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Visit RothRetirement.com Convergent Retirement Plan Solutions and Archimedes announce the recent launch of rothretirement.com.
President Signs Bill That Modifies the Federal Thrift Savings Plan On June 22, 2009, President Obama signed H.R. 1256, the Family Smoking Prevention and Tobacco Control Act into law. This law includes several enhancements to the federal Thrift Savings Plan (TSP). Among provisional changes to TSP are an automatic enrollment feature with the ability for a participant to opt out of participation within 90 days, a qualified Roth contribution program, and a survivor benefit that would allow spouses of deceased TSP participants to maintain a beneficiary TSP account. Subject to approval by the TSP governing board, investments in private sector mutual funds would also be allowed.
Wall Street Journal Article on Roth Conversion Mr. Ben Norquist, Founder and President of Convergent Retirement Plan Solutions, was recently interviewed for a Wall Street Journal article on Making a Good Deal for Retirement Even Better.
FRC Retirement Forum Mr. Ben Norquist, Founder and President of Convergent Retirement Plan Solutions, participated on a panel at the June 17, 2009, FRC 5th Annual Retirement Forum on the topic of Making Sense of Retirement: The Mind of the Advisor and Consumer.
Pershing Insight Conference Mr. Ben Norquist, Founder and President of Convergent Retirement Plan Solutions, along with Beverly Flaxington, Principal at The Collaborative, recently presented Helping Investors Understand the Roth IRA Opportunity at the June 3 – 5, 2009 Pershing Insight Conference
Immediate Elimination of Conversion Eligibility Requirements Proposed H.R 2814, proposed by Rep. Joseph Pitts (R-PA), would eliminate the $100,000 conversion income limit immediately and apply retroactive to conversions on or after January 1, 2009. The proposed legislation would also change the ratable tax option which is scheduled for 2010 would instead apply to 2009 conversions, with taxes to be paid ratably in 2010 and 2011. H.R. 2814 has been referred to the House Committee on Ways and Means. Check back for further updates.
2010 HSA COLAs Issued The IRS recently issued Revenue Procedure 2009-29 to announce the 2010 cost-of-living adjustments (COLAs) applicable to dollar limitations for health savings accounts (HSAs). These cost-of-living increases include adjustments to the annual contribution limitation and the requirements of a high deductible health plan. For details, click here.
IRS Issues 2009 IRA Reporting Forms and Instructions The IRS has issued the 2009 Instructions for Forms 1099-R and 5498, along with the 2009 versions of each of the forms. The most notable change to Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., is what is reported as the taxable amount for Traditional IRA distributions. Form 5498, IRA Contribution Information, was reformatted by adding nine additional boxes. These boxes were added so that transactions that were formerly reported in blank boxes (i.e. postponed contributions, repayments and certain catch-up contributions), will have effective with 2009 reporting, specific boxes in which the transactions are to be reported. And, while IRA trustees/custodians have been allowed to use Form 5498 to satisfy annual required minimum distribution (RMD) statement requirement for years, the newly formatted Form 5498 also provides specific boxes for RMD reporting along with detailed recipient instructions. Click the links below for the 2009 forms and instructions.
IRS Releases Comprehensive Auto Enrollment Guidance Final regulations regarding automatic enrollment arrangements were published February 24th, 2009. These regulations affect 401(k), 403(b) and 457(b) plans with automatic enrollment features and provide a broad range of guidance - some with immediate and others with 1-1-2010 effective dates.
Roth IRA Conversions – A Golden Opportunity for Advisors and Clients Imminent changes to the Roth IRA rules will open the door to more than $1 trillion dollars in potentially convertible retirement plan assets on January 1, 2010 – good news for clients and for advisors looking for new ways to grow their businesses.Click the following link to learn more. http://www.fpajournal.org/BetweentheIssues/CurrentEdition/RothIRAConversions
Convergent Retirement Plan Solutions, LLC,of Brainerd, MN, and Archimedes Systems, Inc. of Waltham, MA, have jointly developed a new web-based tool designed to help advisors identify optimal roth conversion ratio Convergent and Archimedes Systems, Inc. of Waltham, MA, announced today that they have jointly developed a next-generation Roth analytics platform to support the anticipated upsurge in Roth activity projected to occur throughout 2009 and 2010. The first product to be released on the new analytics platform, the “Roth IRA Conversion Optimizer,” serves the financial advisor community and will be released in Q1 2009. A release of a consumer-oriented version is scheduled for Q2 2009. Click here to view the press release.
Final Investment Advice Regulations Published, But Wait. . . Final investment advice regulations were published in the Federal Register on January 21, 2009, but not before White House Chief of Staff Rahm Emanuel signed a memorandum sent to all agencies and departments to stop all pending regulations until a legal and policy review can be conducted by the Obama administration. Based on the memorandum, it appears that the final investment advice regulations may be subject to further review and may not be effective on March 23, 2009, the published effective date. Convergent Retirement Plan Solutions will provide additional information as it is made available. As published, the final regulations provide general guidance on the exemption’s requirements, including computer model certification and disclosures by fiduciaries. The regulations also include a model form to assist advisors in satisfying the exemption’s fee disclosure requirement. In addition, the final regulations include a class exemption expanding the availability of investment advice. Click the link below for the full text of the final investment advice regulations. http://edocket.access.gpo.gov/2009/E9-710.htm Click here to view the memorandum from White House Chief of Staff Rahm Emanuel.
