Deals & People October 22, 2024

Alera Bolsters West Coast Team with Plan Adviser Sorensen

Joshua Sorensen, formerly of Edelman Financial Engines, joins Alera Group as it continues to grow its retirement plan practice.

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Joshua Sorensen

Alera Group Inc. has brought on another retirement plan adviser to expand its employer-sponsored plan services practice—this time with a focus on expanding its West Coast presence, the retirement, insurance and wealth advisory announced Tuesday.

Joshua Sorensen, based in California, will join Alera’s retirement plan services division to provide plan sponsors with fiduciary investment advice, plan design, governance, and participant education and financial wellness guidance.

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Sorensen joins from Edelman Financial Engines, where he was a senior retirement plan division manager. He was also an investment adviser at Cetera and an account executive at Buckman-Mitchell, which was acquired by Arthur J. Gallagher & Co. in 2018.

“Josh is an outstanding retirement plan adviser whose accomplishments are reflected in both the scale of his work with clients and his client-service ethic,” Christian Mango, Alera’s executive vice president and national practice leader for retirement plan services, said in a statement.

Mango has been building up Deerfield, Illinois-based Alera’s retirement practice since joining in September 2022. Sorensen’s hire brings the division’s size to 85 people with $40 billion in client assets.

In September, Alera acquired Advanced Capital Group, an institutional investment consultant with $24 billion in retirement plan and wealth assets.

In December 2023, Alera added the Fraser Group, a Scottsdale, Arizona-based advisory led by George Fraser which works in association with Alera’s Benefit Commerce Group, also in Scottsdale.

“We’re continuing to expand, both by acquisition and by attracting top talent, as we implement our strategy of serving clients up and down the plan-size spectrum,” Mango said. “Bringing on Josh is another milestone, and I’m honored to welcome him aboard.”

Sorensen will, like the Fraser Group, work in association with Alera’s Benefit Commerce Group, according to the announcement.

In retirement and wealth aggregation, Alera Group is competing with insurance-led firms, benefits shops and registered investment advisers. The parent company has more than 4,400 employees working across property and casualty insurance, employee benefits, wealth services and retirement plans.

Compliance October 22, 2024

IRS Announces 2025 Tax Inflation Adjustments

The adjustments affect 60 tax provisions, including health flexible spending plans; tax brackets all saw income threshold increases.

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The IRS on Tuesday announced the annual inflation adjustment in 2025 for tax provisions, including employer-sponsored health flexible spending plans, also known as cafeteria plans.

The cafeteria plans, which allow employees to choose between multiple health benefits, will get a $100 bump to $3,300 in 2025 or for the 2026 tax-filing season. For cafeteria plans that permit carryover of unused amounts, the maximum carryover was raised by $20 to $660.

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Standard tax deductions also will rise. For single taxpayers and married individuals filing separately for 2025, the standard deduction will be $15,000, a $400 increase. For married couples filing jointly, the deduction is rising to $30,000, an increase of $800. The increases are less than the increases of $750 and $1,500, respectively, for the 2024 tax year.

Inflation has stabilized over the past year after the Federal Reserve’s interest rate hikes took hold. The IRS makes annual inflation adjustments to more than 60 tax provisions depending on inflation, based on Revenue Procedure 2024-40.

Other areas that will increase included:

  • For taxpayers with at least three qualifying children, the 2025 maximum earned income tax credit is $8,046, an increase of $216 from 2024;
  • The monthly limitation for the qualified transportation fringe benefit and the monthly limitation for qualified parking will rise $10 to $325;
  • Medical savings accounts for participants covering only themselves will see a deductible of at least $2,850, $50 more than last year, and no more than $4,300, an increase of $150. The maximum out-of-pocket expense amount rises $200 to $5,700. For family coverage, the deductible is not less than $5,700, a $150 increase, and no more than $8,550, an increase of $200. Out-of-pocket expenses for family coverage is $10,500, an increase of $300 from 2024;
  • Estates of decedents who die during 2025 will have an exclusion amount of $13.99 million, an increase of $380,000; and
  • The annual exclusion for gifts jumps to $19,000, up by $1,000, from 2024.

Marginal Tax Rate

The marginal tax rates remained the same in terms of percent of payment, though the income threshold for those rates increased across brackets. The end result is:

  • 37% for individual single taxpayers with incomes greater than $626,350 ($751,600 for married couples filing jointly);
  • 35% for incomes greater than $250,525 ($501,050 for married couples filing jointly);
  • 32% for incomes greater than $197,300 ($394,600 for married couples filing jointly);
  • 24% for incomes greater than $103,350 ($206,700 for married couples filing jointly);
  • 22% for incomes greater than $48,475 ($96,950 for married couples filing jointly);
  • 12% for incomes greater than $11,925 ($23,850 for married couples filing jointly); and
  • 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).

Some tax provisions that were unchanged include: personal exemptions, which remain at 0 after being eliminated in the Tax Cuts and Jobs Act of 2017; no limitations on itemized deductions; and the same level for lifetime learning credits that has been in place since December 31, 2020.

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