Volume 4, Fall 2007 

A Look Inside 

Audits of SEP and SIMPLE IRA 

plans have uncovered common errors, 

which are discussed by the IRS’s EP 

Exam Director ...more on page 2 

The IRS continues to send Taxpayer 

Delinquency Investigation Notices for 

Form 5500 nonfilers for the period 

ending December 31, 2004 ...more on 

page 4 

An extension to file Form 5500 has 

been granted for those affected by the 

California wildfires ...more on page 4 

Determination letter applications 

from adopters of pre-approved 

defined contribution plans will not be 

accepted for an interim period ...more 

on page 4 

The 2008 COLAs applicable to 

retirement plans have been announced 

...more on page 5 

An employer’s failure to execute an 

employee’s election to defer amounts 

to a 401(k) plan is a relatively common 

error ...more on page 6 

Also in this Issue

 New on the Web.......................... 2


 Recent Guidance......................... 3
 
 

The Filing Cabinet.......................6


 Product Profile.............................7


 DOL News....................................8


 Upcoming Conferences

 and Key Dates............................9
 
 

Timing is Everything.................10
 
 

Retirement News

 for Employers
 
 

Information for Sponsors of Retirement Plans 

Internal Revenue Service Tax Exempt and Government Entities 

Is an Automatic Contribution Feature Right for Your Plan? 

Are you looking to increase participation among the rank-and-file employees in 

your 401(k) plan? Are you concerned about your employees’ lack of adequate 

retirement savings? Do you want to get out from under costly and time-consuming 

burdens of nondiscrimination testing? If so, a possible solution is to amend your 

plan to include a “qualified automatic contribution arrangement” (QACA) that first 

becomes available next year. (The IRS has just released proposed rules on 

QACAs for 401(k), 403(b), and 457(b) plans, along with sample language for the 

required notice to participants.) 

The Pension Protection Act (PPA) added an incentive to encourage plans eligible 

to use automatic enrollment to adopt QACAs. Under an additional safe harbor, 

plans that by design satisfy conditions relating to employee elections and deferral 

amounts, employer contributions, and participant notifications will generally not 

have to perform the nondiscrimination tests and will satisfy the “top-heavy” rules 

that generally prohibit owners and key employees from disproportionately 

benefiting under the plan. 

Key conditions for a QACA are: 

•	 	 Coverage – New employees must be automatically enrolled but given an 

opportunity to affirmatively elect out of the plan. An employer may 

optionally set up automatic enrollment for current employees. 

•	 	 Notification – A plan sponsor must notify employees about their right to 

opt out of the plan or to change their deferral amounts from the default 

contribution percentages. In plans that offer investment alternatives, the 

notice must also state how contributions will be invested, subject to DOL 

requirements, if the employee fails to direct his or her investments. The 

notice must be given at least 30 (and no more than 90) days before the plan 

year in which the automatic enrollment takes effect. 

•	 	 Employee default contribution percentage – The plan’s employee elective 

deferral must be set at a minimum of 3% of pay (and not more than 10%) 

for the initial period, escalating by at least 1% per year to 6% after the 

third year following the initial period (assuming that the initial default 

contribution is 3%). 

•	 	 Employer contributions – An employer must make either: a) nonelective 

contributions of at least 3% of pay for nonhighly compensated employees 

(NHCEs); or b) matching contributions of at least 100% of the NHCEs’ 

contributions that do not exceed 1% of pay and 50% of the NHCEs’ 

contributions beyond that up to 6% of pay. The rate of match for the highly 

compensated employees cannot be greater than that for NHCEs. Employer 

contributions must be fully vested after no more than two years of service, 

and such amounts may only be distributed upon the participant’s 

termination of employment, death, or disability. 
Fall 2007 Retirement News for Employers 

New on the Web 

Here are the latest postings to the 

“Retirement Plans Community” web page: 

• “401(k) Plan Potential Mistakes” provides 

tips for plan sponsors in identifying, correcting, 

and avoiding 11 common errors. Check them out 

at www.irs.gov/ep by selecting “Correcting Plan 

Errors” in the left pane. 

