Retirement Plans

IRS Issues Guidance Clarifying Allocation of Plan Expenses to Inactive Participants

In 2003, the Department of Labor issued Field Assistance Bulletin 2003–3 (the “FAB”), which provides guidance on the allocation of expenses paid with plan assets in defined contribution plans. In the FAB, the DOL, in part, stated that plans may charge the accounts of vested separated participants with the account’s share of reasonable plan expenses, […]

New Legislation Clarifies Rule on Plan Loans to Service members

On December 19, 2003, President Bush signed the Servicemembers Civil Relief Act (the “SCRA”) which restates, clarifies, revises and renames the Soldiers’ and Sailors’ Civil Relief Act of 1940. In general, the SCRA temporarily suspends legal proceedings and transactions of individuals entering military service so that they may devote their entire energy to the defense […]

Proposed 401(k) Regulations Include Interesting ESOP Change

On July 17, 2003, the Internal Revenue Service (“IRS”) issued proposed regulations that update and modify the regulations related to 401(k) plans. Hidden in the proposed 401(k) plan regulations is an important change that involves the interaction of employee stock ownership plans (“ESOPs”) and 401(k) plans. The new set of regulations would be effective no […]

Pension Plan Limitations for 2004

The Internal Revenue Service has announced the annual cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2004. The increases that will affect the most plans are the increase in limitations on deferrals and catch-up contributions, and the increase in the maximum compensation limit. EGTRRA Limitation Increases The Economic […]

Recent Court Cases on Cash Balance Plans

Courts have recently decided a number of new cases involving cash balance plans. The issues involved are major, and the decisions, if upheld, could have drastic implications for all cash balance plans. This article analyzes the possible effects of the two most significant cases: Cooper v. The IBM Personal Pension Plan, 2003–2 USTC P 50,596 […]

Internal Revenue Service Simplifies and Streamlines the Employee Plans Compliance Resolution System

Introduction In June 2003, the Internal Revenue Service (the “IRS “) issued Revenue Procedure 2003–44 (the “Revenue Procedure “) in order to simplify and streamline the Employee Plans Compliance Resolution System ( “EPCRS “). EPCRS is a program designed to encourage plan sponsors to correct certain qualification failures, and to facilitate the process, while allowing […]

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