IRS Publicizes Pension Plan Limits for 2014
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Compliance and Regulatory Related IRS Publicizes Pension Plan Limits for 2014 Summary: As we reported last week, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Some pension limitations such as those governing 401k plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. However, other pension plan limitations will increase for 2014. Here are the full details. Source: 401khelpcenter.com IRS COLA Adjustment Mean Changes to Deductions Summary: Contribution limits for 401k plans and IRAs were unchanged, but the 1.5 percent cost-of-living adjustment announced by the IRS this week will change pension plan deductions for 2014. Source: Benefitspro.com IRS Guidance on In-Plan Roth Transfers Could Arrive by Year-End Summary: Retirement plans may see further guidance from the Internal Revenue Service concerning a 2012 statute that expanded opportunities for individuals to make Roth 401k in-plan transfers, an attorney said during a session of the American Society of Pension Professionals & Actuaries' Annual Conference. Source: Bna.com Summary: ERISA sets forth specific reporting and disclosure obligations with respect to qualified retirement plans. A lesser-known fact is that ERISA also requires plan sponsors to retain for a fixed period of time the records that support the information included in the 5500 filing and other reports. What records should be kept? How long should they be kept? How should these records be archived? Source: McKay Hochman Unanswered Questions About Uncashed Checks Summary: Susan M. Halliday, senior benefits law specialist with the DOL, said her agency doesn't have much guidance out about uncashed checks distribution checks. Field Assistance Bulletin 2004-02 only addresses missing participants from terminated defined contribution plans. However, she mentioned an advisory opinion letter in which an attorney argued that once a distribution is made from the plan, the money is no longer considered plan assets. The DOL disagreed, implying it considered benefits plan assets until a check is cashed or a wire transfer is successfully made. Source: Plansponsor.com Plan Corrections Take on a Slightly New Look With Revenue Procedure 2013-12 Summary: The Internal Revenue Service has recently issued its latest update to its Employee Plans Compliance Resolution System -- Revenue Procedure 2013-12. The new procedure makes a number of important administrative and substantive changes to the correction program, to both streamline and expand the program. The key changes are summarized here. Source: Groom.com Year-End Checklist for Plan Sponsors of Retirement and Group Health Plans Summary: With all the planning, there will hardly be time to keep up with all the normal plan maintenance issues. This article will help ease the transition by serving as a to-do list for plan sponsors in meeting its annual notice obligations and any additional actions that may be required or need to be assessed in the wake of ACA and/or the Windsor decision. Source: Troutmansanders.com
403(b) Plans Elective Deferral Limits for 2014 for Employees of Non-profit and Governmental Employers Summary: Some non-profit and governmental employers can choose to offer one or more plans, including 403(b) and section 457(b) plans. This chart page describes and summarizes these limits based on the plan(s) available and the type of employer. Source: Prudential.com
Fiduciary Related Material and Insight Defined Contribution Plan Re-Enrollment: A Fiduciary Imperative? Summary: Evidence is mounting that the self-directed, do-it-yourself approach to DC investing is resulting in poorly constructed participant portfolios. While auto-enrollment directs new participants to a QDIA option such as a Target-Date fund, existing participants' portfolios, often chosen years ago, remain misallocated. This paper looks at: the role a re-enrollment campaign can play in guiding all participants to an appropriate asset allocation, potential roadblocks to implementing re-enrollment and ways to overcome them, and key elements of successful implementation Source: Russell.com Evaluating Target-Date Investment Performance Summary: Evaluating target-date fund performance has proven to be a challenge for many defined contribution plan investment committees. However, with the right metrics, investment committees can make informed decisions about the efficacy of their TDF funds results and understand the core drivers of returns. This paper provides a framework for breaking down TDF results into a few key components and evaluating each component on its unique role. Source: Russell.com
