Although employers who maintain tax-qualified retirement plans are well aware of the requirement to file an annual information return (Internal Revenue Service (IRS) Form 5500), many employers appear unaware of their responsibility to file a similar return for other employee benefit programs. If the IRS discovers that required filings have not been made, penalties are severe. This article will discuss what types of plans need to file, potential penalties and a program that can minimize the...
Read More >>On February 4, 2011, a group of government agencies who are charged with enforcing laws relating to financial institutions (including the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration) issued a proposed rule relating to the enforcement of the Dodd-Frank Act, which directed the agencies to rein in executive pay as...
Read More >>In the past, many employers have used a discretionary bonus system.
However, the use of pay-for-performance compensation plans has
become increasingly popular.
The process is changing because boards of directors are getting more involved in setting corporate goals and want a mechanism by which those goals can be reinforced. The boards want to guide executive behavior. In that process, companies are tying the payment of bonuses to the achievement of distinct goals.
What defines a... Read More >>
The process is changing because boards of directors are getting more involved in setting corporate goals and want a mechanism by which those goals can be reinforced. The boards want to guide executive behavior. In that process, companies are tying the payment of bonuses to the achievement of distinct goals.
What defines a... Read More >>
When we consider the impact of “reasonable compensation,” it is
often in relation to wages paid to executives of not-for-profit
entities or publicly traded companies. For these entities, if wages
are not deemed reasonable compensation because they are too high,
the employer can lose a deduction or incur an excise tax. A
recent court case underscores a different side of “reasonable
compensation” — paying an S-corporation shareholder employee too
little in an attempt to avoid employment taxes.
In...
Many taxpayers, fearing an eventual increase in income tax
rates, have taken the step of converting their individual
retirement accounts to Roth IRAs, thereby paying taxes at current
rates for the benefit of obtaining future tax free earnings.
A recent change in the law allows 401(k) plans to permit their
participants to, in effect, re-characterize their 401(k) plan
balances, within the plan, to Roth IRAs.
What happens when a participant takes a distribution from a
qualified plan?
He or she...
One Last Chance to Repair Deferred Compensation Plan Issues
December 31, 2010 marks the closing of a window offered by the IRS to self-correct non-qualified deferred compensation programs (NQDC) for failure to comply with Internal Revenue Code Section 409A (409A). Although many employers have reviewed their programs for 409A compliance, some have not and should do so. Let's briefly look at the issue and what should be done before year end.
Click here to read more about section 409A and the...
Read More >>We are pleased to provide you with a copy of “The BDO 600, a 2010-2011 Survey of Board Compensation Practices of 600 Mid-Market Public Companies.” This survey reviewed the SEC filings of 600 companies in eight industries with revenues of between $25 million and $1 billion to see how the companies’ board compensation programs were designed, and what changes had occurred since 2009. The survey found that:
- Overall, total board compensation (both cash and equity) increased 2% over 2009 levels;...
December 31, 2010 marks the closing of a window offered by the
IRS to self-correct non-qualified deferred compensation programs
(NQDC) for failure to comply with Internal Revenue Code Section
409A (409A). Although many employers have reviewed their
programs for 409A compliance, some have not and should do so.
Let’s briefly look at the issue and what should be done before year
end.
NQDC include (but are not nearly limited to) traditional deferral
arrangements (such as supplemental retirement...
If your organization utilizes a 403(b) benefit plan,
you most likely know of the recent changes to the Form 5500
reporting and audit
requirements.
After reviewing these changes, many plan administrators had expressed concern that the historical treatment of 403(b) plans as a collection of individual contracts with respect to which employees could engage in a series of actions without the involvement or consent of a plan administrator or employer could make it costly, and in some cases...
Read More >>Details
The Internal Revenue Service has announced that its Employee Plans
Compliance Unit (“EPCU”) will be mailing out a letter and
instructions to a random sample of 1,200 employers that sponsor
401(k) plans asking them to complete a “401(k) Compliance Check
Questionnaire.”
Background
The Service is well aware that 401(k) plans have far surpassed
defined benefit plans as the preferred retirement vehicle for the
majority of employers. A recent IRS Employee Plans Examination
Study of 79 market...
