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Plan sponsors are doing less
Many plan sponsors have halted planned upgrades, suspending actions that may have helped their participants be better prepared for retirement, according to
Pensions & Investments. Although plan sponsors are still reviewing risk profiles among their current asset managers and considering plan design enhancements, few are executing on the results.
What can defined contribution committees do?
Stress test your plan. The last two quarters provide real data about participant behavior and fund results in difficult markets. Understand the impact that subsequent effects may have on your employees’ retirement readiness and reinforce positive actions.
charitable gift annuities,
and others.
The disruption caused by Corona caused more and more people to change jobs, roll over retirement accounts or retire. As a result, they are more likely to see 1099-Rs, whether issued for a distribution from an IRA or employer retirement plan.
The form itself is pretty self-explanatory. All the boxes are essential, but we will focus on Box 7, where you will find the code that indicates the type of distribution being reported. Of the 29 possible codes, the most common include:
Code 1: “Early distribution, no known exception.” Here the IRA owner is below age 59½ at the time of distribution. IRA custodians are not required to determine if the individual qualifies for an exception. If you have an exception, you can file Form 5329.
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On December 27, 2020, President Trump signed into law an additional COVID-19 relief bill, attached to the Consolidated Appropriations Act of 2021, and intended to provide economic assistance to Americans impacted by COVID-19, as well as continued funding for the federal government. However, it also contains a surprising number of provisions relating to employee benefits which are summarized in this advisory.
FSA and Dependent Care Account Relief
Background
The general rule is that Flexible Spending Accounts (FSA) and Dependent Care Accounts elections are irrevocable for the Plan Year, generally the calendar year. The general rule is that unused amounts in the FSA and Dependent Care Accounts are forfeited at the end of the year, subject to three exceptions:
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The Consolidated Appropriations Act, 2021 generally provides the annual funding for the federal government and also contains several important rules giving further COVID-19 relief. The comprehensive relief package funds certain hard-hit industries, expands eligibility for the Paycheck Protection Program (PPP), and extends and expands the Employee Retention Tax Credit.
The Act also relaxes several normally rigid health, welfare, and retirement plan rules in light of the on-going COVID-19 pandemic, easing the financial impact of pandemic-caused employment changes, while instituting new rules related to surprise medical billing.
The Act was approved by Congress on December 21, 2020, and signed into law by President Donald Trump on December 27, 2020.
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On December 21, the House and Senate passed a $2.3 trillion omnibus appropriations and COVID-19 relief package, H.R. 133, the Consolidated Appropriations Act, 2021 (the “Act”). President Trump signed the Act into law on December 27 after initially criticizing the amount of direct payments to individuals and other aspects of the Act late last week.
The massive, 5,593 page document includes a $1.4 trillion appropriations package to fund the government through September 30, 2021, a long-debated $900 billion COVID-19 relief and stimulus package, funding for COVID-19 vaccines and testing, expanded food aid programs, emergency education relief, airline and transportation support, relief for farmers, broadband incentives, and extensions on eviction moratoriums.