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MEETING THE CHALLENGES AHEAD
GETTING VALUE FROM YOUR
RETIREMENT PLANS
Ted Beal
PPG 101434 (3/15) EXP 3/17
Key Benefit Plans
State Retirement System = NJ defined benefit plan for
income
Qualified Plan Opportunities (403(b), 457, Roth, etc…)
Social Security
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Keys for Retirement
Keys for Retirement
1.
Review your state pension plan
- Enroll in MBOS- The Member Benefit Online System
- Understand the Financial Value of TPAF- Teachers
Pension and Annuity Fund
2.
Know Qualified Plan opportunities
3.
Review asset allocation
- Fixed Assets vs. Variable Assets
4.
Health check-up
5.
Understanding Social Security
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Pension Review
1. Understand value
2. Retirement: Afford it? When?
3. Options
4. Life insurance
5. Health
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Qualified Plan Regulations Provide ways to plan for Retirement
The Economic Growth and Tax Reconciliation Act of
2001 enhanced retirement savings options
• Increased plan limits 403(b), 457(b), + 401(a)
• Pay accumulated sick and vacation time as postretirement plan contributions
• Employer contributions
• Roth 403(b) – January 2006
Source: The Economic Growth and Tax Reconciliation Act of 2001, EGTRA
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Qualified Plan Options
2015 Limits
• 403(b)/ 457(b) limits
403(b) – 18,000/ 24,000/ 27,000
457(b) – 18,000/ 24,000/ 3 year catch-up
• Employee vs. Employer contributions
Overall 403(b) / (415(c)) contribution limit up to 53,000/year
(plus age 50+/$6,000)
- This includes employer and employee limits
•401(a) Limits
Source: IRS website tax code 403(b), 457(b), 401(a),
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Qualified Plan Options
Employer Contributions
•Employer Match – attracts + retain key administrators
•Sick and vacation 403(b) Post Retirement contributions
- Contributions can be made for 5 years after retirement
- No payroll taxes
- No income taxes until money is withdrawn from
the 403(b) plan*
* Withdrawals prior to age 59½ may be subject to an additional 10% income tax penalty.
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YouChoose
ChooseQualified
QualifiedPlan
PlanDesigns
Design
You
Design Plan(s) for district and personal needs:
401(a) for benefits package
403(b) for employee benefits and post-employment contributions
Pair with 457(b) for double deferral or potential for pre- 591/2 access
Note: Total possible 2015 limits with all three $ 100,000+
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for
You
and Your
New
Opportunities
forEmployees!
You & Your Employees
Avoid “problematic” severance pay “plans”
(new guidance)
Maximize savings with multiple plans and multiple catch up
options
Convert unused leave pay to retirement benefits
Make employer contributions for up to 5 years after
employees leave
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Our Company
Facts about AXA Equitable
Our Company
• Over $610 billion in assets under management, as
of 12/31/2014*, in the United States.
• 15,000 public schools nationally
• 592 New Jersey Schools/ 400 NJ Municipalities
• NJ Higher Education
Source: AXA internal document growth report AUM 403(b)/457(b) plans 12/31/14
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Thank You!
THANK YOU
This information is not approved or endorsed by any school or state entities. AXA Advisors is
not affiliated with any school or state entity. Securities offered through AXA Advisors, LLC (NY,
NY 212-314-4600), member FINRA/SIPC. Insurance and annuity products offered through
AXA Network, LLC.
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Are Your 403(b) and 457(b) Plans Ready
for an IRS Audit?
Wednesday, June 3, 2015
Disclaimer
PlanConnect Disclosure
This information is provided for educational and
information purposes and is not intended to be
used to avoid tax penalties or render tax or legal
advice. The taxpayer should seek advice from an
independent tax and/or legal advisor.
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Today’s Speaker and Agenda
Speakers
Brayton Wicks – President
Renea Dumas – Assistant Vice President of Operations
Agenda
Plan Administration – What’s Expected
IRS Audit Questionnaire – First Steps
Compliance and Common Errors
Helping to Avoid Compliance Issues
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Plan Administration – What’s Expected
Plan Administration for Section 403(b) and 457(b) Plans
Role of the Administrator
Managing the benefit for your
employees
Ensuring compliance with the IRS
regulations around each plan
Confirming investment providers are
qualified under IRC 457(b) and/or
403(b) and are complying with
applicable tax laws
Administration Options
Self Administration
Use a TPA
Jointly with Providers
Administration Capabilities
Systems
Knowledge and expertise
Functions of a Plan Administrator
Plan and Compliance oversight
Payroll and Contribution
Remittances
Employee Awareness
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IRS Audit Questionnaire – First Steps
IRS Conference Questionnaire
If you Receive a Questionnaire
Don’t ignore the questionnaire
Complete the questionnaire on time
Consider working with a tax
professional, legal counsel, and/or
a retirement plan professional
Who Should be Involved?
