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News
Annual Limits
2011
2010
ERISA Fidelity Bonds
An ERISA fidelity bond protect the participants and
beneficiaries in a retirement plan from fraud or
dishonest acts on the part of the fiduciary and
other selected employees. This type of bond can
be purchased from most insurance companies. The
amount of coverage should be no less than 10% of
the plan assets with a minimum of a 1,000 bond up
to a maximum required bond of 500,000.
To begin the process of purchasing a Fidelity Bond,
click here: www.colonialsurety.com
The Importance of Depositing
Employee Deferrals Timely
The Department of Labor issued some long-awaited
guidance on the deadline for depositing elective
deferrals to a retirement plan. The general rule that
had allowed plan sponsors to deposit employee
elective deferrals to the plan as soon as could be
reasonably segregated from the employer’s
general assets left concern that the later employers
waited to make deposits to the plan, the more likely
they would not be made at all. It is still suggested
by the DOL that employee deferrals be deposited
as soon as administratively feasible. However, the
DOL will not consider these deposits late if
deposited by the 7th business day after following
the day that amounts would have been payable
to the participant in cash.
Change in Cafeteria
reimbursements regarding
Medicines or Drugs
Effective January 1, 2011, a payment or request for
reimbursement for a medicine or a drug is a tax-free
qualified medical expense only if (1) it is a medicine
or drug that requires a prescription, (2) it is an over-
the-counter medicine or drug and the individual
obtains a prescription, or (3) it is insulin.
If amounts are distributed for any medicine or drug
that does not satisfy this requirement, the amounts
will be distributions for nonqualified medical
expenses, which are includible in gross income and
generally subject to a 20% additional tax. This
change does not affect distributions for medicines
or drugs made before January 1, 2011, nor does it
affect distributions made after December 31, 2010,
for medicines or drugs purchased on or before that
date.”
The Importance of Investment
Diversification
To help achieve long-term retirement security, you
should give careful consideration to the benefits of
a well-balanced and diversified investment
portfolio. Spreading your plan assets among
different types of investments can help you achieve
a favorable rate of return while minimizing your
overall risk of losing money. Market or other
economic conditions that cause one category of
assets, or one particular security, to perform very
well often cause another asset category, or
another particular security, to perform poorly. If you
invest more than 20% of your retirement savings in
any one company or industry, your savings may not
be properly diversified. Although diversification is
not a guarantee against loss, it is an effective
strategy to help you manage investment risk. In
deciding how to invest your retirement savings, you
should take into account all of your assets, including
any retirement savings outside of the Plan. No single
approach is right for everyone because, among
other factors, individuals have different financial
goals, different time horizons for meeting their goals,
and different tolerances for risk. It is also important
to periodically review your investment portfolio,
your investment objectives, and the investment
options under then Plan to help ensure that your
retirement savings will meet your retirement goals.
For more information on individual investing and
diversification, visit the Department of Labor Web
site: http://www.dol.gov/ebsa/investing.html.
2011
- Compensation limit under Sections 401(a)(17),
404(l), 408(k)(3)(C), 408(k)(6)(D)(ii): $245,000 - Elective deferral limit for 401(k), 403(b) and 457
(b) plans: $16,500 - Catch-up limit for 401(k), 403(b) and 457(b)
plans: $5,500 - Benefit limitation for Defined Benefit Plans
under section 415(b)(1)(A): $195,000 - Limitation for Defined Contribution Plans under
section 415(c)(1)(A): $49,000 - Elective deferral limit for SIMPLE 401(k) under
Section 408(p)(2)(E): $11,500 - Catch-up limit for SIMPLE 401(k) plans: $2,500
2010
- Compensation limit under Sections 401(a)(17),
404(l), 408(k)(3)(C), 408(k)(6)(D)(ii): $245,000 - Elective deferral limit for 401(k), 403(b) and 457
(b) plans: $16,500 - Catch-up limit for 401(k), 403(b) and 457(b)
plans: $5,500 - Benefit limitation for Defined Benefit Plans
under section 415(b)(1)(A): $195,000 - Limitation for Defined Contribution Plans under
section 415(c)(1)(A): $49,000 - Elective deferral limit for SIMPLE 401(k) under
Section 408(p)(2)(E): $11,500 - Catch-up limit for SIMPLE 401(k) plans: $2,500
ERISA Fidelity Bonds
An ERISA fidelity bond protect the participants and
beneficiaries in a retirement plan from fraud or
dishonest acts on the part of the fiduciary and
other selected employees. This type of bond can
be purchased from most insurance companies. The
amount of coverage should be no less than 10% of
the plan assets with a minimum of a 1,000 bond up
to a maximum required bond of 500,000.
