“Affordable Care Act” employer notices must be mailed to employees by Oct 1 but now DOL says no penalty if your company forgets (the penalty prior to this bulletin was $100 per day). See the bullitin here:
The September “Let’s Talk Money” newsletter is now available
Supreme Court Decision on DOMA & Retirement Plans
Transamerica, one of our retirement plan providers issued this narrative we’d like to pass on:
SUPREME COURT DECISION ON DOMA:
What does it mean for Employer-Sponsored Retirement Plans?
Section 3 of the federal Defense of Marriage Act (DOMA) enacted in 1996 was ruled unconstitutional by the Supreme Court on Tuesday. Under that section of DOMA, the term “marriage” is defined as the legal union between one man and one woman as husband and wife.
The federal definitions of “spouse” and “marriage” under DOMA affect the availability of numerous retirement benefits and rights to same sex spouses under the Internal Revenue Code (“IRC”) and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). In the retirement plan area, same sex spouses have not been legally recognized as married because of DOMA. A few examples of these retirement plan provisions include:
• Survivor benefits in the form of a Qualified Joint and Survivor Annuity;
• Qualified Domestic Relations Orders;
• Application of benefit limitations under IRC Section 415;
• Spousal consent;
• Qualified Optional Survivor Annuity;
• Qualified Pre-Retirement Survivor Annuity;
• Timing of death benefit payments and required distribution rules;
• Rollover rules as applicable to eligible rollover distributions;
• Beneficiary status; and
• Hardship withdrawal provisions.
While some plans may have chosen to extend certain retirement benefits to non-spouse beneficiaries (e.g., survivor annuities), under DOMA plans were not required to do so.
Transamerica Retirement Solutions will be reviewing the DOMA decision in the coming days to determine the implications for our employer-sponsored retirement plans now that federal law recognizes same sex marriages that are entered into pursuant to state law. Currently 12 states (Connecticut, Delaware, Iowa, Massachusetts, Maine, Maryland, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington) plus the District of Columbia recognize same sex marriages. In light of the Supreme Court decision in Hollingsworth v. Perry, this list will soon likely include California.
As a result of the Supreme Court’s decision on DOMA, some immediate questions that employers will have include the following:
• Is the DOMA decision retroactive?
o Will employers be required to provide survivor benefits to same sex spouses for prior periods?
o Will plans be disqualified for not providing survivor benefits to same sex spouses in the past?
• How will plans be administered differently?
o How is a person’s marital status determined?
o Will plan administrators need to track the participant’s residence?
• What benefits would now be required to be provided to same sex spouses?
• What additional notices will be required to be given to same sex spouses?
• What are the implications for nonqualified plans?
• Will any forms such as beneficiary designation forms need to be revised?
• How will this decision impact non-ERISA plans?
• What changes, if any, will be needed to plan documents and Summary Plan Descriptions?
July/August issue of Let’s Talk Money
View our latest newsletter. Articles on: insurance, retirement planning, small business insurance, long-term-care and estate planning.
Let’s Talk Money Newsletter
The May issue of Let’s Talk Money is now available. Investing, finance, insurance and other issues discussed in this issue:
Personal Watercraft
From the Insurance Information Institute:
Personal watercraft are not generally covered by homeowners or auto insurance, and where they are, the coverage limits can be fairly low. You may need to purchase a specifically designed policy in order to insure these vessels. The personal watercraft policy covers:
- Bodily injury
- Property damage
- Guest passenger liability
- Medical payments
- Theft
Typical policies include deductibles of $250 for property damage, $500 for theft and $1,000 for medical payments, although these may vary from company to company.
Liability limits start at $15,000 and can be increased to $300,000. This coverage will provide financial protection if your personal watercraft is involved in an accident.
Most policies also include water sports liability, which covers risks associated with activities such as waterskiing.
Consider buying an umbrella policy which will provide more liability protection. One million dollars in extra coverage costs about $300 a year and would extend to your home and auto insurance policies.
If you have several personal watercraft, you may qualify for a multi-boat discount on your insurance. Additional coverage can also be purchased for trailers and other accessories.
Be sure to speak with your insurance agent or company representative about your specific needs.
Personal Watercraft Safety
Sea Doos, Wave Runners and other personal watercraft are fun and so easy to use that you can get a false sense of security; however, each year they cause thousands of serious injuries.
To safely enjoy your personal watercraft, the I.I.I. suggests the following:
- Never follow directly behind another personal watercraft. Stay at least 100 yards behind the vessel in front, and no less than 50 yards to one side. Because these vessels can travel at a very high rate of speed, each rider must be able to react to sudden changes in order to avoid a collision. Eighty percent of all injuries and fatalities occur when two vessels collide with one another.
