GAO Study issued April 2012 - includes video illustrating revenue sharing

The General Accounting Office (GAO) released a study regarding 401(k) plans.  One of the recommendations is that DOL develop and implement more proactive approaches to plan sponsor educational outreach especially as it relates to plan fees. The study revealed that plan sponsors faced challenges in understanding the fees they paid and how participants are charged.

Included in the report is a link to a short video illustrating how revenue sharing arrangements can work.  The video is 5 minutes long and it shows how complicated this can be.

IRS issues guidance regarding $2500 FSA Limit

The IRS issued Notice 2012-40 regarding the $2,500 FSA limit enacted by Health Care Reform.

There is a lot of welcome news in the Notice including:

• clarification that the limit applies to plan years beginning after December 31, 2012
• plans may adopt conforming amendment at any time through the end of 2014
• for plans with a grace period, amounts carried over will not apply to the $2,500 limit
• relief may be available for reasonable errors in applying the limit

For more details read our ErisaALERT 2012-10.