Tag: 401(k)

EBSA Moving Forward with Rules to Protect Retirement Savings

An article featured recently in The National Law Review by the U.S. Department of Labor regarding Retirement Savings:

 

 

 

The Employee Benefits Security Administration is moving forward with regulations and proposals that will increase the quality of advice being provided to individual retirement account investors and 401(k) plan sponsors and participants. Assistant Secretary of Labor Phyllis C. Borzi delivered this message to the American Society of Pension Professionals and Actuaries last week during the group’s Los Angeles Benefits Conference. A final rule requiring financial services firms to disclose fees to retirement plan sponsors will be out soon, and EBSA is working toward re-proposing a separate rule that would re-define who is a fiduciary for the purposes of giving advice to retirement savers. These rules combined with other regulatory efforts will help ensure that employers and workers are able to make informed decisions and obtain the best possible advice when choosing how they save.

© Copyright 2012 U.S. Department of Labor

IRS Announces Retirement Plan Limitations for 2012 Tax Year – Most Limits Increased

Recently posted in the National Law Review an article written by Alyssa D. Dowse of von Briesen & Roper, S.C. regarding the cost of living adjustments for the 2012 tax year:

The Internal Revenue Service (“IRS”) has announced the cost of living adjustments for the 2012 tax year, which affect various dollar limitations for retirement plans. The IRS increased many of these limitations for the first time since 2009. Some limitations remain unchanged. The following chart highlights many of the noteworthy limitations for the 2012 tax year.

Plan Limit

2011

2012
Social Security Taxable Wage Base $106,800 $110,100
Annual Compensation (Code Section 401(a)(17)) $245,000 $250,000
Elective Deferral (Contribution) Limit for Employees who Participate in 401(k), 403(b) and most 457(b) Plans (Code Sections 402(g), 457(e)(15)) $16,500 $17,000
Age 50 Catch-Up Contribution Limit (Code Section 414(v)(2)(B)(i)) $5,500 $5,500
Highly Compensated Employee Threshold (Code Section 414(q)(1)(B)) $110,000 $115,000
Defined Contribution Plan Limitation on Annual Additions (Code Section 415(c)(1)(A)) $49,000 $50,000
Defined Benefit Plan Limitation on Annual Benefit (Code Section 415(b)(1)(A)) $195,000 $200,000
ESOP Distribution Period Rules—Payouts in Excess of Five Years (Code Section 409(o)(1)(C)) $985,000

$195,000

 $1,015,000

$200,000
Key Employee Compensation Threshold for Officers (Code Section (416(i)(1)(A)(i)) $160,000 $165,000

Plan sponsors should review employee communications and update such communications as appropriate based on the 2012 cost of living adjustments. Other cost of living adjustments can be found on the IRS  website: http://www.irs.gov/retirement/article/0,,id=96461,00.html.

©2011 von Briesen & Roper, s.c