Employee Benefit Plans: New Pension Planning Options
- Topics:
- Accounting software
- Tags:
- Benefits,
- Sponsor,
- Social Security,
- Pension,
- Payroll Solutions,
- Operational Accounting,
- Human Resources,
- Government,
- Free Trade,
- Financial Planning,
- ...
- Source:
- The CPA Journal
FREE Registration is required
Overview: The 2001 Economic Growth and Tax Relief Reconciliation Act has some big extras for those in the retirement plan market. The pension reform provisions of the 2001 Tax Act may be the beginning of a new national strategy for retirement security that attempts to restore the three-legged stool of Social Security, employer-provided benefits, and personal savings. These provisions could lower record-keeping costs, add flexibility, and spur new plan creation. The new law removes the prohibition on the sponsor giving investment advice to participants. Under the old law, sponsors were not allowed to provide investment advice to the participants, although they could be held liable if the participant made bad investment decisions. If the sponsor paid fee-for-service planners to advise participants, then the fee would be imputed income to each participant who received the assistance. The new law allows the sponsor to provide actual advice and investment consultation services. This service, if paid for by the sponsor, will not cause imputed income to the participants after 2001. All participants must be eligible to receive this assistance, not just the highly compensated ones. This is a new area where CPAs can add value for their clients.
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Format: HTML | Date: May 2002 | Pages: 1
