Congress has been working diligently to provide assistance to victims of Hurricane Katrina with the House and the Senate recently passing slightly different relief bills. As of September 19, 2005, these differences are being reconciled, and enactment of the legislation is expected shortly.
Tax and Penalty Relief for Qualified Disaster-Relief Distributions
Although Congress may modify provisions before enactment, following are some of the retirement plan-related provisions of the two current relief bills. This legislation affects qualified retirement plans, 403(b) plans, governmental 457(b) plans and IRAs. If passed as proposed, the legislation would
eliminate the 10 percent early distribution penalty tax and the 20 percent mandatory withholding requirement for qualified disaster-relief distributions up to $100,000,
allow individuals to pay the income tax on qualified disaster-related distributions ratably over three years,
permit individuals up to three years to recontribute qualified disaster-relief distributions back in to their accounts,
allow individuals who took qualified home purchase distributions up to six months before the date Hurricane Katrina was declared a disaster area (August 29, 2005) to recontribute unused amounts, and
increase the maximum retirement plan loan to the lesser of 1) $100,000 reduced by the participant’s highest outstanding loan balance during a one-year look-back period, or 2) the participant’s accrued benefit under the plan.
Watch the ALERT section of www.bisysretirement.com for details on this legislation after enactment.
Look to BISYS for Assistance
800 Consulting Service
Subscribing to BISYS’ 800 Consulting service will provide direct access to ERISA and industry experts to ensure your staff have the answers they need to assist your customers with Hurricane Katrina-related relief. BISYS provides immediate, accurate answers that save valuable staff time lost to research or correcting errors. BISYS’ 800 Consulting service is your best source for questions about:
qualified retirement plans
Coverdell education savings accounts
health savings accounts
Newsletters and Technical Reference Materials
The IRA Reporter and the Retirement Plans Bulletin keep you informed of new developments and explain rule changes. Available in print or Internet delivery.
The BISYS e-Resource Center is a comprehensive online reference service. It contains the award-winning retirement savings content from BISYS’ printed publications, which we have provided to our clients for more than 30 years.
Basic and Advanced IRA On-Site Seminars
Each year thousands of retirement plan professionals attend these courses to get the basic and advanced training they need to feel comfortable handling IRA transactions. These courses use hands-on, interactive materials that enhance the learning experience for individuals who are new to IRAs and for those looking for a general IRA refresher. Basic IRAs equips attendees to work effectively with Traditional and Roth IRAs and provides an overview of SEP and SIMPLE plans and Coverdell education savings accounts. Advanced IRAs: The Ever-Changing IRA covers required minimum distributions, beneficiary options, health savings accounts (HSAs) and new laws and guidance, including Hurricane Katrina disaster relief for retirement plans and IRAs.