…address many common concerns One way that federal law enables employers to avoid missteps is through the use of multiple employer plans, or MEPs. Simply put, MEPs allow unrelated employers to combine their plans under a single MEP “sponsor.” Typically, the sponsor will make this…
…of Form 8881, Credit for Small Employer Pension Plan Startup Costs and Auto-Enrollment to claim the credits. What about businesses that will join or have joined multiple employer plans (MEPs) or Pooled Employer Plans (PEPs)? Fortunately, Section 111 of SECURE 2.0 ensures the startup tax…
…guidance: Sponsors may but are not required to include in their plan any type of Roth contribution – employee elective, employer matching, or employer nonelective. The rules currently (pre-SECURE 2.0) applicable to employee elective Roth contributions also generally apply to the new Roth employer contributions….
…the 3-year credit related to small employer startup costs for employers with no more than 50 employees from 50% to 100% of startup costs. New employer contributions credit: A new 5-year credit for matching and nonelective contributions (to qualified plans other than defined benefit (DB)…
…Deduction limit – the deductible employer contribution cannot exceed 25 percent of total eligible participant compensation. Annual additions limit – for 2023, the total combined limit for employee and employer contributions is $66,000 (or $73,500 for those eligible for catch-up contributions). These are just some…
…greatest standard of care—or risk personal liability if they fall short. Employers Are Fiduciaries By default, employers (plan sponsors) are fiduciaries of the retirement plans that they maintain. First, Section 3(16) of the Employee Retirement Income Security Act of 1974 (ERISA) defines “plan administrator” as…
…credit for small employers SECURE 2.0 provides a new small employer (100 employees or less) tax credit for defined contribution (DC) plans that provide that military spouses are, within two months of hire, immediately eligible for and fully vested in employer non-elective and matching contributions…
…maintained by the employer Must file a Form 5500 annually Voluntary employee deferrals Mandatory employer contributions (generally, 3% match or 2% nonelective) Immediate vesting for contribution types Additional information at IRS SIMPLE 401k facts Safe Harbor 401(k) No limit on number of employees Voluntary employee…
Cash balance plans seem to be getting a lot of attention recently. And for good reason. They can provide substantial benefits—both immediate and long-term—to employers. Plus, they offer employees a clearer picture of their retirement benefits than traditional defined benefit plans. Here we will take…
…highly compensated employees can’t be more than two points more than that of the non-highly compensated employees to pass this test. The ACP test – which stands for – Actual Contribution Percentage – compares employer matching contributions between these two groups. And the Top-Heavy test…
…can Redistribute the forfeited amount to the remaining eligible participants. Or they can Apply the forfeited money towards reasonable plan expenses. This reduces the employer’s out of pocket expense of maintaining the plan. Or the forfeited money can be used by the employer to reduce…
…question is “maybe.” Your client will want to discuss this question with his employer and tax advisor for a definitive answer. Generally, according to the instructions to IRS Form W-2, Wage and Tax Statement, an employer may, but is not required to, report non-Roth, after-tax…