Compensation Issues – Revisited

We are more than halfway through the retirement plan audit season and we have noticed a number of common errors occurring with compensation. I previously discussed these issues in my blog series “Compensation: The Missing Link – Part 1” and “Compensation: The Missing Link – Part 2,” but we want to revisit the issue, since we are seeing this error occur on a rather consistent basis.

Fixing Common Plan Mistakes – Failure to Obtain Spousal Consent

Posted by Maria T. Hurd, CPA The Rule When plans have a Qualified Joint and Survivor Annuity default form of benefit, or when a plan offers life annuity options, spousal consent must be obtained for any distribution or loan out of the plan, except when the plan provides for involuntary cash-outs for balances amounting to $5,000 or less. Qualified plans … Continued

Avoiding the Hardship of Correcting Hardship Distribution Violations

Administering hardship distributions correctly is important to prevent the hardship of completing a correction of an error in administration. Often, plan officials assume that their third party administrator is collecting all the information necessary for the approval and proper processing of a hardship, when that is not always the case.

Unforeseeable Emergency Distributions from 457(b) Plans

State or local governments and organizations that are tax-exempt under IRC Section 501(c) can establish a 457(b) plan to allow their employees to defer income taxation on retirement savings, similar to how the more popular 401(k) plans operate, but with some important differences, including the availability of hardship distributions.

The Basics of Partial Plan Terminations

When employer-initiated personnel reductions occur and it reduces the number of plan participants by 20% or more, a partial termination of a qualified plan is deemed to have occurred.

Plan Officials: Don’t File Your W-3s Just Yet!

Despite the relief retirement payroll managers and retirement plan officials may feel from this most recent sprint to the finish, THE RACE IS NOT OVER. Get that second wind and verify that deferral withholdings that employees have trusted you to put in their retirement accounts were actually deposited to the plan, without exception.