401k Plan Goals — How Do You Measure Success?

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As an employer, you may feel that having a 401k plan in place is sufficient. But have you ever considered your 401k plan goals? Generally speaking, if 401k plans are meant to be used to augment retirement income they may be considered a success. However, if 401k’s are expected to serve as the primary source of retirement income (along […]

Federal Unemployment Tax Act Surtax Expired June 30, 2011

Business owners received a gift from the federal government recently: the temporary 0.2% Federal Unemployment Tax Act (FUTA) surtax expired June 30, 2011. The surtax was part of the 6.2% unemployment tax rate that employers pay to the IRS on the first $7,000 of wages paid annually to each employee. The 6.2% gross rate represented […]

401k Loan Rules

401k loan

Today, the majority of 401k plans include provisions for a participant 401k loan. That means an employee can borrow money from his or her account and repay it through payroll deduction without incurring taxes or penalties. This article examines the details of 401k loans and discusses the pros and cons of taking a loan from retirement […]

401k Record Retention: What Should I Keep And For How Long?

401k record retention

As a plan sponsor, have you ever wondered how long you should maintain various plan records? Are you running out of storage space for your existing records? When it comes to 401k record retention and document storage, remember that your number one goal should be to have materials preserved in a format that allows for quick […]

Target Date Glide Path

glide path

While the term glide path may still be defined by Merriam-Webster as “the proper path of descent for an aircraft preparing to land”, 401k plan sponsors know this refers to a Target Date Glide Path.  This is the process by which your 401k Target Date Investments gradually reduce their equity exposure as participants near retirement age. As currently designed, […]

Automatic Enrollment Improves 401k Plan Participation

automatic enrollment

Low 401k participation is a concern for plan sponsors, since it means that employees are not on track for retirement readiness. In many cases, low participation can result in a failure of the 401k plan’s nondiscrimination tests. Often the test results end up creating unwanted refunds to highly compensated employees.  As 401k Advisors, we look […]

Small Business Jobs Act of 2010: Roth Conversions

Small Business Jobs Act

On September 27, 2010, the Small Business Jobs Act of 2010 (SBJA 2010) was signed into law. The new law significantly expands the potential use of the Roth tax treatment within employer retirement plans. Small Business Jobs Act Gives Many the Option to Rollover to Roth Beginning in 2010, new rules allowed employees who were […]

What Should a Fiduciary Be Doing in Down Markets?

fiduciary

With the recent stock market volatility, retirement plan fiduciaries are wondering what they should be doing, or if they have done enough, to help participants cope with down markets. Following are three governance items for you, as a fiduciary, to follow in times of market turmoil.  As 401(k) Advisors, we work with retirement plan fiduciaries to […]

In-Service Rollovers Explained

401k In-Service Withdrawals

In-service rollovers are poorly understood by both plan sponsors and participants.  A 401(k) plan must specifically allow for this feature.  Greater desire for asset allocation and diversification has highlighted the risks associated with having a majority of a participant’s retirement assets with just one plan and one company stock. An in-service rollover may help you […]

How Does a Pension Plan Work?

pension plan

Because the defined benefit pension plan is less common today than the 401(k) plan, there’s general confusion about how pension plans actually work.  The defining difference is that a pension plan promises a specific benefit (such as monthly income) to participants, while a 401(k) plan has no such guarantee. Unlike a 401(k) plan, a defined benefit pension plan […]

QDIA — Rules for Qualified Default Investment Alternatives

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On October 24th, 2007 the Department of Labor (DOL) issued the long awaited qualified default investment alternatives (QDIA) final regulations. The DOL retained much of the proposed regulations, but also offer a few new opportunities as well as some new variables. Safe harbor relief is available to fiduciaries of participant-directed 401k plans where certain conditions […]

401k Hardship Withdrawal — A Solution In Hard Times?

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  As you know, the United States was hit hard this year by tornadoes. There was a record number of EF5, the most fierce of all tornadoes. The death toll is now the highest it has been since 1950. Many have lost homes, cars, and businesses. As a result of these natural disasters, many have […]

FICA Limits 2012

FICA Limits 2012

FICA Limits 2012 — Likely To Increase Next Year 2011 saw temporary tax cuts for employees; there was a 2% reduction of FICA taxes for all employees. Typically, FICA taxes are collected on 7.65% of earnings. Prior to 2011, the rate has been 7.65% since the 1990s, but with the tax break, the 2011 FICA […]

Form 5500 — 2007 Changes

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  Form 5500 Annual Return/Report of Employee Benefit Plans and related instructions were revised in 2007 by the U.S. Department of Labor (DoL), the Internal Revenue Service (IRS), and the Pension Benefit Guaranty Corporation (PBGC). According to a press release from the DoL, the three significant changes to the Form 5500 for plan year 2007 […]

ERISA 408(b)(2) Final Regulations Effective July 1, 2012

408(b)(2)

The Department of Labor (DoL) has recently released new rules regarding the ERISA 408(b)(2) Servicer Provider Rules and ERISA 404(a) Participant Disclosure Rules. 408(b)(2) regulations become effective July 1, 2012. Service Provider Rules (ERISA 408(b)(2)) The final rule extends the date of Service Provider Fee Disclosure to July 1, 2012. This allows service providers an […]

2012 Maximum 401k Contribution

maximum 401k contribution over 50

  For 2013 401k Contribution Limits, Click Here     On October 20, 2011, the IRS announced 401k contribution limits for 2012. This means that the 2012 pre-tax contribution limit for 401k plans will be $17,000 up from $16,500 with an index for inflation set at $500 increments. 2012 Maximum 401k Contribution Over 50 Increased […]

SAVE Act Would Help Small Business Retirement Plans

SAVE Act

Named the SAVE Act, Congress has reintroduced legislation that would give small businesses greater flexibility and enhanced incentives for sponsoring employer-based retirement plans for their employees as well as promote the disclosure of retirement savings in the form lifetime income to plan participants. The Small Businesses Add Value for Employees Act (SAVE Act) was recently […]

401k Fee Disclosure — A Best Practice Approach

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401k fee disclosure continues to be a dominant topic for plan sponsors.  Representative George Miller, of California, authored legislation that would require 401k retirement plans to notify each plan participant of all the fees they are charged regarding their account. The fees include items such as investment management fees, sales commissions, and any additional fees paid for […]

Investment Manager Style Analysis — What 401k Plan Sponsors Need To Know

mutual fund style analysis

Investment Manager Style Analysis – what is it?  Here’s a clear explanation of  style analysis and the two reasons why investment manager style is critically important to 401k plan sponsors. Our Investment Due Diligence process places an important emphasis on an investment manager’s style, employing a technique called “quadratic optimization.” Quadratic Optimization” is a big […]


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