
Pages 6-10 of 12 pages. Excerpt: "In brief, the data show that the majority of families in the United States do not own an individual account retirement plan at all, but of those that do own at least one plan, most own only one." (Employee Benefit Research Institute)

[Guidance Overview] A Financial Institution Asks: Can We Exercise Our Right of Setoff Against an IRA Account?
Excerpt: "We don't believe you can exercise your right of setoff against an individual retirement account (IRA), for at least three reasons. First, it would breach your fiduciary obligations as trustee or custodian of the IRA. Second, IRAs have been deemed 'special deposits' immune from setoff. And third, the Federal Tax Code provides that IRAs are not 'forfeitable'." (Wolters Kluwer)

[Guidance Overview] Reporting Rollovers from Pretax Plan Accounts to Roth IRAs
Excerpt: "Recent IRS guidance (Notice 2008-30) explained that plans must allow participants to make direct rollovers from pretax plan accounts to Roth IRA accounts. Since the rollover is taxable, the participant may choose to have the employer withhold income taxes. Withholding is not mandatory. What does this mean for 1099-R reporting? The [target page] example illustrates the complexities of reporting these rollovers." (SunGard Corbel LLC)

[Guidance Overview] Required Minimum Distribution from Retirement Plan - Eligible for Rollover to an IRA?
Excerpt: "While Treasury Regulation Section 1.401(a)(9)-7 clearly indicates that an RMD is not eligible for rollover, the IRS recently addressed that issue again in its Spring 2008 Retirement News for Employers. The IRS said, 'Rollovers to IRAs of required minimum distributions (RMDs) from a retirement plan are not permitted. This is true whether the RMD is made because you turned age 70½ or because you retired after age 70½.'" (Wolters Kluwer)

[Guidance Overview] IRS Notice Details Procedures for IRA Transfer to HSA
Excerpt: "In Notice 2008-51, the Internal Revenue Service details guidance to implement a 2006 amendment to health savings account (HSA) legislation that provides plans the option to allow employees to start an HSA by making a one-time tax-free transfer of individual retirement account (IRA) funds." (Wolters Kluwer)

Employer Plan Not Necessary for Retirement Savings
Excerpt: "You may think that saving for retirement starts when you land a job with a defined-contribution plan, such as a 401(k) or 403(b). But even without this benefit, you can build retirement savings on your own. The way to start is through an individual retirement account, or IRA. You may have seen the acronym before or are familiar with what an IRA is." (Chicago Tribune)

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees (PDF)
64 pages. Excerpt: "GAO was asked to report on (1) how IRA assets compare to assets in other retirement plans, (2) what barriers may discourage small employers from offering IRAs to employees, and (3) the adequacy of the Internal Revenue Service's (IRS) and the Department of Labor's (Labor) oversight of and information on IRAs." (U.S. Government Accountability Office)

IRS Issues IRA-to-HSA Transfer Rules
Excerpt: "Holders of individual retirement accounts can shift some cash into health savings accounts without paying income taxes or penalties on the distributions. Officials at the Internal Revenue Service explain the procedures for carrying out 'qualified HSA funding distributions' in IRS Notice 2008-51." (The National Underwriter Company; free registration or paid subscription required)

[Official Guidance] Text of IRS Notice 2008-51 Detailing Rules for Transfer of IRA Funds to an HSA (PDF)
The notice provides guidance on the proper tax treatment of qualified health savings account funding distributions (transfers from IRAs), effective for tax years beginning after 2006. (Internal Revenue Service)

[Opinion] Remarks of IRS Commissioner, Tax Exempt and Government Entities, Before the 2008 Mid-Atlantic Benefits Conference (PDF)
Excerpt: "I'll talk about two related but distinct issues. The first is how to find ways to promote wider coverage and participation – to increase the percentage and number of workers meaningfully participating in a retirement plan of one sort or another. The second is somehow to find ways to make the 401(k) environment and the IRA environment friendlier to the individual with an account." (Internal Revenue Service)

