The IRS has released 2017 cost-of-living adjustments (COLAs) for various retirement plan limitations, with some limitations increasing and others remaining at their 2016 levels. Changes include the following: Annual additions limit for defined contribution plans increased from $53,000 to $54,000 Maximum annual benefit limit under a defined benefit plan increased from $210,000 to $215,000 Annual...

A plan loan feature can be a useful tool for helping to increase plan participation and contribution rates. Nevertheless, plan loans may impede employees’ efforts toward achieving their long-term retirement goals and complicate plan administration. Following is a general discussion of some of the issues surrounding plan loans and suggestions for addressing them. Understanding the Rules Two sets...

Relief for Late Rollovers The IRS has issued new guidance that will help some taxpayers avoid taxes and penalties on rollovers of distributions from employer-sponsored retirement plans that aren’t completed within 60 days. The new guidance allows taxpayers who miss the deadline for any one of 11 specified reasons to correct the error by sending the IRS’s model certification letter (or one...

More Older Americans Are Working A recent Pew Research Center analysis found that the number of older Americans working is increasing. Nearly nine million people, or 18.8% of Americans ages 65 and older, are employed. Only 36.1% of workers 65 and older are working 35 hours or less in 2016, a drop from 46.1% in 2000. Older workers are more likely to be in management, legal, and community/social...

Getting the word out about your retirement plan is an ongoing activity. In addition to the enrollment materials you provide newly eligible employees, you probably communicate with participants routinely, answering their questions and encouraging them to take full advantage of the plan. Required Documents In addition to these efforts, plans are required to make certain plan documents available to...

Whether your organization’s retirement plan has been up and running for several years or you are looking into what would be involved in sponsoring a plan, you may have questions about which plan-related expenses can be paid by the plan and which expenses the employer is responsible for paying. Federal pension law (ERISA) allows plan fiduciaries to use plan assets for the payment of reasonable...

Target date funds (also known as lifecycle funds) have become increasingly popular in retirement plans. Close to 70% of 401(k) and profit sharing plans offered target date funds in 2014, according to the most recent survey by the Plan Sponsor Council of America.* Are target date funds a good fit for your plan? What criteria are important when choosing to use them in a plan? Understanding What...

Leaving a volatile second quarter behind, investor sentiment during the third quarter turned to “risk on”. A decision by the Federal Reserve to maintain the 0.25% - 0.50% range for the overnight rate drove the equity markets higher. Emerging markets outperformed developed markets as the dollar weakened against other major currencies, including the euro and yen. The S&P 500 index ended the...

In IRS Announcement 2015-19, the IRS has ended the individually designed plan determination letter process known as the five-year restatement cycle, effective January 1, 2017. The last year of the five-year restatement cycle, which started February 1, 2016, and ends January 31, 2017, is the restatement window for Cycle A. Other than that, determination letters will only be issued when the plan...