TRA MAKES NEWS HAPPEN

• ▾

  CASE OF THE WEEK – Tax Withholding and Roth Conversions

  July 12, 2024 - Roth conversions are taxable events, generally. Individuals who complete large Roth conversions late in the year may face IRS penalties if they failed to make the appropriate estimated tax payments. Continue
• ▾

  Plan Sponsors Ask…

  July 9, 2024 - Discover the rising prominence of target date funds (TDFs) in retirement plans according to NEPC's 2023 DC Plan Trends and Fee Survey. Currently, 97% of plans offer TDFs, with these funds comprising an average of 47% of plan assets, up from 28% in 2010. This shift is accompanied by a decline in core investment options, with 30% of plans now offering fewer than 10 choices. Continue
• ▾

  CASE OF THE WEEK – Pension Derisking

  July 5, 2024 - The current financial climate is ideal for accelerating the pension plan de-risking trend. Financial advisors, whether they work directly with DB plans or not, can seize opportunities to discuss the impact of pension de-risking with their clients. Continue
• ▾

  CASE OF THE WEEK – Pension Distributions and Restricted Employees

  June 28, 2024 - When discussing benefit restriction rules for defined benefit plans with your clients, remember the significant restrictions that may apply to the High 25 Highly Compensated Employees (HCEs) in the plan. Affected individuals should collaborate with their plan administrators to explore potential exceptions and seek professional advice from a tax and/or legal advisor. Continue
• ▾

  CASE OF THE WEEK – What is the Abandoned Plan Program?

  June 21, 2024 - Explore the distribution options for benefits from an abandoned plan, considering if the plan's sponsor is in Chapter 7 bankruptcy and subject to new special rules or if general abandoned plan rules are applicable. Continue
• ▾

  CASE OF THE WEEK – What to Correct under the Voluntary Fiduciary Correction Program

  June 14, 2024 - The DOL's Voluntary Fiduciary Correction Program (VFCP) offers significant incentives and assistance for fiduciaries to self-correct ERISA violations. Plan officials can voluntarily rectify 19 specific prohibited transactions, with PTE 2002-51 providing IRS excise tax relief for six of these transactions. Continue
• ▾

  CASE OF THE WEEK – Railroad Retirement System Benefits

  June 7, 2024 - When clients have worked for both the railroad and under Social Security, understanding the Windfall Elimination Provision (WEP) is crucial. The WEP affects approximately 2.1 million Social Security beneficiaries, around 3% of the total, as of 2023. Of these, nearly 2.0 million are retired worker beneficiaries, roughly 4% of the retired-worker beneficiary population. This provision also impacts disabled worker beneficiaries and eligible family members. Continue
• ▾

  CASE OF THE WEEK – Hardship Distribution Certification

  May 31, 2024 - ERISA consultants at the Retirement Learning Center regularly address technical queries from financial advisors about retirement plans, including hardship distributions. A common question is whether source documentation, such as proof of medical bills, is required for 401(k) hardship distributions. The SECURE Act 2.0 allows self-certification for all hardship criteria, but IRS audit guidelines still require source documentation. Plan sponsors should consult with record keepers, TPAs, and legal counsel to establish a clear policy until the IRS provides further guidance. Continue
• ▾

  CASE OF THE WEEK – Un-Terminating a Plan

  May 24, 2024 - The correction process detailed here covers multiple aspects of rescinding a plan termination, though not all. Consulting with an ERISA attorney or tax advisor is recommended for specific needs. Continue
• ▾

  CASE OF THE WEEK – What Is The New Transition Rule For Applying Accumulated Forfeitures From Defined Contribution Plans?

  May 17, 2024 - The proposed regulations offer plan sponsors a chance to "clean the slate" in the 2024 plan year by treating forfeitures from prior years as if they first occurred in 2024. Sponsors should apply these accumulated forfeitures by the end of the 2025 plan year. This transition period also allows plan sponsors to review and adjust their administrative procedures to comply with the rule that forfeitures must be used by the end of the year following the year they occurred. Proper use of forfeitures can lower future employer contribution costs and cover reasonable plan expenses. Continue