Plan Sponsor News

President Obama released his Fiscal Year 2014 budget on April 10, 2013. The budget includes a proposal to impose a cap relating to the aggregate account balances in a taxpayer's IRA and employer-based plans, including defined contribution plans such as 401(a), 403(b), and 457(b), as well as accruals in their defined benefit plans.

President Obama released his Fiscal Year 2014 budget on April 10, 2013. The budget includes a proposal to impose a cap relating to the aggregate account balances in a taxpayer's IRA and employer-based plans, including defined contribution plans such as 401(a), 403(b), and 457(b), as well as accruals in their defined benefit plans.

The Department of Labor ("DOL") released "Tips for ERISA Plan Fiduciaries" for Target Date Funds ("TDF") in February 2013.

As part of America Saves Week, ICMA-RC is pleased to announce the launch of RealizeRetirement^SM, a goal-oriented educational online financial resource geared toward public sector workers at various career stages.

As part of America Saves Week, ICMA-RC is pleased to announce the launch of RealizeRetirement^SM, a goal-oriented educational online financial resource geared toward public sector workers at various career stages.

Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions Committee, issued a report on "The Retirement Crisis and a Plan to Solve It," in July. The report included a blueprint for Universal, Secure and Adaptable (USA) Retirement Funds, which the Senator described as "a middle ground between pensions and 401(k)s." The report was released after the Senate Committee on Health, Education, Labor, and Pensions held a series of hearings on retirement security.

As part of their regulatory project to define "governmental plans" under Internal Revenue Code Section 414(d), the Internal Revenue Service ("IRS") and Department of Treasury ("Treasury") conducted a joint hearing in July. The project focuses on defining which entities are eligible to sponsor or participate in a governmental plan. This is important because governmental plans are exempt from many of the rules that apply to private employer plans, and generally may not allow participation by entities that are nongovernmental. The hearing follows the agencies' issuance of an Advance Notice on Proposed Rulemaking in November 2011, town hall meetings in Oakland and Cleveland in the spring of 2012 and receipt of nearly 2,000 written comments from the public. ICMA-RC partnered with the National League of Cities to inform entities that might be affected by the rules under consideration and encouraging those who may be affected to submit comments.

The Department of Labor (DOL) issued Field Assistance Bulletin 2012-02 in May 2012, which provided "question and answer" guidance on issues arising under the DOL's new participant fee disclosure rules. The DOL's response to Question 30, "Q&A-30", addressed how these new rules apply to self-directed brokerage services. The position taken by the DOL in Q&A 30 called into question the viability of offering brokerage windows in private sector 401(k) plans.

On November 16, 2012, the Internal Revenue Service ("IRS") released Announcement 2012-44 allowing participants affected by Hurricane Sandy to take hardship and emergency withdrawals and loans from their employer plans without having to comply with certain verification procedures that may otherwise be required. Announcement 2012-44 applies to loans and/or distributions made on or after Oct. 26, 2012 but no later than Feb. 1, 2013.

On October 18, 2012, the IRS announced the various adjustments applicable to retirement plan contribution limits for 2013. Many of the limitations will change for 2013 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.