Nearly a year after Congress passed changes to the hardship distribution rules in the Bipartisan Budget Act and the Tax Cuts and Jobs Act, the IRS has published proposed regulations to fill in some of the details on how to implement the new rules. 

Facts

We have a non-owner participant in our 401(k) plan who is age 74 and retired in 2014.  That means that he has already been taking required minimum distributions for the last few years. We just recently rehired him in October 2018. Now that he is re-employed he has inquired as to whether he can suspend his RMDs this year.

At DWC we thrive on the really geeky stuff. We place a premium on research and choose to share that knowledge. A vast majority of our industry reads summaries of regulatory developments and trends for their clients’ knowledge. We actually read the laws, regulations and updates and write our own summaries in a manner that is easy to understand for our clients and their advisors.

Facts

One of the non-owner participants in our 401(k) plan will be turning 70 in April of next year (2019).  That means she will reach age 70 ½ in October and will need to start taking required minimum distributions.  The participant knows her first RMD is due no later than April 1, 2020, but she has asked whether she has to wait that long to actually withdraw the money. 

The IRS has released the 2019 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.

Facts

One of the participants in our 401(k) plan submitted a request for a hardship distribution for the purchase of a primary residence.  On review of the supporting documentation, we discovered that the purchase has already occurred and that the requested distribution is to cover the cost of renovations prior to moving in.

Facts

One of the participants in our 401(k) plan heard from a friend that it is possible to take money out of a plan while still employed.  I’ve always heard that age 59 ½ is the rule of thumb as to when in-service distributions are allowed, but this participant is only in her mid-40s.  She has about $100,000 in the plan: $65,000 in employee deferrals, $25,000 in safe harbor matching contributions, and $10,000 in profit sharing.

Facts

I am the 100% owner of my company, and we have a 401(k) plan that allows all our employees to direct the investment of their own accounts from a menu of mutual fund options via our recordkeeper’s website.  The plan has been in place for a while.  Not only have total plan assets grown quite a bit, but I have personally accumulated a significant plan account for myself.  I am considering using a portion of my plan account to invest in real estate.  Most likely, I will purchase a rental condo.

DWC stays on top of what's trending, and our self-proclaimed pension geeks often offer their insights in industry publications. As we transition into the fourth quarter the theme has been, "What Plan Sponsors Need to Know." Get caught up with this month's round up:

Facts

Our company has quite a few employees who only work a few hours each week.  When we setup the 401(k) plan, we wanted to allow all our employees to save, so we set the eligibility requirement at the first day of the month following an employee’s hire date.  Unfortunately, hardly any of our part-timers are contributing, and it has become burdensome and expensive to keep up with all the notices we have to provide each year to people who don’t even have accounts in the plan.