October 2011
The following highlights the most significant New Developments published in the Pension Plan Guide since the last update on September 30, 2011.
During the past month, the Department of Labor has issued final regulations implementing provisions of the Pension Protection Act of 2006 that authorize fiduciary advisers to provide individualized investment advice under eligible investment advice arrangements. The final regulations: define the scope of the fee leveling requirements under an eligible investment advice arrangement; specify the requirements for the certification of model investment advice programs; set forth the conditions under which a fiduciary adviser may elect to be the sole plan fiduciary; explain the circumstances under which an auditor will be deemed sufficiently independent to review an investment arrangement; and provide a nonmandatory Model Fiduciary Adviser Form for the disclosure of fees, compensation and services.
The IRS has released the cost of living adjustments for benefit and contribution limits applicable in 2012. Under the adjustments, the elective deferral limit will increase to $17,000 from $16,500, the Code Sec. 415 annual additions limit will rise to $50,000 from $49,000, the annual compensation limit will increase to $250,000 from $245,000, and the threshold for highly compensated employees will increase to $115,000 from $110,000. However, the catch-up contribution limit tor those age 50 and over will remain at $5,500.
In addition, the IRS has updated procedures for requesting opinion and advisory letters for master and prototype and volume submitter plans; simplified the process for establishing determination letter applications that are exempt from user fees; and delayed the effective date for the interest crediting rules contain in the hybrid pan regulation issued in 2010.
In the courts, the Seventh Circuit ruled that deference to a plan’s method of recalculating lump-sum distribution in order to remedy “whipsaw” calculations was not required. In a pair of interesting cases from the Fifth Circuit, the court held that: (1) a plan could not recover benefits paid to the ex-spouse of a participant under a QDRO obtained pursuant to a “sham” divorce and (2) profit-sharing plan trustees breached their duties of loyalty under ERISA by withholding from an employee forms necessary to elect a rollover distribution.
NEW DEVELOPMENTS
1. DOL Releases Final Rules Allowing for Personalized Investment Advice
The Department of Labor has issued final regulations implementing provisions of the Pension Protection Act of 2006 that authorize fiduciary advisers to provide individualized investment advice under eligible investment advice arrangements. The final regulations: define the scope of the fee leveling requirements under an eligible investment advice arrangement; specify the requirements for the certification of model investment advice programs; set forth the conditions under which a fiduciary adviser may elect to be the sole plan fiduciary; explain the circumstances under which an auditor will be deemed sufficiently independent to review an investment arrangement; and provide a nonmandatory Model Fiduciary Adviser Form for the disclosure of fees, compensation and services. The rules are designed to make high-quality fiduciary investment advice more accessible, while providing important safeguards to minimize potential conflicts of interest.”
The rules will be effective December 27, 2011. Phyllis Borzi, EBSA Assistant Secretary explains that the relatively accelerated effective date is due to the fact that compliance with the Prohibited Transaction Exemption being implemented is voluntary. In addition, the early effective date will allow employers to begin providing much need investment advice for employees on an expedited basis.
The prohibited transaction rules in ERISA and the Internal Revenue Code generally prevent a fiduciary investment adviser from recommending plan investment options if the adviser receives additional fees from the investment providers. Although these rules protect participants from conflicts of interest, ERISA provides exemptions from the rules in appropriate circumstances and permits the department to grant exemptions that have participant-protective conditions. The new regulation implements an exemption that Congress enacted as part of the Pension Protection Act of 2006 to improve participant access to fiduciary investment advice, which contains certain safeguards and conditions to prevent investment advisers from providing biased advice that is not in a participant’s best interest.
To qualify for the exemption in the final regulation, investment advice must be given through the use of a computer model that is certified as unbiased by an independent expert or through an adviser compensated on a “level-fee” basis, meaning that the fees do not vary based on investments selected. Both types of arrangements must also satisfy several other conditions, including the disclosure of the adviser’s fees and an annual audit of the arrangement for compliance with the regulation.
Note, Borzi stressed that the investment advice regulations are separate from and do not affect the Labor Department’s proposed rules governing the definition of fiduciary investment advice, which the DOL will re-propose. According to Borzi, the investment advice regulations, which apply only to fiduciaries, will supplement the fiduciary rules.
