So why is tax reform now more likely in the 113th US Congress than in the past? First, Congress must yet again address the debt ceiling sometime between now and September or October 2013. Secondly, House Republicans, led by Congressman Dave Camp (R-MI) Chairman of the House Ways and Means Committee, are trying to tie tax reform to an increase in the debt ceiling. And third, Senator Max Baucus (D-MT) Chairman of the Senate Finance Committee is apparently not running for re-election which provides him greater freedom in approaching proposed legislation and tax reform. And while President Obama has expressed a desire to have a no-strings-attached debt limit increase, Baucus has publicly stated he’s enough of a realist to know that the different members of the House and Senate have varying ideas on the subject and negotiations are going to play a key role.
With a climate for tax reform strengthening, it’s wise to gain an understanding of where reform might take 401(k) plans. Three notable possible courses of action deserve our attention:
If your business offers a 401(k) plan—or another type of qualified retirement plan—you have been completing and submitting a 5500 form every year since the plan was initiated. And every year the IRS, the Department of Labor and the Pension Benefit Guaranty Corporation use the information contained in the 5500 to assess your plan’s compliance and its ability to protect the employees who are contributing.
Part-time employees may play an important role in your business, which can be a good thing for your bottom line - and can allow welcome flexibility for your employees, too. Many companies, from manufacturing to healthcare, are reaping the benefits of a multifaceted workforce.
But, if you are offering your employees a 401(k) plan as part of your benefits package, it's not safe to assume your part-timers are automatically exempt from the plan. IRS regulations govern this aspect of retirement plans, with formulas for determining minimum age and service requirements, and other stipulations related to part-timers.
This month's newsletter spells out some of the most important need-to-know facts about your part-time team members and your 401(k) program. We hope you'll take a close look, then give us a call. We're here to help you navigate the complexities.