thebenefitsconsultinggroup

Reminder: Don’t Forget to Take Your 2025 Required Minimum Distribution (RMD)

Tue, 11 Nov 2025 19:20:31 GMT

A quick primer on RMDs.

As we approach year-end, it’s time to review your retirement accounts and confirm that your 2025 Required Minimum Distribution (RMD) is scheduled. For retirees — and for business owners participating in their company’s plan — taking your RMD is an important step in staying compliant with IRS rules.

Understanding RMDs

The IRS requires individuals who are age 73 or older to withdraw a minimum amount each year from their tax-deferred retirement accounts.

Your 2025 RMD is calculated based on your December 31, 2024 account balance (or the actuarial value for a Defined Benefit plan) and your IRS life expectancy factor.

Key Exceptions to Know

Still Working: If you’re actively employed, you generally do not need to take RMDs from your current employer’s retirement plan – as long as the plan allows.

Business owners: If you own more than 5% of the company, you must take your RMD once you reach the applicable age, even if you’re still working.

Roth accounts: RMDs are not required from Roth accounts beginning in 2024, thanks to SECURE 2.0 legislation.

Why It Matters

Failing to take your RMD by December 31, 2025 can result in a 25% excise tax on the amount that should have been withdrawn. It’s a preventable penalty that can be avoided with a little preparation.

Plan Ahead

Scheduling your RMD now ensures compliance and avoids a year-end rush.

We’re Here to Help

Our team is available to assist in verifying your RMD calculations, coordinating distributions, and ensuring all your retirement plan accounts meet the year-end requirements. If you have questions about your 2025 RMD or how it fits into your overall retirement strategy, please contact us .

Don’t Miss the Deadline: Timely Deposit of Elective Deferrals & Loan Payments

Sat, 19 Apr 2025 18:45:00 GMT

As a plan sponsor, it’s your responsibility to ensure employee elective deferrals and loan repayments are deposited into your retirement plan as soon as possible after each payroll. It might seem like a small detail, but late deposits can lead to compliance issues, IRS penalties, and unhappy employees.

When must elective deferrals & loan payments be deposited?

The Department of Labor (DOL) requires that these amounts be deposited as soon as administratively feasible following payday — and no later than the 15th business day of the following month. But here’s the catch: that 15-day window is not a safe harbor. In most cases, timely deposit means within a few business days — often within 1-3 days — depending on your company’s payroll practices.

For small employers (under 100 participants), the DOL offers a safe harbor: if deferrals are deposited within 7 business days, they’re considered timely. For larger employers, there’s no such grace period.

Why is this important?

Late deposits are treated as prohibited transactions and could result in:

· Excise taxes to the IRS (paid with Form 5330)

· Corrective filings with the DOL

· Required lost earnings reimbursements

And don’t forget — the DOL audits this closely. Late or inconsistent deposits can raise red flags.

 Tips to stay compliant:

· Establish a consistent deposit schedule – Tie deposits to your payroll cycle and stick to it.

· Automate where possible – Use payroll providers that offer direct integration with your plan’s recordkeeper.

· Document everything – Keep a record of when deferrals are withheld and when they’re deposited.

· Train your payroll team – Make sure they understand the importance of timing and the consequences of delays.

Need help reviewing your deposit process? Contact us today — we’re here to support you.

What is a Qualified Student Loan Payment?

Thu, 02 Jan 2025 16:54:53 GMT

What is a “QSLP,” and should you implement this new provision in your Plan?

The IRS now allows employers to make matching contributions towards Qualified Student Loan Payments. In other words, if a participant is paying on a student loan, the employer may match that loan payment within its 401k plan.

Only qualified education loans incurred by an employee for certain higher education expense are allowed. Also, if the employee has a legal obligation to make a student loan repayment for their spouse and/or their children (there may be exceptions if child does not have the same principal residence for at least ½ year), those loans also qualify for a match.

Things to consider when deciding on whether to implement this provision:

Administrative resources – You must have the resources in place to verify and collect the required documentation to ensure that the loans are qualified higher education expenses like tuition, fees, books/supplies, room/board etc.
Possible additional testing involved – There may be additional testing involved to ensure that the plan still passes the 401k discrimination tests. Additional testing may entail additional administrative fees.
Must be offered to all employees (not just a certain group). The loan payment goes towards meeting the annual 401k limit so an employee cannot defer their 401k limit and get a match on the student loan.
The match on the loan payment will follow the same provisions as the employer match (so vesting or the allocation/calculation will not differ).

If you would like to discuss this further, contact us so that we can provide additional information.

Long-Term Part-Time Employee Coverage

Thu, 02 Jan 2025 13:55:18 GMT

Under the SECURE Act rules, 401(k) plans are now required to cover Long-Term Part-Time Employees.

Who is a Long-Term Part-Time Employee (LTPTE)?

This is an employee who worked at least 500 but fewer than 999 hours in three consecutive years. For plan years after 2024, only two consecutive years are required. If the eligibility rules for your 401(k) plan are more lenient (e.g. the plan provides all employees are immediately eligible to make elective deferrals), no employees will be considered LTPTE.

