Blue Ridge ESOP Associates Industry News

On February 24, 2022, the Internal Revenue Service (IRS) published proposed regulations regarding the calculation and payment of required minimum distributions (RMD’s) under qualified retirement plans. The Proposed Regulations update existing regulations to account for the increase in a participant’s required beginning date to age 72. Specifically for our ESOP and 401(k) clients, these proposed regulations also provide helpful clarifications on the calculation of death benefits.

The deadline to amend your retirement plans for the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act) and the Coronavirus Aid, Relief, and Economic Act (CARES Act) is the last day of the first plan year beginning on or after January 1, 2022 (December 31, 2022 for calendar year plans). Highlighted below are a few key changes that may need to be included in your amendment:

Did you know becoming a participant and earning a contribution are two separate events? An employee could become a participant and not earn a contribution. Plan eligibility and contribution requirements are different aspects of your plan document.

When an employee terminates employment with the company due to a disability, his or her ESOP account may be subject to certain procedures and additional benefits. Before these procedures and benefits can be applied, it is important to understand how your ESOP Plan Document defines disability and whether or not the employee’s circumstance meets that definition.

On November 4, 2021, the IRS announced cost of living adjustments affecting qualified retirement plans for 2022. Almost all of the limits increased from 2021 to 2022, some by greater amounts than we have seen in some time.

Internal Revenue Code Section 401(a)(28) allows employees to diversify a portion of their stock once they meet certain eligibility requirements. There are specific age and service requirements outlined by the IRS to determine who is a Qualified Participant, however your plan may allow for rules that are less restrictive.

Employee Owned is next week in Las Vegas - November 10-12. Stop by our booth and plan to make plans to attend the following sessions with our professionals.