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IRS Announces 2019 HSA and HDHP Limits

The IRS has released the cost of living adjustments to the limits for Health Savings Accounts (HSA) and High Deductible Health Plans (HDHPs). Most of the limits have changed for the 2019 tax year. This release takes into account changes to the 2018 family contribution limit announced by the IRS on April 26, 2018. See our article. 2018 20...

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IRS Changes Course on 2018 HSA Contribution Limit Previously Reduced

The IRS has reversed its decision to reduce the 2018 HSA contribution limit for families. The $50 reduction was thought to be an overbearing challenge since it became applicable in March 2018, instead of at the beginning of the year. By this time, some may have already contributed the original maximum of $6,900, or made payroll elections through a cafeteria plan based on that amount. The finan...

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Nyhart Appoints New CEO Lisa Hague

Nyhart has announced the appointment of Lisa Hague as their first female CEO....

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Disability Claim Regulations Effect on Employee Benefit Plans

DOL has issued final rules on disability claims procedures pertaining to employee benefit plans....

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Don’t Forget the Special Catch-up Limit for 403(b) Plans

Called a catch-up contribution, employees age 50 or older may be able to contribute an extra $6,000 to their 403(b) account, with a maximum of $24,000 for 2018. A lesser known provision is that employees who have been with the same eligible employer for 15 years may be able to further increase their limit on deferrals into their 403(b) account by up to $3,000 in any taxable year (lifetime employer...

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Required Minimum Distribution Guidance for Missing Participants Extended to 403(b) Plans

The Internal Revenue Service (“IRS”) previously issued guidance concerning “missing participants” in qualified retirement plans attempting to process a required minimum distribution (“RMD”). In short, the IRS directed its examiners to cease challenging the qualified status of plans that failed to distribute an RMD, if the plan sponsor made a good faith effort to locate the missing participant. ...

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Budget Act Affects Retirement Plans

While the Bipartisan Budget Act of 2018 (“Budget Act”) may have sounded like just a law to end the government shutdown, there were some retirement plan provisions included. Hardship withdrawals In an effort to simplify the hardship distribution process, the Budget Act makes the following changes to the hardship distribution rules: Removes the rule that all available loans must be taken be...

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Budget Proposal Includes HSA Contributions for Medicare Beneficiaries

On February 12, the White House released its federal budget proposals for the 2019 fiscal year. The budget includes a provision that, if passed, could be a welcome change for beneficiaries of Medicare payments. The proposal would create a new option for Medicare beneficiaries to save for out of pocket healthcare expenses by allowing tax-deductible contributions to health savings accounts (HSAs)...

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Tax Reform Extends Rollover Period for Loan Offset

As we mentioned in our prior article regarding the passing of the Tax Cuts and Jobs Act (“Act”), retirement plans were affected by the new law, particularly the period to repay a plan loan offset. The new rule only applies in the case of an individual who severs employment or when a retirement plan is terminated. For employees unable to pay off any outstanding loan balance right away, the loan ...

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Hardship Distributions May Be Affected by Tax Cuts and Jobs Act

In an indirect manner, and possibly unintended by Congress, the Tax Cuts and Jobs Act (“Act”) may affect the ability for a participant to receive a hardship distribution from their retirement plan. Under the Act, the definition of a casualty loss is changed under the Internal Revenue Code (“Code”) and limits the ability to get a casualty loss deduction to a loss that is caused by a federally de...

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Missing Participant Program for Terminating 401(k) Plans Finalized

The Pension Benefit Guaranty Corporation (PBGC) has expanded its missing participants program to terminated 401(k) plans in an effort to make it easier for people to locate their retirement benefits. This new option is only available for plans terminating after January 1, 2018. Under this voluntary program, instead of establishing an IRA on the missing participant’s behalf, an account balance t...

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Disaster Relief Distributions Available from Retirement Plans

Historically, Congress has allowed retirement plans to offer loans and distributions to give relief to employees and certain members of their families that live in disaster areas. Due to the devastation of Hurricanes Harvey, Irma and Maria, Congress has granted relief from some of the retirement plan distribution rules to victims of these disasters. The highlights of the relief are: Qualified H...

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IRS Gives Guidance on Required Minimum Distributions for Missing Participants

The Internal Revenue Service (“IRS”) has made it easier on plan sponsors processing required minimum distributions (“RMD”) for retirement plans with “missing participants”. These missing participants make it difficult to distribute the RMD timely and therefore jeopardize the qualified status of the plan. In an effort to address this issue, the IRS has directed IRS examiners not to challenge the...