Employees who are eligible solely on account of the LTPTE rules must be allowed to make elective deferrals, but can be excluded from receiving Employer contributions. LTPTEs can also be excluded from compliance and nondiscrimination testing.

Make sure to provide your BCG plan administrator with the census data for ALL your employees. We will determine your LTPTEs and make sure you are in compliance.

To understand how LTPTEs may affect your plan contact your pension consultant .

401(k) Limits Increase for 2025

Fri, 06 Dec 2024 23:23:00 GMT

Employee Elective Deferral Contributions

Employees under the age of 50 who participate in 401(k) or 403(b) plans will be able to contribute up to $23,500 during 2025, which is an increase from the 2024 maximum of $23,000. The limit on catch-up contributions for people over 50 years old will remain at $7,500 for 2025; however plans implementing the new “super catch-up” rule will allow people between the ages of 60 – 63 to make additional catch-up contributions up to a maximum of $11,250.

That means workers who are 50 or older can contribute up to $31,000 from their salary during the 2025 plan year (except for workers utilizing the super catch-up rule who can contribute up to $34,750.)

For more on the super catch-up provision, please click here .

DC Plan Annual Additions Limit

The limitations for DC plans include both employee and employer contributions (safe harbor, match, profit sharing, etc.) The limit on contribution totals is $70,000 per participant for the 2025 plan year, which is an increase from the 2024 limit of $69,000.

So, that’s a maximum of:

o $77,500 including catch-up contributions for those over 50 years old

o $81,250 including super catch-up contributions for those in the 60 – 63 age range

Compensation

Employee compensation limit for calculating contributions will rise from $345,000 to $350,000 and the HCE’s (Highly Compensated Employees) threshold for nondiscrimination testing will increase from $155,00 to $160,000.

As a reminder, employers should convey these changes to their employees to encourage participation in the plan. It is also important to make sure your payroll system is up to date with the new 2025 employee contribution limits prior to the start of the year.

To understand how these changes may affect your plan contact your pension consultant .

To see the full chart of the 2025 Plan Limits, click here .

Super Catch-Up

Fri, 08 Nov 2024 20:46:28 GMT

Understanding the new IRS catch-up limit increase.

Starting January 1, 2025, Plan Sponsors of 401(k) or 403(b) plans have the option to allow participants between the ages of 60 and 63 as of the close of the taxable year to increase their catch-up contribution to a maximum of $11,250.

This age-based increased catch-up limit is also known as the “Super Catch-Up.” It is our current understanding that if your plan already allows for catch-up contributions, implementing the Super Catch-Up is optional.

Some important things to consider for Plan Sponsors interested in this feature are:

Your plan document will need to be amended.
If you make Employer matching contributions, will the Super Catch-Up contributions also be matched?
Your payroll system will need to identify who is eligible to take advantage of the Super Catch-Up rule.
How to communicate the change to all plan participants.

Please email or call our office if you would like more information or would like your plan to include the Super Catch-Up.

IRS Announces Two-Year Delay for New Roth Catch Up Requirements

Fri, 01 Sep 2023 14:11:08 GMT

BCG ahead of the curve on new IRS policy.

The Secure 2.0 Act, enacted in December 2022, required that catch-up contributions for certain participants must be made as after-tax Roth contributions starting in 2024.

The administrative burden this would have placed on retirement plan administrators and the unanswered questions it raised about how the requirement would be implemented made a 2024 effective date virtually impossible. As a result, we predicted the date would be extended until further guidance could be offered and recordkeepers would have time to ramp up.

Turns out we were right! The effective date has been extended two years to 2026 .

At The Benefits Consulting Group we are always ahead of the game, and have been busy amending our client’s plans to allow Roth contributions where needed.

Please contact us here with any questions, or for more information about our Retirement Plan services.

What is your Required Minimum Distribution (RMD) Age?

Tue, 11 Apr 2023 17:17:48 GMT

Understanding new IRS withdrawal rules.

There have been some recent changes to the age one must begin taking a Required Minimum Distribution (RMD) from their qualified retirement account.

It’s been more than thirty years since we’ve seen changes to the The Tax Reform Act of 1986 - first with the 2019 SECURE Act, then again in 2022 with the SECURE Act 2.0.

See the chart below for new RMD ages:

RMD Beginning Ages

Birth Date or Year Age

6/30/1949 or earlier... 70.5

7/1/1949 to 1950... 72

1951 to 1959... 73

1960 or later... 75

So, anyone that turns 73 in 2023 must take an RMD in 2023 - or no later than April 1, 2024.

Now that you have figured out the age your RMD must begin, there are a few other things you need to keep in mind. If you have already started taking RMD’s in prior years, you need to continue withdrawing them. Also, there is an exception for individuals who are non-owners and still currently working - as long as they do not own 5% or more of the company, they can wait until the calendar year in which they retire to begin their RMD’s.

For more information, contact your plan consultant here .