• The “Pension Protection Act of 2006” web 

page now includes two handy charts, listing each 

PPA provision section, description, relevant 

IRC/ERISA section, applicable published 

guidance, and if available, other information 

sources. One chart is sorted by “topic,” the other 

by “Code/ERISA section.” The charts are 

updated periodically. 

• “Tax Issues on Distributions from 

Retirement Plans” and “Automatic 

Enrollment and Other Need-to-Know 

Provisions of the Pension Protection Act of 

2006,” which are speakers’ slides and notes from 

their presentations at the 2007 IRS Nationwide 

Tax Forums, can be found at www.irs.gov/ep by 

selecting the “Benefits Practitioner” tab, then 

“Educational Services & Products.”• 

As in the case of any plan with automatic enrollment, a QACA may 

permit an employee to withdrawal his or her elective deferrals (with 

earnings) within 90 days of first contributing. The withdrawn 

amounts are taxable income in the year distributed, are not subject 

to an early distribution tax, and are not eligible to be rolled over. If 

elective deferrals are withdrawn, employees will forfeit the 

employer matching contributions.• 

Desk Side Chat with Monika Templeman: 

Common Errors Uncovered in Audits of SEP and 

SIMPLE IRA Plans 

In each issue, Monika Templeman, Director of EP Examinations, responds 

to questions and offers insights on retirement plan topics uncovered during 

audits. You may provide feedback or suggest future topics for discussion 

by e-mailing her at: RetirementPlanComments@irs.gov. 

Monika, many employers who read this newsletter have 

SEP or SIMPLE IRA plans for their employees. Could you 

please share your latest examination results? 

I would be happy to. I think it is important for plan sponsors to 

know that my goal is to diversify our audit presence, continually 

examining and providing outreach to all types of retirement plans. 

These IRA-based plans are no exception. To date, we have 

examined over 100 SEP plans and have found about 50% to have 

operational errors, which means that every other plan audited is 

noncompliant. In the SIMPLE IRA area, we’ve completed more than 

400 audits and have found 61% to have operational errors. 

What are the main problems found? 

The biggest error for both SEP and SIMPLE IRA plans is the failure 

to amend the plan for the new EGTRRA limitations. About one of 

every five SEP and one of every four SIMPLE IRA plans audited 

have this mistake. 

For SEPs, the next most occurring error is the violation of the plan’s 

participation and eligibility requirements. Our examiners find that 

employees who are eligible to participate are not included. We also 

have found contribution allocation errors and instances of 

employers making contributions over the allowable limits to 

employees. Excess contributions also raise issues with the 

contribution deduction. 

For SIMPLE IRA plans, we are finding that many employers are 

making late deposits of employees’ elected deferrals. For plans with 

common-law employees, the Department of Labor regulations 

require deposits of salary deferrals as soon as such contributions can 

reasonably be seggregated from the employer’s general assets. 

Depositing these deferrals quarterly or twice a year does not meet 

this requirement. 

2 
Fall 2007 Retirement News for Employers 

Recent Guidance 

• Notice 2007-86 provides additional 

transitional relief, to December 31, 2008, for 

nonqualified deferred compensation plans to 

comply with the April 2007 final regulations 

under §409A. 

• Announcement 2007-102 contains corrections 

to final 403(b) regulations published July 26, 

2007. 

• Proposed Regulations on restrictions on 

benefits in underfunded single-employer defined 

benefit plans. 

• Revenue Ruling 2007-67 contains a mortality 

table that defined benefit plans must use to 

calculate minimum lump-sum distributions 

during plan years beginning in 2008.• 

How can employers correct a failure to amend their plan? 

To facilitate correction, employers that adopted the IRS Model 5305-SEP 

or a financial institution prototype SEP that contained the pre-EGTRRA 

provisions should adopt the most current Form 5305-SEP at 

www.irs.gov/ep. Similarly for SIMPLE IRA plan sponsors, there are two 

models that can be adopted to correct the problem: IRS Model 5304­

SIMPLE and 5305-SIMPLE. Employers would use Form 5304– 

SIMPLE if they allow each plan participant to select the financial 

institution to receive his or her SIMPLE IRA plan contributions. They 

would use Form 5305–SIMPLE if they require that all contributions 

under the SIMPLE IRA plan be deposited initially at an employerdesignated financial institution. 

