Michelle Capezza Quoted in “4 Things Benefits Attys Need to Know About Tax Reform 2.0”Law360 September 25, 2018
Michelle Capezza, Member of the Firm in the Employee Benefits and Health Care & Life Sciences practices, in the firm’s New York office, was quoted in Law360, in “4 Things Benefits Attys Need to Know About Tax Reform 2.0,” by Emily Brill. (Read the full version – subscription required.)
Following is an excerpt:
As a new round of tax-reform proposals winds its way through Congress, flush with plans to alter the ways Americans save for retirement, benefits attorneys should pay attention to provisions that would protect closed pension plans, relax benefit-distribution requirements and allow unrelated companies to join a common retirement plan, experts say.
They also might want to watch a proposal to create retirement-savings vehicles called universal savings accounts, though that policy affects individual savers more than employers, attorneys say.
Here, Law360 breaks down these four proposals. …
Relax Benefit-Distribution Requirements
Current law requires Americans to begin taking money out of their retirement accounts at age 70½. A Family Savings Act proposal would allow people with less than $50,000 saved to keep the money in their retirement accounts past this age.
Benefits attorneys should take note of this provision because employers will need to change the way they administrate their 401(k) plans if it becomes law, said Michelle Capezza, a member of Epstein Becker & Green PC.
Employers whose workers have less than $50,000 in their 401(k) accounts must ask those workers to certify that they have no other retirement savings, Capezza said. They’ll also need to file information with the IRS about the account balances of their 69-year-old employees, Capezza said.
“Administration of required minimum distributions will [add] layers of complexity and reporting,” Capezza said.
Capezza said she has had her eye on the Family Savings Act because of the amount of benefits-related proposals it contains. If Tax Reform 2.0 passes, which isn’t expected until November, plan sponsors will have a lot of work on their hands — amending plans and updating administrative procedures, plan distribution materials and communications with participants, she said.
“The consensus appears to be that there won’t be much movement on Tax Reform 2.0 until after the November mid-term elections,” Capezza said. “Plan sponsors will need to monitor any developments that could impact their plans.”