Art of the Qualified Plan Audit

Not Enough RMD Participants must take an Required Minimum Distribution (RMD) from retirement plans and IRAs. 403(b) plans often have more than one account in the name of each participant. While each 401(k) plan must issue its own RMDs, an individual can take one RMD distribution for the entire amount computed using the balances in … Continued

In its quest to Set Every Community Up for Retirement Enhancement, SECURE 2.0 enhanced the Long-Term Part-Time (LTPT) rules of Secure 1.0 by making them applicable to 403(b) plans. Since employees are more likely to contribute to an employer-sponsored retirement arrangement than an Individual Retirement Account, and more Americans are working part-time since the pandemic, … Continued

Plan sponsors of retirement plans with hardship withdrawal provisions have come to realize that complying with hardship rules is sometimes a hardship. One of the most common questions we receive from clients involves the administration of the hardship withdrawal provisions. Changes from the SECURE 2.0 Act Luckily, the SECURE 2.0 Act in Section 312 has … Continued

The Rule Individuals who turn age 72 after December 31, 2022, AND who reach age 73 before January 1, 2033, have a compulsory RMD age of 73. What It Means Individuals who turn 73 during 2023 must take an RMD for 2023 by April 1, 2024, but individuals who turn 72 during 2023 do not … Continued

Retirement Readiness vs. Immediate Financial Needs Life is a balancing act. Regulators strive to fight leakage by imposing penalties on early distributions, but they also don’t want to add to legitimate unforeseen and extreme emergency situations by imposing penalties when participants are in trouble. At the same time, regulators don’t want to impose administrative burdens … Continued

Money Talks: Price Sometimes Trumps Value Small retirement plans are exempt from the financial statement audit retirement for a reason: not because they don’t need the oversight or the help, but because audits are not practical, affordable, or cost-effective for them. In the real world, money talks. If small plans or their plan sponsors had … Continued

SECURE 2.0: Mandatory Automatic Enrollment Coupled with Corrective Contribution Relief Employees Plan to Make the Right Choice…Later When it comes to choosing to save for retirement, people tend to be short-sighted. Many eligible employees don’t choose to participate in their employer-sponsored retirement plans. Behavioral finance studies show that people tend to imagine themselves making the … Continued

Retirement plan administration is not a costless endeavor. Plan sponsors must administer the retirement plan following plan provisions, legislative requirements, and participant elections. To help administer the plan, plan sponsors hire service providers to help with recordkeeping, custody of assets, investment advisor tracking, and auditing the plan. Regulatory authorities want to promote retirement readiness with … Continued

Enhanced Correction Options: I Didn’t Know What I Was Missing! Mistakes happen…all the time, especially in retirement plan administration. For years, I have been thankful for the self-correction opportunities granted by the IRS Program, the Employee Plan Compliance Resolution System. With each update to the program, my clients would benefit from additional opportunities to self-correct … Continued

Increased Retirement Savings; Enhanced Self-Correction of Operational Failures; Decreased Costs to Implement a Plan The SECURE 2.0 Act of 2022 (Act) was signed into law on December 29, 2022. The Act strives to increase retirement savings, improve retirement plan operation and correction rules, and decrease the cost of setting up a retirement plan. Plan amendments … Continued