EGTRRA Restatements... The time has come
In this issue:
It's that time again! Time for what, you ask? To participate in that never ending ritual of qualified retirement plan restatements! As legislation affecting retirement plans is enacted, the Internal Revenue Service (IRS) requires all plan sponsors to restate or "rewrite" their plans to conform to current law.
The Economic Growth and Tax Relief Reconciliation Act (EGTRRA), which was signed into law in June 2001, introduced sweeping changes to the retirement plan arena. The restatement deadline is now upon us to incorporate the EGTRRA provisions into qualified plan documents.
Some of the key provisions of EGTRRA are:
- Increased benefit and contribution limits;
- Increased elective deferral limits;
- Increased compensation limit;
- Created a "catch-up" provision for older workers, allowing individuals age 50 and older to make additional elective deferrals;
- Liberalized the rollover rules;
- Created the Roth 401(k); and
- Created additional incentives for small employers to offer retirement plans to their employees.
This newsletter is intended to provide general information on matters of interest in the area of qualified retirement plans and is distributed with the understanding that the publisher and distributor are not rendering legal, tax or other professional advice. Readers should not act or rely on any information in this newsletter without first seeking the advice of an independent tax advisor such as an attorney or CPA.