How Much Could 401k Contribution Limits Rise in 2025?
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Compliance and Regulatory How Much Could 401k Contribution Limits Rise in 2025? How much will the maximum 401k, 403b, and 457 deferrals for defined contribution plans rise in 2025? More than this year, if one firm's forecast is any indication. Milliman researchers Nina Lantz and Abby Kendig believe it will increase by $1,000, going from $23,000 in 2024 to $24,000 in 2025. Source: Napa-net.org 2025 IRS Retirement Plan Limits Forecast -- May This is an update to the Milliman 2025 IRS Limits Forecast using the U.S. Bureau of Labor Statistics report published June 12, 2024. This article includes information about the limits for qualified retirement plans, how these limits are calculated, how they are affected by SECURE 2.0, and why they may be relevant for certain plan sponsors. Source: Milliman.com Form 5500 Deadline Fast Approaching The deadline for filing the Form 5500 Series for 2023 calendar year plans is fast approaching. Employers and plan sponsors with a calendar-year plan must submit the Form 5500 Series by July 31, the last day of the 7th month after the end of the plan year about which they are to report. So they must submit the Form 5500 series for reporting about the 2023 plan year by July 31, 2024. Source: Asppa.org Offering a retirement plan carries with it responsibilities, but also benefits. So making the most of a plan maximizes its worth to all the stakeholders. This is the first in a series concerning the practical tips for making the most of a retirement plan. This installment focuses on the importance of making sure data is accurate. Source: Asppa.org IRS Clarifies 10% Additional Tax for Certain Emergency Distributions The IRS issued guidance on June 20 on the application of exceptions to the 10% additional tax under Internal Revenue Code (IRC) Section 72(t)(1) for emergency personal expense distributions and domestic abuse victim distributions. The guidance comes in Notice 2024-55. More specifically, Notice 2024-55 provides guidance on the portions of the SECURE 2.0 Act that added exceptions to the 10% additional tax. Source: Asppa.org Group Says DOL Overreaches with "Lost and Found" Database The ERISA Industry Committee wants the DOL to back off from requiring retirement plans to provide what it calls excessive amounts of participant information for its SECURE 2.0-mandated "Retirement Savings Lost and Found" database. Source: 401kspecialistmag.com »» Click here for more Compliance and Regulatory Material Insight: Studies, Research, Analysis, and Papers CITs Assert Greater Dominance in DC Plans The growing adoption of collective investment trusts in the DC market has raised questions about whether mutual funds are heading toward obsolescence. Factors such as pricing, fee transparency, and investment minimums are just a few variables that shape whether mutual funds will remain a competitive investment vehicle, according to the latest Cerulli Edge--U.S. Retirement Edition. Source: Cerulli.com Many Workers Don't Realize They Are Not Contributing to Workplace Plans Many nonparticipating employees, 59%, thought they were saving for retirement through their workplace plans, according to a recent study by Principal Financial Group. Among the respondents who believed they were saving for retirement in workplace plans but weren't, 49% thought they were automatically enrolled, 41% assumed they signed up themselves and 77% said they started saving as soon as they were eligible for the plan. Source: Planadviser.com Business Owners Delay Retirement Due to Savings Fears While most business owners say they're on track for retirement, recent findings from Nationwide show that just over a third (36%) have postponed their retirement in the past year. This concern is even more prominent for small business owners, with 57% who say they have pushed back their retirement timelines. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Advisers and Other Service Providers DOL Files Counter-Brief to Retirement Security Rule Challenge The DOL answered one of two open lawsuits in the federal courts challenging the Retirement Security Rule on June 14. The regulator's first response in court argued that the new rule is compliant with existing case law and is substantially different from a 2016 regulation that was vacated by the U.S. 5th Circuit Court of Appeals. Source: Planadviser.com First Lawsuit Filed Against DOL Over New ERISA Investment Advice Regulations Texas-based insurance industry plaintiffs, including a nonprofit trade group, have filed the first lawsuit to challenge the DOL's recently issued final regulations that broaden the definition of fiduciary under ERISA. The plaintiffs allege that the regulations exceed DOL's authority under ERISA, the Internal Revenue Code, and the Administrative Procedure Act. They also claim that the rule and transaction amendments violate the APA because they are arbitrary, capricious, and incompatible with ERISA and the IRC. Source: Hallbenefitslaw.com The New Fiduciary Rule: Confusion About Annual Retrospective Reviews The DOL's new fiduciary regulation will be effective on September 23, 2024. Parts of the PTEs will be effective on that date also, but other parts will not be effective until a year later -- September 23, 2025. Unfortunately, this split of the effective dates has created a considerable amount of confusion about what needs to be done and when it needs to be done. This article discusses one of those issues, the annual retrospective review and report. Source: Fredreish.com Court and Legal Upcoming Appellate Arguments for Benefits Attorneys to Watch Several important benefits cases are pending before various U.S. Courts of Appeals. Benefits attorneys should look out for the upcoming appellate arguments in these cases including Tanika Parker et al. v. Tenneco Inc. et al., case number 23-1857, U.S. Court of Appeals for the Sixth Circuit. In this class action lawsuit, workers allege that their automotive company employers mismanaged their 401k plan by charging excessive recordkeeping fees and maintaining high-cost investment offerings. Source: Hallbenefitslaw.com DOL Argues That Class Action Waivers in Plan Agreements Are Unenforceable The Department of Labor filed an amicus brief to the U.S. 6th Circuit Court of Appeals in May which argued that a mandatory arbitration provision in a 401k plan document is unenforceable if it is tied to a class-action waiver. Most appeals courts have so far agreed with them. Source: Plansponsor.com Milliman Manages a Win in TDF Fiduciary Breach Suit This suit was filed in January 2022 and made several allegations regarding practices by the fiduciaries of the Milliman, Inc. Profit Sharing and Retirement Plan. At issue was a suite of target risk funds. Those funds were put in the plan menu in 2013, but the suit comments that "having only been launched in November 2012, the Unified Funds were brand new, had no investment track record, and were untested." Source: Napa-net.org HP Prevails in "Novel" 401k Forfeiture Reallocation Suit The third of the forfeiture reallocation suits to come before a federal judge was described as a "swing for the fences" and dismissed, with a "catch." Judge Freeman commented that the plaintiff "advances a novel legal theory under which it is a breach of fiduciary duty to allocate forfeited amounts to reduce employer contributions rather than to pay administrative costs." She went on to note that "to date, there is no binding authority that addresses this theory...." Source: Napa-net.org »» Click here for more Court and Other Legal Issues Marketplace News MetLife, Micruity Partner on Retirement Income Solutions Future Capital Helps Advisors Break the 401k Planning Barrier
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