Our Voluntary Correction Program is available for this and other errors. 

A description of the Voluntary Correction Program can be found here. 

Do you have any tips to help ensure successful plan operation? 

We are finding — in all plan examinations, not just for SEPs and 

SIMPLE IRAs — that employers are operating their plans differently 

from the way the plan document specifies. If plan sponsors or 

administrators would take the time to review their plan documents, many 

of the errors could be avoided. For instance, my examiners have found 

employers using a different definition of compensation than that 

specified in the plan and using a different matching contribution formula 

than the one written in a plan. There are many other examples, but my 

point is: employers need to read their plan. It could save them money for 

the aspirin they may need when we come to examine the plan. 

We also have web pages devoted to SEPs and SIMPLE IRAs. These 

pages include tips on establishing and operating a plan, as well as 

checklists containing the top errors we are finding on examination. The 

checklists are designed as a diagnostic tool to help employers keep their 

plans in compliance with important tax and qualification rules. 

I would also recommend that plan sponsors uncovering a mistake in plan 

operation visit our Correcting Plan Errors web page. This will provide 

them with the steps they should take next when an error is found in their 

plan. 

I look forward to keeping the flow of information coming by sharing 

additional audit insights in the next edition.• 

3 
Fall 2007 Retirement News for Employers 

Did You Receive a Form 5500 

Delinquency Notice? 

Please help us update our records, identify and 

correct employer identification (EIN) and plan 

numbers, and resolve other discrepancies, but 

more importantly, obtain delinquent or missing 

Forms 5500/5500-EZ from employers. 

The IRS continues to send Taxpayer 

Delinquency Investigation (TDI) Notices to 

employers for whom we have no record of a 

Form 5500 or 5500-EZ filed for the plan year 

ending December 31, 2004. The first 

delinquency notice, CP 403, is normally sent 15 

months after a Form 5500/5500-EZ was due. A 

second notice, CP 406, is sent 15 weeks later if a 

response to the first notice is not received or if a 

response is insufficient. See our Frequently 

asked Questions on CP 403/406 Notices for 

additional information.• 

Form 5500 Filing Relief Due to California 

Wildfires 

An extension to January 31, 2008, has been granted to Form 5500 

filers located in the seven California counties identified by the 

Federal Emergency Management Agency (FEMA) as major 

disaster areas, according to the Department of Labor’s Employee 

Benefits Security Administration’s (EBSA) October 31 News 

Release. The relief is available for Form 5500-series filings that 

are required to be filed between October 21, 2007, and January 

31, 2008. Form filers entitled to the relief should check Part I, 

Box D on the Form 5500 or Part I on Form 5500-EZ, attaching a 

statement to the form in accordance with the instructions. 

The extension also applies to filers located outside the affected 

areas that are unable to obtain the necessary information from 

service providers, banks, or insurance companies whose 

operations were directly affected by the fires. 

Filers who have additional questions may contact EBSA’s EFAST 

Helpline at (866) 463-3278.•

Determination Letter Program Halted 

for Some Defined Contribution Plans 

Effective December 18, 2007, the IRS will temporarily stop 

accepting determination letter applications (Form 5307) from 

adopters of pre-approved defined contribution (DC) plans. In 

Announcement 2007-90, the Service explained that all preapproved DC plans will have to be restated to comply with the 2001 

tax law (generally referred to as “EGTRRA”), and that the agency 

in early 2008 expects to open the two-year period for such plans to 

adopt the EGTRRA-restated amendments. 

