401(k)

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Who is an Employee?

Maintaining a retirement plan for your employees is no easy task. At various points during the year, employers and HR departments field participant questions, help with enrollments, deliver notices and statements, and participate in the distribution process. However, an additional responsibility, and one of the most important, is the collection of data that is used for compliance testing and government reporting. Though all these duties are important, one task drastically affects the outcome of your compliance testing; accurate reporting of all employee information to your third-party administrator. Sound onerous? Not really.

Pro-Rata Participant Fees and Fee Transparency: A Recordkeeper’s Conundrum

What does it mean when fees are assessed "pro-rata"? The pro-rata method of assessing a fee is when the total fee amount is deducted proportionally from participant accounts. In terms of fee fairness, pro-rata fees will ensure that all participant fees are reasonable based on their account balance. In terms of fee clarity, a participant will never be able to verify or calculate their pro-rata fee, since they are only aware of their individual account balance and not the balances of other participants.

2017-08-10T14:28:40-05:00August 8th, 2017|Categories: 401k Resources|Tags: , , , , , |Comments Off on Pro-Rata Participant Fees and Fee Transparency: A Recordkeeper’s Conundrum

Business Owner Seeks to Maximize Retirement Contributions in Pre-Retirement Years

This business owner had delayed saving for retirement and was looking to maximize retirement contributions for himself having not contributed significantly for retirement in prior years.

2018-12-03T09:47:36-05:00July 18th, 2017|Tags: , , |Comments Off on Business Owner Seeks to Maximize Retirement Contributions in Pre-Retirement Years

Cash Balance Plan Design for Medical Practice Buyout

In this case, the junior partner was looking to buy out the senior partner in a Medical Practice. The HCEs in this medical practice were the Partners and their spouses. HCEs include employees that have at least 5% ownership in the company during the current plan year or the prior plan year regardless of their annual compensation. Immediate family of the Owner(s) of the company, e.g., spouse and children, are also considered HCEs for plan purposes.

2017-07-19T15:16:43-05:00July 18th, 2017|Tags: , , |Comments Off on Cash Balance Plan Design for Medical Practice Buyout

Cash Balance Plan Maximizes Tax Deductions for Law Firm Partners

This law firm wanted to implement a cash balance plan to maximize tax deductions for the founding partners and give larger contributions to the junior partners using an advanced profit sharing design. We worked with the firm to maximize each founding partner’s profit sharing and cash balance contributions while providing larger contributions for the junior partners.

2017-07-19T15:17:37-05:00July 18th, 2017|Tags: , , , |Comments Off on Cash Balance Plan Maximizes Tax Deductions for Law Firm Partners

Retirement Plan Rx (June 2017)

The latest news regarding retirement plans has centered around service provider fees.  While fees are a highly important aspect of managing an employer-sponsored retirement plan, they are not the only metric of your overall retirement plan's health. A low-cost retirement plan does not necessarily parallel a fruitful pension program for employees.  Studies show that since Social Security was never designed to fully fund an individual's retirement, employer-sponsored retirement plans have become an integral part of employees' overall financial plan for their future.  Relying so heavily on this one component should prompt any plan sponsor to ask one very straightforward question… How healthy is my company's retirement program?

2017-06-15T08:28:27-05:00June 14th, 2017|Categories: Newsletters/Bulletins|Tags: , , , , , , , |Comments Off on Retirement Plan Rx (June 2017)

The Integrity of a 401k Plan Provider

The Department of Labor (DOL) fiduciary rule, delayed from the original April 10, 2017 deadline, expands the ERISA (Employee Retirement Income Security Act) definition of “investment advice fiduciary” so that every financial professional working with retirement plans would be held accountable as a fiduciary of the plan.

2017-04-18T23:17:28-05:00April 18th, 2017|Categories: 401k Resources|Tags: , , , , , , , |Comments Off on The Integrity of a 401k Plan Provider

Timing is Everything ( February, 2015)

For years now, we have been hearing from the Department of Labor (DOL) about the importance of depositing employee 401(k) deferrals and loan payments as quickly as possible. While that continues to be the case, it seems that there is not nearly as much commentary about when to deposit company matching or profit sharing contributions. That is about to change with this article.

2017-03-23T21:51:55-05:00February 26th, 2015|Categories: Newsletters/Bulletins|Tags: , , , |Comments Off on Timing is Everything ( February, 2015)

Year-End Compliance Testing Overview (December, 2014)

The end of the calendar year is fast approaching which means the plan year end for many qualified plans. It will be time for plan sponsors to collect complete employee data to enable their service providers to perform the numerous compliance tests required to retain the plans tax qualified status.

2017-03-23T21:51:55-05:00December 26th, 2014|Categories: Newsletters/Bulletins|Tags: , , , , |Comments Off on Year-End Compliance Testing Overview (December, 2014)
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