Convergent Retirement Plan Solutions, LLC, launches interactive, online retirement education and planning resource for near retirees. Convergent launched “Learning to Retire,” an interactive, on-line learning application designed to help educate near-retirees about the myriad decisions they will face as they prepare for the transition into retirement. Click here to view the press release
IRS Releases Notice 2009-9 On Friday, January 09, 2009, the IRS released Notice 2009-9. The notice provides guidance to financial institutions on reporting required minimum distributions for 2009 after enactment of the Worker, Retiree, and Employer Recovery Act (WRERA) of 2008. This notice states that Issuers of the 2008 Form 5498, IRA Contribution Information, should not put a check in Box 11, and that the RMD statements required under Notice 2002-27 need not be sent to IRA owners for 2009. The notice also clarifies that IRA owners who delayed taking their 2008 RMDs until April 1, 2009, are still required to take those distributions. Please click the following link for details. www.irs.gov/pub/irs-drop/n-09-09.pdf Click here for your training solution.
President Bush Signs RMD Legislation Click here for Information on Convergent’s Crucial Industry Update Webcast covering this recent change.
No Relief for 2008 RMDs Treasury Assistant Secretary for Legislative Affairs Kevin Fromer explained in a letter to Congressman George Miller (D-California), chairman of the House Education and Labor Committee, that the Treasury Department and Internal Revenue Service have determined that changes for 2008 required minimum distributions (RMDs) should not be undertaken. Mr. Fromer further stressed that individuals who are subject to the RMDs for 2008 should take their distribution under the existing rules, as the relief provided by Congress applies only to 2009. H.R. 7327, the “Worker, Retiree and Employer Recovery Act of 2008” is awaiting President Bush’s signature. News sources report that White House Press Secretary Tony Fratto says the bill will be signed within ten days of receipt by the President. Click here for Information on Convergent’s Crucial Industry Update Webcast covering this recent change.
President Bush's Signature on 2009 RMD Relief Imminent H.R. 7327, the “Worker, Retiree and Employer Recovery Act of 2008” is awaiting President Bush’s signature. News sources report that White House Press Secretary Tony Fratto says the bill will be signed within ten days of receipt by the President. This legislation provides relief from the 2009 required minimum distribution (RMD) rules applicable to IRA owners and plan participants age 70½ or older. Click here for Information on Convergent’s Crucial Industry Update Webcast covering this recent change.
Pension Relief Legislation On Thursday, December 11, 2008, the U.S. Senate passed pension relief legislation affecting both IRAs and employer-sponsored qualified retirement plans. The bill, H.R. 7327, which has now been passed by both the House and the Senate and is awaiting the President’s signature, contains a number of short-term changes to the federal retirement plan laws. These changes are designed to help buffer American taxpayers and businesses from some of the more adverse consequences arising under current federal law as a result of the current economic crisis. H.R. 7327 is being cited as the “Worker, Retiree, and Employer Recovery Act of 2008.” Click the following link to view the bill http://thomas.loc.gov/ then search the bill number H.R. 7327 in the Search Bill Text (select by Bill Number radio button) Click here for Information on Convergent’s Crucial Industry Update Webcast covering this recent change.
403(b) Relief On Thursday, December 11, 2008, the IRS issued Notice 2009-3 providing temporary relief during 2009 for public schools and other tax-exempt entities in regards to the new written plan requirements mandated under the final 403(b) regulations that are generally effective January 1, 2009. Click the following link to view the notice. http://www.irs.gov/pub/irs-drop/n-09-03.pdf Click here for Information on Convergent’s Crucial Industry Update Webcast covering this recent change.
2009 COLAs Issued The IRS recently issued News Release IR-2008-118 and Notice 2008-102 to announce the cost-of-living adjustments (COLAs) applicable to dollar limitations for employer-sponsored retirement plans and other items for tax year 2009. For details, click here.
Qualified Charitable Distribution Provision Extended Emergency Economic Stabilization Act of 2008
DOL Issues IRA/401(k) Advice Guidance On August 22, 2008, the Department of Labor (DOL) published three significant documents pertaining to investment advice programs for IRA holders and qualified plan participants. Please click on the following link for further information about the recent DOL initiatives. http://www.brainshark.com/convergentrps/vu?pi=586758293
Convergent Retirement Plan Solutions, LLC Announces the Addition of SEI and The Calvert Group to its Growing List of IRA Clients Brainerd, MN - July 10, 2008 - Convergent Retirement Plan Solutions, LLC announced that it was recently selected by SEI to help support its IRA client base of over 300,000 IRA holders through a comprehensive array of IRA documentation and technical support services. In addition, Convergent announced that it has been selected by The Calvert Group to provide similar IRA documentation and consulting support services. “Since our inception in 2004, Convergent has set out to distinguish itself through its industry expertise, flexible solutions and best-of-class customer service” said Connie Spaulding, Convergent’s Director of Sales and Marketing. “It’s extremely rewarding for us to have these core business principles validated by such well-respected firms as SEI and The Calvert Group.” According to Michael Harvey who heads SEI’s IRA Administration Group, “I was intrigued with Convergent’s business model; and the more I learned, the more obvious it became that it matched the needs of SEI. The staff at Convergent is extremely focused on building a holistic solution that fulfills the ever-changing needs of our unique environment.” Stan Young, Vice President of Client Services for Calvert Distributors, Inc. echoed similar sentiments. “Having worked with several of the principals of Convergent in the past, I was confident that Calvert’s document needs would be fully addressed when we made the decision to switch to Convergent. Convergent took the time to understand our business model and documentation needs and worked hand-in-hand with us to assure appropriate verbiage and data capture consistent with our business.” SEI and The Calvert Group join a growing list of marquee financial service firms that have recently turned to Convergent Retirement Plan Solutions, LLC for ongoing support of their organization’s retirement initiatives. About SEI About The Calvert Group About Convergent Retirement Plan Solutions The HEART Act Provides Tax Relief For Military On June 17, 2008, President Bush signed into law the Heroes Earnings Assistance and Relief Tax Act of 2008, commonly referred to as the HEART Act. The HEART Act provides tax relief and incentives for members of the military and their families. While the HEART Act includes a wide variety of tax relief and incentive provisions, only the most significant retirement plan related provisions are identified below. Qualified Plans to Provide Additional Death Benefits Plan Distributions Due To Severance Of Employment It is important to note, however, if amounts are distributed under this provision, the individuals are not permitted to make elective deferrals or employee contributions to the plan during the six-month period beginning on the date of the distribution. This provision is effective for years beginning after December 31, 2008. Qualified Reservist Distributions Made Permanent Military Death Gratuities And SGLI Are Eligible For Rollover Differential Pay Treated As Wages For the full text of the bill, go to www.thomas.gov and search for HR 6081 by bill number. The most current version is H.R.6081.ENR.