Pre-approved defined benefit (DB) plan adopters are not affected by 

the announcement. In addition, pre-approved adopters of DC or DB 

plans may continue to submit Form 5307 applications for a 

determination related to the Voluntary Correction Program or as 

required under the Audit Closing Agreement Program.• 

4 
Fall 2007 Retirement News for Employers 

2008 Retirement Plan Limits Announced 

The IRS has announced the cost-of-living adjustments (COLAs) to 

retirement plan limits for 2008, with key items shown below: 

Contributors to 

this Issue: 

Avaneesh Bhagat 

Bob CreMeens 

Kathy Davis 

Peter McConkey 

Mark O’Donnell 

Nancy Payne 

Sharon Polo 

Keith Ruprecht 

John Schmidt 

Paul Sian 

Brenda Smith-Custer 

Marjorie Taylor 

Monika Templeman 

Mikio Thomas 

Kathy Tuite • 

Limit 2008 

Defined Contribution Plan Annual Dollar Limit 

(The maximum dollar amount that may be contributed to a participant's 

account under IRC §415(c)) 

$46,000 

Defined Benefit Plan Annual Dollar Limit 

(The maximum dollar amount that may be payable to a participant under 

IRC §415(b)) 

$185,000 

401(k)/403(b) Elective Deferral Limit 

(The maximum annual amount of elective deferrals and designated Roth 

contributions (if permitted under the plan) to 401(k) and 403(b) plans 

under IRC §402(g)(1)) 

$15,500 

Goverments/Tax-Exempts Deferral Limit 

(The maximum annual amount of elective deferrals to 457 plans under IRC 

§457(e)(15)) 

$15,500 

SEP Minimum Annual Compensation Limit 

(The least amount an employee must earn in compensation to be eligible to 

participate in a SEP under IRC §408(k)(2)(C)) 

$500 

401(k)/403(b)/457 "Catch-up" Limit 

(The additional amount that a participant age 50 or older may defer to 

401(k), 403(b), or 457 plans under IRC §414(v)(2)(B)(i)) 

$5,000 

SIMPLE Employee Contribution Limit 

(The maximum annual amount of elective deferrals to SIMPLE plans under 

IRC §§401(k)(11) and 408(p)(2)(E)) 

$10,500 

SIMPLE "Catch-up" Limit 

(The additional amount a participant age 50 or older may defer to 

SIMPLE plans under IRC §414(v)(2)(B)(ii)) 

$2,500 

Highly Compensated Employee Compensation Limit 

(The compensation threshold triggering classification of an employee as 

"highly compensated" under IRC §414(q)(1)(B)) 

$105,000 

Annual Compensation Limit 

(An employee's maximum compensation that a plan may take into account 

for determining employer contributions and deductions under IRC 

§§401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii)) 

$230,000 

Top-Heavy Plan's Key Employee Compensation Limit 

(The definition of "key employee" compensation level triggering the 

application of top-heavy rules under IRC §416(i)(1)(A)(i)) 

$150,000 

For a complete listing of the 2008 limits, refer to our “COLA Increases 

for Dollar Limitations on Benefits and Contributions” web page 

under “Published Guidance.”• 

5 
Fall 2007 Retirement News for Employers 

Fixing Common Plan Mistakes: 

Correcting a Failure to Effect Employee Deferral 

Elections 

The Filing Cabinet 

Revised Form 5500 for 2007 

The Department of Labor (DOL) issued a 

Media Release announcing revisions to the 

2007 Form 5500, instructions, and schedules. 

See EBSA’s web site for the revised Form 

5500-series or call (800) TAX-FORM (829­

3676) to order paper copies. 

Revised Publications 

The IRS and DOL jointly have revised: 

• Choosing a Retirement Solution for Your 

Small Business (Publication 3998), 

highlights the types and key features of 

various retirement plans that small employers 

or tax practitioners with small business 

clients that wish to sponsor a plan. 

• SEP Retirement Plans for Small 

Businesses (Publication 4333), provides 

guidance on Simplified Employee Pension 

(SEP) plan establishment, operation, and 

maintenance. 

• SIMPLE IRA Plans for Small Businesses 

(Publication 4334), provides guidance on 

Savings Incentive Match Plan for Employees 

(SIMPLE) IRA plan establishment, 

operation, and maintenance. 

Additional forms and publications are 

available on the “Retirement Plans 

Community” web page by clicking on “EP 

Forms & Publications” in the left pane. 

Paper copies can be requested by calling 

(800) TAX-FORM (829-3676).• 

Each issue of the RNE looks at a common error that occurs in retirement plans 

and provides information on fixing the problem and lessening the probability of 

its recurrence. 

