Archive for the ‘Employee Benefits’ Category
Please join us on May 2, 2013 at Greenwalt CPAs Education Center for a 2 hour seminar which will address the actions that your organization needs to take in 2013, and what you need to be aware of going forward. The rules,
costs, and options associated with the Health Care Reform act are complicated and are not well understood. Wanza Schweiger, CEBS & Managing Partner of Benefit Innovations, LLP and Marie Jett, CPA, Senior Manager in our Tax Services Group will discuss the following topics:
· What must I be aware of now and going forward?
· What needs to happen by July 31, 2013?
· What will the costs be —
- Of health insurance?
- In additional taxes?
- For self-insured plans?
· How will Health Care reform affect the future of group health insurance plans?
· What are my options to best position my organization —
- To be able to minimize the cost to the organization
- To minimize the cost to our employees.
WHO SHOULD ATTEND?
· Personnel who handle employee benefit matters for their organization
· Owners/managers who are responsible for overseeing and approving critical organization decisions.
· Those who are concerned about the future of health care and where it is headed.
Our doors will open at 8:00 am on May 2 for coffee and light refreshments. The session will begin at 8:30 and we plan to be finished by 10:30 am.
To register, please click here.
or call Suzanne Haskamp at 317.260.4476. When you register, you will have an opportunity to list some of the key questions you would like to have addressed.
By Stacey L. Spencer, QKA | Manager, Employee Benefit Services
Have you had to reduce your workforce during 2012? If so, there may be repercussions that affect the retirement plan you sponsor. Your plan may have experienced a partial termination.
The IRS considers a partial termination to have occurred when an employer-initiated action results in a significant decrease in plan participation. Generally, the IRS presumes a partial termination has occurred when an employer experiences a workforce reduction of 20%.
by Anita Sherman, CPA | Managing Partner and Marie Jett, CPA | Manager, Tax Services Group
The election is over. For employers and plan sponsors that adopted a “wait and see” approach before focusing on Obamacare compliance issues, the time for waiting is over. Indiana is not planning on creating an insurance exchange, so individuals who can’t find coverage from the many sources currently readily available will need to go through the Federal exchange. Also, full time equivalents for purposes of determining applicability are those employees working 30 hours or more per week (used in determining whether a company has 50 or more employees).
Please click here to see the changes that you need to be aware of for 2013
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group and Tim Ayler, CPA | Partner, Audit & Other Assurance Services
The Social Security Administration (SSA) recently announced cost-of-living adjustments (COLAs) for 2013. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not drained by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.
By Stacey L. Spencer, QKA, Manager, Employee Benefit Services | Tim Ayler, CPA, Partner, Director Employee Benefit Services Group
Continuing the discussion of hardship distributions, one of the requirements of a hardship distribution is that upon receipt of a hardship distribution from a 401(k) plan (or 403(b) or 457(b) plan), the employee is prohibited from making elective contributions to the plan and all other plans maintained by the employer for at least six months. Whether deferrals may resume automatically, or only upon participant election, will be indicated in the plan document.
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
In my last article, I discussed the burden of proof on the plan sponsor to assure a hardship request meets the IRS criteria. In this piece, we will look at the pros and cons of taking hardship distribution from the participant’s perspective.
As a reminder, a hardship distribution allows emergency access to one’s retirement account balance. 401(k) plans, 403(b) plans, and 457(b) plans may permit hardship distributions. Hardship distributions are only allowed for an immediate and heavy financial need, and are limited to the amount necessary to satisfy that financial need.
PROS:
- The advantage of taking a hardship distribution is pretty obvious; participants are allowed to withdraw money from their retirement plan to cover a financial hardship.
- If the forms and backup documentation are provided without delay, then the funds can be in the participant’s hands in short period of time.
- Employees may have access to funds in their accounts for legitimate purposes, such as a down payment on a house, college tuition or to pay medical expenses not covered by insurance.
CONS:
- The amount withdrawn cannot be repaid to the plan. So if the participant’s financial situation changes, they cannot put the money back into the plan.
- Participants who take a hardship distribution are required to suspend deferrals for six months afterwards. If there is an employer match, they miss out on those contributions during the suspension period.
- Because the hardship distribution is not a loan, it is subject to ordinary income taxes. The participant will have to report the hardship distribution as taxable income in the year of distribution. If the participant is under the age of 59½, they may also be required to pay a 10% early distribution penalty in addition to the income taxes.
- Loss of compounding interest on the amount of the hardship distribution. This is one of the most detrimental consequences of taking a hardship distribution and it is something that participants often do not consider.
Participants should consult with a tax advisor and carefully consider all options and the ramifications of taking a hardship distribution. In most cases, the long term disadvantages of taking a hardship distribution far outweigh the advantages.
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
A hardship withdrawal allows emergency access to one’s 401(k) account balance. The key here is emergency access. Hardship withdrawals are only allowed for an immediate, pressing need, and only when all other means of obtaining funds have been exhausted. If the 401(k) plan also allows loans, the participant must first take all available loans prior to applying for a hardship distribution. Additionally, the hardship withdrawal can only be for the amount of the immediate financial need. One cannot request a hardship withdrawal in anticipation of a future need, even a continuing need such as mortgage payments or college tuition.
The Simplified Employee Pension Plan or SEP is a retirement plan designed to benefit self-employed individuals and small business owners. Sole proprietorships, S and C corporations, partnerships and LLCs can establish a SEP.
The SEP plan provides employers with a simplified method to make contributions toward their employees’ retirement and, if self-employed, their own retirement. Contributions are made directly to an Individual Retirement Account (IRA) set up for each employee (a SEP-IRA).
by Stacey Spencer, QKA | Manager, Employee Benefit Services Group
Vesting is the non-forfeitable interest in the employer portion of your account. Your vested percent determines how much of the employer contributions you get to keep when you leave the company. It does not matter whether you terminated employment voluntarily, if you are fired or laid off.
Implementing a vesting schedule is a way for employers to reward loyalty. It provides an incentive for you to continue working there. In many instances, the more years you work, the more employer money you get to keep.
Remember that you are always 100% vested in any money you contribute directly to your own retirement plan. Your deferrals, adjusted for any investment gains or losses, are always 100% vested.
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
The Social Security Administration (SSA) recently announced cost-of-living adjustments (COLAs) for 2012. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not drained by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.