March 23, 2014

IRS Expands Use of Pre-Approved Plan Documents To Cash Balance Plans

March 23, 2014

Currently, the Internal Revenue Service (“IRS”) requires that all “Cash Balance” plans employ an “individually designed” plan document. While individually designed plan documents do provide the greatest degree of flexibility with regard to plan design, there is a “trade-off” that occurs when such a plan document is used. This is because an individually designed plan document also happens to be the most expensive form of plan document for a plan sponsor to adopt and maintain. Therefore, the increased plan design flexibility available through an individually designed plan document comes at a very real and direct cost.

March 22, 2014

IRS Issues Final Regulations on Mid-Year Reduction or Suspension of Safe Harbor Contributions

March 22, 2014

On November 15, 2013, the Internal Revenue Service (“IRS”) issued final regulations regarding how a plan sponsor is permitted to exit a safe harbor 401(k) feature in the middle of the current plan year (“Final Regulations”). These rules both clarified and supplemented the existing operational rules regarding safe harbor 401(k) matching and non-elective (commonly referred to as “profit sharing”) “full year” contribution requirements.