Note: An exhaustive analysis of the rules will be featured in PEN Report 1913 (November 7, 2011) and in the November issue of the Practical Guide to 401(k) Plans.
The final rules were reported in PEN Report 1912 (October 31, 2011). The rules were reproduced at the Daily Document Update Section off PEN at Par. 109X. The regulations were provided in PEN Report 1913.
2. Benefit and Contribution Limits to Increase in 2012
Many of the benefit and contribution dollar limits applicable to 401(k) plans will increase in 2012. Thus, effective January 1, 2012, for example, the elective deferral limit will increase to $17,000 from $16,500, the Code Sec. 415 annual additions limit will rise to $50,000 from $49,000, the annual compensation limit will increase to $250,000 from $245,000, and the threshold for highly compensated employees will increase to $115,000 from $110,000. However, the catch-up contribution limit tor those age 50 and over will remain at $5,500.
Annual additions limit. Effective January 1, 2012, the annual additions limitation applicable to defined contribution plans under Code Sec. 415(c)(1)(A) will increase to $50,000 from $49,000. Note, the limitation on annual benefits under a defined benefit plan under Code Sec. 415(b)(1)(A) will rise to $200,000 from $195,000.
Elective deferral limits. The elective deferral limit under Code Sec. 402(g) will increase to $17,000 from $16,500 for 2012. Similarly, the limit on elective deferrals under a 403(b) plan or a 457 governmental plan will rise to $17,000. However, the limit on deferrals to a SIMPLE 401(k) plan under Code Sec. 408(p)(2)(E) will remain $11,500.
Roth 401(k) deferrals. The amount of an individual's designated Roth contributions (as an elective deferral) is subject to the Code Sec. 402(g) annual limit on elective deferrals, reduced by the amount of the participant's other elective deferrals under the 401(k) plan. Thus, the Code Sec. 402(g) limit applies to the total of the employee's pre-tax elective deferrals (including contributions to a SEP and elective employer contributions to a SIMPLE plan) and after-tax Roth contributions. For example, a participant who defers $13,000 to a 401(k) plan may only make a designated Roth 401(k) contribution of $4,000 for 2012. However, participant contributions to a Roth 401(k) account are not limited by contributions to a Roth IRA. Thus, a participant under age 50 may, for 2012, contribute up to $17,000 to a Roth 401(k) (or a Roth 401(k) and a traditional 401(k)) and $5,000 (unchanged from 2011) to a Roth IRA.
Catch-up contribution limits unchanged in 2012. The dollar limitation under Code Sec. 414(v)(2)(B)(i) for catch-up contributions by individuals age 50 and over to a non-SIMPLE 401(k) plan will remain $5,500. The dollar limitation on catch-up contributions to SIMPLE 401(k) plans will continue to be $2,500 in 2012.
Annual compensation limit. The annual compensation limit under Code Secs.
401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) will increase from $245,000 to $250,000 for 2012.
CCH Note: A plan may not base allocations under a defined contribution plan on compensation in excess of the Code Sec. 401(a)(17) limit. Accordingly, compensation used by a plan in applying the Code Sec. 415 limits may not exceed the applicable Code Sec. 401(a)(17) limit for the year.
Application of annual compensation limit to SIMPLE plans. The amount of an employer's matching contribution under a SIMPLE 401(k) plan is subject to the annual compensation limit. Accordingly, the maximum employer matching contribution to a SIMPLE 401(k) account for 2012 will be $7,500 (3 percent of $250,000). Similarly, the 2 percent nonelective contribution an employer may make under a SIMPLE 401(k) plan is also based on the annual compensation limit. Thus, the maximum nonelective employer matching contribution for 2012 will be $5,000 (2 percent of $250,000).
Key employee compensation threshold. The dollar limitation under Code Sec. 416(i)(1)(A)(i), governing the definition of key employees in a top-heavy plan, will increase to $165,000 from $160,000. Thus, in 2012 a key employee will include any employee who, at any time during the plan year containing the determination date for the plan year is: (1) an officer of the employer with annual compensation in excess of $165,000; (2) a 5 percent owner of the employer; or (3) a 1 percent owner of the employer with an annual compensation from the employer of more than $150,000.
