ERISA Knowledge Center

ERISA Knowledge Center

ERISA Knowledge Center

Articles

The Department of Labor’s RFI

The Department of Labor's RFI The U.S. Department of Labor recently released a Request for Information (RFI) regarding its Fiduciary Rule. According to the Department, this RFI "seeks public input that could form the basis of new exemptions or...

Revenue Procedure 93-42

Revenue Procedure 93-42 Revenue Procedure 93-42 Internal Revenue Service 1993-2 C.B. 540   26 CFR 601.201: Rulings and determination letters. Rev. Proc. 93-42 SECTION 1. PURPOSE AND OVERVIEW .01 This revenue procedure provides guidelines for...

Sidecar Accounts

Sidecar Accounts Before the retirement community shifted to a pretax 401(k) system in the 1980s, many companies offered a supplemental savings account (to be used for short-term emergencies) to complement the defined benefit (DB) plans of their employees....

Hardship Withdrawals from 401(k) and 403(b) Plans

Hardship Withdrawals from 401(k) and 403(b) Plans On February 23, 2017, the Internal Revenue Service released its Substantiation Guidelines for Safe-Harbor Distributions from Section 401(k) Plans. And on March 7, 2017 they released a similar memorandum...

The Cadillac Tax

The Cadillac Tax Health insurance has always been a hot topic of conversation both in the political and financial worlds, and it's easy to see why, especially in recent years. Health care costs continue to skyrocket, not just for individuals, but also for...

Nevada’s New Fiduciary Standard

Nevada's New Fiduciary Standard As discussed in a previous article, the Department of Labor's Fiduciary rule, which went in to effect on June 9, could have its final applicability date pushed back beyond January 1, 2018 to allow firms more time to come up with more...

A Look at The New Fiduciary Rule’s First Month

A Look at The New Fiduciary Rule's First Month The Department of Labor's Fiduciary Rule went in to effect less than a month ago, and already new concerns surrounding it are arising. The first of these is the struggle of the SEC and DOL to come to an agreement on the...

Is PBGC Coverage Required for Your Plan?

The Pension Benefit Guaranty Corporation was established on September 2, 1974 under President Gerald R. Ford with the signing of ERISA (the Employee Retirement Income Security Act). According to Ford, "Under this law, the men and women of our labor force will have...

The New Fiduciary Rule’s Important Take-Aways

The New Fiduciary Rule's Important Take Aways On April 7, 2017, just three days before the original set applicability date, the Department of Labor announced they will be postponing the applicability dates originally stated in the Fiduciary Rule from April 10, 2017 to...

Better Solutions for Today’s Retirement

With the introduction of 401(k) plans in 1980, the responsibility for retirement contributions shifted from the employer to the employee. Unfortunately, the employee had no way of gauging what those contributions should be, or how the contributions should be invested....

Defining a Standard of Care

In the context of retirement readiness, how do we identify the circumstances under which reasonable caution and prudence must be exercised? The standard of care stems from the 1837 case of Vaughan v Menlove. This case established that the standard of care is dependent...

Employee Investment Outcomes and the New Fiduciary Standard

When Section 401(k) became a permanent provision of the Internal Revenue Code in 1980, a seismic shift occurred in American workers’ preparation for retirement. The responsibility for contribution and investment decisions shifted from employers to employees. Before...

Employees & Short-Term Value

In today’s world of instant gratification, it’s no wonder that workers value short-term benefits the most. According to a worldwide study of more than 10,000 workers conducted by Mercer, a salary increase was preferred over all types of benefits. While saving for...

Corrective Distributions

The 401(k) plan has emerged as the most popular form of retirement plan in the United States. This trend will likely continue for some time for a number of reasons. One is the cost savings to employers, since deferral contributions are paid by employees. Another is...

Cash Balance Plans for Larger Tax-Deferred Contributions

Cash Balance Plan: What is it? How does it work? There are two main types of qualified retirement plans: defined contribution (DC) and defined benefit (DB). The maximum annual contribution to a DC plan is $54,000, while the contributions to a DB plan could be in...

Profit Sharing Plans: Best Ways to Use Them and Why

Profit Sharing Plans: Better Ways to Use Them and Why A Profit Sharing Plan is another special type of defined contribution (DC) plan under which employers, rather than employees, are the ones making contributions. After the company makes its annual contribution, the...

Safe Harbor Plans: Costly When Poorly Designed

 Safe Harbor Plans: Costly When Poorly Designed A safe harbor provision simply means that you will not violate a statute or regulation as long as certain conditions are met. In other words a free pass for nondiscrimination testing for 401(k) plans. Traditional Safe...

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