401(k) Plans
(7/2/09)- According to a recent survey by the Grant Thornton, a compensation benefits firm, 29% of employers have altered or intend to alter their 401(k) match this year. Two-thirds of those will eliminate it (in some of the cases for only a temporary period of time), 22 percent will reduce it and 11% intend to increase their match.
The Pension Rights Center maintains a list of employers that have downgraded their matches that can be viewed at pensionrights.org .
(5/13/09)- President Barack Obama's budget proposal for the federal fiscal year that starts in September, 2010 calls for the future establishment of a program in which all workers would be automatically enrolled in employers' retirement plans. Under the present set-up, most plans require the employee to act in order to be in the plan.
Under the administration's plan, employers that don't offer a retirement plan would be required to enroll their employees in a direct-deposit individual retirement account (IRA). Employees would be able to opt out of either approach.
Separately, legislation has been introduced in Congress that would require the 401(k) to list the fees on the investment statement, and would essentially repeal regulations that allow mutual-fund companies to offer personal advice to 401(k) participants in the plans the companies manage.
(4/21/09)- Starting January 1, 2010 non-spousal beneficiaries of 401(k) plans will be able to roll a lump-sum distribution into their own "inherited" IRA account. Up until now, only spouses could effectuate such a roll-over, unless the company 401(k) plan specifically allowed this to happen.
Although the beneficiary will have to start taking distributions immediately, he or she can thus avoid the big tax bite that would come from taking one big lump-sum distribution. On the other hand, spouses do not have to start making distributions immediately.
Congress approved this non-spousal change in the economic-recovery package that was passed late last year.
The Congress enacted a similar law in 2006,but a 2007 ruling by the IRS gave the employers sponsoring the 401(k) plans the right whether or not to allow such transfers by heirs other than spouses
FOR AN INFORMATIVE AND PERSONAL ARTICLE ON PRACTICAL
SUGGESTIONS WHEN SELECTING A NURSING HOME SEE OUR ARTICLE "How to Select a Nursing
Home"
By Allan Rubin
updated July 2, 2009
http://www.therubins.com
To e-mail: hrubin12@nyc.rr.com or rubin@brainlink.com