One welcome qualified plan change under the Tax Cuts and Jobs Act is the extension of the period within which a participant may pay the amount of an “offset” of an outstanding plan loan to another qualifying plan or IRA to accomplish a tax-free rollover of the loan offset amount. The change became effective January
FORFEITURE FREEDOM
Some of our employer client sponsors of pre-approved 401(k) plans have contacted us regarding plan amendment notices received recently from their prototype or volume submitter plan document sponsors relating to the expanded use of forfeitures in their plans. An employer is informed either that an amendment has already been made for all employers that have
DETERMINATION LETTER RATIONING: IRS REVEALS THE BRAVE NEW WORLD
Last year’s announcement by the Internal Revenue Service (IRS) of the elimination of the current five-year remedial amendment cycle system for determination letter approval of restated individually-designed qualified plan documents provoked bitter criticism and calls to reverse course. The Service cited budget constraints allowing a median time of only three hours of agent review per
DEATH AND TAXES FOR QUALIFIED PLANS
An IRS plan audit uniquely focuses an employer’s mind on the core identity of its qualified retirement plan, which is that of a tax exempt organization, but one whose exemption (or “qualification”) requirements are far pickier than those applicable to one’s favorite charity. Any single material operational violation or non-conforming written plan provision risks disqualification
THE RETROACTIVE AMENDMENT FIX FOR PLAN OPERATIONAL FAILURES
Frequently a plan sponsor’s operational failure to follow the terms of its 401(k) or other qualified plan can be corrected under the IRS’s Employee Plans Compliance Resolution System (“EPCRS”) (described at http://www.irs.gov/Retirement-Plans/EPCRS-Overview) with a retroactive amendment instead of a sometimes expensive financial correction. This possibility should not be surprising, given that the maintenance of
Employee Relief Charities – The Unbenefit That Keeps On Giving
Especially during the holidays, but also throughout the year, both employers and employees often seek a means of financially assisting distressed coworkers and their families. The various methods of targeting relief to employees are summarized in IRS Publication 3833, DISASTER RELIEF, PROVIDING ASSISTANCE THROUGH CHARITABLE ORGANIZATIONS at http://www.irs.gov/pub/irs-pdf/p3833.pdf. Some employers establish a “donor-advised fund”