INFORMATION OF USE TO BENEFIT PLAN SPONSORS AND BENEFIT ADVISERS

When is a 401(k) Not a Retirement Plan?                 

Short answer – a 401(k) plan is not a “retirement plan” for California creditor protection purposes when it was expressly set up to protect IRA rollover assets from creditors. This was the holding in a 2019 California Court of Appeal decision that is still valid law and that is worth revisiting: O’Brien v. AMBS Diagnostics, LLC, 38 Cal. App. 5th 553, 562 (2019), rev. den. 2019 Cal. LEXIS 8003 (October 23, 2019) Mr. O’Brien got into a legal dispute with his former business partners in AMBS Diagnostics, LLC (AMBS) and lost at trial,…

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IRS Announces 2022 Retirement Plan Limits

On November 4, 2021, the IRS announced 2022 cost-of-living adjustments for annual contribution and other dollar limits affecting 401(k) and other retirement plans.  The maximum annual limit on salary deferral contributions to 401(k), 403(b), and 457(b) plans increased $1,000 to $20,500, but the catch-up contribution limit for employees aged 50 and older stayed the same at $6,500.  That raises the total deferral limit for a participant aged 50 or older to $27,000.  The Section 415(c) dollar limit for annual additions to a retirement account was increased to $61,000 from $58,000, and the $6,500…

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Scary Surprise for Some New 401(k) Sponsors: Plan Audit Costs

Imagine you are a California business owner, with three fast-casual restaurant operations throughout the state. You employ over 100 employees, such that by September 30, 2020, you were either required to have a retirement plan in place, or to begin to participate in the CalSavers program by forwarding employee contributions to Roth IRAs managed by a state-appointed custodian. Your decisions about whether to adopt your own retirement plan were made in the early days of the COVID-19 pandemic when business operations, cash flow, and staffing needs were chaotic and fast-changing. On balance, however,…

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“I am a benefits (ERISA) attorney. I help businesses prevent, and fix, problems with their employee benefit plans in order to preserve the tax-qualified status of those plans, and ultimately the saleability of their businesses.”

-Christine P. Roberts

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Christine P. Roberts
Mullen & Henzell L.L.P.
phone: (805) 966-1501
email: croberts@mullenlaw.com

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