Ben Norquist to present at FRC Retirement Conference Mr. Ben Norquist, President and CEO of Convergent Retirement Plan Solutions, will be among industry experts presenting on the topic of “Empowering Advisors in the Retirement Market” at the FRC Retirement Conference June 18th, 2008, in Boston, MA. For more information - FRC’s 4th Annual Retirement Forum.
2009 HSA COLAs Issued On May 13, 2008 the IRS issued Revenue Procedure 2008-29 to announce the 2008 cost-of-living adjustments (COLAs) applicable to dollar limitations for health savings accounts (HSAs). These cost-of-living increases include adjustments to the annual contribution limitation and the requirements of a high deductible health plan. For details, click here.
Relief for Direct Deposit of Economic Stimulus Payments Made to IRAs and Other Tax-Favored Account On April 30, 2008, the IRS released Announcement 2008-44 which allows for Economic Stimulus Payments directly deposited into individual retirement arrangements (IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (MSAs), Coverdell Education Savings (ESAs), or a qualified tuition program accounts (QTP or section 529 program) to be withdrawn tax-free and penalty-free. This relief is designed to help taxpayers who may have been unaware that by choosing direct deposit for their entire regular tax refund, they were also choosing to have their stimulus payment directly deposited as well. If a taxpayer elected a split refund, however, their stimulus payment will be paid by a paper check. To qualify for the special tax relief, individuals must withdraw from the tax-favored accounts listed above, an amount less than or equal to the amount of their Economic Stimulus Payment no later than the deadline for filing the taxpayer’s income tax return for 2008, plus extensions. In the case of a Coverdell ESA, the deadline for the distribution is the later of May 31, 2009, or the time for filing the taxpayer’s income tax return for 2008, plus extensions. Financial organizations receiving the direct deposits of Economic Stimulus Payments and making these distributions should report the deposit and distribution in the usual manner. According to Announcement 2008-44, it will be the responsibility of the taxpayer to report on his or her 2008 Form 1040 that the amount withdrawn is not subject to federal taxes or penalties under the Code. Details on reporting these withdrawals and claiming the relief will be include in tax forms and instructions for 2008. Click the link below for the full text of Announcement 2008-44.
PPA Guidance Issued by IRS On March 5, 2008, the IRS released Notice 2008-30. This notice contains guidance on distribution-related provisions of the Pension Protection Act (PPA) that became effective in 2008. PPA provisions addressed in the notice include rollovers from eligible retirement plans to Roth IRAs, additional survivor annuity options and interest rate assumptions for lump sum distributions. In addition, Notice 2008-30 also provides guidance on amending plans to require that distribution of excess deferrals include gap period earnings. To listen to a brief update (less than 5 minutes) on two of the more interesting topics related to employer plan to Roth IRA rollovers contained in Notice 2008-30, click the following link. Click the link below for the full text of Notice 2008-30. IRS Issues 403(b) Guidance On November 27, 2007, the IRS issued the much-anticipated, follow-up 403(b) guidance in the form of Revenue Procedure 2007-71. As expected, this IRS pronouncement contains model 403(b) language that may be used by employers as they prepare to meet the new employer-level “written plan” requirements outlined in the final 403(b) regulations issued earlier this year. In addition to providing model plan language, however, Rev. Proc. 2007-71 contains crucial guidance concerning transition rules for 403(b) arrangements established prior to January 1, 2009. Given the scope of change that is occurring within the 403(b) market and the level of confusion generated by the final 403(b) regulations, this transition guidance represents “must-have” information for virtually all 403(b) providers. I encourage you to listen to a brief summary of Rev. Proc. 2007-71 (just over 2½ minutes long) by clicking the following link. http://www.brainshark.com/convergentrps/vu?pi=838482464 At Last . . . Final QDIA Regulations Issued On October 24, 2007, the Department of Labor (DOL) published the long-awaited final regulations on qualified default investment alternatives (QDIAs). These critical regulations provide the safe harbor guidance necessary for plan sponsors to minimize their fiduciary exposure for default investments under automatic enrollment 401(k) plans. The final regulations, which are effective December 24, 2007, put to rest what has arguably been one of the most hotly contested issues within the defined contribution market in recent memory. To the satisfaction of some industry groups and the dismay of others, the final regulations do not include stable value funds as a QDIA. In addition to resolving the issue of stable value funds as a type of QDIA, the final regulations include a number of refinements and clarifications to the proposed regulations based on written comments received from over 120 interested parties including, among other things, an explicit 90-day restriction on the assessment of any surrender charges, liquidation or exchange fees or redemption fees on QDIAs. Convergent Retirement Plan Solutions, LLC is conducting an immediate, in-depth analysis of the final regulations in preparation for an upcoming live, interactive web-based workshop designed to help financial executives understand the final QDIA regulations including the related administrative requirements and business development opportunities. To get more information regarding Convergent’s upcoming, web-based QDIA workshop, contact us at 218-824-4900. For access to the final regulations, please visit http://www.dol.gov/ebsa/regs/fedreg/final/07-5147.pdf. 2008 COLAs Issued On October 18, 2007, the IRS issued News Release IR-2007-171 to announce the 2008 cost-of-living adjustments (COLAs) applicable to dollar limitations for employer-sponsored retirement plans. On this same day, the IRS released Revenue Procedure 2007-66 which included cost-of-living increases to figures relating to deductions for Traditional IRA contributions, Roth IRA contribution eligibility, the saver's tax credit, as well as dollar limitations associated with medical savings accounts (MSAs). For details, click here. Final 403(b) Regulations Issued On July 23, 2007, the IRS issued the much anticipated final 