Administrators of employee benefit plans, as well as qualified retirement plans
should determine if they meet the definition of fiduciary.
Caveat: Although individuals may be eligible to withdraw money from their retirement plans
as a result of Hurricane Katrina, their plans may not permit early withdrawals.
Employers may contribute to each plan, but they should understand that discrimination rules may impact the operation of the programs, resulting in unintended consequences if the HSA cannibalizes the qualified retirement plan
To that end, the anti-alienation provisions of the Employee Retirement Income Security Act (ERISA) section 206(d) and IRC section 401 (a)(13) have protected tax-qualified retirement plans
from the claims of creditors of plan participants and their beneficiaries, with three major exceptions.
Simplification, however, will encourage employers to keep retirement plans
, according to the AICPA.
If you advise companies that sponsor qualified retirement plans
, be prepared to deal with this rising trend of top-heavy based claims.
Even though qualified retirement plans
are subject to numerous pension law protections (namely, the Employee Retirement Income Security Act of 1974, more commonly known as ERISA), individuals often prefer not to leave their retirement funds under the control of an organization where they no longer work.
Company's who offer their employees a 401(k) plan face increased pressure and fiduciary responsibilities to disclose more information to their participants in the retirement plan
Although most practitioners have personal retirement accounts, believe it or not, a surprisingly large number don't have formal retirement plans
for their businesses.
The Wall Street Journal article, "Value of Unused Vacation Days Can Now Be Added to 401 (k)s" (12/10/96), based on Letter Ruling (TAM) 9635002, has generated a great deal of interest on the concept of converting vacation days into qualified retirement plan
participants are encouraged to contribute more to qualified retirement plans
now that higher contribution limits have been made permanent through the Act.
However, the 15% excise tax on excess retirement accumulations will not be avoided and if the participant is married, the spouse must consent in writing to waive her rights to benefits under the retirement plans