Most years, the only thing we have to worry about when it comes to retirement plan administration is adjusting for the cost-of-living increase to contribution limits. Some years we don’t even have that, but this year is an exception with that, plus major changes you will need to make and consider. So first, the easy stuff. The cost-of-living increase, to the maximum amount an individual can contribute to their 401(k), 403(b), governmental 457 and the Thrift Savings plans, will be increased to $23,500, up from $23,000 in 2024. The catch-up contribution will remain at $7,500 and the limit on annual…
Posts published in “Pension”
They say timing is everything, and if there were ever a time to implement a 401(k) plan, the time is now. We first wrote about the Secure Act 2.0, in this post back in February 2023, a short time after it was signed into law by President Biden. One of the best parts of this act is that the government wants to give business owners money to start a plan AND even better, they want to give you money to give to your employees. This is accomplished in three different tax credits to small business owners, as covered below. Let’s…
Whether you are a working employee, someone in their retirement or an employer/plan sponsor, the SECURE 2.0 Act of 2022 has something for everyone. It was included as part of the Consolidated Appropriations Act, 2023, which was passed by Congress on December 23, 2022 and signed into law by President Biden on December 29, 2022. While there is something for everyone, we will focus on the areas in which it affects employers. Some items are effective this year while others will phase in over the next couple of years, but it may be a good idea to start planning today.…
There are times when an employee’s actual gross pay (excluding taxable fringe items) is insufficient to accommodate all of their deductions in full. In those cases where there is not enough net pay, there is an order in which deductions are to be processed until the check is zero. I am going to cover the basics of that order without going into the details of each specific deduction, as this would end up being a super-sized blog. Be sure to check out my previous blogs for details on some of the specific deductions. Deductions are taken in the order below,…
There is a direct correlation between the size of an employer’s workforce and the likeliness of their offering a retirement plan. While about 92% of companies having greater than 10,000 employees offer a 401(k)-style plan, those with under 10 employees, the rate drops to 8%. The flip side is that 86% of employers do not offer a plan, which translates to about 68 million Americans without access to a employer-sponsored plan, and states have taken notice. Beginning in 2017, a number of states have implemented laws requiring smaller businesses to implement a plan with many more in the legislative proposal…
As 2015 is just starting to wind down, the government has already set many limits for 2016. In general, the limitations will not change as a result of the cost of living index not meeting the statutory thresholds that trigger a change. The Old-Age, Survivors, and Disability Insurance (OASDI), aka Social Security, wage limit remains unchanged at $118,500 and a tax rate of 6.20%. The last time the OASDI wage limit did not increase was between 2009 to 2011 where it remained at $106,800. Prior to 2009, the limit had always increased going all the way back to 1950. The deferral limits for your pension…