403(b) regulations. The final regulations, which are the first comprehensive regulations issued for 403(b) plans in over 43 years, not only encompass the legal changes made to 403(b) plans since 1964, but also make significant changes to 403(b) plans. With new plan requirements and operational responsibilities, the final regulations attempt to put the rules for 403(b) plans on the same level as 401(k) and 457(b) plans. Sponsors of 403(b) contracts, administrators, participants and beneficiaries will all be affected by the final regulations. The final regulations are effective July 26 2007, and generally apply to taxable years beginning on or after December 31, 2008. Please click the following link for the full text of the final 403(b) regulations. Click the following link for a special edition of the IRS’s Employee Plan News. Final Roth Regulations Issued On April 27, 2007, the IRS released final regulations on the distribution and taxation of Roth 401(k) and Roth 403(b) assets. These regulations adopt, with certain modifications, the proposed regulations that were issued on January 26, 2006. Guidance on the reporting requirements and conforming amendments requirements are also included in these final regulations. In addition, these final regulations amend the existing Roth IRA regulations to reflect the interaction of designated Roth 401(k) and Roth 403(b) assets with Roth IRAs. These final regulations, which are effective April 30, 2007, generally apply to taxable years beginning on or after January 1, 2007. Please click here for your training solution. Click the link below for the full text of the final Roth regulations. http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/E7-8125.htm2006 IRA/HSA Contribution Deadline Extended for Northeastern Storm Victims The Internal Revenue Service (IRS) released News Releases NJ-2007-22, NY-2007-18 and NH-2007-35 granting tax relief to taxpayers in the Presidential Disaster Area that was struck by severe storms and flooding April 14-18, 2007. The deadline for affected taxpayers to file returns, pay taxes and perform other time-sensitive acts falling on or after April 14, 2007, has been postponed to June 25, 2007. As a result, these affected taxpayers have until June 25, 2007, to make contributions to an IRA or HSA for tax year 2006 that were otherwise due to be made on or before April 17, 2007. This relief also includes the filing of Form 5500 series returns Affected taxpayers include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals’ offices are in the covered disaster area, are also entitled to relief. In addition, certain relief workers assisting in the relief activities are also eligible for tax relief. Click the link below for the full text of the combined IRS new release which includes the counties that are in the Presidential Declared Disaster Area. www.irs.gov/newsroom/article/0,,id=169765,00.html 2007 Annual Reports on the Future of Social Security and Medicare Each year, the Trustees of the Social Security and Medicare trust funds report on the current and projected financial status of the two programs. It comes as no surprise that the 2007 Annual Reports show the financial condition of both programs to be problematic. Social Security’s current annual surpluses of tax income over expenditures will soon begin to decline and then turn into rapidly growing deficits as baby boomers retire. Medicare’s Hospital Insurance Trust Fund is expected to pay out more in hospital benefits during 2007 than it receives in taxes and other dedicated revenues. The growing annual deficits in both programs are projected to exhaust Medicare Hospital Insurance reserves in 2019 and Social Security reserves in 2041. This drawdown of reserves and the general revenue transfers are placing increasing pressure on the Federal budget. In fact, for the first time, a “Medicare funding warning” is being triggered, signaling that non-dedicated sources of revenues (primarily general revenues) will soon account for more than 45 percent of Medicare’s expenditures. By law, this warning requires that the President propose, and Congress consider, remedial action. Click the link below for a summary of both the Social Security and Medicare report. www.treas.gov/offices/economic-policy/reports/summary-of-reports-2007.pdf IRS Releases Final 415 Regulations On April 4, 2007, the IRS issued final regulations governing Internal Revenue Code Section (IRC Sec.) 415 annual additions to qualified retirement plans. These regulations which were released under Treasury Decision 9319 provide a comprehensive update to the regulations that were originally released in 1981. Much of the interim guidance and statutory changes that has been released since 1981, including changes to IRC Sec. 415 made by the Pension Protection Act of 2006, have been included in the final regulations. The regulations which are effective April 5, 2007, generally apply to limitation years beginning on or after July 1, 2007. Click the link below for the full text of Treasury Decision 9319. http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/E7-5750.pdf April 17 is Deadline for Tax Year 2006 IRA Contributions The IRS has issued News Release IR-2007-15 which confirms that taxpayers across the nation will have until Tuesday, April 17, 2007, to file their 2006 returns and pay any taxes due. The April 17, 2007, deadline also applies to tax year 2006 contributions to Traditional and Roth IRAs. Taxpayers will have extra time to file and pay their taxes as well as deposit IRA contributions because April 15 falls on a Sunday in 2007, and the following day, Monday, April 16, is Emancipation Day, a legal holiday in the District of Columbia. Click the link below for the full text of News Release IR-2007-15. www.irs.gov/newsroom/article/0,,id=167194,00.htmlPPA Guidance Issued by IRS On January 10, 2007, the IRS released IRS Notice 2007-7. This notice contains guidance on Pension Protection Act (PPA) provisions that relate primarily to distributions from employer retirement plans and IRAs that are effective in 2007 or earlier. PPA provisions addressed in the notice include interest rate assumptions for lump sum distributions, hardship distributions from 401(k) and similar plans, early distributions to terminated public safety employees, rollovers from employer retirement plans to Inherited IRAs by non-spouse beneficiaries, qualified charitable distributions from IRAs, distributions to pay for health insurance for retired public safety officers, earlier vesting of certain employer contributions, and new rules for the notice, consent period for distributions. Click the link below for