Many defined benefit plan sponsors are looking for ways to reduce the on-going liability and the volatility of the annually required contributions to their defined benefit plans, which is sometimes referred to as “de-risking.” One de-risking strategy involves offering lump-sum payouts to retirees in pay status as a replacement of their annuity payments. This strategy […]
KH
As explained in a prior blog post, an employee who timely files a Section 83(b) election will be taxed on the fair market value of property transferred (typically restricted stock) to him or her in exchange for services on the date of grant rather than as the stock vests. In addition, by making a Section […]
GG
In its April 1, 2015 Employee Plans News, the IRS stated that defined contribution plan sponsors must maintain hardship distribution records and that plan sponsors cannot rely on electronic participant self-certification for hardship distributions. The IRS indicated that plan sponsors should keep the following: Documentation of the hardship request, review and approval; Financial information that […]
AM
The IRS recently released final regulations clarifying two aspects of the “performance-based compensation” exception to the $1,000,000 limit on deductible compensation paid to covered employees under Section 162(m) of the Internal Revenue Code. Proposed regulations issued in 2011 provided that in order to qualify awards as “performance-based compensation” a shareholder approved equity plan must specify […]
GG
As we move into 2015, employers continue to grapple with numerous Health Care Reform concepts. Employers should be cautious regarding arrangements promoted to avoid health care penalties because the agencies are cracking down, as shown below. On November 4, 2014, the IRS and other agencies indicated that they have become aware that group health plans […]
NC
The IRS recently announced cost of living adjustments for 2015. The key dollar amounts for retirement plans (compared to the 2014 dollar limits) are noted below. Maximum Qualified Retirement Plan Dollar Limits 2015 2014 Limit on Section 401(k) deferrals (Section 402(g)) $18,000 $17,500 Dollar limitation for catch-up contributions (Section 414(v)(2)(B)(i)) $6,000 $5,500 […]
AM
On September 18, 2014, the IRS released IRS Notice 2014-55, which now allows employees to make certain mid-year health coverage changes when they reduce below 30 hours of service or enroll in a qualified health plan through a Marketplace. Employers who want to permit either of these two new changes (which are explained in detail […]
NC
The IRS recently issued guidance on the use of longevity annuities in defined contribution plans and IRAs. These longevity annuities are known as “qualified longevity annuity contracts” or “QLACs.” A QLAC is a deferred annuity that begins at a specified age, but not later than age 85. This type of annuity allows individuals to have […]
AM
Many employers adopt defined contribution retirement plans that have been pre-approved by the IRS. Plan sponsors of pre-approved plans submit the plans to the IRS to obtain approval of whether the form of the plan meets the requirements of Internal Revenue Code Section 401. These pre-approved plans are often referred to as “volume submitter plans” […]
KH
In our 2013 End of Year Plan Sponsor “To Do” List Part 2 – Health and Welfare I did a lengthy summary of the various changes required to employer health care arrangements on account of IRS Notice 2013-54. On May 6, 2014, I followed that up with a blog entitled Non-integrated health reimbursement arrangements (whatever […]
NC