House Committee OKs Extenders Package with Pension, Deferred Compensation Provisions
Excerpt: "The House Ways and Means Committee, on May 15, 2008, approved the Energy and Tax Extenders Bill of 2008 (H.R. 6049), legislation that includes provisions affecting IRAs, qualified plan distributions, and nonqualified deferred compensation. The measure was scheduled to be considered by the full House on May 20, 2008." (Wolters Kluwer)

[Guidance Overview] PPA: IRS Provides Guidance on 2008 Distribution Rules (PDF)
Excerpt: "The Pension Protection Act of 2006 (PPA) includes several provisions relating to payments made from various types of pension plans that became effective for distributions made on or after January 1, 2008. On March 5, 2008, the IRS released Notice 2008-30, providing guidance regarding the following provisions: Rollovers to Roth IRAs; Payment of gap period income on excess deferrals; Qualified Optional Survivor Annuities (QOSAs); and Calculation of lump sum benefits in defined benefit plans." (Prudential's Pension Analyst)

Uptick in Roth 401(k)s
Excerpt: "The Merrill Lynch Retirement Group reports that, among the 1,700 plans on its proprietary record keeping system, 12% added a Roth option as of March 31, 2008." (Employee Benefit Adviser; free registration required)

[Guidance Overview] Third Circuit Opines That 'Rousey' Overruled 'Clark'
Excerpt: "Many will remember how, close on the heels of the U.S. Supreme Court's 2005 decision in Rousey v. Jacoway, 125 S.Ct. 1561 (2005), the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ('BAPCPA') was signed into law, providing IRAs with greater bankruptcy protection. . . . A recent Third Circuit Court case, In Re: Krebs, finally puts to rest some confusion going on in the Third Circuit about the impact of Rousey as it pertains to pre-BAPCPA bankruptcy cases." (Attorney B. Janell Grenier via Benefitsblog.com)

[Guidance Overview] Distributions from Decedent's IRA to Beneficiary Calculated Based on Life Expectancy of Beneficiary
Excerpt: "The IRS has privately ruled that the required minimum distributions (RMDs) from a decedent's two IRAs could be calculated for all past and future years based on the life expectancy of the beneficiary as determined under the Single Life Table of Reg. §1.401(a) (9)-9." (Wolters Kluwer)

Merrill Lynch Sees Uptick in Roth 401(k)s
Excerpt: "The Merrill Lynch Retirement Group reports that, among the 1,700 plans on its proprietary record keeping system, 12% had added a Roth option as of March 31, 2008." (Employee Benefit News; free registration required)

[Guidance Overview] IRS Provides Tax Relief for Certain Recipients of Stimulus Payments
Excerpt: "Individuals who elected to have their federal tax refunds credited to their individual retirement arrangement (IRA), health savings account (HSA), Archer MSA, Coverdell education savings account (ESA) ,or qualified tuition program account (QTP or section 529 program) via direct deposit are eligible to withdraw those amounts on a tax and penalty-free basis." (RetirementDictionary.com)

[Guidance Overview] Bankruptcy Appellate Panel Upholds IRA Assets Exclusion
Excerpt: "[A] U.S. Bankruptcy Court judge in Kansas was correct in turning aside an argument by a creditor that the funds now held in an IRA should be included in the pool of the debtor's assets used to repay debts. The lower court judge ruled -- and the appellate panel agreed -- that the creditor had not proven that the ESOP was improperly established or administered -- a prerequisite for putting the funds into the bankruptcy estate." (PLANSPONSOR.com)

Safe Ways to Spend Your Nest Egg
Excerpt: "But I think another reason those of us lucky enough to have accumulated retirement savings are reluctant to draw it down is fear of not doing it right. The looming concern for many who have only retirement savings and Social Security is outliving the savings. The prospect of a reduced standard of living toward the end of our lives is a real concern . . . ." (Washington Post; free registration required)

CalPERS Committee Neutral on Proposed Private IRA Plan
Excerpt: "The California Public Employees' Retirement System is about to vote on whether the mammoth public pension fund takes the first step to helping private individuals chart their financial future. But only after it can be convinced that such a plan is legal – and that CalPERS controls it." (Sacramento Bee)

