Compliance December 12, 2013

IRS Issues 2013 Cumulative List

The Internal Revenue Service (IRS) has issued the 2013 Cumulative List of Changes in Plan Qualification Requirements (2013 Cumulative List).
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The 2013 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2014, and ending January 31, 2015. Plans using this Cumulative List will primarily be single employer individually designed defined contribution plans and single employer individually designed defined benefit plans that are in Cycle D and multiemployer plans. Generally an individually designed plan is in Cycle D if the last digit of the employer identification number of the plan sponsor is four or nine.

The 2013 Cumulative List reflects law changes under:

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  • The Pension Protection Act of 2006 (PPA ’06);
  • The U.S. Troop Readiness, Veterans’ Care, Katrina Recovery and Iraq Accountability Appropriations Act, 2007;
  • The Heroes Earnings Assistance and Relief Tax Act of 2008 (HEART Act);
  • The Worker, Retiree, and Employer Recovery Act of 2008 (WRERA);
  • The Small Business Jobs Act of 2010 (SBJA);
  • The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (PRA 2010);
  • The Moving Ahead for Progress in the 21st Century Act (MAP-21); and
  • The American Taxpayer Relief Act of 2012 (ATRA).

IRS Notice 2013-84 is here.

Data & Research December 12, 2013

Older Participants Not Prepared for Retirement

More than half (60%) of 401(k) participants age 55 and older believe they are ill-prepared for retirement, says new research.
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“Many individuals are forced into retirement due to job loss or health concerns for themselves or a family member,” says Kevin Chisholm, associate director at the Boston-based global analytics firm Cerulli Associates, which conducted the research. “This means that an individual needs to be prepared for retirement before the age they expect to retire.”

Cerulli’s research, reported in the latest Cerulli Edge: Retirement Edition, analyzes the regulatory changes within defined contribution (DC) plans over the past decade, how legal action is presenting a challenge for 401(k) plan sponsors, and fiduciary pressures faced by 403(b) plans.

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“It is essential that DC plans continue to evolve to ensure retirement readiness for a majority of participants,” says Chisholm.

As part of its research, Cerulli recently surveyed participants of 401(k) retirement plans and found 37% of those age 55 and older believe they are not adequately prepared if suddenly forced into retirement. This includes 53% of participants in the 55 to 59 age bracket, which the retirement industry classifies as preretirees.

“The number of preretirees that are unprepared for retirement is staggering,” says Chisholm, pointing to findings that more than 75% of participants between the ages of 55 and 59 say they are either not prepared for retirement, or unsure if they are prepared.

More information about how to purchase this report is here.

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