Note, the compensation limit applicable to 1 percent owners is not adjusted for inflation.
Highly compensated employee threshold. The limitation used in the definition of highly compensated employees under Code Sec. 414(q)(1)(B) will increase to $115,000 from $110,000. Accordingly, an employee will be considered highly compensated if he or she performed services for the employer in the determination year and:
1. was a 5% owner at any time during the current plan year (determination year) or the preceding plan year (look-back year), or
2. earned compensation from the employer in excess of $80,000 ($115,000 for 2012) during the preceding year, and if the employer so elects, was in the top-paid group (i.e., top 20% of employees by compensation) of the employer for the preceding year.
The chart below illustrates the benefit and contributions limits applicable in 2011 and 2012.
MAXIMUM DOLLAR LIMITS
2012 2011
Elective Deferrals ..................... $17,000 $16,500
Catch-up Contributions (non-SIMPLE) ..... 5,500 5,500
Annual Defined Benefit Limit ............ 200,000 195,000
Annual Defined Contribution Limit ....... 50,000 49,000
Annual Compensation Limit ............... 250,000 245,000
Grandfathered Compensation Rule for
Government Plans .......................... 375,000 360,000
Deferrals for Government Plans .......... 17,000 16,500
Highly Compensated Employee Limit ....... 115,000 110,000
SIMPLE Plan Employee Deferrals .......... 11,500 11,500
Catch-up contributions (SIMPLE) ......... 2,500 2,500
SEP Coverage ............................ 550 550
SEP Compensation Amount ................. 250,000 245,000
Tax Credit ESOP Maximum Balance ......... 1,015,000 985,000
Amount for Lengthening of 5-Year ESOP
Period .................................... 200,000 195,000
The COLAs were reported in PEN Report 1912 (October 31, 2011). IRS News Release, IR-2011-103, October 20, 2011 is reproduced at Par. 17,037Q.
3. Maximum Amount of Earnings Subject to Social Security Will Increase in 2012
The maximum amount of earnings subject to Social Security tax will increase in 2012 to $110,100 from $106,800. Of the estimated 161 million workers who will pay Social Security taxes in 2012, about 10 million will pay higher taxes as a result of the increase in the taxable maximum.
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 60 million Americans will increase 3.6 percent in 2012. The 3.6 percent cost-of-living adjustment (COLA) will begin with benefits that nearly 55 million Social Security beneficiaries receive in January 2012. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2011.
The Social Security adjustment was reported in PEN Report 1912 (October 31, 2011). The Social Security News Release and Fact Sheet are reproduced at Par. 24,009Z.
4. Deference to Plan’s Method for Recalculating Distributions Not Required to Remedy “Whipsaw” Calculations
When fashioning a remedy for cash balance plan participants injured by the plan’s pre-PPA impermissible use of a “whipsaw” calculation that denied participants the addition of future interest credits to their early lump-sum distributions, a trial court was not required to defer to the plan’s proposed method for recalculating lump-sum distributions, the U.S. Seventh Circuit Court of Appeals has ruled.
PENSION PL GUIDE OCTOBER 17, 2011
In Conkright v. Frommert (PEN Par. 24,006W), the United States Supreme Court held that a plan interpretation by an administrator with discretionary authority to interpret the plan should be accorded deference, even though the administrator’s prior related interpretation was determined to be invalid. In this case, however, the issue was not plan interpretation, because the original, unlawful calculation was essentially codified in the plan. Plan administrators exercised no interpretive discretion over the original interest rate calculation. As such, the court explained, the Conkrightholding did not apply. On remand, the trial court was to select a recalculation method without deferring to the plan’s suggestions.
Thompson v. Retirement Plan for Employees of S.C. Johnson & Son, Inc., was reported in PEN Report 1910 (October 17, 2011) at Par. 24,009W.
5. Plan Could Not Recoup Benefits Paid to Ex-Spouse of Participant Under QDRO Obtained Pursuant to “Sham Divorce”
ERISA does not authorize a plan administrator to consider the good faith of the parties to a divorce when determining the qualified status of a domestic relations order. Thus, the Fifth Circuit ruled that ERISA does not allow a plan to recoup benefits paid to the ex-spouse of a plan participant pursuant to a domestic relations order that was based on an allegedly sham divorce.
