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.

 

 

IRS Issues Self-Assessment Forms for Federal, State, and Local Government Employers
(Posted on July 10, 2017 by )


Internal Revenue ServiceThe IRS has now issued a series of forms to enable federal, state, and local governments to assess their compliance with federal tax statutes, and has set forth some common errors found in examining such employers. Several of the forms relate to employee benefits issues, and may be of assistance to governments trying to ensure that they comply with all legal requirements.

The forms are as follows:

For use by Federal, State and Local Government Entities

For use by State and Local Government Entities Only

Read more.

Webinar – Phased Retirement Programs: Exploring the Issues
(Posted on December 5, 2016 by )


Lorman Distinguished Faculty MemberPhased retirement has become increasingly popular among two groups of employees: those who would like to begin easing away from work at a younger age, and those who need to continue working at older ages but require a less demanding schedule. We recently conducted a webinar to help employers identify the situations in which phased retirement may be beneficial, and structure phased retirement arrangements in such a way as to avoid the practical and legal pitfalls.

The PowerPoint presentation for the webinar is now available at this link.

Judge in Detroit Bankruptcy Case Denies Any Special Protections for Pensions
(Posted on December 5, 2013 by )


BankruptcyCourtJudge Steven W. Rhodes of the U.S. Bankruptcy Court for the Eastern District of Michigan had now issued an opinion stating that the bankruptcy proceedings for the City of Detroit can go forward. The opinion provided no special protections for as yet unfunded pension benefits (although benefits already in the pension funds were protected). The judge rejected a contention that Michigan constitutional provisions prohibiting impairment of pensions would provide protection to promised but unfunded benefits.

Read more.

“No . . . law impairing the obligation of contract shall be enacted.” [Article I, Section 10, Michigan Constitution]

“The accrued financial benefits of each pension plan and retirement system of the state and its political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.” [Article IX, Section 24, Michigan Constitution]