The Problem 

An employer’s failure to execute an employee’s election to defer 

amounts to a 401(k) plan is a relatively common error. Like its 

cousin – mistakenly excluding an employee from a plan – the 

problem can be rectified by making a qualified nonelective 

contribution (QNEC) to the plan on behalf of the employee, and as 

in the case of other operational problems, the error can be fixed 

through the Employee Plans Compliance Resolution System 

(EPCRS). 

The problem to address is one of a missed deferral opportunity: the 

employee received taxable compensation instead of being able to 

defer amounts on a pre-tax basis and to accumulate earnings on 

those deferred amounts tax free until qualified distributions are 

taken. Let’s look at two examples, neither of which entails “catchup” contributions for employees age 50 or older, after-tax 

contributions, or “designated Roth” contributions. In both cases, the 

employees are nonhighly compensated employees (NHCEs). 

Situation 1: Amy’s elective deferral election at the start of 2006 

somehow was never processed by the employer’s payroll system. As 

a result, Amy received taxable compensation amounts that should 

have been contributed to the plan during the first six months of the 

year. The facts in this situation include: the plan’s actual deferral 

percentage (ADP) for NHCEs of 5%; Amy’s election form agreeing 

to a deferral of 10% of pay; and her compensation of $20,000 for 

the six months that no deferrals were made. 

Situation 2: Bob elected to defer 5% of his compensation in 2006. 

The plan includes bonuses in the definition of compensation that is 

used for an employee making elective contributions. Although Bob 

was able to make deferrals on his base compensation, the payroll 

system overlooked his bonus. The facts here entail an ADP of 3%; 

Bob’s base compensation of $19,000; and his bonus of $2,000. 

The Fix 

As in the case of an erroneous exclusion of an employee from the 

plan, the remedy requires the employer to make a corrective 

contribution of 50% of the missed deferral (adjusted for earnings) 

on behalf of the affected employee. The employee is fully vested in 

those contributions, which are subject to the same withdrawal 

restrictions that apply to elective deferrals. However, unlike in the 

case of mistaken exclusions where the missed deferral amount is 

6 
Fall 2007 Retirement News for Employers 

Product Profile – 403(b) Plan Checklist 

(Publication 4546) 

You may put off scheduling your car’s 30,000­

mile tune-up, but there’s no need to delay your 

403(b) retirement plan check-up. Just like your 

automobile, your retirement plan needs regular 

attention and care to keep it operating well. The 

403(b) Plan Checklist (Publication 4546), is 

what you need to keep your retirement plan 

running at peak performance. 

The checklist provides 10 “yes/no” questions 

that will quickly help you review your plan for 

common mistakes. While this checklist does not 

cover every possible mistake you could make 

with your plan, it will let you know if you need 

to talk with your benefits professional. 

Reviewing your plan annually can save you time 

and money. So, visit our “Retirement Plans 

Community” web page and click “EP Forms/ 

Publications/Products” and get your 403(b) plan 

tuned up today!• 

estimated based on the ADP for the employee category (e.g., 

NHCE), in both illustrative examples, the employees’ election 

deferral amount is known. Thus, the missed deferral and the 

corresponding corrective contribution (50% of the missed deferral) 

are based on the participant’s actual election instead of the ADP 

(i.e., 5% or 3%, respectively) of the NHCEs. 

Before correcting for the exclusion, however, the plan must evaluate 

whether, in the event that the employee had made the missed 

deferral, it would still pass the applicable ADP test. The ADP test 

should be corrected according to the plan’s terms before 

implementing any corrective contribution on behalf of the employee. 

In addition, the missed deferral amount should be reduced, if 

necessary, to ensure that the employee’s elective deferrals (the sum 

of deferrals actually made and the missed deferrals, for which a 

corrective contribution may be required) comply with all other 

applicable plan and legal limits. Assuming that the plan passes the 

ADP test and that no changes must be made to the missed deferral 

amounts on account of plan or legal limits, the fixes for Situations 1 

and 2 are determined as follows: 

Situation 1: Amy’s missed deferral amount is $2,000 (i.e., 10% 

(Amy’s election percentage) multiplied by $20,000 (her 

compensation earned during the period in which the employer failed 

to implement her election)). The amount of the corrective 

contribution the employer must make on Amy’s behalf is $1,000 

(i.e., 50% multiplied by Amy’s $2,000 missed deferral amount). 

