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How the SECURE Act is Changing Retirement

How the SECURE Act is Changing Retirement

On December 20, 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law.The SECURE Act represents some of the most significant changes to retirement plan law since the passage of the Pension Protection Act of 2006, over thirteen years ago. The provisions of the Act are broad ranging and span many different effective dates.Financial Help for Plan SponsorsThough tax credits have been in place to help offset the cost of adopting a new retirement plan, the SE...
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The Final Rule on Hardship Distributions

The Final Rule on Hardship Distributions

On Sept. 23rd, the IRS published a final rule that relaxes several existing restrictions on participant hardship distributions from defined contribution plans.Some of these changes are mandatory, requiring employers to make the changes by Jan. 1st, 2020, while others are optional. Though the IRS had issued the proposed regulations in 2018, the final regulations clarify a few key provisions: The Loan-First Rule. The new rule removes the requirement that participants exhaust their ability to take ...
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Safe Harbor 401(k) Plan Design

Safe Harbor 401(k) Plan Design

Being the bearer of bad news isn’t fun.When the third-party administration firm relays that aspects of the annual compliance testing have failed causing many of the company’s executives to receive taxable distributions from the plan, it isn’t a great day for the HR manager. The administrator explains that the regulations require testing to prevent highly paid employees from receiving disproportionately greater benefits than other employees. At a much-needed lunch that day, the ...
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It's All in the Design...

It's All in the Design...

For many new Plan Sponsors, and even those savvy at running company retirement plans, understanding plan design can be daunting. Industry terminology, IRS code sections, and complicated illustrations can make understanding difficult.As a retirement plan service provider, we try to ensure that your plan design is the most optimal for your group of employees. Since employee demographics can change, it’s a good idea to understand the basics and review your design from time to time.Permitted D...
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Complying with Safe Harbor Deadlines

Complying with Safe Harbor Deadlines

All 401(k) plan contributions have deposit deadlines, and it’s up to 401(k) fiduciaries to meet them. Yet, many are unclear about the deadlines applicable to their 401(k) plan. That confusion can easily lead to late contributions.Most of the confusion surrounds the deadline to deposit amounts withheld from employee wages, i.e., 401(k) pre-tax, 401(k) Roth, and/or participant loan repayments. Passed into law in 2004, the Department of Labor (DOL) set forth the rules to comply with the safe ...
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Bucket List: Retirement

Bucket List: Retirement

The economy continues at its strong pace, keeping unemployment at its lowest rate in nearly 50 years. While this is usually good news, employee financial vulnerability is clouding this sunny forecast. The repercussions are impacting their ability to save for retirement.Millennials are the most stressed by their financial situations, followed by Gen X and Baby Boomers according to PWC’s 8th annual Employee Financial Wellness Survey released in June 2019. More than 80% of the employees surve...
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Protect Your 401(k)

Protect Your 401(k)

Though some employers may not think so, the truth is that in today's world 401(k) plans are subject to fraudulent activity and that the often-overlooked retirement plan can be the perfect place for it to occur. For example, in late 2017, several news outlets reported a scheme targeting individual 401(k) accounts. The U.S. Attorney's office in Colorado had filed a lawsuit to recover up to $2 million in losses due to fraudulent distributions from retirement plan accounts. The lawsuit, file...
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Automatic Enrollment is on the Rise

Automatic Enrollment is on the Rise

With the future of Social Security in question, it is becoming ever increasingly important for workers to self- prepare for post-retirement living. Studies show that approximately one out of every three eligible workers choose NOT to participate in their employer-sponsored 401(k) plan. Offering automatic enrollment in your 401(k) plan is a way for you, as Plan Sponsor, to help lend a hand to employees that are not fully aware of the significance of having a post-retirement source of revenue.Plan...
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The 401(k) Turns 40

The 401(k) Turns 40

In 2018, the 401(k) plan celebrated its 40th birthday! Though extremely popular today, 401(k) plans came about almost by accident. IRC Section 401(k) was passed into law as part of the Revenue Act of 1978 and was included to limit executive compensation. However, in 1980, Ted Benna of the Johnson Companies used the provision to create and get IRS approval of the first 401(k) plan for his company. For this he is often referred to as the father of the 401(k).At its inception, employees could contr...
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Know Your Options

Know Your Options

If your plan offers a Roth 401(k) provision, your participants might ask, “Which one is better for me?” As the availability of Roth options in 401(k) plans and Roth contribution percentages continue to rise, it’s important to be able to guide participants in making the right choice.401(k) plans offer many advantages to participants; the ability for accounts to grow on a tax-deferred basis, the chance of receiving employer contributions in the form of a match or non-elective con...
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