Sham divorce used to secure full lump-sum benefit. Participants in the employer’s defined benefit plan allegedly obtained sham divorces in order to obtain lump-sum pension distributions, which they would not otherwise have received without separating from employment. By getting divorced, the participants and their spouses were able to obtain domestic relations orders (DROs) from state courts, which assigned 100 percent (or 90 percent) of the participants’ pension benefits to the spouses. The DROs enabled the participants to utilize a plan provision that allowed the spouses of pilots who had attained age 50 to obtain, upon divorce, a lump-sum benefit, even if the pilots continued working. By pursuing divorce, the pilots successfully secured their full benefits before an expected PBGC takeover of the plan, which would have resulted in the participants having to take their benefits as an annuity rather than as a lump-sum. However, while the plan authorized the payment of lump-sum benefits in the event of divorce, the participants remarried their former spouses after receiving the benefits, suggesting that the divorces were not obtained in good faith.
Employer claim for restitution under ERISA Sec. 502(a)(3). Upon discovering the scheme, the employer filed suit under ERISA Sec. 502(a)(3) , seeking restitution of the lump-sum benefits it had paid to the spouses while they and the pilots were divorced. A federal trial court dismissed the claim, holding that, under ERISA Sec. 206(d)(3), a plan administrator is not empowered to refuse to treat a domestic relations order as a QDRO merely because the administrator believes the order was not obtained in good faith. According to the trial court, a plan administrator may not refuse to qualify a DRO for reasons (such as the lack of good faith ) that are not specifically enumerated in ERISA Sec. 206(d)(3).
Form of benefit not authorized under plan. On appeal, the employer argued that the DROs did not satisfy the requirements under ERISA Sec. 206(d)(3)(D)(i) that the order not require the to plan to provide any type or form of benefit, or any option, not otherwise authorized under the plan. According to the employer, the DROs provided a benefit not otherwise authorized under the plan because they enabled the participants obtain retirement benefits while the parties were still working in manner not authorized by the plan (i.e., a sham divorce)
The Fifth Circuit, after noting that the plan permitted lump-sum distributions to be made to the ex-spouse of a pilot who has attained age 50 and continued to work, found that ERISA Sec. 206(d)(3) does not allow an administrator to consider the good faith of the underlying divorce when determining the qualified status of a DRO. ERISA Sec. 206(d)(3)(D)(i) only allows an administrator to determine that a QDRO is not qualified if it would require benefits to be paid in a specific manner or time frame that is not authorized by the terms of the plan. Plan administrators, the court explained, are required to determine the qualified status of a DRO without engaging in “complex determination of underlying motives or intent.”
Application of sham transaction doctrine. The employer, alternatively, argued for an application, in the QDRO context, of the sham transaction doctrine, pursuant to which sham divorces may be disregarded for purposes of enforcing tax, bankruptcy, and immigration law. The court refused to incorporate the sham transaction doctrine into ERISA Sec. 206(d)(3), as that would require private entities (other than courts) to investigate the private lives of employees order to ascertain the “genuineness” of the intention behind a divorce.
Note: The court, in dicta, ruled that a plan administrator would not be prevented from recouping benefits paid out pursuant to a divorce (or divorce decree) that was determined by a court or other agency to be a sham.
The court was especially reluctant to tamper with the comprehensive enforcement scheme of ERISA by extending, absent Congressional intent, the application of the sham transaction.
Brown, et al. v. Continental Airlines, Inc., was reported in PEN Report 1909 (October 10, 2011) at Par. 24,009V.
6. Trustees breached duty of loyalty by withholding forms necessary to elect rollover distribution from profit-sharing plan
Profit-sharing plan trustees breached their duty of loyalty under ERISA when they withheld from a participant the election forms and other information needed to elect a rollover distribution of his vested account balance, the U.S. Court of Appeals in New Orleans (CA-5) has ruled.
