Qualified retirement plans were a good deal before the December 2017 Tax Cuts and Jobs Act. For many professional firms, they’re now better than ever. Here’s the new part: many owners of pass-through businesses like S corporations, LLCs and sole proprietors are eligible for a 20% deduction on Qualified Business Income (QBI), essentially non-W2 business […]Read More… from Professional Firm Retirement Plans and the New QBI Tax Deduction
CERBT Audited vs. Reported Assets
For most California public agencies funding Other Post-Employment Benefits (OPEB) through CERBT, there is a small difference between the 6/30/2017 assets originally reported and the final audited assets (Fiduciary Net Position, or FNP). Our clients have been asking what to do about it. Even the State of California has the same issue. We’ve discussed it […]Read More… from CERBT Audited vs. Reported Assets
2018 PEPRA compensation limits
The 2018 PEPRA compensation limits are $121,388 for Social Security members and $145,666 for non-Social Security members. These limits are the maximum pay that a California public agency can recognize in a defined benefit plan for PEPRA members, i.e. those first hired by a public employer in 2013 or later. “Classic” members hired from 1996 […]Read More… from 2018 PEPRA compensation limits
What’s the Impact of 2018 IRS Retirement Plan Limits?
The IRS Notice 2017-64 just announced the 2018 retirement plan benefit limits, and there are many changes since 2017. What does it all mean for employer-sponsored retirement plans? Below is a table summarizing the primary benefit limits, followed by our analysis of the practical effects for both defined contribution (DC) and defined benefit (DB) plans. […]Read More… from What’s the Impact of 2018 IRS Retirement Plan Limits?
2017 Pension Lump Sums Are Looking More Affordable
How quickly things change! A month ago we were anticipating very expensive 2017 lump sum costs for defined benefit (DB) pension plans due to continually low interest rates. However, rates have been on a strong rebound since the election and now 2017 lump sums are looking much more affordable. The IRS recently released the November […]Read More… from 2017 Pension Lump Sums Are Looking More Affordable
2016 Pension Accounting Preview: a Positive Outlook
Many defined benefit (DB) plan sponsors are aware that interest rates dropped significantly in the first half of 2016 but staged a remarkable rise since the November election. Combined with relatively strong equity returns, 2016 year-end pension disclosures may not be as bad as expected 6 to 8 weeks ago. Discount Rate Analysis Using the […]Read More… from 2016 Pension Accounting Preview: a Positive Outlook
Pension Lump Sums Likely More Expensive in 2017
Lump sum windows and other pension risk transfer strategies continue to be popular among many defined benefit (DB) pension plan sponsors. Paying lump sums to terminated vested participants can reduce long-term plan costs and risks by permanently eliminating these liabilities. However, the cost of the lump sum payments is heavily influenced by the underlying interest […]Read More… from Pension Lump Sums Likely More Expensive in 2017
What’s the Impact of 2017 IRS Retirement Plan Limits?
The IRS just announced the 2017 retirement plan benefit limits, and there are some notable changes from 2016. What does it all mean for employer-sponsored retirement plans? Here is a table summarizing the primary benefit limits, followed by our analysis of the practical effects for both defined contribution (DC) and defined benefit (DB) plans. Qualified […]Read More… from What’s the Impact of 2017 IRS Retirement Plan Limits?
Closed DB plan nondiscrimination testing relief extended for 2017
Employers with “closed” DB pension plans (i.e., closed to new entrants, but benefits continue to accrue for existing participants) received another extension of nondiscrimination testing relief in IRS Notice 2016-57. This will help these employers demonstrate compliance with existing nondiscrimination testing rules while waiting for final regulations likely to be effective starting in 2018. […]Read More… from Closed DB plan nondiscrimination testing relief extended for 2017
False alarm! IRS withdraws controversial proposed cross-testing regulation provisions
A couple of months ago, the IRS proposed some changes to the §1.401(a)(4) nondiscrimination testing regulations. On Thursday, they withdrew the part of those proposed regulations that was bad news for plan sponsors, as noted in our prior post. We are pleased the IRS has reconsidered the unintended consequences benefit formula restrictions and “facts and […]Read More… from False alarm! IRS withdraws controversial proposed cross-testing regulation provisions