Newsletter Articles

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.

The economic environment of the last few years created financial challenges for individuals and businesses alike. Even though the worst of the recession appears to be behind us now, some of those financial challenges have had a ripple effect that continues to show itself. One area where that is especially true relates to the loans participants took from their 401(k) plans. Economic pressures certainly brought about an increase in loans, but it also caused some participants with loans to have trouble repaying them.

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).

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.

Qualified plans must perform annual testing to be sure that the plan doesn’t unfairly discriminate in favor of “highly compensated employees” (HCEs) or exceed the contribution limits set forth by the IRS. Depending on your plan provisions, it isn’t just one calculation, but a series of tests that show that your plan is not discriminatory. If your plan is audited, the auditor is looking for proof of this compliance.

Earlier this year, the Bipartisan Budget Act of 2018 was passed by Congress and signed into law. While this law made several changes that impact retirement plans, one provision changing the rules around hardship distributions is particularly notable…

Every Fall, the coming year’s Cost-of-Living Adjustments (COLAs) are released by the Internal Revenue Service. The benefit increases counteract the effects of inflation and keep up with the “cost of living”.

It’s the time of year when Plan Sponsors scramble to deliver the myriad notices required to be given to their participants. Even with the help of service providers, the sheer number of notices can be overwhelming…

Compliance deadlines approaching in December 2018 and January 2019.

Natural disasters can cause upheaval in many aspects of victims’ lives and this destruction often extends to financial matters. What should otherwise be routine compliance for plan deadlines can prove difficult in these extreme events and the government tends to grant temporary relief in such cases…