The purpose of this page is to draw your
attention to issues that are important and potentially time sensitive.
Required Minimum
Distribution Waiver For 2009
One provision of The Worker, Retiree and Employer Recovery Act of 2008
permits participants in IRA's, TSA/403(b) plans, SIMPLE plans, 457 Deferred
Compensation plans and 401(k) plans to waive their 2009 Required Minimum
Distribution, (RMD). Participants are required to resume their RMD's in 2010.
The
Treasury Department And The Internal Revenue Service Issue Dramatic Changes to
the 403(b) Program Effective September 24, 2007!
The long awaited final 403 (b) regulations have been issued. The changes are
dramatic and wide spread. Primarily the new rules call for employers to have
plan documents in force by January 1, 2009. Tax- free exchanges under IRS
code section 90-24 will effectively end on September 24, 2007.
Employers will need to certify future tax-free exchanges and rollovers! In
addition funds can only be transferred to providers that have an agreement with
the employer. Click here for more
information.
DROP Enrollment Window Changed
Effective
January 7, 2003 instructional personnel in grades K-12 may elect to
participate in DROP anytime after reaching their normal retirement date. Other
personnel classes must enroll in DROP within one year of first becoming
eligible. Enrollment in DROP past the deadline will result in
reduced time permitted in DROP.
Tax Law Allows Transfer For Purchase
Of Pension Plan Service Credits
IRS 403(b) 13 allows employees
to transfer assets from TSA/403(b)'s and IRA's to their pension plan to purchase
service credits. The transfer is tax-free. FRS participants can download the
request form from the FRS website.
Click
here for the form.
School Board Employees FRS Pension Plan Choice
State of Florida school
board employees have a choice between the FRS Pension Plan and
the FRS Investment Plan. For
more information click here.
IRA
Contributions
It is important to keep track of your own contributions to Individual
Retirement Accounts. Companies do not necessarily monitor the amount of IRA
contributions made to individual accounts.
Florida
Retirement System
Effective July 1, 2001,
members of the current FRS defined benefit plan who were actively employed on
that date will be vested after 6 years of service in any retirement class.
TEFRA Loans
The IRS has become very strict with Tax Sheltered Annuity (TSA), 403
(b) loan repayments. As a result some providers are defaulting loans if
the repayment schedules are not closely followed. It is prudent to be certain that
your loan payments are being made in accordance with your loan repayment
schedule. Once a loan has defaulted it is considered a deemed distribution from
your policy and is taxable. Contact your financial advisor for more information.
Long Term Care
Legislation
Long
term care legislation that would provide a 100 percent above-the-line tax deduction for the
purchase of a private long term care insurance policy, a tax credit of up to
$3,000 for people who need long term care services (or their caregivers), and
the inclusion of LTC coverage in cafeteria plans and Flexible Spending Accounts
stalled in Congress.
By
2005, an estimated nine million elderly Americans will need long term care. Most
will be cared for at home: family members and friends are the sole caregivers
for 70 percent of the elderly. But many others will enter nursing homes, at an
annual cost of $50,000 or more. Private LTC insurance offers the best way to
cope with the financial drain of either home care or nursing home care. In
addition, by providing tax incentives for the purchase of LTC insurance,
Congress can help alleviate the burden on public programs.
Please
log onto www.ltcweb.org for valuable
information on long term care, but more importantly, please visit the
"Contact your Legislators" feature at www.ltcweb.org and urge your
member of Congress to support measures that will create an above the line tax
deduction for long term care.
| 