Friday, February 26, 2010

U.S. Labor Department rules to improve retirement security announced as part of White House Middle Class Task Force's year-end report

The DOL announced two new rules. One rule is designed to help workers obtain unbiased advice about how to invest in their IRAs and 401(k) plans and the other establishes new guidelines on disclosures for multiemployer retirement plans:

Washington – Today, at a White House forum hosted by Vice President Joe Biden, the U.S. Department of Labor announced two new rules designed to enhance retirement security and transparency for the millions of workers covered by 401(k), pension and other retirement arrangements. The announcement was part of the White House Middle Class Task Force's year-end report, which the vice president released at this morning's event.

During the past year, the Middle Class Task Force has focused on solutions to the challenges facing America's middle class - including retirement security and the need for high-quality jobs for middle class workers. The report details the year's work of the task force, and it includes a proposed rule on investment advice. The department also is announcing the publication of a final rule on multiemployer plan transparency.

"A secure retirement is essential to workers and the nation's economy. Along with Social Security and personal savings, secure retirement allows Americans to remain in the middle class when their working days are done. And, the money in the retirement system brings tremendous pools of investment capital, creating jobs and expanding our economy," said U.S. Deputy Secretary of Labor Seth Harris. "These rules will strengthen America's private retirement system by ensuring workers get good, objective information. When that happens, workers make the kind of decisions that are good for their families and the nation as the whole."

The first of the two rules would ensure workers receive unbiased advice about how to invest in their individual retirement accounts or 401(k) plans. If the rule is adopted, it would put in place safeguards preventing investment advisors from slanting their advice for their own financial benefit. Investment advisors also would be required to disclose their fees, and computer models used to offer advice would have to be certified as objective and unbiased. The department estimates that 2 million workers and 13 million IRA holders would benefit from this rule to the tune of $6 billion.

The second rule announced today establishes new guidelines on the disclosure of funding and other financial information to workers participating in multiemployer retirement plans - those collectively bargained by unions and groups of employers. It will ensure transparency by guaranteeing workers can better monitor the financial condition and day-to-day operations of their retirement investments. The rule will go into effect in April 2010.

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Monday, February 22, 2010

Retirement News for Employers – Winter 2010 Edition

The IRS released Retirement News for Employers – Winter 2010 Edition. It contains the following articles:

  • April 30, 2010 Filing Deadline for Adopting Employers of Pre-Approved Plans – Filing Tips for Submissions
  • Deadline for Making Employer Contributions
  • Clarification of HEART Act Changes for Retirement Plans
  • Future Requirements for Tax Return Preparers
  • Have You Heard of ERPAs?
  • The Filing Cabinet
  • New on the Web
  • We're Glad You Asked!
  • Is Your Distribution from Your Roth IRA Taxable?
  • Desk Side Chat…With Monika Templeman - The Latest in the World of Code §403(b) Plans
  • SEP Plan Pitfalls Phone Forum (Free) - February 26, 2010
  • DOL News
  • Employee Plans Published Guidance
  • Mark Your Calendar
  • Timing Is Everything Flyer

Tuesday, February 2, 2010

IRS Notice 2010-15 – Miscellaneous HEART Act Changes

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2010-15 – Miscellaneous HEART Act Changes

Notice 2010-15 provides guidance in the form of questions and answers with respect to certain provisions of the Heroes Earnings Assistance and Relief Tax Act of 2008 ("HEART Act"). The notice also requests comments regarding any additional issues relating to the sections of the HEART Act that are addressed in the notice.

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IRS Announcement 2010-03 – Automatic Approval of Changes in Funding Method for Takeover Plans and Changes in Pension Valuation Software

Part IV. Items of General Interest

IRS Announcement 2010-03 – Automatic Approval of Changes in Funding Method for Takeover Plans and Changes in Pension Valuation Software

Automatic approval of changes in funding method for takeover plans and changes in pension valuation software. This announcement provides, for plan years beginning on or after January 1, 2009, automatic approval for certain changes in funding method with respect to single-employer defined benefit plans that result either from a change in the valuation software used to determine the liabilities for such plans or from a change in the enrolled actuary and the business organization providing actuarial services to the plan. This guidance is being provided in response to numerous requests from actuaries and plan sponsors, many of whom are continuing to modify their valuation software in order to implement the changes to the funding rules made by the Pension Protection Act of 2006, the Worker, Retiree, and Employer Recovery Act of 2008, and guidance regarding these legislative changes.

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IRS Notice 2010-06 - Relief and Guidance on Corrections of Certain Failures of a Nonqualified Deferred Compensation Plan to Comply with § 409A(a)

Part III --- Administrative, Miscellaneous, and Procedural

IRS Notice 2010-06 – Relief and Guidance on Corrections of Certain Failures of a Nonqualified Deferred Compensation Plan to Comply with § 409A(a)

This notice provides rules governing the taxation of nonqualified deferred compensation plans. Section 409A of the Code requires that a nonqualified deferred compensation plan meet certain plan document requirements, and that the plan be operated in compliance with the plan document. Notice 2010-6 permits taxpayers to correct certain failures of a nonqualified deferred compensation plan to comply with the plan document requirements of section 409A, or in certain circumstances, to limit the amount includible in income and additional taxes under section 409A as a result of a plan document failure. Notices 2008-113 and 2008-115 modified.

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