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2018 Brings Increased DOL Penalties for Employee Benefit Plans

The Department of Labor (DOL) released its annual adjustments for civil monetary penalties affecting various benefit plan related violations. Below are highlights of the more common penalties. Form 5500 Required to be filed by most ERISA plans, the maximum fee for filing a late Form 5500 is $2,140 each day the Form is late. Previously the fee was $2,097. Reports and Recordkeeping A failure...

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Tax Cuts and Jobs Act Effect on Health and Welfare Plans

As we mentioned in our prior article regarding the passing of the Tax Cuts and Jobs Act (“Act”), health and welfare plans were affected by the new law. No longer can employers take a deduction on their tax return for contributions to an employer-sponsored qualified transportation fringe benefit provided on a tax-free basis to an employee. This includes expenses for transit passes, qualified par...

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IRS Changes Fee Structure for Correction Program

In an effort to encourage larger employers to voluntarily correct errors in their plan, the IRS has revised the fees charged to employers for using the IRS Voluntary Correction Program (“VCP”). VCP is a program the IRS offers to allow an employer who sponsors a retirement plan to correct a variety of operational and document errors, as long as the plan is not under audit by the IRS. Previously ...

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QSEHRA Establishment Deadline is on the Horizon

Recent guidance issued by the IRS on qualified small employer HRAs (“QSEHRA”) answer many of the remaining questions about these relatively new arrangements. QSEHRAs allow small employers the ability to provide reimbursement for certain health expenses, including health insurance premiums. (Read our previous article) IRS notice 2017-67 gives further guidance on how the arrangements should opera...

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President Signs New Tax Bill

On December 22nd, President Trump signed into law the Tax Cuts and Jobs Act, which is being hailed as one of the biggest tax reform bills in recent history. There are many tax changes in the bill; however, retirement plans were not majorly affected. What was not included in the law is the proposed “Rothification” of contributions, as well as the reduction of contribution limits. This means tha...

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2018 Cost of Living Adjustments

The IRS has released the cost of living adjustments that affect the dollar limits for various retirement plans and health & welfare plans for the 2018 tax year. Many of the limits have increased from 2017 to 2018 due to an increase in the Consumer Price Index on which these limits are based. Please contact your Nyhart consultant for additional information or questions. ...

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IRS Finalizes New Mortality Table

In order to reflect the increased longevity of today’s society, the IRS has finalized regulations that adopt a new mortality table for use with pension plans. This increased longevity has several impacts on defined benefit plans - minimum funding requirements, lump sum payments and Pension Benefit Guaranty Corporation (PBGC) premiums. Minimum Funding A portion of the minimum contr...

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Holistic Financial Planning for Employees

Votaire is a personalized and comprehensive financial planning platform that provides help to employees at all stages of their lives. Whether the person has questions about retirement income, life insurance, healthcare, investing, budgeting or debt management, Votaire can help....

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Fiduciary Rule Moving Forward

The Department of Labor (DOL) recently confirmed that, barring any action by the courts or Congress, the effective date of the DOL’s fiduciary rule will not be delayed further.  The rule will take effect in part on June 9, 2017 with the full implementation of the rule taking effect on January 1, 2018. Originally, the rule was scheduled to take effect April 10, 2017.  However, the Trump ...

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IRS Announces 2018 HSA and HDHP Limits

The IRS has released the cost of living adjustments to the limits for Health Savings Accounts (HSA) and High Deductible Health Plans (HDHPs). Most of the limits have changed for the 2018 tax year.                                &...

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403(b) Remedial Amendment Period – IRS Guidance

March 31, 2020 will be the last day of the initial remedial amendment period (RAP) for 403(b) plans. The remedial amendment period is the time allowed for employers to correct operational functions or language errors in their plan(s). A look back – and what was missing: You may recall, in 2007 the IRS put out regulations requiring 403(b) plans to have a written plan document. Gaining a tax-favor...

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DLGF Reporting Requirement

Since 2014, the Indiana Department of Local Government Finance (DLGF) has required political subdivisions to report by March 1st of each year their Other Post-Employment Benefits (OPEB) liabilities online through the DLGF website using their Gateway portal. Benefits defined as OPEB include healthcare and other non-pension benefits provided to employees at retirement, which may include medical, pre...