ERISA Sec. 404 does not enumerate the particular duties of a fiduciary, but under the common law of trusts, a fiduciary has a duty of loyalty to administer a trust solely in the interest of the beneficiaries. Connected to the duty of loyalty in the ERISA context is a duty to disclose to participants material facts affecting the participant's interest in the plan. The employer knew as of the employee's termination that he did not have the forms needed to apply for his benefits. Thus, under ERISA Sec. 502(a)(2), an award of $183,000, representing the difference in the employee’s account balance at year-end 2007, when he left the employer, and Spring 2009 when he received the rollover distribution, was appropriate.
Kujanek v. Houston Poly Bag I, Limited was reported in PEN Report 1911 (October 24, 2011) at Par. 24,009X.
7. IRS Updates Procedures for Requesting Opinion and Advisory Letters for M&P and VS Plans
The IRS has updated the procedures for requesting opinion and advisory letters on the acceptability of the form of master and prototype (M&P) and volume submitter (VS) plans. The updated procedures are effective October 31, 2011.
The IRS has made many changes to the procedures, including minor revisions and clarifying language. In addition, the purpose and background sections of the procedures have been updated to summarize the second six-year remedial amendment cycle for pre-approved defined contribution and defined benefit plans. In the purpose section, the IRS notes that it began accepting applications for pre-approved defined contribution plans February 1, 2011. The second six-year remedial amendment cycle for pre-approved defined contribution plans ends January 31, 2017.
As provided in Section 18.02(1) of Rev. Proc. 2007-44 (CCH Pension Plan Guide Par. 17,299S-25), the 12-month applicable on-cycle submission period for non-mass submitter sponsors and practitioners, word-for-word identical adopters, and M&P minor modifier placeholder applications will end on January 31, 2012, and the nine-month applicable on-cycle submission period for sponsors and practitioners maintaining defined contribution mass submitter plans will end on October 31, 2011. The IRS has extended the submission deadline to submit applications for opinion and advisory letters for defined contribution mass submitter plans from October 31, 2011 to January 31, 2012. The 2010 Cumulative List of Changes in Plan Qualification Requirements, Notice 2010-90 (CCH Pension Plan Guide Par. 17,146F), is to be used by plan sponsors and practitioners submitting determination, opinion or advisory letter applications for plans during this period.
M & P pre-approved plan program changes. Among the changes in the M&P plan program: (1) the description of the six-year remedial amendment cycle and other amendment requirements are updated to conform to the interim amendment requirements (including deleting former section 8.03 regarding a special one-year rule to amend following the issuance of a revenue ruling or other guidance) and (2) provisions are added to clarify that an M&P mass submitter amending its plan should submit a restated plan during the applicable on-cycle submission period for the next six-year cycle, rather than submitting the amendments between submission periods, and to state that the M&P mass submitter must provide copies of the amendments to sponsors who have adopted the plan.
VS pre-approved plan program changes. Among the changes in the VS plan program: (1) language is added to clarify that each adoption agreement counts as one specimen plan for purposes of the 30-employer requirement (or 10, if applicable) and (2) a rule is removed under which a VS practitioner's authority to amend on behalf of an adopting employer is conditioned on the plan being covered by a favorable determination letter (if the employer is required to obtain a determination letter in order to have reliance), and other provisions concerning the practitioner's authority to amend on behalf of an adopting employer are clarified.
Rev. Proc 2011-49 was reported in PEN Report 1910 (October 17, 2011) and reproduced at Par. 17,299T-69.
8. IRS Simplifies Process for Establishing Determination Letter Applications Exempt from User Fees
The IRS has issued guidance that, generally effective for applications filed after January 31, 2011, simplifies the process for establishing the eligibility of applications for determination letters on the qualified status of small employer retirement plans for exemption from the user fee requirement under Code Sec. 7528(b)(2) . The guidance provides a simplified means by which to determine whether an application has been filed within a plan’s remedial amendment period beginning within the plan’s first five plan years.
Code Sec. 7528(b)(2)(B) and (C) provide that an application for a determination letter on the qualified status of a small employer pension, profit-sharing, stock bonus, annuity, or employee stock ownership plan (ESOP) or the exempt status of a trust that is part of the plan is exempt from user fees if, among other things, the application is filed by the later of the last day of the fifth plan year the plan is in existence or the last day of any remedial amendment period of the plan beginning within the first five plan years.