- Don’t jump the wake of a passing boat. You could misjudge its speed and cause a collision. Or you might end up in the path of traffic coming from the other direction.
- Stay alert! Be aware of what is going on around you. Steer clear of other watercraft, swimmers, divers, water skiers and fishermen
Boats…they need insurance too!
Most companies provide limited coverage for property damage for small boats such as canoes and small sail boats or small power boats with less than 25 mile per hour horse power under a homeowners or renters insurance policy. Coverage is usually about $1,000 or 10 percent of the home’s property value and generally includes the boat, motor and trailer combined. Liability coverage is typically not included–but it can be added as an endorsement to a homeowners policy. Check with your insurance representative to find out if your boat is covered and what the limits are.
Larger and faster boats such as yachts, and personal watercraft such as jet skis and wave runners require a separate boat insurance policy. The size, type and value of the craft and the water in which you use it factor into how much you will pay for insurance coverage.
For physical loss or damage, coverage includes the hull, machinery, fittings, furnishings and permanently attached equipment as part of either an actual cash value policy or on an agreed amount value basis. These policies also provide broader liability protection than a homeowners policy. But there are distinct differences between the two types of policies.
Actual Cash Value policies pay for replacement costs less depreciation at the time of the loss. In the event of a total loss, used boat pricing guides and other resources are used to determine the vessel’s approximate market value. Partial losses are settled by taking the total cost of the repair less a percentage for depreciation.
Agreed Amount Value basis policies mean that you and your insurer have agreed on the value of your vessel and in the event of a total loss you will be paid that amount. Agreed Amount Value policies also replace old items for new in the event of a partial loss, without any deduction for depreciation.
Physical damage exclusions might include normal wear and tear, damage from insects, mold, animals (such as sharks), zebra mussels, defective machinery or machinery damage.
Boat insurance also covers:
- Bodily injury—for injuries caused to another person
- Property damage—for damage caused to someone else’s property
- Guest passenger liability—for any legal expenses incurred by someone using the boat with the owner’s permission
- Medical payments—for injuries to the boat owner and other passengers
- Theft
Most companies offer liability limits that start at $15,000 and can be increased to $300,000. Typical policies include deductibles of $250 for property damage, $500 for theft and $1000 for medical payments. Higher limits may be available. Additional coverage can be purchased for trailers and other accessories. Boat owners may also consider purchasing an umbrella liability policy which will provide additional protection for their boat, home and car.
Boaters should also inquire about special equipment kept on the boat, such as fishing gear, to make sure it is covered and verify that towing coverage is included in the policy.
Boat owners should also inquire about discounts for the following:
- Diesel powered craft, which are less hazardous than gasoline powered boats as they are less likely to explode
- Coast Guard approved fire extinguishers
- Ship-to-shore radios
- Two years of claims-free experience
- Multi-policies with the same insurer, such as a car, home or umbrella policy
- Safety education courses, such as those offered by the Coast Guard Auxiliary, U.S. Power Squadrons, or the American Red Cross.
Boat Safety
There are thousands of recreational boating accidents per year. Contributing factors to these accidents include traveling too fast for water or weather conditions, driving under the influence of drugs or alcohol, failing to follow boating rules and regulations, carelessness and inexperience.
To prevent boating accidents, we offer these safety suggestions:
Care and protection of vessel
- Check weather forecasts before heading out.
- Let someone know where you’re going and when you expect to return.
- Check engine, fuel, electrical and steering systems, especially for exhaust-system leaks.
- Carry one or more fire extinguishers, matched to the size and type of boat. Keep them readily accessible and in condition for immediate use.
- Equip the vessel with required navigation lights and with a whistle, horn or bell.
- Consider additional safety devices, such as a paddle or oars, a first-aid kit, a supply of fresh water, a tool kit and spare parts, a flashlight, flares and a radio.
Care and protection of crew and guests
- Make sure that every person on board the boat wears a life-jacket.
- Know and obey marine traffic laws, the “Rules-of-the-Road.” Learn various distress signals.
- Keep an alert lookout for other watercraft, swimmers, floating debris and shallow waters.
- Pay attention to loading. Don’t overload; distribute the load evenly; don’t stand up or shift weight suddenly in a small boat; and don’t permit riding on the bow, seatbacks or gunwales.
- Don’t operate a boat while under the influence of alcohol or drugs.
Skippers can obtain free advice and boating-safety courses from the U.S. Coast Guard Auxiliary. Upon request, the auxiliary will conduct a Courtesy Marine Examination (CME) on your boat, checking electrical and safety equipment and fuel hoses. Boats meeting safety standards are awarded the CME decal “Seal of Safety.”
