The Employee Retirement Income Security Act of 1974, also known as ERISA, was originally signed into law by President Gerald Ford and established certain minimum standards for pension plans in private-sector jobs. It also outlined rules on the effect of federal income taxes on employee benefit plans.
As is commonplace with any piece of legislation, there have been multiple amendments made to ERISA over the years. In December, for example, President Barack Obama signed the Multiemployer Pension Reform Act of 2014, which had some impact on specific portions of ERISA and created a new “critical and declining” funding status. The plan also permanently extended certain provisions of the Pension Protection Act that would have expired at the end of last year, and drastically altered the partitioning rules under ERISA. Specifically, it removed a partition limit that had only been allowed for “orphan” beneficiaries, attributable to bankrupt employers.
The Internal Revenue Service (IRS) also announced increased contribution limits for retirement plans for 2015, and has regularly done so over the years. Today, the annual Salary Deferral Limit for 401(k)s, 403(b)s and the majority of 457 plans is up to $18,000.
When these types of changes to ERISA occur, the general public might not necessarily have a solid grasp on exactly how it affects their retirement planning. Therefore, it is important to work with an attorney to understand what actions are necessary to take when these types of changes occur.
For more information, speak with a knowledgeable attorney at Marcari, Russotto, Spencer & Balaban Contact us online or call (888) 351-1038 to set up a meeting at one of our offices in North Carolina, South Carolina or Virginia.
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