The SECURE Act represents some of the most significant changes to retirement plan law since the passage of the Pension Protection Act of 2006, over thirteen years ago. The provisions of the Act are broad ranging and span many different effective dates.
Upcoming Compliance Deadlines: Form 1099-R, ADP/ACP Corrective Testing, Employer Contributions, Required Minimum Distributions, Excess Deferral Amounts
The IRS published the final rule regarding participant hardship distributions from defined contribution plans. Hardships get a little easier with expanded qualification rules and streamlined review process. Some of these changes are mandatory, requiring employers to make the changes by Jan. 1, 2020, while others are optional. Though the IRS had issued the proposed regulations in 2018, the final regulations clarify a few key provisions.
Safe Harbor 401(k) Plans can eliminate a host of testing issues for traditional 401(k) Plans. If HCE contributions in your plan have resulted in corrective distributions in the past, you may consider a Safe Harbor plan in 2020. The deadline is quickly approaching, so be sure to contact us before December 1st to make 2020 plan changes.
Every Fall, the coming year's Cost-of-Living Adjustments (COLAs) are released by the Internal Revenue Service. The benefit increases counteract the effects of inflation and keep up with the "cost of living." See the limits for 2020.
RPG Consultants was among the first firms in the United States to successfully complete the independent certification process for recordkeepers, and has now earned the certification for the 8th consecutive year. Our CEFEX-ASPPA certification signifies our commitment to adhere to a standard of excellence and a dedication to recordkeeping and administration best practices.
Though some employers may not think so, the truth is that in today's world 401(k) plans are subject to fraudulent activity and that the often-overlooked retirement plan can be the perfect place for it to occur. For example, in late 2017, several news outlets reported a scheme targeting individual 401(k) accounts.
With the future of Social Security in question, it is becoming ever increasingly important for workers to self-prepare for post-retirement living. Studies show that approximately one out of every three eligible workers choose NOT to participate in their employer-sponsored 401(k) plan.
In 2018, the 401(k) plan celebrated its 40th birthday! Though extremely popular today, 401(k) plans came about almost by accident. IRC Section 401(k) was passed into law as part of the Revenue Act of 1978 and was included to limit executive compensation. However, in 1980, Ted Benna of the Johnson Companies used the provision to create and get IRS approval of the first 401(k) plan for his company. For this he is often referred to as the father of the 401(k).
401(k) plans offer many advantages to participants; the ability for accounts to grow on a tax-deferred basis, the chance of receiving employer contributions in the form of a match or non-elective contribution, the ability to contribute even after attaining age 70 ½, and protections from bankruptcy. These benefits are consistent whether a participant chooses traditional or Roth contributions, or even both! So, what makes Roth and traditional routes different and what are the advantages and disadvantages of each?