Upcoming Seminar; Upcoming Client Celebration; New Budget Law’s Employee Benefit Changes
I. Upcoming Seminar. As previously announced, we'll be holding our next clients and friends seminar at the BWI Marriott on Thursday May 10, 2018, from 8 a.m. to noon. Please contact Alison Christian at 410-321-9000 or firstname.lastname@example.org if you'd like to reserve a spot at the seminar. As always, the seminar is free.
II. October 6, 2018 Clients and Friends Celebration. As previously announced, we’ll be celebrating Smith & Downey’s first quarter century by honoring our clients and friends at a party on Saturday October 6, 2018, from 6 p.m. to 11 p.m., at the lovely Vollmer Center on the grounds of the Cylburn Arboretum (off Northern Parkway in Baltimore near Sinai Hospital).
There will be no continuing education to sit through, and we’ll have finger food, a light bar, songs from the “Golden Decade of Rock” from The Back Pages Band, and lots of fun at the piano featuring the masterful stylings of our colleague Howard Kirkpatrick. Please contact Alison Christian at email@example.com or 410-321-9000 if you would like to reserve a spot at this very special celebration.
III. New Budget Law’s Employee Benefit Changes. The budget bill signed into law on February 9 includes the following changes affecting employee benefit plans. (The first three changes apply to 401(k) plans and 403(b) plans and are not required changes, so a plan must be amended to take advantage of these changes.)
-Directs the IRS to allow retirement plan participants who take hardship distributions to continue contributing to the plan, and to all other plans maintained by the employer (including, for example, nonqualified plans), effective for plan years beginning after 2018.
This eliminates the former suspension of contributions rule that affected these participants. Nonqualified plans also should be amended to take advantage of this change in the law.
-Permits employers to remove all restrictions on the type of contributions eligible for hardship withdrawals, effective for plan years beginning after 2018. Therefore, 401(k) plans and 403(b) plans may be amended to allow hardship withdrawals of safe harbor contributions, qualified nonelective contributions (QNECs), qualified matching contributions (QMACs), and earnings on all contributions.
-Eliminates the requirement that retirement plan participants take available plan loans before taking hardship distributions, effective for plan years beginning after 2018.
-Creates a new IRS Form 1040SR for individuals age 65 or older, which will be similar to Form 1040EZ but not restricted because of the amount of taxable income or because the income for the tax year includes Social Security benefits, distributions from qualified retirement plans, annuities or other deferred payment arrangements, interest and dividends, or capital gains and losses.
-Effective for tax years after 2017, permits individuals to recontribute to an IRA or retirement plan an amount previously withdrawn (and any interest on that withdrawal) pursuant to an IRS levy and later returned to the individual by the IRS, without regard to the limits on IRA contributions and rollovers.
-Calls for the creation of a bipartisan Congressional committee to address multiemployer pension plan solvency issues.
-Includes special rules for retirement plan participants and employers affected by the recent California wildfires.
Please contact us if we can assist with your responses to this new law.