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.
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