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Partnership & C-Corporation Reminder: Tax Return Filing Date Changes

Beginning with fiscal years ending after December 31, 2015 (the 2016 tax season), the filing deadlines have changed, which is good news. The changes are a result of years of activism by tax preparers. The new deadlines create more logical flow for businesses with pass-through income. However, beware these changes are imbedded in a law that gives the Internal Revenue Service (IRS) an increased au...

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21st Century Cures Act – A Welcome Gift to Small Employers!

On December 13, 2016, President Obama signed the 21st Century Cures Act (“Act”). Tucked deep away, towards the end of the law, is a welcome gift to small employers! The law makes it possible for small employers to use Health Reimbursement Arrangements (“HRA”s) to pay back employees who buy their own health insurance. Beginning January 1, 2017, companies with less than 50 employees wil...

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2017 Cost of Living Adjustments

The IRS has released the cost of living adjustments that affect the dollar limits for both retirement plans and health & welfare plans for the 2017 tax year. Most limits will remain unchanged from 2016 to 2017 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. Please contact your Nyhart consultant for additional information or quest...

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IRS Announces Regulations For Lump Sum Distributions

Some defined benefit plans offer no lump sum payment option. For the many that do, the choice is an “all or nothing” lump sum payment or annuity payments (fixed payments for a period). The IRS recently announced great news to those participants wanting or needing more flexibility when facing how their retirement plan payments come to them. New IRS rules clarify and simplify the rules for d...

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IRS Extends Temporary Nondiscrimination Relief

Many employers have closed their defined benefit (DB) plans to new participants. This has been done to reduce costs and lower future funding duties. These closures are often called “soft-frozen” or “closed” plans, where participants prior to a certain date are still active. Now employers are finding they cannot afford to meet any of the nondiscrimination testing alternatives and fund the DB plans ...

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IRS Updates Employee Plans Compliance Resolution System (EPCRS)

We do not live in an error-free world. While it would be great if all retirement plans could be amended one time, and one time only, it is not reality. The IRS recognizes this and designed the Employee Plans Compliance Resolution System (EPCRS) to address plan correction issues. EPCRS lets plan sponsors correct some common plan failures to satisfy the plan qualification requireme...

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IRS Relief for Missed Rollover Deadline

The IRS just made what many experts are calling a surprise move. Savers who miss a 60-day deadline for rolling over their IRA or workplace retirement savings plan, like a 401(k), are getting a second chance. This comes as a relief to plan sponsors often facing issues with participants who, by accident, don’t get their rollover funds deposited timely. The 60-day limit has l...

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Deadline for PPA Restatements

On April 6, 2016, the Department of Labor (DOL) announced the final fiduciary rule which has meaningful implications for the definition of a fiduciary as it applies to investment advice. The final rule, which is the result of a nearly six-year process, describes the circumstances under which a person providing investment advice would be considered a fiduciary under the Employee Retir...

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Department of Labor Finalizes “Fiduciary Rule”

On April 6, 2016, the Department of Labor (DOL) announced the final fiduciary rule which has meaningful implications for the definition of a fiduciary as it applies to investment advice. The final rule, which is the result of a nearly six-year process, describes the circumstances under which a person providing investment advice would be considered a fiduciary under the Employee Retir...

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Impact of Obergefell v. Hodges on Health and Welfare Plans

The IRS recently issued Notice 2015-86, providing initial guidance on the impact of the U.S. Supreme Court’s decision in Obergefell v. Hodges on health and welfare plans, and further guidance on the application to retirement plans. The Notice confirms that the Obergefell decision does not require any changes to the terms of a health and welfare plan, noting that if the plan offers benefits to same...

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Internal Revenue Service Issues New Guidance on Mid-Year Amendments to Safe Harbor Plans

The Internal Revenue Service (IRS) has historically been very restrictive with respect to what changes could be made mid-year to a safe harbor plan. However, IRS Notice 2016-16 erased most  restrictions that kept employers from adopting mid-year amendments to safe harbor 401(k) and 403(b) plans.  The Notice provides much needed guidance and allows a change to be made mid-year if the following requ...

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Internal Revenue Service Announces Changes to Voluntary Correction Program Compliance Fees

When mistakes are made with respect to a qualified plan, one option that is available to a plan sponsor is the Voluntary Correction Program (VCP) under the Internal Revenue Service (IRS) Employee Plans Compliance Resolution System (EPCRS) to fix the mistakes. To encourage employers who sponsor 401(a) qualified retirement plans and 403(b) plans to correct plan failures, the IRS has announced in R...

