faces
                     ...from the HR Perspective
New MFYCO
Human Resource UpdateSeptember 2012
In This Issue
Changes to the IRS Letter-Forwarding Program
MFYCO Facebook
Worst PIN Codes
Affordable Care Act
E-Verify
eLaws Quick Link
Retirement Plan Limits
Track Government Spending
Terms of Use

 

  

 

Home Economics

One of the courses that has been dropped in most high schools is "Home Economics." Home Economics covered many subjects in relation to the running of the physical household such as cooking, cleaning, purchasing food and household items and perhaps sewing. One subject, usually detested by the students, was the economics part, and primarily the creation of a household budget. Today, unless students learn from their parents, or take a finance related course in college, they are left on their own to structure their financial affairs. What effect does this have on our employees and our companies?

Most companies have 401(k) plans, and many of them match their employees' contributions. However, even with the match, companies may have a hard time meeting the discrimination tests due to low contribution rates or insufficient participation by the non-highly compensated employees. Companies are also offering an array of healthcare plans that permit employees to balance their contribution against perceived plan use. Flexible spending accounts (FSAs) allow employees to make healthcare contributions, provide for uncovered medical expenses and dependent care on a pre-tax basis. All of these, and other, plans require employees to make reasonable decisions to get the best financial advantage.

 Every day, the quality and quantity of employees' work drives profits up or down. However, due to a lack of financial training, most employees do not know how their efforts help or hurt their employer's bottom line. An unstructured survey once showed that some employees thought their employer had lots of money and could well afford to provide better working conditions and pay. These feelings are what unions prey on to organize workforces.

I suggest that consideration be given to a series of financially related courses for your employees. If properly done, these need not be boring or complicated. They can be either in person or over the internet. In order to make the proper benefit plan decisions, one needs to know what the family budget is - the first step might be a basic household budget course. Following that could be a session or two covering planning for unexpected healthcare events, dependent care, college education and the future including retirement. While some mutual fund companies provide retirement planning, what is needed is broader coverage starting with the basic budget.

That brings us to educating employees on how a company works. Here, simple is better. What needs to be shown is how working together in an efficient manner can help the company along, how most of a company's income goes to expenses, what remains is profit that is reduced by taxes and a good portion of that needs to be put away for the future.

If we educate our employees so they can better take care of their financial affairs, how to use the benefit plans we provide, and how our companies work, we should have a happier, more productive workforce.

Suggestions or ideas about any of the topics we cover are always welcomed. And if you think you could use assistance in the development of any courses, please feel free to discuss it with us.

 

Sincerely,

 

Michael F. Yates,

President

 

If you find value in this newsletter please let us know. Feel free to call me with a comment and/or ask a question at any time (908-689-4200) or send me an email (myates@mfyco.com). We offer this timely information as another benefit of your relationship with our company. If you feel a friend or colleague would benefit from receiving our newsletter, please feel free to forward a copy. 


You can view all of our newsletters by clicking the 'newsletter archives' link at our company website www.mfyco.com.

 

 

UPDATE

Changes to the IRS Letter-Forwarding Program

 

On August 31, 2012, the Internal Revenue Service issued Revenue Procedure 2012-35, IRB 2012-37, revising the scope of the IRS letter-forwarding program. Revenue Procedure 2012-35 provides that the IRS will no longer forward letters on behalf of plan sponsors or administrators of qualified retirement plans or qualified termination administrators (QTAs) of abandoned plans under the Department of Labor's Abandoned Plan Program who are attempting to locate missing plan participants and beneficiaries. 

 

Since the IRS letter-forwarding program began, numerous alternative missing person locator resources, including the Internet, have become available to assist a plan sponsor or plan administrator in locating a missing participant or beneficiary owed a retirement benefit, enabling the program change.  

 

In particular, this change affects retirement plan sponsors and administrators who are searching for plan participants or beneficiaries in order to correct failures that require payment of additional benefits in accordance with the Employee Plans Compliance Resolution System (EPCRS), as described in Revenue Procedure 2008-50, 2008-35 IRB 464. Accordingly, in future guidance on EPCRS, the IRS intends to provide an extended correction period for plan sponsors and administrators affected by this change in the letter-forwarding program.  

 

Revenue Procedure 2012-35 applies to requests postmarked on or after August 31, 2012. Requests that are postmarked prior to that date will continue to be processed pursuant to Revenue Procedure 94-22, 1994-1 CB 608.

 

Taken From - IRS Employee Plans News (8/31/2012)

 

How do we overcome this new hurdle? We recommend that employers conduct at least an annual follow-up with any employee or beneficiary who is not yet in pay status. Notices sent certified mail with a return receipt request are the most beneficial as they will alert you sooner if an in individual has moved. We understand that the Post Office will forward mail for 12 months and return any mail for the next six months with the forwarding address attached. You can then adjust your records. Sending notices to retirees or beneficiaries in pay status is also helpful to keep those records up to date to prevent payments from continuing after an individual's demise. Notices to those in pay status could also include a reply card that must be signed by the recipient. These signatures could then be checked against the signature on file with the company. We will have more on this subject in next month's newsletter.

