Just when we had figured out the required minimum distributions (RMDs) rules for retirement plan participants—Congress changed them—again! Under the SECURE Act 2.0 of 2022 (SECURE 2.0) there are no less than six changes to RMDs in all. The most talked about adjustment to the…
A frequently asked question by small business owners who sponsor savings incentive match plans for employees (SIMPLE) IRA plans is, “Can I terminate my SIMPLE IRA plan and start a 401(k) plan mid-year?” It’s a straightforward question that, currently, has a problematic answer due to…
A sweeter tax deal may await you as result of law changes if you are a “small” business owner who does not currently offer a workplace retirement plan. By small, I mean businesses with 50 or fewer employees. Section 102 of the SECURE Act 2.0…
An advisor in Ohio asked: “My client suffered an accident and cannot keep employees on at his business. He was wondering if he could lay off employees over time to avoid triggering full vesting for a partial plan termination?” Here’s What We Know The IRS…
A sweeter tax deal may await you as result of recent law changes if you are a “small” business owner who does not currently offer a workplace retirement plan. By small, we mean businesses with 50 or fewer employees. Section 102 of the SECURE Act…
A recent call with an advisor involved a question on 401(k) catch-up contributions. The advisor asked: “When does a 401(k) deferral become a catch-up contribution?” An employee salary deferral becomes a catch-up contribution when it exceeds the lowest of the following three limits (See Treasury…
In a merger and acquisition (M&A) situation, where the acquiring organization does not assume the seller’s retirement plan, what is something that the selling company often overlooks with respect to its retirement plan? M&A scenarios are notorious for treating retirement plans as an after-thought. Because…
Our consultants regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings plans. Recently we received a call from a financial advisor who asked: “Can you summarize the rules and…
Recently, there’s been a lot of coverage in the media about IBM’s redirecting of its 401(k) matching contribution to a fixed-rate cash balance plan. Some of the coverage has been negative, especially around the potential impact on 401(k) plans and whether this may cause other…
Pentegra recently received a question from a financial advisor who asked: “My client has made non-Roth, after-tax contributions to his 401(k) plan for 2023. Will those amounts be reported on his Form W-2 and, if so, where?” The answer to the first part of the…
On December 20, 2023, the IRS released Notice 2024-02, “Grab Bag” guidance on certain provisions of SECURE 2.0 in the form of Frequently Asked Questions (FAQs). Let’s begin with the guidance released around employer Roth contributions. Optional treatment of employer contributions or nonelective contributions as…
This is the second article on the recent IRS “Grab Bag” guidance on provisions of SECURE 2.0 (Notice 2024-02). Let’s dive into the guidance on SECURE 2.0’s cash balance provision. To start with the bottom line: The Grab Bag guidance will generally allow plans that…