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IRS gives guidance on how to apply retroactive transit benefits for 2015

The IRS issued Notice 2016-6 to provide procedures for employers on how to actually apply transit benefit adjustments for 2015 stemming from The Protecting Americans from Tax Hikes Act of 2015 (PATH Act).  The Act retroactively and permanently reinstated parity for parking and mass transit benefits where previously mass transit benefits were limited to $130/month and parking benefits were limited ...

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IRS Q&A on Health Reform Discusses HRAs and Health FSA Carryover

On December 16, 2015, the Internal Revenue Service issued Notice 2015-87 containing guidance on a wide-range of topics under the Affordable Care Act (ACA).  The Notice reaffirms existing guidance on a Health Reimbursement Arrangement’s (HRA) inability to reimburse premiums paid for individual health insurance premiums unless an exception applies.  Among other items, the Notice also discusses Healt...

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Transit Benefit Retroactive Extension for 2015

Earlier this year, the IRS extended retroactively for 2014 a measure that increases the maximum monthly exclusion amount for mass transit passes and van pool benefits from $130/month to $250/month. This change was made so that these transportation benefits matched the $250/month exclusion for qualified parking benefits.  This provision expired at the end of 2014. The recently signed Protecting Ame...

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Impact of Obergefell v. Hodges on Employee Benefit Plans

The United States Supreme Court (“Court”) ruled in Obergefell v. Hodges (“Obergefell”) that same-sex marriage bans are unconstitutional. The decision in Obergefell is a continuation of the Court’s expansion of protections of married same-sex couples from United States v. Windsor. Obergefell will primarily impact private employers with respect to state law including state taxes and related withhol...

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Affordable Care Act Cadillac Tax Delayed to 2020

On Friday, December 18, 2015, President Obama signed a $1.1 trillion omnibus spending bill, which included a provision to delay the Affordable Care Act’s (ACA) “Cadillac tax” on high-cost employer sponsored health plans. The Cadillac tax that was originally scheduled to take effect in 2013 and then delayed to 2018, has now been pushed back again to 2020.  The bill also makes the tax a deductible e...

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2016 Cost of Living Adjustments Announced

The IRS has released the cost of living adjustments that affect the dollar limits for both retirement plans and health & welfare plans for the 2016 tax year. Most limits will remain unchanged from 2015 to 2016 because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. While health FSAs experience no limit increase, plan sponsors may still allow...

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PPA Restatements for Defined Contribution Plans

The IRS requires all retirement plans to be restated periodically to ensure that a plan accurately reflects current regulations and legislation. The current round of restatements is referred to as the “PPA restatement” and applies to employers using pre-approved 401(k), profit-sharing, or other defined contribution plan documents. These pre-approved plans receive approval in advance from the IRS t...

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Revisions to the IRS Determination Letter Program

Historically, a plan sponsor could get assurance that their retirement plan was in compliance with current laws and regulations by requesting a favorable determination letter from the IRS, which allowed sponsors to be confident in the tax-qualified status of their plan. These requests were made in accordance with a five-year restatement cycle established by the IRS.   However on July 21, 2015 the ...

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Significant Changes to GASB Reporting of OPEB Liabilities

Other Post-Employment Benefit (OPEB) accounting standards are once again in the spot light. The Government Accounting Standards Board (GASB) issued two pronouncements (GASB statement numbers 74 and 75) in June 2015, which significantly changed the financial reporting requirements by state and local governments of their OPEB liabilities. Easily the largest change since the implementation of accrual...

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IRS Limits Lump Sum Distribution Options

In Notice 2015-49 the IRS placed limits on the ability of a plan to offer lump sums to participants that are receiving annuity payments from a defined benefit plan.  The ability to allow participants to change from an annuity to a lump sum payment is a strategy often referred to as “de-risking” whereby the plan tries to manage risk by cashing out retirees and terminated participants and shifting t...

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Monitoring Differing Terms in your SPD vs. the Plan Document

A recent court case out of the Sixth Circuit Court (Pearce v. Chrysler Group LLC Pension Plan) reminds plan sponsors to carefully monitor the terms and provisions used in the retirement plan document versus those used in the summary plan description (SPD).  The court held that a material conflict between an SPD and the plan permits a participant to file a claim....

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