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401(k)
401(k) Fiduciary Litigation: Morals from the Story
Topics: 401(k), Advisor standard of conduct, ERISA, Qualified Plans, Regulation
This WR Marketplace is created exclusively for AALU members by experts at K&L Gates and the AALU staff, led by James E. Earle, Matthew R. Jones, Richard H. Nettles, and Rebecca Liu. The AALU WR Newswire and WR Marketplace are published by AALU as part of the Essential Wisdom Series, the trusted source of actionable...
IRS Blesses Employer’s 401(k) Plan Designed to Provide Retirement Benefits Tied to Student Loan Repayments
Topics: 401(k), IRS, Regulation
In an IRS Private Letter Ruling (“PLR”) issued last year, PLR 201833012, the IRS blessed a 401(k) plan design in which employees who repay student loan debt instead of making 401(k) employee contributions can receive employer retirement contributions to make up for missed 401(k) matching contributions. Incorporating a student loan repayment (“SLR”) feature into a…
IRS Issues Proposed Regulations on Relaxed Rules for 401(k) Hardship Distributions
Topics: 401(k), Qualified Plans
The 2018 Budget Act changes to the hardship distributions rules will make it easier for participants to take these distributions. The changes, as described in the Proposed Regulations, include (1) expanding the contributions and earnings that are eligible to be received in a hardship distribution (including post-1988 earnings on 401(k) deferrals), (2) expanding the permitted…
401(k) Plan Loans: Considering a Loan Program – Better Know the Basics
Topics: 401(k), Qualified Plans
To establish an effective 401(k) loan program, the plan sponsor must ensure that the loans comply with requirements under the Internal Revenue Code (“Code”), along with making other important design decisions. Specifically, plan sponsors must ensure that loans are: (1) made on commercially reasonable terms, (2) adequately secured and documented in writing, (3) paid off…
Generally, every 401(k) plan must satisfy annual nondiscrimination requirements, which are met by passing numerical tests that compare the average percentage of compensation deferred by highly compensated employees to the average percentage deferred by non-highly compensated employees. Failure of these tests typically results in a refund of some or all of the amounts deferred by…
401(k) Hardship Distributions- IRS Eases Substantiation Requirements.
Topics: 401(k), IRS, Qualified Plans, Regulation
Most 401(k) plans allow participants to take distributions while employed in the event of a financial hardship, although IRS regulations strictly define what constitutes a financial hardship. Further, the IRS typically has set stringent audit standards for plans in documenting the satisfaction of distribution requirements, which has frustrated the goal of many plan sponsors and…
Retirement Planning 101 – The Fundamentals of Automatic 401(k) Contribution Enrollments.
Topics: 401(k), Qualified Plans
Employers constantly search for effective employee benefit offerings that will help to attract and retain employees. As improving participation in employee benefits is a key method for enhancing employee satisfaction and loyalty, the addition of automatic employee contribution enrollment in 401(k) plans has become a popular means to increase participation while also possibly reducing expenses.…