In order to simplify the user fee exemption analysis, the IRS will treat a plan’s application as having been filed by the last day of the plan’s remedial amendment period beginning within the five plan years if: (1) the application is filed with the IRS by the last day of the submission period for the plan’s current remedial amendment cycle, and (2) the plan first came into existence no earlier than January 1 of the tenth calendar year immediately preceding the year in which the submission period for the plan’s current remedial amendment cycle begins.
IRS Notice 2011-86 was reported in PEN Report 1912 (October 31, 2011) and reproduced at Par. 17,148G.
9. IRS Releases Updated LRMs for Defined Contribution plans and CODAs
The IRS has released an updated Listings of Required Modifications (LRMs) for defined contribution plans and cash or deferred arrangements (CODAs).
The LRMs for defined contribution plans contain sample plan provisions that satisfy certain specific requirements of the Internal Revenue Code, taking into account changes in the plan qualification requirements and guidance listed in the 2010 Cumulative List of Changes in Plan Qualification Requirements (see CCH Pension Plan Guide Par. 17,146F).
The CODA LRMs contain sample plan provisions that satisfy certain specific requirements of the Internal Revenue Code, as amended through the Small Business Jobs Act of 2010 (P.L. 111-240).
The LRMs were reproduced in PEN Report 1911 (October 24, 2011). The LRMs for defined contribution plans begin at Par. 41,038. The CODA LRMs are at Par. 41,041.
10. IRS Postpones Effective Dates for Hybrid Plan Interest Crediting Rules
The IRS has postponed the effective/applicability dates for the interest crediting rules contained in hybrid plan regulations issued in 2010. Under the notice, the proposed interest crediting regulations under Code Sec. 411(b)(5), when finalized, will be effective for plan years that begin no earlier than January 1, 2013. In addition, the IRS has extended the deadline for adopting plan amendments under Code Sec. 411(a)(3) and formalizes a special timing rule for providing an ERISA 204(h) notice of certain amendments adopted to change the interest crediting rate under a hybrid plan.
Application of interest crediting rules. Under Code Sec. 411(b)(1)(H)(i), a defined benefit plan may not discontinue an employee's benefit accrual or reduce the rate of an employee's benefit accrual because of age. Under Code Sec. 411(b)(5), a hybrid plan violates the age discrimination prohibition unless the plan provides that the interest credit (or an equivalent amount) for any plan year will be calculated at a rate that is not greater than the market rate of return. In 2010, the IRS issued final and proposed regulations providing guidance on the interest crediting and market rate of return requirements (see PEN Pars. 24,509T and 20,262V). The final regulations are generally effective for plan years beginning on or after January 1, 2011. However, IRS Reg. §§1.411(b)(5)-1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i), specifying the interest crediting rates and combinations of rates that satisfy Code Sec. 411(b)(5), are effective for plan years beginning on or after January 1, 2012, which is also when the proposed regulations are proposed to be effective.
Under the new relief, the IRS provides that the proposed regulations, when finalized, will apply to plan years beginning on or after a date to be specified in the regulations, which will not be earlier than January 1, 2013. In addition, the IRS intends to amend the final regulations to postpone the effective date of Reg. §§1.411(b)(5)-1(d)(1)(iii), (d)(1)(vi), and (d)(6)(i) to match the effective date of the proposed regulations when they are finalized. The IRS states that, until the final regulations are amended, plan sponsors may rely on the notice with respect to the postponement of the effective/applicability date.
Extension for adopting plan amendments. The notice also extends the deadline for adopting an interim or discretionary plan amendment to comply with Code Sec. 411(a)(13) (other than Code Sec. 411(a)(13)(A)) and Code Sec. 411(b)(5) until the last day of the first plan year before the plan year for which the proposed hybrid plan regulations, once finalized, apply to the plan.
As a result of this extension, the IRS's review of an application for a determination letter submitted between February 1, 2011, and January 31, 2012, will not consider the final regulations, other than the requirements of Code Sec. 411(a)(13)(A), unless the plan has been amended for the final regulations. In this case, the IRS will only consider those parts of the final regulations that are effective in plan years beginning on or after January 1, 2011.
IRS Notice 2011-85 was reported in PEN Report 1911 (October 24, 2011) and reproduced at Par. 17, 148F.