 

 
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Worst PIN Codes

Hopefully you have all read our Worst Password article and changed your own password if it fell on the list. Now we want to share with you the worst PIN codes. If you lost your ATM card on the street, how easy would it be for someone to correctly guess your PIN? Not hard at all if your number falls on the below list. If it does, contact your bank to find out how you can change it! Just don't change it to your birthday or year you were born. If someone finds your wallet, your license has your birthday on it. Data shows that every single 19__ combination can be found in the top 20% of most used PINs.

 

PIN

Freq

#1

1234

10.713%

#2

1111

6.016%

#3

0000

1.881%

#4

1212

1.197%

#5

7777

0.745%

#6

1004

0.616%

#7

2000

0.613%

#8

4444

0.526%

#9

2222

0.516%

#10

6969

0.512%

#11

9999

0.451%

#12

3333

0.419%

#13

5555

0.395%

#14

6666

0.391%

#15

1122

0.366%

#16

1313

0.304%

#17

8888

0.303%

#18

4321

0.293%

#19

2001

0.290%

#20

1010

0.285%

 

* Data courtesy of Data Genetics

 


We invite you to share our newsletter. 
(It's a lot to think about!) 
 
 

Affordable Care Act - What's left to Accomplish, timeline below: 

 

         Linking Payment to Quality Outcomes

 

Effective for payments for discharges occurring on or after October 1, 2012

 

The law establishes a hospital Value-Based Purchasing Program (VBP) in Original Medicare. This program offers financial incentives to hospitals to improve the quality of care. Hospital performance is required to be publicly reported, beginning with measures relating to heart attacks, heart failure, pneumonia, surgical care, health-care associated infections, and patients' perception of care.

 

         Improving Preventive Health Coverage

 

Effective January 1, 2013

 

To expand the number of Americans receiving preventive care, the law provides new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.

 

         Increasing Medicaid Payments for Primary Care Doctors

 

Effective January 1, 2013

 

As Medicaid programs and providers prepare to cover more patients in 2014, the Act requires states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services. The increase is fully funded by the federal government.

 

         Expanded Authority to Bundle Payments

 

Effective no later than January 1, 2013.

 

The law establishes a national pilot program to encourage hospitals, doctors, and other providers to work together to improve the coordination and quality of patient care.  Under payment "bundling,"  hospitals, doctors, and providers are paid a flat rate for an episode of care rather than the current fragmented system where each service or test or bundles of items or services are billed separately to Medicare. For example, instead of a surgical procedure generating multiple claims from multiple providers, the entire team is compensated with a "bundled" payment that provides incentives to deliver health care services more efficiently while maintaining or improving quality of care. It aligns the incentives of those delivering care, and savings are shared between providers and the Medicare program.

 

         Additional Funding for the Children's Health Insurance Program (CHIP)

 

Effective October 1, 2013

 

Under the new law, states will receive two more years of funding to continue coverage for children not eligible for Medicaid.

 

         Establishing Affordable Insurance Exchanges

 

Effective January 1, 2014

 

Starting in 2014 if your employer doesn't offer insurance, you will be able to buy it directly in an Affordable Insurance Exchange. An Exchange is a new transparent and competitive insurance marketplace where individuals and small businesses can buy affordable and qualified health benefit plans.  Exchanges will offer you a choice of health plans that meet certain benefits and cost standards.  Starting in 2014, Members of Congress will be getting their health care insurance through Exchanges, and you will be able buy your insurance through Exchanges too.

 

         Promoting Individual Responsibility

 

Effective January 1, 2014

 

Under the new law, most individuals who can afford it will be required to obtain basic health insurance coverage or pay a fee to help offset the costs of caring for uninsured Americans.  If affordable coverage is not available to an individual, he or she will be eligible for an exemption.

 

         Increasing Access to Medicaid

 

Effective January 1, 2014

 

Americans who earn less than 133% of the poverty level (approximately $14,000 for an individual and $29,000 for a family of four) will be eligible to enroll in Medicaid. States will receive 100% federal funding for the first three years to support this expanded coverage, phasing to 90% federal funding in subsequent years.

 

         Makes Care More Affordable

 

Effective January 1, 2014

 

Tax credits to help the middle class afford insurance will become available for those with income between 100% and 400% of the poverty line who are not eligible for other affordable coverage. (In 2010, 400% of the poverty line comes out to about $43,000 for an individual or $88,000 for a family of four.) The tax credit is advanceable, so it can lower your premium payments each month, rather than making you wait for tax time. It's also refundable, so even moderate income families can receive the full benefit of the credit.  These individuals may also qualify for reduced cost-sharing (copayments, co-insurance, and deductibles).