IRS ANNOUNCES RECORD INCREASES TO 401(K) CONTRIBUTIONS FOR 2023

Mon, 21 Nov 2022 20:37:52 GMT

In 2023, employees will be able to contribute up to $22,500 a year, up from $20,500 to 401(k), 403(b) and other tax-advantaged employer savings plans. The limit on catch-up contributions for people 50 or older also rose to $7500 from $6500. That means a worker over 50 years old can contribute a maximum of $30,000 next year.

The total contribution limit, which includes employer contributions, increased from $61,000 to $66,000. So, for those over 50 years old who take advantage of the catch-up contribution, that’s a maximum total of $73,500.

Employee compensation limit for calculating contributions will rise from $305,000 to $330,000 and the HCE’s (Highly Compensated Employees) threshold for nondiscrimination testing will increase from $135,00 to $150,000.

We have not seen these large increases in decades, we can thank inflation for that! Employers should convey these changes to their employees to encourage increased participation.

To understand how these changes may affect your plan contact your pension consultant here .

To see the full chart of the 2023 Plan Limits, click here .

New Participant Disclosure Requirement

Fri, 18 Mar 2022 17:12:28 GMT

The SECURE ACT and "lifetime income illustrations"

Participant’s in 401(k) and Profit Sharing plans will be seeing some new figures on their benefit statements starting soon. The SECURE Act now requires statements to include “lifetime income illustrations”. These illustrations will show the participant what their account would provide in the form of a monthly income payable for life assuming the participant was 67 years old (or actual age if older) and retired now. They will also show the monthly income if it was payable until the later of the death of the participant or the participant’s spouse.

The illustrations are based on a specific set of assumptions regarding interest and mortality. Participants are assumed to be married to someone their own age. It should be noted that the numbers illustrated are hypothetical and do not represent what the participant could actually receive. It’s possible the retirement plan might not even offer monthly installments. The Department of Labor feels this information will still help the participant gauge where they are in their pursuit of financial security in retirement.

If you have questions about the new disclosures feel free to contact us.

Larry Shippee
President

What should I do if I have an excess deferral?

Fri, 09 Apr 2021 22:07:40 GMT

The total of all salary deferrals a participant makes to various retirement plans – including 401(k), 403(b), SARSEP and SIMPLE IRA plans – is limited to $19,500 (plus an additional $6,500 if age 50 or over) for 2020.

If an individual defers more than this limit for 2020, the excess deferral amount plus earnings must be distributed by April 15, 2021. Excess salary deferrals not withdrawn by April 15 are taxable in 2020 and again when withdrawn. The date to remove excess salary deferrals has not been extended.

Individuals who made salary deferral contributions to two or more retirement plans in 2020 may be most at risk for exceeding the deferral limit. Use our Interactive Tax Assistant to help determine how to correct excess salary deferrals.RMD’s) are back on for 2021.

Participants in qualified retirement plans (401(k)’s, IRA’s, etc.) used to be required to begin taking distributions once they reached age 70 ½. That requirement has now been changed to age 72. So if you turned 72 in 2021 or before, be sure that you take the proper distributions by the required due date. That date is December 31, 2021 if you turned 72 prior to 2021 and it’s April 1, 2022 if you turn 72 in 2021. Contact us for more information.

What?! I Can Lower My 2020 Tax Bill Now?

Mon, 15 Mar 2021 21:01:06 GMT

It is now tax season so business owners are huddling with their accountants to get the bad news. Accountants are looking for ways to lessen the pain. That is where Qualified Retirement Plans (401(k), Profit Sharing, Defined Benefit and Cash Balance Plans) come in. For over 30 years accountants have come to us for ways to reduce the check to Uncle Sam and for over 30 years the answer has always been the same. Yes, you can do it, but not for last year.

This year that has all changed. For the first time you can set up a qualified retirement plan AFTER the end of the year but use it to reduce your tax burden for LAST year. That is right. 2020 is the first year you do not have to take action by December 31! And you can make contributions to the plan all the way up to the due date of your tax return, even the extended due date, and still take the deduction on your 2020 return.

And, by the way, do not miss the tax credit for setting up a new plan. That is TAX CREDIT , not tax deduction. Call us for details.

Expert Testimony

Mon, 15 Feb 2021 22:01:06 GMT

As Jonathan Kimble Simmons says in the Farmers Insurance commercials; “We know a thing or two because we’ve seen a thing or two.” Well, you can’t service as many retirement plans as we have, for as long as we have, without seeing a thing or two. At The Benefits Consulting Group we’re steeped in retirement plan expertise. So it’s not surprising that when an expert is needed, we get the call.

You might think we’re all 5500’s and discrimination testing. But The Benefits Consulting Group get’s called upon to provide expert testimony for disputes ranging from retirement plan servicing to divorce settlements. Our actuarial expertise combined with our knowledge of the operation of retirement plans makes us ideally suited to provide expert testimony.

The Exemption Was Nice While It Lasted

Fri, 15 Jan 2021 22:01:06 GMT

The $2 trillion Coronavirus Aid, Relief and Economic Security Act (commonly known as the CARES Act) waived the requirement for minimum distributions from retirement plans. But that waiver was just for distributions required in 2020. Required Minimum Distributions (RMD’s) are back on for 2021.