[Opinion] A Reconsideration of Tax Expenditure Analysis (PDF)
87 pages. Excerpt: "This document, prepared by the staff of the Joint Committee on Taxation . . . reconsiders the utility of the JCT Staff's current implementation of tax expenditure analysis. . . . Driven off track by seemingly endless debates about what should and should not be included in the 'normal' tax base, tax expenditure analysis today does not advance either of the two goals that inspired its original proponents: clarifying the aggregate size and application of government expenditures, and improving the Internal Revenue Code." (U.S. Congress, Joint Committee on Taxation)

Text of Study: Ownership of Individual Retirement Accounts (IRAs) and 401(k)-Type Plans (PDF)
Excerpt: "Growth in the number of 401(k)-type plans and the number of participants in those plans, which increased sharply in the 1990s, has slowed in recent years, according to a new EBRI study." (Employee Benefit Research Institute (EBRI))

[Guidance Overview] IRS Allows Tax-Free Withdrawal of Economic Stimulus Payments from IRAs
Excerpt: "Financial institutions receiving the direct deposit of the Economic Stimulus Payment and making the distribution should report the deposit and distribution in the usual manner. Taxpayers will receive instructions in the Form 1040 package that will allow them to report the distribution on their individual income tax return in a manner that shows that the amount withdrawn is not subject to taxes or penalties." (Wolters Kluwer)

Americans' FY 2007 Retirement Assets Up $1.1 Trillion from 2006
Excerpt: "Americans held $17.6 trillion in retirement assets at the end of 2007, up $1.1 trillion from year-end 2006, the Investment Company Institute reported." (Occupational Health and Safety)

[Guidance Overview] Retirement Plan Service Provider May Be Liable for Breach of ERISA Fiduciary Duty in Cross-Selling Rollover IRAs Invested in Proprietary Mutual Funds
Pages 1-2 of 7 pages. Excerpt: "A federal district court in Iowa allowed class action claims to proceed against a financial services company for alleged breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974, as amended ('ERISA'), resulting from the company encouraging retirement plan participants to roll over their 401(k) plan assets into IRAs invested in the company's proprietary mutual funds." (Goodwin Procter LLP)

Consolidating Retirement Funds
Excerpt: "Consolidating multiple retirement plans can help simplify life and gain control over qualified plan assets. For example, consolidating IRA and 401(k) assets with one institution may save both time and money. Assets can be transferred from one IRA provider to another without taxes or penalties." (The Republican Eagle)

[Guidance Overview] Former Participants Have Standing to Pursue Equitable, But Not Legal Remedies With Respect to IRA Rollovers (PDF)
2 pages. Excerpt: "Plaintiffs are former participants in 401(k) plans, who allege that in rolling over their plan accounts to IRAs, defendants violated ERISA. On April, 21 2008, a federal judge in Iowa ruled that former participants in a 401(k) plan lacked standing to pursue legal remedies under ERISA, despite the Supreme Court's recent ruling in LaRue v. DeWolff, Boberg & Assoc., Inc., 128 S. Ct. 1020 (2008), but held that standing was proper to pursue equitable relief under ERISA. Young v. Principal Financial Group, Inc., S.D. Iowa., No. 4:07-cv-386." (Sutherland Asbill & Brennan LLP)

[Guidance Overview] Relief Allows Penalty-Free Withdrawal of Economic Stimulus Payments from Certain Tax-Favored Accounts
Excerpt: "For taxpayers who choose to leave the directly deposited amounts in their HSAs, IRAs, or other tax-favored accounts, the directly deposited amounts will count toward their contribution limits and will be subject to otherwise-applicable tax consequences, including any penalties resulting from excess contributions that are not timely corrected." (Employee Benefits Institute of America)