Human resources
Payroll
Investment providers
Third Party Administrator
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Confidential: Disclaimer
16
Plan Compliance and Common Errors
Contributions
Responsibilities
Plan Documents
Types of contributions permitted
Knowing the Regulations
Annual limits, including catch-ups
Applying years of service
Ordering rules
Excess contributions
Monitoring Procedures
Roles
Process
Timing
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Record Retention
Maintaining copies of agreements
Payroll records
Common Errors
Failure to Follow the Terms of the Plan
Calculating Years of Service
Excess Contributions
Employee limit includes Roth
15 year of service catch-up calculation
Ordering rules when using both catch-ups
Includible compensation – post retirement
Post-employment
Exceeding Five Years
Distributing Excess Contributions
Identifying and disbursing timely
Retaining Records
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Plan Compliance and Common Errors
Distributions & Loans
Responsibilities
Responsibilities
Common Errors
Plan Documents
Types of distributions permitted
Eligibility rules
Knowing the Regulations
Loans
Hardships
Unforeseen emergency withdrawals
Failure to Follow the Terms of the Plan
Excess Loans
Not aggregating outstanding loan
balances across all plans and providers
Not Obtaining Supporting Documents
Residential loan
Hardship
Unforeseen emergency
Required Documentation
Monitoring Procedures
Roles
Process
Invalid Reason for Hardship and
Unforeseen Emergency Withdrawals
Record Retention
Maintaining all supporting
documents
Failure to Suspend and Restart
Contributions
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Plan Compliance and Common Errors
403(b) Universal Availability
Responsibilities
Eligibility to Participate (Elective
Deferrals)
Follow plan document provisions
Recommend allowing all employees
(keep it simple)
Only certain exclusions permitted under
403(b) regulations
Effective Opportunity to Participate
Notify employees at least annually of
their ability to participate and make
changes
New employee welcome kit
Informational website
Group meetings or workshops
Periodic communications
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Common Errors
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No Supporting Documentation
Who received the annual notice and copy
of the notice delivered, date, etc.
Proof new employee received notice (IRS
is suggesting within thirty days of hire and
an additional thirty days to enroll)
Exclusion of Certain Classifications of
Employees
Substitutes
Lower paid employees – not making them
aware of their ability to participate
Entry and Election Changes
New employee entry (giving adequate
time for new employees to enter)
Failure to process SRAs timely
Helping to Avoid Compliance Issues
What Can a TPA Do?
Provide and Maintain Plan Documents
Compliance Oversight for Transactions
Compliance review and sign-off
Historical repository of supporting
documents
Universal Availability
Annual notice and tracking
New employee notification and tracking
Participant education
Technical Support
Answer regulation questions
Inform on regulation changes
Employee and Advisor Services
One-on-one customer service support
(bilingual in some cases)
Regulation and plan education
Website and online tools/calculators
Contribution Limit Testing
Standard limits & Catch-ups
Manage Salary Reduction Agreements
Retain SRA changes and track and
report all salary reduction changes
Remittance Management and Tracking
Timely remittance of contributions
Provide common remitter services
Historical reporting
Help to Manage Investment Providers
Information sharing across all providers
Audit Support
Provide supporting documentation
Procedures and work with vendors
State-of-the-Art Systems
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Thanks and Questions
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Appendix: 2015 Limits
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PlanConnect, LLC is a wholly owned subsidiary of AX A Distribution Holding Corporation, an indirect subsidiary of AXA Financial, Inc.
PlanConnectSM, Connect2ComplySM, Connect2MaintainSM, Connect2RemitSM and Connect2AchieveSM are service marks of AX A Distribution
Holding Corporation. PlanConnectSM may not be available in all states. AXA Financial, Inc. and its family of companies do not provide tax advice.
Please consult with your tax advisor regarding your particular circumstances. Each company is affiliated. AXA Distribution Holding Corporation
and AXA Financial, Inc. are located at 1290 Avenue of the Americas, New York, NY 10104, 212.554.1234.
PlanConnect,
July 17, 2015
LLC
is
located
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Madison
Street,
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Syracuse,NY
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800.923.6669