NEWS & INFO

 

Retirement Plan Updates

Click Here for a our retirement Fall Newsletter

New Limits for 2010 & 2011

  • The maximum deferral limit a 401(k) plan participant may elect in 2010 and 2011 is $16,500 for individuals under age 50 and $22,000 for individuals age 50 and over. Maximum plan contributions to a participant's account is 100% of pay or $49,000. ($54,500 for those with catch-up).
  • The current deduction limit for profit sharing plans remains at 25% of compensation.
  • The retirement compensation limit is $245,000 for 2010 and 2011.
  • Simple Plan Limits:  The maximum deferral contribution is $11,500 for 2010 and 2011.  The catch up for individuals age 50 or over remains $2,500.

Estimated Testing

If you would like our firm to prepare an estimated ADP test, please send us your census (all employees through the end of September) via email or by diskette in Lotus 1,2,3 or in Excel.  If you need a census sheet, please email us to request one (retirement@profben.com).  Estimated testing is recommended for our clients who have previously failed their ADP tests, are a first year plan or who have other complicated ownership or testing issues.  Estimated testing is not generally needed for plans that are Safe Harbor, Profit Sharing Only or plans where owners and highly compensated employees do not participate. Our firm does not charge for this test. 

IRS Safe Harbor Provision - Annual Notification is Required!!

The IRS allows plans to make a 100% vested contribution which will enable the plan to pass the Actual Deferral Contribution, Actual Compensation Contribution and the Top Heavy tests.  Implementation of this provision for the 2012 plan year requires advance notice to employees by December 1, 2011 for calendar year plans.  If you are interested in this provision and do not already have a notice to post for the 2012 plan year, please call us.  The Safe Harbor match also satisfies the top heavy test.

Section 125 Cafeteria Plan Updates

Over the counter drugs are no longer allowed to be reimbursed through the cafeteria plan effective 1/1/2011. Employee contributions limits of $2,500 per person are set to begin for plans with a plan year starting after 1/1/2012.

Debit Card Technology (BPS)

We offer the Metavante Benefits Payment System debit card system, which automates the process of paying for eligible pretax account expenses. It enables employees to use the debit card at eligible FSA locations wherever MasterCard or Visa is accepted. Approved expenses are automatically deducted from participant's pretax account, which is prefunded by the employer. The debit card eliminates claim forms, double out-of-pocket payments, and waiting for reimbursement checks. The BPS card has proven to be very popular with our clients and has significantly increased participation in the 125 Cafeteria Plans that offer it. All account information is located online and employees can access their personal information at their convenience. More information can be located at their web site found at http://www.benefitspaymentsystem.com.

The card will not be accepted at all MasterCard locations because it can only be used for qualified medical expenses. For example, it will not be recognized at department stores or restaurants.