Posts Tagged "Greg Matthews"


In June, the IRS released guidance (confirming its prior position on this issue) blocking one corporate tax strategy to accelerate the deductibility of 401 (k) salary deferrals and matching contributions that are attributable to compensation paid after the end of the tax year. But another strategy was given the “okay.” The prior position blocked a tax deduction technique where an employer — with a plan year that...

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There is apparently a still open issue relating to qualifying for tax free distributions from a Roth 401(k). The issue arises if EGTRRA — the 2001 pension reform legislation that, among other things, created Roth 401(k) accounts — is not extended and relates to the question of whether a distribution from a Roth 401(k) may not meet the five-year requirement for a tax-free withdrawal. IRS speakers at the ABA Tax section...

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As a way to better manage the cost of administering a plan, employers frequently ask about the options for allocating plan expenses to participants. These discussions may focus on several related issues including whether charging such accounts to former employees can legally rid the plan of accounts from the plan and to also encourage former employees with larger accounts to agree to take distributions. Additionally, removing small...

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Most analyses of the tax benefits of Roth contributions compare the results of a tax-deferred contribution to a plan versus the contribution of the same amount as a Roth contribution, less the tax payment required on the contribution. This results in the conclusion that there is no difference in the resulting savings of the participant if the tax rate at the time of the contribution is the same as the tax rate at the time the...

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A new study from benefits consulting firm Hewitt Associates contains very bad news for 401(k) participants. The study reviewed the account balances and deferral rates of 1.8 million employees at 72 large companies. It factored in inflation rates and medical expense increases during retirement and concluded that retirees will have to replace an average of 126 percent of their salaries when they retire to meet their post-retirement...

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