the full text of Notice 2007-7. www.irs.gov/pub/irs-drop/n-07-07.pdf President Bush Signed the Tax Relief and Health Care Act of 2006 On December 20, 2006 , President Bush signed the Tax Relief and Health Care Act of 2006 into law. This Act contains numerous provisions that will enhance Health Savings Accounts (HSAs), one of which will allow for a transfer of Traditional or Roth IRA assets to an HSA. The following which represents a summary of the changes are generally effective for the 2007 tax year. Contribution Limits Increased Contribution Limit Not Prorated for Partial Year of Eligibility Cost-of-Living Adjustments Announcement FSA Coverage No Longer Means HSA Ineligibility FSA/HRA Transfers to HSAs Exception for Comparable Contributions Made by Employers One Time IRA Distribution to Fund HSA Retirement Services Providers Accelarate Channel Training with Convergent and Brainshark Convergent's On-Demand Training Powered by Brainshark helps Firms Drive Revenue with Customized Channel Education Waltham, MA - December 12, 2006 -- Brainshark, Inc., the leader in on demand communications that enable sales and marketing effectiveness, today announced that Convergent Retirement Plan Solutions, LLC has selected Brainshark to support channel sales and product training for its financial services management clients. Using Brainshark Rapid Learning, Convergent will extend their expertise to help clients train their sales channels and plan sponsors on complex retirement products and investment concepts. “The retirement services market is extremely competitive, and recent regulatory changes such as the Pension Protection Act of 2006 add to the complexity and confusion in retirement services distribution,” said Ben Norquist, President, Convergent Retirement Plan Solutions, LLC. “Providers that are able to educate channels more effectively than their peers and provide greater value to the channel relationship gain a sustainable competitive advantage. Working with Brainshark, we're helping our clients increase their market reach and impact by delivering valuable education that channels can access anytime in a compelling and convenient format.” Utilizing Brainshark Rapid Learning, Convergent's topic experts can quickly and easily develop engaging, voice-enriched online training courses, enroll clients and their broker channels in required training, and track and report on completion. The ability to easily modify and update content allows Convergent to offer highly customized courses to meet client requirements. The courses will be offered as part of a Convergent's blended training offerings that include on-site workshops, live web conferences, and on-demand learning. Convergent will also use the Brainshark Gateway for Microsoft Live Meeting to capture sessions that are delivered in a Live Web conference via Microsoft Office Live Meeting, and make those sessions available in a flexible and trackable on-demand format for those who missed the live event. "Convergent and Brainshark have many joint customers who recognize the strategic importance of training in gaining mindshare with their channels and increasing sales opportunities,” said Joe Gustafson, CEO, Brainshark, Inc. “Not only are we thrilled to help Convergent expand the reach of their own expertise in Retirement Services topics, but we're pleased to help the financial services firms we serve today continue to increase their sales and channel readiness with Brainshark." Upcoming Event About Convergent About Brainshark, Inc. 2007 COLAs Issued On October 18, 2006 , the IRS issued News Release IR 2006-162 to announce the 2007 cost-of-living adjustments (COLAs) applicable to dollar limitations for employer-sponsored retirement plans. Also, on November 9, 2006 , the IRS released Revenue Procedure 2006-53 which included cost-of-living increases to figures relating to deductions for Traditional IRA contributions, Roth IRA contribution eligibility, the saver's tax credit, as well as dollar limitations associated with health savings accounts (HSAs) and medical savings accounts (MSAs). For details, click here. President Bush Signs The Pension Protection Act of 2006 Into Law! On August 17, 2006, President Bush signed the Pension Protection Act of 2006 into law. The most comprehensive pension reform legislation in over 30 years affects virtually every type of tax-qualified retirement savings vehicle including defined benefit pension plans, 401(k) and 403(b) plans as well as IRAs. Regardless of your role in the financial services industry (i.e., sales, marketing, compliance, operations, etc.) this far-reaching pension reform bill is likely to affect you, your colleagues, and your clients. The following represents a summary of the key retirement savings provisions (some of which take effect January 1, 2007). Changes to defined benefit pension funding rules and PBGC pension guarantees ERISA preemption from state laws restricting use of auto-enrollment Safe harbor rules for auto-enrollment 401(k) pl Tax-free IRA withdrawals for charitable purposes Rollovers of employer plan distributions to nonspouse beneficiary IRAs New prohibited transaction exemption for investment advice Direct payment of tax refunds to IRAs Direct rollovers from employer-sponsored plans to Roth IRAs Fiduciary relief for negative consent asset mapping ERISA 404(c) protection for certain default investment arrangements Permanent extension of EGTRRA retirement savings provisions Permanent extension of Saver's tax credit Rollover of after-tax dollars to 403(b) arrangements Penalty-free withdrawals for certain reservists called to active duty Penalty-free withdrawals for police, firefighters and other public safety employees Increased IRA contribution limits in certain bankruptcy situations Diversification options for certain contributions invested in employer securities Combination defined benefit/401(k) plans (i.e., DB(k)) Faster vesting requirements for employer contributions For the full text of the bill, please click on the link below. President Bush Signs the Heroes Earned Retirement Opportunities (HERO) Act President Bush signed The Heroes Earned Retirement Opportunities (HERO) Act (H.R. 1499) into law on May 29, 2006 . The HERO Act expanded the definition of compensation for purposes of making Traditional and Roth IRA contributions to include nontaxable combat pay received by military personnel serving in combat zones. Prior to the passage of the HERO Act, nontaxable combat pay was generally not eligible compensation for purposes of making IRA contributions. The HERO Act is effective for taxable years beginning after December 31, 2003 . With this retroactive