To begin the process of purchasing a Fidelity Bond,
click here: www.colonialsurety.com
The Importance of Depositing
Employee Deferrals Timely
The Department of Labor issued some long-awaited
guidance on the deadline for depositing elective
deferrals to a retirement plan. The general rule that
had allowed plan sponsors to deposit employee
elective deferrals to the plan as soon as could be
reasonably segregated from the employer’s
general assets left concern that the later employers
waited to make deposits to the plan, the more likely
they would not be made at all. It is still suggested
by the DOL that employee deferrals be deposited
as soon as administratively feasible. However, the
DOL will not consider these deposits late if
deposited by the 7th business day after following
the day that amounts would have been payable
to the participant in cash.
Change in Cafeteria
reimbursements regarding
Medicines or Drugs
Effective January 1, 2011, a payment or request for
reimbursement for a medicine or a drug is a tax-free
qualified medical expense only if (1) it is a medicine
or drug that requires a prescription, (2) it is an over-
the-counter medicine or drug and the individual
obtains a prescription, or (3) it is insulin.
If amounts are distributed for any medicine or drug
that does not satisfy this requirement, the amounts
will be distributions for nonqualified medical
expenses, which are includible in gross income and
generally subject to a 20% additional tax. This
change does not affect distributions for medicines
or drugs made before January 1, 2011, nor does it
affect distributions made after December 31, 2010,
for medicines or drugs purchased on or before that
date.”
The Importance of Investment
Diversification
To help achieve long-term retirement security, you
should give careful consideration to the benefits of
a well-balanced and diversified investment
portfolio. Spreading your plan assets among
different types of investments can help you achieve
a favorable rate of return while minimizing your
overall risk of losing money. Market or other
economic conditions that cause one category of
assets, or one particular security, to perform very
well often cause another asset category, or
another particular security, to perform poorly. If you
invest more than 20% of your retirement savings in
any one company or industry, your savings may not
be properly diversified. Although diversification is
not a guarantee against loss, it is an effective
strategy to help you manage investment risk. In
deciding how to invest your retirement savings, you
should take into account all of your assets, including
any retirement savings outside of the Plan. No single
approach is right for everyone because, among
other factors, individuals have different financial
goals, different time horizons for meeting their goals,
and different tolerances for risk. It is also important
to periodically review your investment portfolio,
your investment objectives, and the investment
options under then Plan to help ensure that your
retirement savings will meet your retirement goals.
For more information on individual investing and
diversification, visit the Department of Labor Web
site: http://www.dol.gov/ebsa/investing.html.
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| Benefit Plans Services Inc., offers retirement plans, 401k Plans, 403b Plans, Age-Weighted Plans, Davis bacon Plans, Money Purchase Plans, New Comparabillity Plans, Profit Sharing Plan, Safe Harbor 401k Plans, SEP Plans, Simple 401k Plans, Thrid Party 401k We are a third party retirement plan provider located in Huntington WV, throughout the Tri-State Valley, We are a full service benefits consulting firm providing a wide range of retirement services in ARIZONA, AZ, ARKANSAS, AR, CALIFORNIA, CA, COLORADO, CO, CONNECTICUT, CT, DELAWARE, DE, DISTRICT OF COLUMBIA, DC, FLORIDA, FL, GEORGIA, GA, HAWAII, HI, IDAHO, ID, ILLINOIS, IL, INDIANA, IN, IOWA, IA, KANSAS, KS, KENTUCKY, KY, LOUISIANA, LA, MAINE, ME, MARYLAND, MD, MASSACHUSETTS, MA, MICHIGAN, MI, MINNESOTA, MN, MISSISSIPPI, MS, MISSOURI, MO, MONTANA, MT, NEBRASKA, NE, NEVADA, NV, NEW HAMPSHIRE, NH, NEW JERSEY, NJ, NEW MEXICO, NM, NEW YORK, NY, NORTH CAROLINA, NC, NORTH DAKOTA, ND, OHIO, OH, OKLAHOMA, OK, OREGON, OR, PENNSYLVANIA, PA, PUERTO RICO, PR, RHODE ISLAND, RI, SOUTH CAROLINA, SC, SOUTH DAKOTA, SD, TENNESSEE, TN, TEXAS, TX, UTAH, UT, VERMONT, VT, VIRGIN ISLANDS, VI, VIRGINIA, VA, WASHINGTON, WA, WEST VIRGINIA, WV, WISCONSIN, WI and WYOMING, WY. We serve the communities of Ashland, Russell, Greenup Paintsville, Louisa, Prestonsburg, Pikevile, Chesapeake, Proctorville, Ironton, South Point, Portsmouth, Gallipolis, Jackson, Coal Grove, Rockhill, Huntington, Barboursville, Milton, Ona, Hamlin, West Hamlin, Branchland, Ranger, Winfield, Teays Valley, Lesage, Apple Grove, Logan, Williamson, Kermit, Cross Lanes, Winfield, Dunbar, St. Albans, Ravenswood, Parkersburg, Point Pleasant, Kenvoa, Ceredo, Wayne, Lavalette, Charleston, Cross Lanes, Beckley, Buffalo, Morgantown, Clarksburg and the Tri-State |