401(k) plan

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A Simple Guide to 401(k) Participant Disclosures

When it comes to 401(k) plans, plan sponsors have a fiduciary responsibility to distribute a variety of documents and disclosure notices. Imposing this responsibility on plan sponsors helps ensure that participants have the necessary information about the plan provisions and investment options in order to make informed and timely decisions for their personal financial wellness.

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).

Know Your Options

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 contribution, the ability to contribute even after attaining age 70 ½, and protections from bankruptcy. These benefits are consistent whether a participant chooses traditional or Roth contributions, or even both! So, what makes Roth and traditional routes different and what are the advantages and disadvantages of each?

2019-02-06T13:43:01-05:00February 6th, 2019|Categories: Newsletters/Bulletins|Tags: , , , , |Comments Off on Know Your Options