8 Things to Do by New Year’s Eve

1. As we careen toward 2015 with ever-accelerating speed, the IRS has issued a reminder about year-end deadlines relevant to retirement plans. Following are eight “to dos” the IRS suggests.

1. Distribute 2013 401(k) excess contributions and excess aggregate contributions (both adjusted for 2013 income and losses).

2. Establish a qualified retirement plan for 2014 (you can’t make retroactive elective deferrals.)

3. Distribute 2014 required minimum distributions (RMDs) (you have until April 1, 2015, to pay the first RMD for a participant who turned 70 ½ in 2014, or for a participant other than a 5% owner, who retired in 2014.)

4. Revoke a single-employer defined benefit plan sponsor’s previous election to use a funding balance to offset minimum required contributions for the 2014 plan year, to the extent the election exceeded the full minimum required contribution for the year. This deadline only applies to plans with valuation dates as of the first day of the plan year.

5. Elect to reduce Jan. 1, 2014, funding balances to avoid or lift benefit restrictions under Code Section 436 for single-employer DB plans.

6. Recertify a single-employer DB plan’s 2014 AFTAP if it had previously been certified using MAP-21 rates on or before Sept. 30, 2014, and the use of Highway and Transportation Funding Act (HATFA) rates causes a material change (deadline applies if changes in IRC Sect. 436 restrictions are applied prospectively). See Notice 2014-43.

7. Make elections under HATFA.

8. Make one-time elections under the Cooperative and Small Employer Charity Pension Flexibility Act of 2014 (the CSEC Act). Elect not to treat a plan as a CSEC plan, meaning that it would not be subject to the special rules for CSECplans; also, elect not to treat a plan as an eligible charity plan and comply with Pension Protection Act rules retroactively for all years beginning with the 2008 plan year (election due to the IRS by Dec. 31, 2014, regardless of the plan's plan year).  

More on Elections Under HATFA

Following are actions to take regarding such elections.

• Revoke a deemed election to defer using HATFA rules for a single-employer DB plan to 2014 by either providing written notice or filing an amended Form 5500, 5500-SF or 5500-EZ for the 2013 plan year.

• Restore any single-employer DB plan's funding balances if a reduction made before applying HATFA rates is no longer necessary (if the original election was made on or before Sept. 30, 2014).
• Add excess 2013 contributions made on or before Sept. 30, 2014, to a single-employer DB plan to the plan's 2014 funding balances (only if HATFA rates apply for 2013).
• Redesignate any single-employer DB plan contributions no longer needed for 2013 as 2014 contributions (only if HATFA rates apply for 2013 and the original contribution was made between Jan. 1, 2014 and Sept. 30, 2014).