effective date, any military personnel who received combat pay during 2004 or 2005 and were otherwise eligible to make Traditional IRA or Roth IRA contributions will have a three year period to make contributions for those years. These retroactive contributions must be made no later than May 28, 2009 . The Tax Increase Prevention and Reconciliation Act Will Open the Roth IRA Conversion Flood Gate On May 17, 2006 , President Bush signed the Tax Increase Prevention and Reconciliation Act (H.R. 4297) into law. The one r retirement plan-related provision included in the new law will remove the eligibility requirements that are currently in place for Roth IRA conversions. Current law prohibits anyone with modified adjusted gross income in excess of $100,000 and/or a married person who files a separate tax return from converting their Traditional or SIMPLE IRAs to Roth IRAs. These eligibility requirements will be eliminated beginning in 2010. Beginning in 2010, when the eligibility requirements are lifted, anyone will be able to convert a Traditional or SIMPLE IRA to a Roth IRA. Additionally, IRA holders who convert in 2010 will have the option of including the taxable conversion amount in income ratably over two years (2011 and 2012) or including the entire amount in income in 2010. All of the other retirement plan-related provisions which had been included in earlier versions of H.R. 4297 were stripped from the final version of the bill. However, there is talk amongst legislators that the passage of H.R. 4297 is just the first step of a two-step process, with another bill to follow. Some of the retirement plan-related provisions not included in the final version of H.R. 4297 may find their way into H.R. 2830, pension reform legislation, which is now in the conference committee negotiation stage. Legislators are still striving to reach an agreement on H.R. 2830 by their self-imposed deadline of Memorial Day. FDIC Insurance Limits for IRAs and Certain Other Retirement Accounts to Under the FDIC's new rules, all deposits at the same insured bank that are in this broad category of The new law that allowed the FDIC to raise the limits also established a method for considering an increase in the limits on all deposit accounts (including retirement accounts) every five years starting in 2011. These increases will be based, in part, on inflation. For more information, please click on the link below. http://www.fdic.gov/news/news/press/2006/pr06029.html Baucus Bill Will Aid Retirement Savings, National Savings to Improve America's Economic Competitiveness Washington , DC -- Legislation has been introduced by U.S. Senator Max Baucus (D-Mont.), Ranking Democrat on the Senate Finance Committee, which seeks to boost America 's economic competitiveness through personal and national savings. Baucus, a conferee on the pension reform bill currently under consideration, says that helping Americans increase their personal savings boosts investment that is essential to innovation and economic growth. Likewise, restoring fiscal responsibility to government spending can improve our country's ability to invest. The Savings Competitiveness Act of 2006 will increase employee access to retirement savings, and restore fiscal responsibility to the Federal budget through strong pay-go rules. It will be the third in a series of Baucus bills to enhance American economic competitiveness. "Individuals, businesses and governments all have to live within their means to maintain financial health. Money in the bank affords opportunities to invest, and the ability to deal with unexpected crises," said Baucus. "Savings can put America on firmer financial footing, and enhance our ability to compete worldwide." Click the link below for the full text of the bill. http://finance.senate.gov/press/Bpress/2005press/prb031606leg.pdf IRS Offers Relief to Employers with SIMPLE IRA Plan The Employee Plans division of the IRS has announced that it is offering employers with SIMPLE IRA plans an extended time to update their plans for the provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Employers have until December 31, 2006 , to either adopt the latest version of an IRS model SIMPLE IRA plan (revised August 2005) or adopt a prototype document updated with the EGTRRA provisions. If a taxpayer has an IRS SIMPLE IRA plan with a revision date of March 2002 or later, it does not need to take any action as the plan is up-to-date. The original deadline for amending SIMPLE IRA plans was December 31, 2002. This relief is coming as a result of findings during the initial phase of the examination project on SIMPLE IRA plans established by the Employee Plans division in January 2005. Examiners discovered that many employers had failed to update their plans for the EGTRRA provisions. Plans not in compliance with this requirement could lose the retirement savings and tax benefits these plans provide to both the employers sponsoring them and the employees participating in them. The IRS is sending an information letter regarding the SIMPLE IRA plan amendment relief to 190,000 employers that have been identified as offering SIMPLE IRA plans. This mail out effort will begin in early March and continue each week for the next three to four months. The IRS recognizes that many self-employed individuals with SIMPLE IRA plans will not be reached by this mailing. The IRS has also sent letters to approximately 185 drafters of prototype SIMPLE IRA plans, asking them for assistance in getting the word out. For more information, please click the link below. www.irs.gov/retirement/article/0,,id=154950,00.html Additional Roth 401(k) Regulations Issued, Distribution Issues Addressed The IRS, on January 25, 2006 , released the second round of Roth 401(k) regulatory guidance in less than a month. These newly released regulations provide guidance on many of the distribution-related issues left unanswered by the regulations issued on December 29, 2005. Al though issued in proposed format, the preamble to the regulations stipulates that taxpayers may rely on the guidance provided in the proposed regulations until final regulations are issued. Please click here for your training solution. Please click the link below for the proposed regulations relating to designated Roth accounts. Mr. Norquist to Speak at NTSAA National Conference Ben Norquist, CPC, CISP, president of Convergent Retirement Plan Solutions, LLC will present “ Beyond Investments: A Holistic Approach to Retirement Income Planning ” at this year's National Conference of the National Tax Sheltered Accounts Association (NTSAA) on February 4th and 5th in Indian