Insights: Studies, Research and White Papers Coming Soon From a 401k Plan Sponsor Near You: New and Improved Focus on Participant Education Summary: There's a new policy statement debate that sounds strikingly similar to the IPS debate. It's consistent with the current evolution going on in the 401k arena -- and it might just give employees a better chance to meet their retirement goals. It's called the Education Policy Statement (EPS). Source: Fiduciarynews.com Sample Education Policy Statement Summary: A 401k plan Education Policy Statement contains high level objectives and describes potential methodology for achieving those objectives. It is intended to assist the plan sponsor with implementing, monitoring and evaluating a proactive participant education program. Source: Abgil.com Survey Finds Employers Boosting Efforts to Help Workers Save for Retirement Summary: The continued shift from defined benefit plans to defined contribution plans has placed a greater emphasis on employees to take responsibility for their own retirement readiness. A new survey by Aon Hewitt reveals that employers are increasingly taking bolder actions to help ensure participants achieve greater financial security. Source: 401khelpcenter.com Professionally Managed Accounts Boosting Retirement Fund Results Summary: Companies are still struggling with the best way to prepare workers for retirement. While target-date funds are the most popular way to offer sophisticated investment strategies, more plan sponsors are turning to professionally managed accounts in their 401k plans to improve results, a new study shows. Source: Workforce.com What "Average" 401k Balances Can Miss Summary: While so-called "average" 401k balances are a widely cited benchmark of retirement savings progress, they can present a distorted picture, as illustrated in a recent report by the nonpartisan Employee Benefit Research Institute and the Investment Company Institute. Source: Ebri.org
Items of Special Interest to Advisors Investment Advisers Must Review Their Written Policies and Procedures at Least Annually Summary: Investment advisers must understand that the process for developing written policies and procedures should never be considered "done." This process should be consider an ongoing process and investment advisers must understand that the annual compliance review requirement is as important as the initial development and implementation of the written policies and procedures. SEC and state securities regulators do not have to find that harm has been done to clients in order for actions to be taken against the investment adviser. Source: Ria-compliance-consultants.com The Cardinal Rules for Retirement Plan Providers Summary: As a retirement plan provider, you also didn't get a book that told you how to act and behave as a plan provider to your clients. But, there are some lines you should never cross and cardinal rules that you should never break. This article reviews some cardinal rules that author has developed for his practice that may be of use to you in your practice. Source: Jdsupra.com ERISA Newsletter for Retirement Plan Service Providers Summary: This is a newsletter for service providers to ERISA governed retirement plans. It primarily focuses on legal issues faced by service providers, but also contains valuable information for plan sponsors and fiduciaries. Source: Drinkerbiddle.com Even Wirehouse Brokers Are Entering the 401k Space Summary: Many expected wirehouses to be down for the count after the DOL's 408(b)(2) fee disclosure regulation, since their reps -- employees of the firms -- would appear to owe their first duty to their employer, and not the 401k clients. However, wirehouses have taken to segmenting their field force, appointing a handful of specialist advisers to provide fiduciary advice, provided they meet training requirements and asset levels. Source: Investmentnews.com (free registration may be required)
Court, Legislative and Washington DC Top 25 Washington "Power Hitters" Summary: The first step in the process of engagement is understanding the issues and the people in Washington who have the most influence over them. This is a list of the top 25 most influential officials in Washington, grouped by four key areas: tax reform, DOL's definition of fiduciary rulemaking, SEC's uniform fiduciary rulemaking, and regulation of IRAs. Source: Napa-net.org Developer's Guilty Plea in 401k Theft Summary: Michael A. Stortini, 52, of Frank Robino Companies LLC, admitted to diverting more than $600,000 from an employee 401k pension account to pay business expenses, and failing to pay over $450,000 in payroll taxes to the Internal Revenue Service for two years. Source: Delawareonline.com Judge Orders Restoration of More Than $1.6 million to Sunkist Growers Retirement Plans Summary: The department previously filed a lawsuit alleging that from January 2006 through April 2011, the defendants used retirement plan assets to improperly reimburse the company for expenses including salaries and benefits for employees and managers working in various departments at Sunkist Growers. Source: 401khelpcenter.com Marketplace News New York Life Releases 401k Planning Videos Jeb Graham Named "Retirement Plan Advisor of the Year" Great-West Adds Sales Director for Northeast Market Ameritas Introduces TPA Affinity Program Aon Hewitt Initiates Web-Based DC Nexus David Lipkin Inaugurated as 45th President of ASPPA
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