While most companies understand that an annual financial statement
audit is required, many companies are surprised when they find out
their employee benefit plans also need to be audited. Companies may
not think they really need to pay attention to the audit
requirement, but these types of audits are important, and are
something the IRS and Department of Labor take very
seriously.
This is the time of year when companies should start looking at whether or not their plans need an audit. From a...Read More >>
This is the time of year when companies should start looking at whether or not their plans need an audit. From a...Read More >>
Click the links below for more information on each topic.
Recent Employee Benefit Plan Developments
- Electronic Filing of Form 5500s now required
- Additional changes to 2009 Form 5500
- Fee disclosures
- 403(b) plans
- Deadline extended for certain retirement plan amendments
- EBSA's 2010 priorities
- DOL withdraws final investment advice regulations
- PBGC flat-rate increase
Accounting, Auditing and Reporting Update
Read More >>Beginning with the 2009 Form 5500 filings (due in 2010), employee benefit plans that are qualified under section 403(b) of the Internal Revenue Code that are sponsored by charitable organizations and covered under the Employee Retirement Income Security Act of 1974 (ERISA) will be subject to the same reporting and audit requirements that currently exist for section 401(k) plans.
What does this mean for affected organizations? It most likely means that they face significant challenges with:
- Establ...
Our Real Estate and Construction Group has released the results of its second annual survey of the Real Estate and Construction markets in Northeast Ohio.
The surveys cover a variety of topics, including political insight, financial issues, the local economy and industry trends. The survey was developed and analyzed by the Real Estate and Construction Group at Skoda Minotti with assistance from the real estate and construction experts at Ranallo & Aveni, LLC and Lake National Bank.
The survey...
Read More >>With the end of the year approaching many companies are asking questions related to their business, such as "How can we cut costs?" How can we save time?" and "How can we add value to our processes?" These same questions also apply to a company’s employee benefit plan. Many companies don’t take the time throughout the year to evaluate their plan and any changes that should be made to it. The end of the year is a great time to analyze the plan for any changes that can take place during the next...
Read More >>The Internal Revenue Service recently issued substantial guidance designed to boost retirement savings, including:
- Changes to automatic retirement plan contributions;
- Contributions of unused paid time off to be contributed to a retirement plan; and
- A detailed explanation of tax-free rollover options.
The guidance is found in several rulings identified below. You can access the rulings by following this link.
Summary of Changes
1. Automatic Contribution Increases under Automatic...
Read More >>The initial due date of the Form 5500 for calendar year end benefit plans is July 31, 2010, which is quickly approaching. Any benefit plan whose Form 5500 or annual audit is not completed by July 31, 2010 can file for an extension of time to file, which extends the calendar year end plan due date to October 15, 2010. The extension process remains the same as it has been in the past, however, there are some major changes to the actual filing of the Form 5500.
As of January 2010, all Form...
Read More >>This is a friendly reminder that any Form 5500 on extension needs to filed by October 15th. This applies to calendar year plans.
If your plan has more than 100 eligible employees, you may need to attach audited financial statements for the plan to the Form 5500.
Looking for assistance with your benefit plan audit? Contact us at
440-449-6800 or
visit our web site for more information.
Suspension of
Required Minimum Distribution Requirement
One of the many
provisions in the Worker, Retiree, and Employer Recovery Act, which
was signed into effect in December 2008 by then President Bush,
provided for a one-year suspension of the required minimum
distribution ("RMD") payments for certain retirement plan
accounts.
Under current law, the RMD rules provide that participants in
"qualified plans" and individual retirement arrangements ("IRAs")
are generally required to begin taking...
This week is our final update in our series on the changing rules and regulations and their impact on employee benefit plan audits.
This
week’s topic:
2009 Cost of
Living Adjustments for Qualified Retirement Plans
The Internal Revenue
Service announced cost-of-living adjustments applicable to dollar
limitations for pension plans and other items for tax year
2009.
Click here for
more of this article.
For more information on employee benefit plan audits, please leave a comment below, or contact Dani...
Read More >>
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