Wells, California. The NTSAA's National Conference is the premier forum for providers, agents, brokers, sales and marketing managers, staff, plan sponsors and school business and finance officials involved with the §403(b) and §457(b) markets. The NTSAA's National Conference is designed to provide insightful information on retirement issues relating to the not-for-profit and public markets, technical education and legislative updates. Sessions this year include non-ERISA and expanded ERISA-related topics, compliance issues, technical and regulatory updates, market and product trends, selling skills and marketing strategies and effective practice management. The program is designed to offer the latest information on the factors impacting the retirement markets, plan design and compliance. For more information on NTSAA's National Conference, refer to www.ntsaa.org/2006NatlConf.php. Convergent and Archimedes Join Forces to Create Web Retirement Income Planning Toolkit Convergent Retirement Plan Solutions, LLC of Brainerd, MN, and Archimedes Systems, Inc. of Waltham, MA, announced today that they have formed a strategic alliance to focus on the design and development of web-based retirement income planning tools and resources. Under the new alliance, Convergent 's senior consultants will collaborate with Archimedes' senior development team in the design, testing and ongoing enhancements of retirement income planning software that will be used by financial professionals as well as individual investors. “The synergy between the two firms is very strong,” said Ben Norquist , president of Convergent . “Archimedes has been developing customized, high-end financial planning software for the top financial services firms for over two decades. My team is very excited to be working with such an experienced team of designers and developers.” Martin Leinwand, president of Archimedes, echoed Norquist's comments, adding, “We're very pleased to have the opportunity to collaborate with such an experienced team of retirement industry veterans. The senior team members at Convergent are widely recognized experts in the retirement services industry with a proven track record of designing next generation solutions for the retirement services industry.” Scheduled for release in Q1 of 2006, the alliance's first jointly designed retirement income planning platform will be geared toward the financial advisor community. "For our first release, we have designed a robust, yet manageable, retirement income planning toolkit,” said Norquist. “Our goal is to help advisors stake out turf in the burgeoning baby-boomer retiree market. The reports that our tool generates will address the hot issues for this generation: dual-career retirement, semi-retirement, and part-time work.” According to Norquist, subsequent releases scheduled for the second and third quarters of 2006 will incorporate more advanced features such as integrated, multi-generational RMD stretch IRA planning concepts as well as Roth conversion analysis and advanced 72(t) analysis. Convergent Retirement Plan Solutions, LLC is a firm comprised of seasoned retirement industry veterans dedicated to creating tailored compliance, education and business development solutions for the retirement services industry. The principals of Convergent have hands-on experience in virtually all aspects of the retirement services industry from retirement product conceptualization and development to marketing, sales and distribution, to servicing and administration. This “in-the-trenches” perspective allows Convergent to provide real-world solutions to the real-world challenges faced by retirement plan providers. For more information regarding Convergent , refer to www.convergentrps.com or contact Ben Norquist at 218-824-4900. Archimedes Systems designs, builds and delivers personalized decision-making tools for the financial services and employee benefits industries. For over 20 years, Archimedes' staff has provided financial institutions and plan sponsors with print and Web-enabled Archimedes-hosted tools that perform retirement, education, and other personalized employee communications. In the college funding market, Archimedes is a leading business-to-business provider of college financing and Section 529 decision support tools. Financial service professionals, plan sponsors and benefit consultants can visit www.archimedes.com to learn more about Archimedes' products and services. IRS Issues Final Roth 401(k) Regulations Following months of industry anticipation, the IRS issued final Roth 401(k) regulations on December 30, 2005, providing industry guidance for some of the practical issues regarding the establishment and administration of Roth 401(k) arrangements. Click the following link for Treasury Decision 9237. www.ustreas.gov/press/releases/reports/roth401k_reg_attch.pdf Gulf Opportunity Zone Act (GOZA) On December 21, 2004 , President Bush signed the Gulf Opportunity Zone Act (GOZA) of 2005 . GOZA will provide tax relief for the recovery of the regions of Louisiana , Mississippi and Alabama devastated by Hurricane Katrina. The bill also provides charitable giving incentives and tax relief to families and individuals affected by Hurricanes Rita and Wilma. This is similar to the relief already provided to the victims of Hurricane Katrina when Congress passed the Katrina Emergency Tax Relief Act . Click the following link for a summary of the Act. http://waysandmeans.house.gov/media/pdf/taxdocs/120605gozonesummary.pdf IRS Releases Notice 2005-92 Providing Guidance On Katrina Legislation The IRS has released Notice 2005-92 to offer guidance on the changes brought about by the Katrina Emergency Tax Relief Act of 2005 (KETRA). The Notice is broken down into sections to assist individual taxpayers and employers with retirement plans in applying the loan and distribution provisions within KETRA. The IRS also identified Form 8915 as the mechanism they will use to receive information from taxpayers. The Form 8915 should be available soon. Click the following link to view Notice 2005-92. www.irs.gov/pub/irs-drop/n-05-92.pdf Katrina Emergency Tax Relief Act of 2005 (KETRA) Signed into law on September 23, 2005, by the President, the Katrina Emergency Tax Relief Act of 2005 (KETRA) provides for relief and incentives for those impacted by Hurricane Katrina. Read more . . . Temporary Regulations For IRA Annuity Conversions To Roth IRA The IRS has released temporary regulations to address the issue of determining the fair market value of insurance products during a conversion to a Roth IRA. In certain instances products were being sold that would have a deflated