Retirement Plan Updates
New
Limits for 2007
& 2008
‚The
maximum deferral limit a 401(k) plan participant may elect in 2007 changes to $15,500
for individuals under age 50 and $20,500
for individuals age 50 and over. Maximum plan
contributions to a participant’s account is 100% of pay or $45,000.
‚The
maximum deferral limit a 401(k) plan participant may elect in 2008 remains at
$15,500
for individuals under age 50 and $20,500
for individuals age 50 and over. Maximum plan
contributions to a participant’s account is 100% of pay or $46,000.
‚The
current deduction limit for profit sharing plans remains at
25% of compensation.
‚The
retirement plan compensation limit increases to $225,000 for 2007 and $230,000 for 2008.
‚Simple Plan Limits: The maximum deferral contribution is $10,500 for
2007 and for 2008. The catch up for
individuals age 50 or over is $2,500 for 2007 and 2008 year.
Holiday
Schedule & Office
Updates
Our office will close 5 pm on Friday, December
21st and
will be closed all day Monday and Tuesday, December 24 and 25, 2007 and Monday and
Tuesday, December 31, 2007 and January 1, 2008. Limited
staff will be available to assist you between the hours of 10:00 AM and 2:00 PM Wednesday,
December 26 through Friday, December 28.
Estimated
Testing
If you would like our firm to prepare an estimated ADP
test, please send us your census (all employees through 9/30/07) 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 2008 plan
year requires advance notice to employees by December 1, 2007 at the latest. If
you are interested in this provision and do not already have a notice to post for 2008, please call us. The Safe Harbor
match also satisfies the top heavy test.
Roth
Contributions to 401(k) & 403(b) Plans
Effective January 1, 2006, Roth contributions can be
added as an option to your 401(k) plan or 403(b) plan.
Adding Roth contributions to your plan requires a plan amendment. There is a $100 charge to amend your PBS, Inc.
document, however, other plan amendments can be made at the same time with no additional
charge. If you would like more information
about adding Roth contributions to your plan, please email us at retirement@profben.com
and we will email you a Roth fact sheet.
Section 125
Cafeteria Plan Updates
Over-the-Counter Medications
Now Covered
Now, by participating in a 125 Cafeteria Plan, you will be able to pay for those
over-the-counter medicines that previously were not eligible. Over-the-counter items
used to alleviate or treat a specific injury or illness that are now eligible for
reimbursement through a 125 Cafeteria Plan include: allergy medicines (such as Claritin),
headache remedies (such as aspirin or ibuprofen), and medicines to treat colds and flu.
Also, eligible are muscle pain ointments, Pedialyte, Nicotine gum and patches,
glucosamine/chondroitin for arthritis and diaper rash ointments. (Over-the-counter
items such as vitamins, dietary supplements, most herbal remedies, and personal-use items
are still not eligible.)
Debit Card Technology (MBI)
We offer the Flex Convenience 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 MBI 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 www.medibank.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.
NEW!!!
Employer E-Learning Tool
To view the course simply logon to MBI's corporate website at www.mbibenefits.com and
click on the link located in the yellow banner at the top of the page titled
"Employer Briefing." The course is accompanied by an audio track and covers IRS
guidelines, actual enrollment increases and cost savings experienced with the card. We
hope that you find this course useful in using and promoting the MBI Benefits Card.
FSA Calculator
This innovative product allows you to help your employees estimate their out-of-pocket
costs for medical, dental and vision coverage. To use this new estimating tool, launch the
calculator at www.fsaandyou.com.
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