Retirement and Pensions Update - Janurary 2, 2013


In This Update:

Fiscal Cliff Deal Includes Provisions on Charitable Contributions and Roth Roll Overs; PBGC Testifies in Subcommittee Hearing on Multiemployer Plans; IRS Updates Retirement Plan Rules for Hurricane Sandy Relief; IRS Official Says Due Diligence Key in Setting Interest Rates on Plan Loans; PBGC Publishes Guidance on 2013 Premium Payments; PBGC Seeking Extension of Administrative Review Information Collection Request; BLS Finds Defined Benefit Plans Costlier than Defined Contribution Plans; and ABA Comments on Re-Proposal of Fiduciary Rule.

Excerpt from Fiscal Cliff Deal Includes Provisions on Charitable Contributions and Roth Roll Overs - As part of the deal reached to avert the fiscal cliff, Congress extended tax-free distributions from individual retirement plan for charitable purposes and provisions related to roll over into Roth plans. The compromise bill extends for two years the provision that permits tax-free distributions to charity from an Individual Retirement Arrangement (IRA) held by someone age 70½ or older of up to $100,000 per taxpayer, per taxable year. Additionally, the deal allows participants in 401(k)-style retirement plans to roll over assets into Roth individual retirement accounts, allowing them to make after-tax contributions to the plan and all the principal and earnings are tax-free when distributed. Currently, plans may allow participants to convert their pre-tax accounts to Roth accounts, but only with respect to money they have a right to take out of the plan.

Please see full update below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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