457 Answer Book, Eighth Edition, Published
(Posted on June 5, 2020 by )


The Eighth Edition of the 457 Answer Book was published on June 5, 2020. Carol V. Calhoun is the author of Chapter 1, History of 457 Plans, and Chapter 14, Miscellaneous Issues.

The 457 Answer Book is an in-depth resource that provides answers to the questions that tax-exempt organizations, state and local governments, their accountants, tax and legal advisors, 457 administrators, product providers, and investment counselors need to know.

Guiding readers through all aspects of 457 plan administration — from installation through the audit process — the 457 Answer Book describes: the duties and responsibilities of those performing the functions; the required legal, accounting, and administrative tasks; checklists that facilitate control of each administrative process; and suggested forms.

The 457 Answer Book also provides:

  • The history and legal origins of the plan
  • Design and drafting standards
  • Suggested administrative procedures
  • Data processing and payroll considerations
  • Operations and fund flow mechanics
  • Marketing and sales suggestions
  • And much more

More information on the book can be found at this link.

2020 IRS Benefits & Contributions Limits Announced
(Posted on November 18, 2019 by )


irsOn November 6, 2019, the IRS issued IRS Notice 2019-59, announcing the changes in pensions and benefits limits for 2020. The maximum limits on employee pretax contributions to 401(k), 403(b), and 457(b) plans (without catch-ups) increased from $19,000 to $19,500, the maximum limit on annual additions (primarily to defined contribution plans) rose from $56,000 to $57,000, and the maximum limit on benefits (when expressed as an annual benefit) under a defined benefit plan rose from $225,000 to $230,000. A variety of other limits, including the limits on annual compensation taken into account and the compensation used in the definition of a key employee, also increased.

A chart showing details, and limits from 1996 to 2020, can be found at this link.

 

 

403(b) and 457(b) Plan Compliance Challenges PowerPoint Now Available
(Posted on August 27, 2019 by )


Strafford webinarSections 403(b) and 457(b) plan compliance presents significant challenges for employee benefits counsel and plan administrators. Sponsors of 403(b) and 457(b) plans must consider the impact of recent regulatory and litigation developments to ensure strict compliance to avoid potential claims.

As part of a Strafford webinar on “403(b) and 457(b) Plan Compliance Challenges,” Carol V. Calhoun gave a presentation on ways in which new developments create challenges for tax-exempt and governmental organizations which sponsor such plans. A copy of the PowerPoint for her speech can be found at this link.

403(b) and 457(b) Plan Compliance Challenges: Avoiding Pitfalls in Plan Design and Administration
(Posted on August 27, 2019 by )


A recent Strafford CLE webinar guided employee benefits counsel on key compliance challenges in the design and administration of 403(b) and 457(b) plans and methods to overcome them. A panel discussed complex rules and pitfalls to avoid in plan design, key administrative challenges, the universal availability rule, excess contributions, hardship distributions, and methods to limit claims.

The PowerPoint slides for the portion of the presentation given by Carol V. Calhoun are below.

IRS Permits New Benefits in High Deductible Health Plans
(Posted on July 18, 2019 by )


Internal Revenue ServiceThe IRS has recently issued Notice 2019-45, which increases the scope of preventive care that can be covered by a high deductible health plan (“HDHP”) without eliminating the covered person’s ability to maintain a health savings account (“HSA”).

As background, since 2003, eligible individuals whose sole health coverage is a HDHP have been able to contribute to HSAs. The contribution to the HSA is not taxed either when it goes into the HSA or when it is used to pay health benefits. It can for example be used to pay deductibles or copays under the HDHP. But it can also be used as a kind of supplemental retirement plan to pay Medicare premiums or other health expenses in retirement, in which case it is more tax-favored than even a regular retirement plan.

As the name suggests, a HDHP must have a deductible that exceeds certain minimums ($1,350 for self-only HDHP coverage and $2,700 for family HDHP coverage for 2019, subject to cost of living changes in future years). However, certain preventive care (for example, annual physicals and many vaccinations) is covered without having to meet the deductible. In general, “preventive care” has been defined as care designed to identify or prevent illness, injury, or a medical condition, as opposed to care designed to treat an existing illness, injury, or condition.

Notice 2019-45 expands the existing definition of preventive care to cover medical expenses which, although they may treat a particular existing chronic condition, will prevent a future secondary condition. For example, untreated diabetes can cause heart disease, blindness, or a need for amputation, among other complications. Under the new guidance, a HDHP will cover insulin, treating it as a preventative for those other conditions as opposed to a treatment for diabetes. Read more.