Situation 2: Bob’s missed deferral amount is $100 (i.e., 5% (Bob’s 

election percentage) multiplied by $2,000 (his 2006 bonus from 

which elective contributions were not made even though he elected 

to make a contribution of 5% of all compensation, which included 

bonuses)). The corrective contribution required on behalf of Bob is 

$50 (i.e., 50% multiplied by his $100 missed deferral). 

The described correction only applies to missed deferrals. The 

corrective contribution also must be adjusted for earnings from the 

date that the elective deferrals should have been made through the 

date of the corrective contribution. 

Making Sure It Doesn’t Happen Again 

Employers should establish systems that can help ensure that 

employees are provided the opportunity to make deferrals/after-tax 

contributions to the plan according to the plan’s terms. They also 

should work to ensure that third-party plan administrators have 

sufficient understanding of the plan’s terms to operate the plan 

accordingly. This is especially important if there have been plan 

amendments or changes to either payroll systems or administrators. 

Keep in mind that despite all of your good efforts, mistakes happen. 

In that case, the IRS can help you correct the problem so that you 

retain the benefits of your qualified plan.• 

7 
Fall 2007 Retirement News for Employers 

DOL News 

The Department of Labor’s Employee Benefits Security Administration 

(DOL/EBSA) announced new guidance and tools to assist plan sponsors in 

complying with ERISA, including those featured below. You can subscribe 

to DOL/EBSA’s web site homepage or PPA page for updates. 

Final Rule on Default Investment Alternatives 

for Participant-Directed Plans 

A final rule published in the Federal Register establishing qualified default 

investment alternatives (QDIAs) makes it easier for employers to 

automatically enroll workers in their 401(k) and other defined contribution 

plans. The regulation implements PPA provisions providing relief to plan 

fiduciaries who invest the assets of participants who do not provide 

investment direction in QDIAs. The QDIAs described in the rule will 

encourage the investment of employee assets in investment vehicles 

appropriate for long-term retirement savings. 

Additional Guidance on Timing of Individual Benefit Statements 

Field Assistance Bulletin 2007-03 provides that plan administrators of 

individual account plans that do not provide for participant direction of 

investments will, in the absence of further guidance, be deemed in good-faith 

compliance with the law if benefit statements are furnished to participants 

and beneficiaries on or before the date the Form 5500 annual return/report is 

filed by plans, but not later than the last date on which the plan administrator 

is required to file the report, including any extensions. 

Online Calculator to Help in Computing Penalties, File Overdue 

Form 5500 Reports 

The EBSA web site now includes an interactive calculator that makes it 

easier for employers and plan administrators who are delinquent in meeting 

annual reporting requirements under ERISA to accurately compute penalties 

owed under the agency’s Delinquent Filer Voluntary Compliance Program 

(DFVCP). 

Interactive Web Tool on Fiduciary Responsibilities under ERISA 

The ERISA Fiduciary Advisor is a new interactive web tool to help 

employers and service providers to private-sector retirement plans 

understand their responsibilities and comply with the law. 

Rules on Selecting Annuity Providers 

for Benefit Distributions from Pension Plans 

An interim final rule was published in the Federal Register that amends 

Interpretive Bulletin 95-1 to limit the application of the bulletin to the 

selection of annuity providers for benefit distributions from defined benefit 

plans. 

A proposed rule was also published to provide guidance, in the form of a 

safe harbor, for the selection of annuity providers by fiduciaries for benefit 

distributions from individual account plans, such as 401(k) plans. These 

rules are being issued pursuant to the PPA.• 

8 
Fall 2007 Retirement News for Employers 

Retirement News for Employers 

Retirement News for Employers (RNE) is a 

free, quarterly newsletter aimed at keeping 

employers informed about retirement plan 

sponsorship. RNE is prepared by the IRS’s 

Employee Plans (Tax Exempt and Government 

Entities) office. 

