Five Major Trends for 403(b) Plans
The last decade has seen a major shift in the treatment of 403(b) retirement plans, and many 403(b) plans now look and feel closer to 401(k) plans. Most of these changes are positive, especially from the viewpoint of the employee/investor. But while the Department of Labor’s (DOL’s) introduction of Employee Retirement Income Security Act (ERISA) to 403(b) opened plans to a variety of investment vehicles, it also created additional disclosure requirements and responsibilities for plan fiduciaries. A recent article in NACUBO’s Business Officer magazine closely examines the undercurrents of these changes, summarizing five major trends to look for in future changes: Increased recognition of the. Read More.
If Young Higher-Education Employees Have Retirement Plans, They’re as Conservative as Those of Baby Boomers
A recent study by Fidelity Investments found younger higher-education employees investment strategies, where they exist, don’t necessarily align with their needs. As Market Watch reports, fewer than 25% of respondents ages 21-32 have a formal investment plan, and those that do are very conservative in their choices. Nearly half (49%) of the higher education workers surveyed described themselves as “conservative” investors when it comes to retirement, regardless of age. In fact, younger employees were found to be using the same asset allocation strategies as their older counterparts, with Gen Y using a similar asset mix (50% stock, 35% bond/annuity and 15% cash). Read More.
Compensation Packages Exceed $1 Million for Private-College Presidents
In a review of 2008-09 fiscal year tax documents performed by the Chronicle , 30 of 448 private- college leaders received compensation packages above the $1 million mark, many of whom retired from smaller colleges. Though many chief executives and presidents began accepting pay freezes and reduced salaries in 2008 as a result of the recession, more large-sum payouts and retirement packages are expected as Boomer-aged leaders begin to retire.
IRS Scrutiny of Employment Tax Compliance Continues
The IRS continues to send audit letters to U.S. businesses and organizations as part of the Employment Tax National Research Project (NRP) . Just because your organization may not have received a letter yet doesn’t mean it won’t. Only 2,000 such letters have been sent to date, with 4,000 still to come over the next two years. As report over at the CFO Zone : The NRP is the first the IRS has undertaken in 25 years. During that time, the agency noted, business practices regarding employment taxes may have changed significantly, prompting the need for study. In particular, the IRS is looking for data that will allow. Read More.
Beginning in 2011, FSA Reimbursement Will Require Prescriptions for OTC Meds
Beginning January 1, 2011, Flexible Spending Accounts (FSAs) will no longer be able to be used for over-the-counter medications without a prescription. Part of new uniform standards established by the Affordable Health Care Act , the changes do not affect the purchase of insulin, whether the patient has a prescription or not. Other health care expenses will remain unchanged, such as medical devices, eyeglasses, contact lenses, co-pays and deductibles. Similar regulations will be in effect for health reimbursement arrangements (HRAs), Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs). The changes affect all workplace health plans. Check with your employer for plan. Read More.
DOL Issues FAQ Guidance for Form 5500 Electronic Filing
Effective for plan years beginning on or after January 1, 2009, retirement and welfare plans are required to file annual reports on Form 5500 electronically on the EFAST2 system. The Department of Labor (DOL) has recently released an FAQ series on issues related to Form 5500′s electronic filing requirements and EFAST2. Covered Plans All retirement plans, with the exception of plans that only cover the sole owner(s) and no other employees, are required to file 5500 electronically. Those few plans not required to file electronically must complete a Form 5500-EZ or 5500-SF. Delinquent or Amended Reports EFAST2 will also be open to file delinquent or amended reports. Filings from. Read More.