Author Archives:
Erin Carter

While retirement has long been considered a time for rest, relaxation, and rejuvenation, the unfortunate reality is this may be out of reach for many. Although there are many contributing factors exacerbating the situation, it appears that lack of workplace retirement plan coverage is the main cause. Without employer-matching contributions, it is difficult for most workers to accumulate retirement savings. Given this, it is no surprise that 22% of Americans have less than $5,000 saved and 15% have nothing saved at all. This alarming trend has prompted Congress to act by making additional retirement plan reforms. Despite this, it may be several years before the full benefits of the SECURE Act 2.0 are realized.

There has been much discussion in Congress over the last few years on how to update and reform retirement saving rules. The unfortunate reality is that many Americans will not have enough to retire. It is a serious issue when one considers that the average working household has virtually no retirement savings. Several studies have illustrated the depth of the problem and just how many will be forced to work beyond the traditional retirement age. The lack of access to workplace retirement plans and limited savings have intensified the issue.

Managing an employer-sponsored retirement plan can be quite challenging. There are several regulatory, compliance, and reporting requirements imposed by the IRS and the Department of Labor. Matters can become more complicated when dealing with a large plan. New requirements such as an annual plan audit, which peers into virtually every aspect of operations, need to be conducted.  Attention is placed on the plan's functions and whether compliance requirements are met.  Given the complexities, it is not uncommon for plans to commit unintentional errors in plan management.

Over the past few years, a new investment framework focused on the environmental, social, and governance (ESG) framework has been introduced to help screen investment opportunities. The focus is on determining how a company safeguards the environment, manages relationships with employees, and suppliers, and considers internal controls, audits, shareholder rights, and more. The approach has become so popular there are a number of ESG rating agencies including MSCI, ISS ESG, and FTE Russell. They provide important information on the ESG quality of an investment. In other words, ESG has become an increasingly important framework to investors.

Soon, the IRS will allow 403(b) retirement plans to use the same approval process as other qualified plans. Depending on a plan sponsor’s employer identification number, this process can start as soon as June 1, 2023. Though there are some exceptions, most 403(b) plans will qualify in the new guidance outlined in Revenue Procedure 2022-40. A determination letter confirms a plan is operating by relevant rules and regulations.  This is welcome news for many Atlanta not-for-profit organizations which previously were not permitted to make a request.

FASB’s Statement on Auditing Standards (SAS) No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, provides revised guidance for the calendar year 2023 financial statement audits. The broad concept of improved risk assessment standards in SAS 145 will extend to other areas of an audit, like IT and material misstatements.

Required minimum distributions (RMDs) are an important part of a beneficiary’s or heir’s tax planning since income tax is due on RMDs in the year the distribution is taken. Previous rules allowed beneficiaries to stretch payments over their lifetime or take the full distribution in later years after the account holder’s death. This approach provided for a more targeted tax plan. The SECURE Act changed how RMDs for inherited accounts work, but at the time failed to provide clear guidance. As a result, many taxpayers who were supposed to make RMDs in 2021 or 2022 did not.

Atlanta high-net-worth individuals and families have many considerations for charitable giving strategies as part of their estate plan. In a sea of options, two of the more common choices include either a donor-advised fund (DAF) or a private foundation. Both will provide certain tax benefits and help individuals and families further their legacy. However, depending on the situation, one may be a better option than the other. There are several factors to consider when deciding which approach makes the most sense.

For many Atlanta plan sponsors maintaining compliance with ERISA regulations is an important priority that is second only to serving participants. One component of compliance is an annual review of plan operations, including amendments that must be made to accommodate legal, and other changes. Throughout 2020, many were challenged by the fast pace of regulatory changes made that often required the adoption of new plan amendments. It was especially difficult because the needed guidance to implement the changes were often issued after the fact.

Risk in a financial statement takes on many forms. It can be a material misstatement or can manifest as an undefined intangible that’s highlighted in a footnote. Auditors spend the most time in financial statement audits on identifying and assessing material misstatements because of the impact on the company’s financial position. Yet, risk assessments made up 25 percent of audit deficiencies in 2020 peer reviews, so there’s clearly more work to do to shore up this aspect of financial reporting.