[Guidance Overview] Converting Retirement Plan Funds to a Roth IRA
Excerpt: "If your client wants to convert employer plan funds directly to a Roth IRA, there are some new Internal Revenue Service (IRS) rules you should be aware of. The Pension Protection Act of 2006 (PPA) allows such conversions beginning in 2008. In some cases, after-tax plan funds can be converted to a Roth IRA tax-free, if only those funds are converted and the remaining plan funds are rolled to a traditional IRA. Notice 2008-30 confirms that Roth conversions can be done from employer plans such as 401(k)s, 403(b)s and 457s." (Financial Planning)

[Guidance Overview] Economic Stimulus Payments to IRAs/Health Savings Accounts Can Be Withdrawn
Excerpt: "According to Announcement 2008-44, if the taxpayer withdraws the payment 'no later than the time for filing the taxpayer's income tax return for 2008, plus extensions,' the amount withdrawn will be treated as 'neither contributed to nor distributed from the account.' Therefore, according to the IRS, 'the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code.'" (Attorney B. Janell Grenier via Benefitsblog.com)

[Official Guidance] IRS Announcement 2008-44: No Penalty for Withdrawing Stimulus Payment That Was Deposited Directly Into IRA, HSA or Similar Accounts (PDF)
4 pages. Excerpt: "The account specified by the taxpayer could be a checking or saving account, or an account that is given favorable tax treatment under the Code, such as an IRA, a health savings account (HSA), an Archer MSA, a Coverdell education savings account (CESA), or a qualified tuition program account (QTP or section 529 program) . . . . An individual may withdraw from a tax-favored account an amount less than or equal to the amount of the Economic Stimulus Payment directly deposited into such account, notwithstanding any restrictions in the Code. To the extent that the withdrawal is made no later than the time for filing the taxpayer's income tax return for 2008, plus extensions (or in the case of a CESA, the later of May 31, 2009, or the time for filing the taxpayer's income tax return for 2008, plus extensions), the amount withdrawn is treated as neither contributed to nor distributed from the account. Thus, the amount withdrawn will not be subject to regular federal income tax nor to any additional tax or penalty under the Code." (Internal Revenue Service)

House Passes Taxpayer Rights Bill, Including Provisions on IRAs and HSAs
Excerpt: "The House on April 15, 2008, passed H.R. 5719, The Taxpayer Assistance and Simplification Bill of 2008, this year's version of taxpayer rights legislation. Among the items included in the legislation are provisions affecting IRAs and health savings accounts (HSAs)." (Wolters Kluwer)

Lousy 401(k)? Lousy Economy? Get a Roth!
Excerpt: "From a pure tax standpoint, a Roth IRA is usually a better choice if you expect to be in a higher tax bracket when the time comes to make withdrawals. A pretax vehicle like a 401(k) or traditional IRA is a better option if you expect to be in a lower tax bracket when you retire.But if you've got a lousy 401(k) plan, the Roth IRA wins hands down, no matter how your tax situation is likely to shake out." (Money via CNNMoney.com)

More Companies Offer Roth 401(k)s, But Complexity Remains a Concern
Excerpt: "Roughly 22% of corporations now offer a Roth 401(k) option to their workers, up from 12% last year, according to a survey from accounting firm Grant Thornton, which, along with Plan Sponsor Advisors and law firm Drinker Biddle, polled chief financial officers and human resources executives at nearly 200 companies." (Financial Week; free registration required)

Principal IRA Rollover Suit Could Blaze New Territory
Excerpt: "A lawsuit by former 401(k) participants against the Principal Financial Group appears poised to make new law. The lawsuit is over allegations that the company duped participants into IRA rollovers into Principal's proprietary mutual funds." (planadviser)

A Stalwart of Retirement Planning: The IRA
Excerpt: "Financial experts say that one often-overlooked resource is the humble Individual Retirement Account, or I.R.A., which has been a part of the personal finance landscape for so long that many of us take it for granted. . . . The rules for some I.R.A. contributions are so complex that many Americans may not realize they are eligible to make them . . . ." (The New York Times; free registration required)

Introducing the Wealthy to Roth IRAs As the Income Limit on Roth IRA Participation Disappears in 2010
Excerpt: "Advisors take heed: the income limit for those who can convert their retirement holdings from a traditional IRA to a Roth IRA (now applicable to anyone with a modified adjusted gross income of $100,000) disappears permanently in 2010, so high-net-worth folks -- even Bill Gates -- will be able to get a portion of their assets into a tax-free Roth account." (Investment Advisor)

