Your 2013 Contribution for Retirement

Happy new year!  Have you adjusted your retirement plan contributions yet? The Internal Revenue Service (IRS) has a list of the new limits on their website located at http://www.irs.gov/uac/2013-Pension-Plan-Limitations. Do you have an IRA? In general, you can up your contributions to $5,500. Do you have a 401(k) or 403(b) plan? Likewise, you can up your contributions to $17,500. Older employees may be able to contribute more. However, your plan may have additional limits that might restrict you to a lower number so be sure to check with your benefits department.

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Retirement Plan Help - Gov't Agencies

Where do you go for help?  I always suggest starting with your plan administrator with any questions.  What happens if it is clear there is a problem with your retirement plan account and you need help because the plan administrator is not helping or appears to be acting shady?

Briefly, I wanted to go over different government agencies that may be able to help you.

For all qualified retirement plans regardless of type, the Internal Revenue Service (IRS) and Department of Labor (DOL) can be of help:
Employee Benefits Security Administration (EBSA) of the DOL http://www.dol.gov/ebsa/publications/Filingretirementclaim.html
IRS http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1


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Summary Annual Report (SAR) for Your Retirement Plan

What is the Summary Annual Report (SAR)? Once a year, you likely receive a one or two page document for your retirement plan entitled Summary Annual Report. What is it?

Every qualified retirement plan is required to annually report with government agencies. They submit a  form each year and generate an SAR to distribute to plan participants. The SAR is required to be distributed to participants (active and terminated) along with other individuals (death beneficiaries and alternate payees from Qualified Domestic Relations Orders) entitled to benefits under the plan.

The SAR is an aggregate or plan-level summary.  It does not tell you how much is in your account.  So what value is it to you?  The form gives you information about the plan administrator with contact information.  You should already have this information. The form also gives information on obtaining the full form from the Department of Labor (DOL). You are entitled to a copy if you want, but you will not receive much useful information from doing so.

In general, it does not tell you a lot. However, it can warn you regarding potential problems. It is key that you compare expected activity to the year reported on the SAR. If you are a participant in a Roth or 401(k) account who made contributions during the year, employee contributions of $0 is a big red flag.   If you are a participant who rolled over funds from an old retirement plan during the reporting year and you see $0 for rollovers from other plans, that is a big red flag. I also suggest reviewing your statements first. If you see the contributions on your statements and the time frames match up, the SAR likely has a reporting error. I would still recommend following up with your contact at the plan administrator since they may need to file a corrected form with the government.

Let's say you rolled over $100,000 to your current employer's plan from the profit sharing at your last employer during the 2011 calendar year. You see the 2011 calendar year statements and SAR both show $0 in rollovers for that new plan. Your prior employer's statement shows the funds went out and you received an IRS Form 1099-R for the 2011 year. Your plan administrator denies receiving the funds and the old company's plan says the same thing. You may wish to escalate the situation to the Department of Labor's EBSA office or the IRS.


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Retirement Benefits After a Job Loss

If you have left a job recently, you may have concerns over retirement and health benefits.  The Department of Labor has a great resource located on their website at http://www.dol.gov/ebsa/publications/joblosstoolkit.html#.UHc9irS8_ww.  I recommend taking a look if you haven't already done so!  FYI Includes a Spanish-language resource.

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Spanish Retirement Plan Materials From EBSA

As part of the EBSA's National Hispanic Heritage Month education efforts, they have included retirement plan related Spanish language materials on their website at http://www.dol.gov/ebsa/newsletter/.  In addition, there are also Spanish language videos on the newsletter website for those fluent in Spanish who might not speak the language. Great education efforts to share with friends and family!

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Participating in a Retirement Plan

On Monday, we commemorated Labor Day.  The law that governs retirement plans, ERISA, was signed into law on Labor Day 38 years ago.  I find it only fitting that we discuss participating in retirement plans this week.  Due to the variety of retirement plans, participation can be an active or rather passive process.  If you are in an defined benefit plan or any retirement plan that only allows for employer contributions and you are unable to direct plan investments, you may only need to complete a beneficiary form.

Regardless of your plan type, you should receive a Summary Plan Description (SPD), or a brief summary of the plan document written at a layman level, within ninety days of becoming eligible for the plan.  If you direct investments, you will need to make a choice on an enrollment or investment election form.  If you are able to make employee contributions, you will also need to make a choice on an enrollment form.  Regardless of plan type, you will need to complete beneficiary forms.  The form will determine how your vested benefit will be distributed if you die.  Sometimes these elections will be on three separate forms or they can all be combined on the same form.  As a result, terms other than investment election, beneficiary or enrollment form may be used by your plan administrator.

I would encourage everyone to participate if they haven't already.  If you think you should be eligible and you haven't received any paperwork or instruction about how to sign up, a brief call to your benefits department may be useful.  They should be able to help you out with signing up or advise you regarding when you should be eligible.  If you are not expected to meet eligibility, for example due to hours worked, they should also let you know that.  Many employers gladly discuss the plan and/or give out SPD's before participants are not even eligible yet, if an employee is interested.  They are not required to, but they often want to share the great benefits that you may qualify for in the future.

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