For your convenience, RNE includes Internet 

links – identified by the blue underlined text – 

to referenced materials. 

How to Subscribe 

RNE is distributed exclusively through IRS email. Sign up for your free subscription by 

going to the “Retirement Plans Community” 

web page and selecting “Newsletters” in the 

left pane. Prior editions of the RNE are also 

archived there. 

Send Comments/Suggestions to: 

EP Customer Education & Outreach 

SE:T:EP:CEO 

1111 Constitution Ave., N.W., PE-4C3 

Washington, DC 20224 

FAX: (202) 283-9525 

E-Mail: RetirementPlanComments@irs.gov 

Have a Question? 

For taxpayer assistance with retirement 

plans technical and procedural questions: 

Please call (877) 829-5500 or visit the “Contact 

EP/Services” section at www.irs.gov/ep. 

For questions relating to retirement income, 

IRAs, Roth IRAs, educational IRAs, medical 

savings accounts, and section 125 cafeteria 

plans: 

Please call (800) 829-1040.• 

Upcoming Conferences and Key Dates 

Meeting deadlines is a sometimes cumbersome part of operating your 

retirement plan. To help, we’ve listed some upcoming important dates and 

deadlines. Please note that the filing dates are for calendar-year plans. 

Dec. 13: DOL Seminar: Fiduciary Education Seminar – Tucson, AZ. 

Dec. 31: Deadline for: making 2007 required minimum 

distributions; and distributing 2006 401(k) excess 

contributions (including income or losses) without 

jeopardizing a plan’s tax-qualified status. 

Jan. 15: Fourth quarterly contribution due date for 2007 defined 

benefit plans. 

Jan. 31: Deadline for: filing Form 945, Annual Return of Withheld 

Federal Income Tax; and giving recipients of 2007 retirement 

plan distributions Form 1099-R, Distributions From 

Pensions, Annuities, Retirement or Profit-Sharing Plans, 

IRAs, Insurance Contracts, etc. 

For a comprehensive list of upcoming EP Educational Events, visit the 

“Retirement Plans Community” web page, select “Plan Sponsor/ 

Employer,” then “Questions: Where to Get Answers” and click on 

“Upcoming EP Educational Events.” • 

Department of the Treasury Publication 4278 (11-2007) 

Internal Revenue Service Catalog Number 37968B 

www.irs.gov 

9 
Fall 2007 Retirement News for Employers 

Timing is Everything 

Some helpful retirement planning tips from the IRS for 2008... 

How much can you contribute to your retirement plan?
 
 


If you are a 401(k), 403(b), or governmental 457 plan participant:
 
 


•	 You can make up to $15,500 in elective contributions. (Roth 401(k) or Roth 403(b) plan participants can 

defer a combined maximum of $15,500 in after-tax and pre-tax elective contributions.) 

•	 Age 50 and Older? You may be eligible to make “catch-up contributions” of up to an additional $5,000. 

(457 plan participants may make larger catch-up contributions during the three years before retirement.) 

If you are a SIMPLE IRA or SIMPLE 401(k) plan participant: 

• You can make up to $10,500 in pre-tax contributions. 

• Age 50 and Older? You may be eligible to make “catch-up contributions” of up to an additional $2,500. 

Are you entitled to a tax credit for your contributions? 

Low- and moderate-income taxpayers can save on taxes by saving for retirement. The Saver’s 

Credit provides a tax credit of up to $1,000 ($2,000 if filing jointly) if you contribute to a 

traditional or Roth IRA, 401(k), 403(b), governmental 457, SARSEP, or SIMPLE plan. 

To qualify for the credit, adjusted gross income from IRS Form 1040, 1040A, or 1040EZ (federal income tax 

return) cannot be more than: 

• $53,000, if married filing jointly; 

• $39,750, if head of household; or 

• $26,500, if single, married filing separately, or qualifying widow(er). 

File Form 8880, Credit for Qualified Retirement Savings Contributions, to calculate the credit. 

Talk to your employer or visit www.irs.gov/ep for additional information on these items. 

Department of the Treasury Publication 4278-B (11-2007) 

Internal Revenue Service Catalog Number 47978D 

www.irs.gov