[Guidance Overview] If an Individual Rolls Over Two IRA Distributions in a 12-Month Period, What Are the Consequences?
Excerpt: "An IRA owner is allowed to roll over just one distribution from the same IRA, or the same assets, in a 12-month period. According to the instructions for filing Form 5498, an IRA custodian/trustee should report (or correct any reporting already completed) any ineligible rollover contribution as a regular contribution. This required reporting serves to make the second (or third, etc.) distribution from a single IRA in a 12-month period, taxable." (Wolters Kluwer)

[Guidance Overview] Beneficiaries Naming Beneficiaries - Examples and a New Form, the IRA Successor Beneficiary Form
Excerpt: "May an individual retirement account (IRA) beneficiary name a beneficiary -- a successor to receive any remaining assets upon the beneficiary's death? What are the benefits of doing so?" (Wolters Kluwer)

Bill Would Order CalPERS to Offer IRAs to All Californians Working in the Private Sector
Excerpt: "A bill in the state Assembly would require the California Public Employees' Retirement System, the mammoth pension fund for government workers, to offer individual retirement accounts for private-sector employees. The goal of the bill, AB2940, is to increase retirement savings among the vast number of people who have no plan at work and don't have the will or skill to open an IRA on their own." (San Francisco Chronicle)

[Guidance Overview] With Active Participant Status – Can You Deduct Your IRA Contribution?
Excerpt: "[I]f the individual is an active participant or married to an active participant, his eligibility for deducting a traditional IRA contribution depends on his modified adjusted gross income (MAGI) and tax filing status. The MAGI limits as they apply to the different tax filing statuses are [in the chart on the target page]." (RetirementDictionary.com)

California Assembly Panel Passes State-Run IRA Proposal
Excerpt: "The bill envisions the Employment Development Department using its existing automated system for collecting payroll taxes to allow workers to have contributions deducted from their paychecks. CalPERS is renowned for its investing prowess, supporters say, and could use a contractor to service the accounts, such as mailing statements and maintaining a Web site. If the retirement system tapped into a large market, the big pool of investors would create economies of scale." (The Sacramento Bee)

[Guidance Overview] IRS Answers Questions About PPA Distributions
Excerpt: "In Notice 2008-30, the IRS answers questions about certain distribution-related provisions of the Pension Protection Act of 2006 (PPA) that took effect in 2008. The notice addresses interest rate assumptions for lump sum distributions, rollovers from eligible retirement plans to Roth IRAs, qualified optional survivor annuity (QOSA) requirements and gap-period earnings." (Watson Wyatt Worldwide)

[Official Guidance] Text of Taxpayer Assistance and Simplification Act, H.R. 5719 (PDF)
Excerpt: "To amend the Internal Revenue Code of 1986 to conform return preparer penalty standards, delay implementation of withholding taxes on government contractors, enhance taxpayer protections, assist low-income taxpayers, and for other purposes." (U.S. House of Representatives via American Benefits Council)

[Guidance Overview] Official Summary of the Taxpayer Assistance and Simplification Act, H.R. 5719 (PDF)
3 pages. Changes related to IRAs and HSAs are included. (American Benefits Council)

The Best New Features of a Rich 401(k)
Excerpt: "Over the past year or two, a combo of new government regulations and a chaotic stock market - not to mention the continued slashing of traditional pensions - has spurred many companies to revamp their 401(k) plans in ways that can pay off big-time. Unlike a regular 401(k), the Roth version - permanently greenlighted by Congress in 2006 - lets you make contributions only after the money is taxed. But withdrawals are tax-free. If you'll be in a higher bracket in retirement, a Roth 401(k) can be a better deal." (CNNMoney.com)

Roth 401(k) vs. Regular 401(k) Calculator
Schwab provides this Roth 401(k) calculator to help people make a determination about whether or not a Roth 401(k) is right for them. (Schwab Retirement Plan Services)

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