ERISA Roundup - 4th Quarter 2020
Our dedicated team of employee benefit plan auditors possess the specialized knowledge and experience to help keep you informed and compliant with the appropriate standards and changes in regulation that may impact your organization’s plan(s). In addition, through our membership in the BDO Alliance USA, we have access to BDO’s ERISA Center of Excellence. We’ve highlighted below some of the content in the recently-published 4th Quarter 2020 ERISA Roundup.
Annual cost-of-living adjustments (COLA) for 2021 have been announced by the Internal Revenue Service and the Social Security Administration.
Sponsors of defined benefit and defined contribution plnas: keep the following deadlines and other important dates in mind as you ensure compliance for plans in 2021.
In addition to those important deadlines and dates, plan sponsors should be aware of the contribution plan limits and other rolling notices for 2021:
- Employee salary deferral limits for 401(k), 403(b) and 457 plans will be $19,500. Age 50 catch-up contribution limit increases to $6,500.
- Health Savings Account contribution limit is $3,600 (single) and $7,200 (family). Age 55 catch-up contribution stays at $1,000.
- Traditional and Roth Individual Retirement Account contribution limit will be $6,000. catch-up contributions for participants age 50 and over is $1,000.
- Limitation for the annual benefit under a defined benefit plan under Section 415(b)(1)(A) will be $230,000.
- The dollar amount used to define “highly compensated employee” under Section 414(q)(1)(B) will be $130,000.
- Newly eligible employees must receive a Summary Plan Description (SPD) within 90 days after becoming covered by the plan.
- Provide quarterly statements and fee information to participants.
Plan sponsors have a fiduciary obligation to ensure that participant 401(k) contributions (including participant loan repayments) are deposited into participant accounts as soon as reasonably possible. The COVID-19 pandemic, however, has caused many issues for plan sponsors trying to remit those deposits on time. The Department of Labor (DOL) has provided relief for plan sponsors who have been late remitting employee contributions to their service providers because of the pandemic, but plan sponsors still have an obligation to accurately document what caused the delay.
Over 80% of the 17 A&E firms included on the NCEO list of the nation’s 100 largest employee-owned companies utilize an Employee Stock Ownership Plan or ESOP to achieve broad employee ownership. Learn why using an ESOP as a succession planning strategy can help clearly define a firm’s ethos, especially for firms that thrive on reputation, legacy, and employee morale.