More retirement-related regulatory news for plan sponsors, including links to detailed information.
PBGC annual report shows improvement in single-employer program and deterioration in multiemployer program
The Pension Benefit Guaranty Corporation (PBGC) has released its Annual Report, which showed that PBGC’s deficit increased to about $62 billion in fiscal year 2014, largely due to the declining condition of a few multiemployer plans. The financial condition of the single-employer program improved with a deficit of about $19.3 billion, down from $27.4 billion in the previous year.
The increase in PBGC’s deficit in the report is consistent with the estimates included in the FY 2013 Projections Report that was released in June. The projections report found that the insolvencies of a minority of multiemployer plans have become both more likely and more imminent.
To read the entire report, click here.
IRS updates rollover chart
The IRS has updated its “Rollover Chart” for 2014. It’s a one-page summary in the form of a table, listing the eight kinds of plans and IRAs that can make rollover-eligible distributions, and the corresponding eight kinds of plans and IRAs into which those distributions can (or cannot) be rolled over. The chart was updated November 17, 2014, to reflect revised rollover rules.
To view the chart, click here.
Joint Committee on Taxation publishes analysis of the Tax Reform Act of 2014
The Joint Committee on Taxation (JCT) has released a Discussion Draft prepared by the Chairman of the House Committee on Ways and Means. This document provides a technical explanation, estimated revenue effects, distributional analysis, and macroeconomic analysis of the Tax Reform Act of 2014. Thea draft proposes to reform the Internal Revenue Code. Provisions related to pension and retirement begin on page 101, and include:
• Changes to rules for individual retirement arrangements.
• Repeal of exception to 10-percent penalty for first-time home purchases and elimination of first-time home purchase as a qualified distribution from a Roth IRA.
• Termination of new simplified employee pensions.
• Termination for new SIMPLE 401(k) plans.
• Modification of required distribution rules for pension plans.
• Reduction in age for allowable in-service distributions.
• Modification of rules governing hardship distributions.
• Extended rollover period for the rollover of plan loan offset amounts in certain cases.
• Coordination of contribution limitations for 403(b) plans and governmental 457(b) plans.
• Application of 10-percent early distribution tax to governmental 457 plans; and Inflation adjustments for employer-sponsored retirement plan dollar limitations on benefits and contributions.
To read the entire draft, click here.