 

         Ensuring Coverage for Individuals Participating in Clinical Trials

 

Effective January 1, 2014

 

Insurers will be prohibited from dropping or limiting coverage because an individual chooses to participate in a clinical trial. This applies to all clinical trials that treat cancer or other life-threatening diseases. 

 

         Eliminating Annual Limits on Insurance Coverage

 

Effective January 1, 2014

 

The law prohibits new plans and existing group plans from imposing annual dollar limits on the amount of coverage an individual may receive.

 

         No Discrimination Due to Pre-Existing Conditions or Gender

 

Effective January 1, 2014

 

The law implements strong reforms that prohibit insurance companies from refusing to sell coverage or renew policies because of an individual's pre-existing conditions. Also, in the individual and small group market, it eliminates the ability of insurance companies to charge higher rates due to gender or health status.

 

         Increasing Small Business Health Insurance Tax Credit

 

Effective January 1, 2014   

 

The law implements the second phase of the small business tax credit for qualified small businesses and small non-profit organizations. In this phase, the credit is up to 50% of the employer's contribution to provide health insurance for employees.  There is also up to a 35% credit for small non-profit organizations.

 

 

         Paying Physicians Based on Value Not Volume

 

 Effective January 1, 2015

  

A new provision will tie physician payments to the quality of care they provide. Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care. 

 

Excerpt from Healthcare.gov (a Federal Government website managed by the U.S. Department of Health & Human Services)

 

Call: 908-689-4200 to contact a
MFYCO professional consulting associate.
happypeople
 

On September 28, 2012, President Obama signed into law S. 3245 which reauthorizes E-Verify until September 30, 2015.

 

E-Verify is a free, Internet-based service that enables participating employers to electronically verify that their newly hired employees are authorized to work in the United States by comparing information from the Employment Eligibility Verification Form I-9 to the Social Security Administration's data.  For more information on registering to use E-verify, visit www.dhs.gov/e-verify.



 What would you like to see in a future issue?

Contact our office with your suggestions.

  email: info@mfyco.com
 

 
 

 Retirement Plan Limits

 

 

2012

2011

2010

Maximum Annual Defined Benefit

$200,000

$195,000

$195,000

Maximum DC Annual Addition ($$)

$50,000

$49,000

$49,000

Maximum 401(k) Deferrals    

$17,000

$16,500

$16,500

Older EE Catch-Up Contribution

$5,500

$5,500

$5,500

Maximum Plan Compensation

$250,000

$245,000

$245,000

Highly Compensated Threshold

$115,000

$110,000

$110,000

Key Employee in a Top-Heavy Plan

$165,000

$160,000

$160,000

SSA Social Security Wage Base

$110,100

$106,800

$106,800

PBGC Maximum Monthly Guarantee

$4,653.41

$4,500

$4,500

PBGC Maximum Annual Guarantee

$55,840.92

$54,000

$54,000

Maximum DC Annual Addition (%)

100%

100%

100%

Social Security Tax  - Employee

Social Security Tax  - Employer

4.2%

6.2%

4.2%

6.2%

6.2%

6.2%

Medicare Tax

1.45%

1.45%

1.45%

DC Plan Deduction Limit

25%

25%

25%

Definition of Compensation for DC  

Plan Deduction Limit

Includes Deferrals


 
about MFYCO ...

  • Michael F. Yates & Company, Inc. can help you with a variety of services ranging from retirement plans to providing results-oriented survey instruments, training and development programs for your employees. Our products and services are intended to help you maximize the effectiveness of your Human Resources function.
     
  • These products and services incorporate our years of experience so that you receive rapid results and exceptional value. From onsite consulting, to strategic business integration, to Web enablement, we understand how Human Resources can be applied to solve your problems and achieve your goals. As a result, we can help you get the most out of your investment and turn your most precious resource into a competitive advantage.
     
  • We offer Consulting, Retirement Planning, Pension and 401(K) both qualified and non qualified Plans, Welfare Plans, Communications, Computer Systems, Executive Plans, Compensation, Mergers, Acquisitions, Divestitures and Other Services. 
     
    We offer a true and honest, Client Partnership.
     

Take the Michael F. Yates & Company, Inc. challenge!

Call us today ... 908-689-4200 



mh group
 How to Track Government Recovery Spending

 

"The Board shall establish and maintain...a user-friendly, public-facing website to foster greater accountability and transparency in the use of covered funds. The website...shall be a portal or gateway to key information relating to the Act and provide connections to other government websites with related information." 

 
 
Michael F. Yates & Company, Inc.
_________________

 
101 Belvidere Avenue
P.O.Box 7
Washington, NJ 07882-0007 
 
908-689-4200

fax: 908-689-6300
 
email: info@mfyco.com


 

 
Our staff and firm are proud
members
of the following professional organizations:

Society of Actuaries
 
American Society of Pension Professionals & Actuaries

Society for Human Resource Management
  
GAPS (Global Association Pension Services)

WorldatWork

 American Management Association

 

National Federation of Independent Business

Better Business Bureau

 

 


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