fair market value at the time of conversion , resulting in a transaction that the IRS would view as underreporting of the true taxable amount. The regulations provide guidance on valuing the annuity involved in the transaction to prevent any abuses. They are effective for distributions on or after August 19, 2005 . The regulations can be found here . . . www.irs.gov/pub/irs-regs/td_9220.pdf RMDs With Qualified Disclaimers Clarified By IRS In Revenue Ruling 2005-36 , the IRS has helped to eliminate some of the about handling required minimum distributions (RMDs) when a beneficiary disclaimer is also being used. The ruling, through three different scenarios, reinforces the opinion that RMDs may be taken from an IRA that is later disclaimed, an issue that arises when an RMD needs to be satisfied before year - end and the beneficiaries have yet to decide what to do with the account. The IRS clarified that any RMD taken by a beneficiary that later disclaims must also eventually be accompanied by the earnings attributable to the RMD amount. Additional details from the IRS can be found here . . . www.irs.gov/irb/2005-26_IRB/ar11.html IRS To Increase EP Scrutiny Carol Gold, director of Employee Plans, Tax-Exempt and Government Entities Division , recently informed the employee benefits community of the IRS' s plan to increase its efforts in the area. Although Gold indicated that the employee benefits area isn't in terrible disarray, she does believe that the “EP community hasn't been immune to the lure of hucksters or promoters.” Her concern stems partly from the fact that enforcement has slipped in the last few years and that the IRS has noticed some trouble spots recently. Gold indicated that increased examinations will be occurring, as has been the trend starting last year. Changes at the IRS to cover the new initiatives include hiring 55 new agents, modernizing its infrastructure, improving review and filing in the Form 5500 area, and working with the Office of Professional Responsibility to help locate practitioners not up to professional standards. Organizations performing in the employee benefits area would be well advised to review current processes and procedures to evaluate adherence to compliance standards. Convergent Retirement Plan Solutions announces Michael Book as new head of national sales Brainerd, Minnesota [April, 2005] – Convergent Retirement Plan Solutions, LLC, a leading outsource provider to the retirement services industry, announced today the addition of Michael Book as the firm's new head of national sales. Mr. Book will report directly to Ben Norquist , president and co-founder of Convergent Retirement Plan Solutions, LLC. “Mike brings a wealth of retirement industry experience to the table” said Mr. Norquist. “His diverse expertise in the IRA, small plans and defined contribution marketplace make him a perfect fit for Convergent .” In his new role, Mr. Book will have direct responsibility for all of Convergent 's marketing and business development initiatives on a nationwide basis. “Over the years, I've come to appreciate Ben's ability to surround himself with talented people and use the combined talents of those people to develop truly innovative solutions within the retirement services industry” said Mr. Book. “I'm impressed with the team of industry veterans Ben has assembled and I believe Convergent 's value proposition is perfectly aligned with the evolving needs of the retirement services marketplace so I'm extremely excited to be joining Convergent 's executive management team.” Prior to joining Convergent , Mr. Book held senior-level sales positions with two of the nation's leading retirement service outsource providers, BISYS Retirement Services and Universal Pensions, Inc. (UPI). Convergent Retirement Plan Solutions, LLC is a leading provider of outsourced solutions for the retirement services industry. Through a diverse array of compliance, training and business development solutions, Convergent helps the nation's leading financial services organizations excel in the IRA, small business and corporate retirement plans market place. For more information, contact Ben Norquist at Roth 401(k) The Roth IRA took the retirement world by storm in 1998 with benefits such as tax free distributions and penalty free withdrawals of basis. The major limiting factor for many individuals was the income limits that prevented them from contributing to the IRAs, 2006 will be a good year for those taxpayers. Congress passed the law making Roth 401(k)s a reality in 2001 and people have waited patiently for the 2006 effective date. Like the Roth IRA contributions will be after tax and then grow tax-free for retirement. The differences include no income limits and that the contributions are only limited as any other deferral into a 401(k) plan. Read the proposed regulations here . . . www.treas.gov/press/releases/reports/rothproposed.pdf Orphan Plans In response to requests from financial organizations, recordkeepers and plan participants the Department of Labor (DOL) has released proposed regulations to help deal with so called “orphan” plans. Orphan plans are typically plans that have been abandoned by their employers (typically due to bankruptcies, mergers and acquisitions) leaving the assets held by trustees or custodians that do not have the ability to terminate the plans and distribute the assets. The DOL has proposed that the entity holding the plan assets may become a newly defined qualified termination administrator (QTA) and assist in closing out the plan. The proposal tries to make the process as efficient and cost effective as possible once it has been determined the plan is abandoned. Read more from the DOL here . . . http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.access.gpo.gov/2005/05-4464.htm Safe Harbor Rollover March 28, 2005 is the effective date for the new safe-harbor rollover requirements forcing employers to determine how they wish to handle them. In an attempt to help plan sponsors and participants, law changes were made to have small plan balances of terminated participants rolled into IRAs. The changes allow employers to cash out terminated participants that have balances between $1,000 and $5,000 by rolling those balances to IRAs at a service provider they have chosen, these rules may be applied to smaller balances as well. Decisions needed by plan sponsors included determining who to use as a Safe Harbor IRA Provider (SHIP) and ultimately, when amending the plan document, whether to roll the balances over $1,000 or to elect not to distribute those balances at all. www.irs.gov/irb/2005-03_IRB/ar10.html |
