PA Pension Planners

ASPPA

Updates

Roth 401(k)

EGTRRA added section 402A to the Internal Revenue Code, which provides that a participant who is making elective deferrals to a 401(k) plan, may designate all or some of those contributions as “Roth” contributions. Roth contributions are included in the participant’s income in the year they are made. When distributed the Roth contribution plus the…

Automatic Rollovers

Automatic rollover of mandatory cash out distributions. Under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), a plan (including 403(b), governmental 457(b), and non-electing church plans) that provides for a mandatory cash out (without participant consent) distribution of a nonforfeitable account balance that does not exceed $5,000 must, as a condition of…

Post GUST

For plans that have already been updated for GUST, various short amendments described below may be needed, depending on the particular plan. EGTRRA good faith amendment.   Pursuant to IRS requirements, this must be structured as a separate amendment from the updated GUST document. The EGTRRA good faith amendment must be adopted no later than the…

EGTRRA

On June 7, 2001, President George W. Bush signed into law the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).  The Act includes a significant number of changes that affect retirement plans, including IRAs.  Most of these changes are favorable to both plan sponsors and participants alike.  In addition, many of the changes…

GUST

GUST is an acronym for a series of laws passed since 1994 affecting qualified retirement plans. GUST stands for GATT (General Agreement on Tariffs and Trade–generally referred to as the Retirement Protection Act of 1994), USERRA (Uniformed Services Employment and Reemployment Rights Act of 1994), SBJPA (the Small Business Job Protection Act of 1996), TRA…