Qualified Pension Plans for Puerto Rico Employees- The Perfect Storm Has Arrived (September 2011) by Elizabeth Thomas Dold and David N. Levine
Cafeteria Plans, HRAs, and External Appeals Requirements Under PPACA (July 2011) by Aimee Nash
Implementing Distributions Under Terminating 403(b) Plans (June 2011) by Glenn Sulzer
IRS Provides Guidance on In-Plan Rollovers to Roth Accounts (January 2011) by Aimee Nash
The Medicare Tax on Unearned Income and Roth Conversions (November 2010) by Bruce D. Steiner
Foreign Account Reporting for Retirement Plans (September) by Jennifer E. Eller
What's In the IRS's 401(k) Compliance Questionnaire? (July 2010) by Glenn Sulzer
Being a Retirement Plan Fiduciary: More Angst Than Ever (May 2010) by Michael Snyder
Employee Stock Purchase Plan Final Regulations (March 2010) by Brian A. Benko
Suspension of Required Minimum Distributions for 2009 Facilitates Roth Conversions (November 2009) by Bruce D. Steiner
Target-Date Funds: Balancing Risk With Success (September 2009) by Michael Snyder
Impact of PPA on Defined Contribution Plan Administration (May 2009) by Brodie Secrest
The Non-ERISA, Nonprofit 403(b) Plan May be More Difficult to Achieve Post Final 403(b) Regulations (March 2009) by Aimee Nash
Distributing Annuities from Defined Contribution Plans: The Qualified Plan Distributed Annuity (June 2008) by Robert J. Toth, Jr. and Robert W. Kistler
3. DB/K Document from ftwilliam.com is Industry First for Leveraging DB/K Plans
The new DB/K “wrap” document is available in the ftwilliam.com retirement plan document package.
5. Keeping Up with PPA Guidance
The Pension Protection Act of 2006 represents the most sweeping overhaul to the pension law in more than 30 years. In addition to making myriad changes to the Internal Revenue Code and ERISA, the PPA requires government agencies to issue perhaps hundreds of guidance items over the next several years.
Keeping track of these guidance issuances will be a monumental task for pension and benefit practitioners. CCH has created a valuable search aid --the Table of PPA Guidance --which allows practitioners to quickly locate PPA guidance items. The Table lists official guidance issued by government agency (Internal Revenue Service, Department of Labor, Pension Benefit Guaranty Corporation, and joint agency releases), form of guidance, date of issuance, short description of the guidance, and the CCH paragraph number at which the guidance item may be found in full text. Internet customers can quickly link from the Table to a specific guidance item. The Table of PPA Guidance is designed to help busy practitioners stay abreast of the continuing flow of PPA issuances and is available exclusively to CCH PENSION PLAN GUIDE subscribers.
The Table of PPA Guidance is at PEN Par. 51C.
6. Comprehensive Plan Reporting and Disclosure Calendar Chart
Employee benefit plans are subject to numerous reporting and disclosure requirements that require information to be provided to plan participants and beneficiaries and filed with the IRS, DOL, PBGC, and other government agencies. Failure to comply with any applicable reporting requirement can result in significant penalties.
In order to assist plan administrators and others in satisfying their reporting obligations, PEN features a plan reporting calendar that neatly encapsulates all of the various reporting requirements. The calendar lists the reports required in a calendar year in chronological order. In addition, the calendar highlights the subject matter of a report and indicates both the party required to file the report and the party to whom the report must be directed.
The Plan Reporting Calendar is at PEN Par. 36.
7. Check "Calendars . Tables . Interest Rates" for Quick Answers
Electronic and print customers of the CCH Pension Plan Guide can find many pertinent pension facts and figures by consulting the handy "Calendars. Tables. Interest Rates" section of the Guide.
Some of the helpful features of this section are:
Current withholding tax tables (PEN Pars. 46, 46A, and 46B)
Cost-of-living adjustment charts for retirement plans, IRAs, and social security (PEN Par 48)
PBGC monthly benefit chart (PEN Par. 49)
Table of Public Laws Amending the Internal Revenue Code and ERISA (PEN Par. 51B)
Table of current and historical interest rates (PEN Par. 52 and following)