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E-News ~ 1st Qtr 2004 |
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From the office of Tim Olson Welcome to 2004, and the first of The Olson Group quarterly newsletters. We will include articles on what's happening in today's ever-changing employee benefits industry to keep you informed. We are finally winding down all the transition issues moving away from G&W this past year, and are now focusing on developing our Website, new email, and a host of other services that will be introduced in 2004. For example, our pension clients will be contacted shortly to establish a service schedule for the entire year. You can then tell your employees what month(s) a registered rep will be available to help them with asset allocation, and other retirement plan questions. We added another full time position in the Elkhorn office, and if you haven't spoken to her, I am very excited to announce Paula Mills has filled the position. She and Suzi Sciscoe will help you in any way with all of your day-to-day service needs. Home Exercise Equipment For Treating Obesity May Be A Deductible Medical Expense
For a copy of the IRS Information Letter 2003-0202 go to www.irs.gov/pub/irs-wd/03-0202.pdf IRS Announces 2004 Mileage Rate For Transportation To Obtain Medical Care The IRS has announced that the standard mileage rate for use of an automobile to obtain medical care (as described in Code Section 213) will increase from $0.12 to $0.14 per mile for 2004. Health FSAs that reimburse participants for transportation expenses incurred in obtaining medical care will be subject to the new rate. (IRS Rev. Proc. 2003-76; IRS New Release IR-2003-121, Oct. 15, 2003) For a copy to to www.irs.gov/pub/irs-drop/rp-03-76.pdf |
IRS Announces 2004 Cost-of-Living Increases In Dollar Limits For Retirement Plans The IRS has announced the 2004 cost-of-living increases applicable to the dollar limits for retirement plans. The IRS news release also summarizes the limits scheduled to increase under the Economic Growth & Tax Relief Act of 2001 (EGTRRA). Some of the highlights that will change in 2004 are as follows:
Limits That Will Not Change in 2004
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(As published by the Internal Revenue Service)
| 2004 | 2003 | 2002 | 2001 | |
|---|---|---|---|---|
| Elective Deferrals (401K & 403b Plans) |
$13,000 | $12,000 | $11,000 | $10,500 |
| Annual Benefit Limit | $165,000 | $160,000 | $160,000 | $140,000 |
| Annual Contribution Limit | $41,000 | $40,000 | $40,000 | $35,000 |
| Annual Compensation Limit | $205,000 | $200,000 | $200,000 | $170,000 |
| 457 Deferral Limit | $13,000 | $12,000 | $11,000 | $8,500 |
| Highly Compensated Threshold | $90,000 | $90,000 | $90,000 | $85,000 |
| SIMPLE Contribution Limit | $9,000 | $8,000 | $7,000 | $6,500 |
| Roth Contribution Limit At Age 50 or Older |
$3,000 $3,500 |
$3,000 $3,500 |
$3,000 $3,500 |
N/A N/A |
| Traditional Contribution Limit At Age 50 or Older |
$3,000 $3,500 |
$3,000 $3,500 |
$3,000 $3,500 |
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| SEP Coverage | $450 | $450 | $450 | $450 |
| SEP Compensation Limit | $205,000 | $200,000 | $200,000 | $170,000 |
| Income Subject to Social Security | $87,900 | $87,000 | $84,900 | $80,400 |
| Top Heavy Plan Key Employee Comp | $130,000 | $130,000 | $130,000 | N/A |
| Catch-Up Contributions | $3,000 | $2,000 | $1,000 | N/A |
| SIMPLE Catch-Up Contribution | $1,500 | $1,000 | $500 | N/A |
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The Mutual Fund Controversy The mutual fund industry and its trading practices have come under investigation in recent weeks. The scandal involves trading abuses and wrongdoing by a large number of their employees, including top fund executives. The SEC and New York Attorney General are investigating market timing and late day trading in mutual funds. Questions have been raised concerning the following fund groups - Alliance Capital, Federated Investors, Fred Alger Management, Invesco Funds, Janus Capital Group, Loomis Sayles & Company, MFS Investment Management, Nations Funds, One Group Mutual Funds, PBHG Funds, Putnam Investments and Strong Capital Management. Several mutual fund firms still enjoy excellent reputations - American Funds, Fidelity, TIAACREF, T. Rowe Price, Vanguard, and Dimensional Fund Advisors. Our carriers have been in contact with the companies who manage the funds and are on top of the situation. At this time, none of the information indicates any violations of propriety rules and regulations as established by the SEC. The carriers will continue to monitor these situations and keep us advised.
??? QUESTION CORNER ???
Do you have a question that you would like answered that would be beneficial to others reading this newsletter? If so, call our office or send us an e-mail and we'll put it in the next edition.
Every Day, Tell At Least One Person Something You Like, Admire, Or Appreciate About Them
The Anchor of Attitude
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Health Savings Account The option to set up a Health Savings Account (HSA) becomes available this month as part of the new Medicare law. Any individual who is covered by a high-deductible health plan may establish an HSA. Amounts contributed to an HSA belong to the individual and are completely portable. Every year the money not spent, stays in the account and gains interest tax-free, just like an IRA. Unused amounts remain available for later years. Many people reduce health insurance costs by buying policies that have high deductibles. The law permits tax-sheltered savings accounts to finance these deductibles - at least $1,000 a year for individuals, $2,000 for couples, and a high cap on annual out-of-pocket expenses of $5,000 for individuals and $10,000 for families. The employer and employee combined may make pretax contributions to the account up to the amount of the health-plan deductible each year - but no more than $2,600 (or $5,150 for families) in 2004. You can receive a tax deduction for contributions, invest this money and pay no taxes on the earnings upon withdrawal, provided the money is used for health expenses, including long-term-care services. Otherwise, a 10% penalty applies. We just held a seminar on HSA plans at the HFMA meeting in Omaha this past week. If you want more information, let us know.
Teamwork
"Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has."
Customer Service Contacts
AFLAC 1-800-462-3522 Allstate (AHL) 1-800-521-3535 www.ahlcorp.com Ameritas 1-800-487-5553 www.ameritasgroup.com AUL 1-800-249-6269 www.eretirement.aul.com PRINCIPAL 1-800-547-7754 www.principal.com UNUM 1-800-255-6148 www.unumprovident.com |
The Olson Group
20214 Veterans Drive, Suite 200PO Box 543
Elkhorn, NE 68022
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PHONE: (402) 289-1046 |
TOLL FREE: 1-866-289-1046 |
FAX: (402) 289-1012 |
EMAIL: tolson@theolsongroup.net |
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