ARTICLES

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Articles

Welcome to the Jordan & Associates newsletter library. Get latest industry information and insight here.

Cost of Living Adjustments for 2021

On October 26, 2020, the IRS announced the Cost of Living Adjustments affecting the dollar limitations for retirement plans. Contribution and benefit increases are intended to allow participant contributions and benefits to keep up with the “cost of living” from year to year. Here are the highlights from the 2021 limits.

Cycle 3 Plan Document Restatements

Approximately every six years, the IRS requires that pre-approved qualified retirement plans update (or restate) their plan document to reflect recent legislative and regulatory changes. Plan restatements are divided into staggered six-year cycles depending on the type of plan (e.g. defined benefit plans or defined contribution plans, such as 401(k) and 403(b) plans).

Upcoming Compliance Deadlines for Calendar-Year Plans

Participant Notices – Annual notices due for safe harbor elections, Qualified Default Investment Alternatives (QDIA), and Automatic Contribution Arrangements (EACA or QACA).

IRS Issues Additional Pandemic Relief

On June 29, 2020, the IRS issued Notice 2020-52 in response to the COVID-19 pandemic providing welcome relief to plan sponsors who are considering suspending safe harbor contributions and also to those who may already have regardless of whether the employer is suffering an economic loss.

Electronic Delivery Could Save Billions

On May 21, 2020, the U.S. Department of Labor and the Employee Benefits Security Administration (EBSA) announced the publication of a final rule that will allow employers to communicate the required retirement plan disclosures and other plan information electronically. 

Understanding the CARES Act

On Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a massive relief bill for those suffering as a result of the Coronavirus pandemic, was signed into law. Besides the generalized financial relief afforded to individuals, as well as loans and other concessions for businesses, the bill includes the following provisions to help participants and employer sponsors of retirement plans.

How the SECURE Act is Changing Retirement

On December 20, 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law. 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 Final Rule on Hardship Distributions

On Sept. 23rd, the IRS published a final rule that relaxes several existing restrictions on participant hardship distributions from defined contribution plans. Some of these changes are mandatory, requiring employers to make the changes by Jan. 1st, 2020, while others are optional.

Safe Harbor 401(k) Plan Design

When the third-party administration firm relays that aspects of the annual compliance testing have failed causing many of the company’s executives to receive taxable distributions from the plan, it isn’t a great day for the HR manager. The administrator explains that the regulations require testing to prevent highly paid employees from receiving disproportionately greater benefits than other employees.

IRS Announces Limits for 2020

Contribution and benefit increases are based on a calculated change in the Consumer Price Index and are intended to allow participant contributions and benefits to keep up with the “cost of living” from year to year. Here are some highlights from the 2020 changes: