Other Information
Types of Plans
Cross-Tested 401(k) Safe Harbor Profit Sharing Plans (Adobe Acrobat PDF): A defined contribution plan with three (or more) types of contributions, including a safe harbor profit sharing or matching contribution, where the amount of contribution can vary for each person. Nondiscrimination testing is required, but the safe harbor contribution provides an automatic pass of the salary deferral (ADP) and/or matching (ACP) nondiscrimination test(s).
Qualified Retirement Plans (Adobe Acrobat PDF): A general explanation of the two different types of qualified plans (defined benefit or defined contribution) including differences in contribution requirements, and contribution/benefit/deduction limits.
Safe Harbor 401(k) Procedures and Options (Adobe Acrobat PDF): An explanation of the safe harbor contribution options and the notice requirement that must be met each year in order for a plan to maintain its safe harbor status.
Form 5500 Related
EFAST2 Step by Step Instructions for Plan Sponsors (to register & obtain signing credentials) (Adobe Acrobat PDF): Beginning with the 2009 plan year, Form 5500 filers are required to file and sign electronically using the new web-based system called EFAST2. Each plan sponsor needs to register for signing credentials just once with the DOL.
Plan Fidelity Bond Requirements (Adobe Acrobat PDF): The Employee Retirement Income Security Act (ERISA) requires that every person who handles plan assets or funds be bonded except for Form 5500-EZ filers. The bond must be a fidelity bond. The minimum bond amount is based on the value of plan assets with a special requirement for a plan with less than 100 participants that wishes to waive the annual audit by an independent qualified public accountant.
Plan Reporting Requirements (Form 5500) (Adobe Acrobat PDF): The plan sponsor of a plan with less than 100 participants (except Form 5500-EZ filers which are not subject to the additional reporting requirements to begin with) can choose each year to waive the audit by an independent qualified public accountant if one of two conditions are met with respect to the plan’s assets and if certain additional information is included in the Summary Annual Report (SAR) for that year.
Distributions
IRS Notice – Your Rollover Options (Adobe Acrobat PDF): Participants are required to receive this notice no more than 180 days prior to the date their pension is scheduled to commence if any part of their benefit is eligible to be rolled over to an IRA or other qualified plan.
Defined Benefit Plans Only
Actuarial Speak 101 (Adobe Acrobat PDF): Quick reference to the general definition of over 75 actuarial terms, 35 actuarial acronyms and 20 law acronyms.
Credit Balances Under PPA (Adobe Acrobat PDF): A general summary of how the Pension Protection Act of 2006 (PPA) dramatically changed pension plan funding rules, beginning with the 2008 plan year.
Terminating a Defined Benefit Plan – General Steps (Adobe Acrobat PDF): Terminating a defined benefit plan involves many steps, including participant notice requirements and plan amendments. Government filings are required each plan year until all plan assets have been distributed.
Interest Credits and Cash Balance Plans (Adobe Acrobat PDF): Cash Balance plans have become an increasingly popular form of tax qualified retirement plan. A Cash Balance plan is a defined benefit plan that looks like a defined contribution plan only with substantially higher contribution limits.
How to Take Full Advantage of a Cash Balance Plan Interest Crediting Rate: It is not intuitively obvious to potential participants that a 4% interest crediting rate in a cash balance plan today is an attractive retirement planning option. Only after the cash balance plan is considered as part of an overall retirement planning investment portfolio does a fixed or variable interest crediting approach (as opposed to a market rate approach) in a cash balance plan start to make good financial sense.
Defined Contribution Plans Only
In-Plan Conversion to Designated Roth Accounts (Adobe Acrobat PDF): Summary of the main Roth conversion provisions in the Small Business Jobs and Credit Act (effective September 27, 2010) which allows the conversion of account balances within qualified defined contribution plans to Roth accounts.