Jan/Feb Let’s Talk Money Newsletter
View the newsletter here: https://www.ltmonline.com/jerrysiver
Estate Planning:
What your children should know about your finances
It may not be easy talking to your adult children about your finances and estate strategy. But discussing your finances with your grown children now can better prepare your whole family for the future.
General Interest:
Great way to start the new year
If you spent more than you wanted to this holiday season, you need to take a closer look at where your money is going. A spending plan can help you track your money and get your finances in order.
I resolve to . . .
Instead of making the same resolutions you have in the past, resolve this year to improve your financial health. We offer several ways to become more financially fit.
By the numbers: spending patterns
The Employee Benefit Research Institute has released some statistics on the spending patterns of Americans ages 50-64.
The minimum payment trap
Paying the minimum amount on your credit card may seem like a good idea, but it’s not. Not only will it take you longer to pay off the balance, but you’ll also end up paying more for the item than what it originally cost.
Insurance:
Single? You need life insurance, too
Just because you’re single doesn’t mean you shouldn’t consider life insurance. Incorporating a life insurance policy into your financial strategy can be a smart move.
The gift of a better financial future
If you’d like to help a family member get the year off to a better financial start, consider making a gift that can make a real difference in your loved one’s financial future. Your generosity also may help save estate taxes later.
Retirement Planning:
Take charge of your retirement
With pensions becoming far less common than in the past, it’s up to you to figure out how to fund your retirement. We discuss several recommendations from the IRS for preparing for retirement.
Put a realistic price tag on your retirement
When it comes to funding retirement, not everyone needs to save the same amount. Figuring out how much income you’re going to need ahead of time can put you on the path toward an enjoyable retirement.
Seniors:
Have you had the talk?
The beginning of a new year is a good time to talk to your loved ones about your possible long-term care needs. Discussing your wishes and possible solutions for long-term care can help alleviate any future stress and indecision.
Small Business:
Does your business have a contingency plan?
Financial issues can cause considerable stress between business partners. Setting up a buy-sell agreement can alleviate some of that potential stress.
The life insurance crisis
Many American households don’t have individual life insurance, even though they need the protections it provides. If you’re looking for a way to help your business attract and retain valuable employees, consider making life insurance part of your employee benefit package.
Standard:
Are you an abstract or a concrete thinker?
If you have trouble saving money, it could be because your strategy doesn’t match the way you think. Figuring out what kind of thinker you are can help you create a successful strategy for reaching your goals.
Womens:
Protect your income with disability insurance
Illness or injury can happen to anyone. Would you be prepared if it happened to you? Having long-term disability insurance coverage could help keep you financially afloat if you were prevented from working due to disability.
Christmas Holiday Hours
We will be closed for the Christmas holiday begining 3:00pm Friday and will open again 8:30am Wednesday December 26. There is someone on call while we’re closed. Call our main number and listen for the option to be transferred to the employee on call. If a claim needs to be made during this time our website has links to each insurance companies website for online reporting.
Retirement Income…you’re probably in trouble.
I’m noticing a disturbing trend when talking to people about saving for retirement and what their expectations are for their own retirement. Most people have no idea how much income they’ll need when they retire. Even worse, hardly anyone has a specific plan describing how much they need to save NOW to enable them to have enough money when it comes time TO RETIRE.
If you’re under 50, you are in luck…you still have time. If you’re over 50, and haven’t been saving at least 20% of your income, you might be in trouble.
So, unless you have:
• a large trust fund
• are already independently wealthy
• have a big inheritance coming your way soon
• lucky enough to have a large pension
You need to follow this advice, as appropriate to your age:
Over 50, but not retired
Within the next few weeks, write down your ideal plan for retirement. Include everything that could affect your income or spending. For example, will you downsize your home; will you want to spend winters in a warm climate; will you take up a new hobby or activity (golf or travel can be expensive); will you earn money doing part time work; what will groceries, telephone, gas, insurance, cable, etc, etc, cost.
Once you have your list, assign a dollar value (in annual terms using today’s values) to each. Then, add all those amounts up to see what you’ll be spending each year. Next is the step that’s a little complicated: you’ll need to calculate your annual retirement income using projected Social Security benefits, pension benefits, retirement savings you’ll have accumulated and income property you may own. Your spending amount is now subtracted from your income amount and if the result is a negative number you’ll need to spend less or retire later
Under 50
Good news, you still have time to build a decent retirement income. You need to save enough so that your retirement savings are equal to this multiple of your annual income at these ages:
Age 40, 1.61 x annual income
Age 45, 3.53 x annual income
Age 50, 5.82 x annual income
Age 55, 8.56 x annual income
Age 65 15.7 x annual income
If you have any questions about how to make sure you’ll be able to retire with enough income, get advice from an Investment Advisor, they aren’t paid commission so they have no incentive to sell you anything.
Jerry Siver