Category Archives: 401(k) Plans

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Benefit Plan Regulators Have Been Busy – Very Busy

Benefit plan regulators were active in the period leading up to the Federal government’s June 30 fiscal year-end. Significant new rules and regulations were proposed for retirement plans, deferred compensation plans and group health plans. It’s not a walk on the wild side, but some of the dry regulatory pronouncements will impact most benefit plan … Continue Reading

401(k) Self-Directed Brokerage Accounts: A Cautionary Tale

A recently filed lawsuit rekindled some old concerns about self-directed brokerage accounts. What are they? Let’s start at the beginning. Self-Directed Brokerage Accounts or “SDBAs” is the name the retirement industry has given to individual participant brokerage accounts maintained either on a stand-alone basis or through the 401(k) provider handling the menu of funds. The … Continue Reading

Miss the April 30, 2016 PPA Restatement Deadline? Use Plan B.

The deadline for restating a 401(k), profit sharing, or money purchase pension plan to a pre-approved Pension Protection Act document has come and gone. So what’s a fiduciary to do? It was, after all, a responsibility of the plan fiduciary to ensure that the plan was updated and signed by the April 30, 2016 deadline. … Continue Reading

Boomerang Employees and 401(k) Considerations

We used to call them “rehires” back in the day: those employees who quit and were hired back. And it didn’t happen all that often. Many companies had policies not to. They’re now called “boomerang employees, and now it’s different. Different times, different economy. Employees who left the nest decide they want to come back, … Continue Reading

It’s a 401(k) fee state of mind for plan fiduciaries

Class action law suits and Department of Labor enforcement initiatives have created a 401(k) fee state of mind for fiduciaries. How much, who pays for them, and how they are paid are issues about which service providers offer guidance. @GregIacurci in his article, How Should Retirement Plans Pay Their 401(k) Fees? in Investment News (registration … Continue Reading

IRS Announces 2016 Retirement Plan Limits: Most Remain Unchanged

The IRS recently announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2016. For the third time in six years, most of the limitations were unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment: 401k Elective Deferrals: … Continue Reading

Who pays 401(k) fees? Us or them?

        That’s the question employers ask regarding who pays 401(k) fees. The “us” being, of course, the employer, and the “them” being the plan participants. The number of “thems” has been increasing. According to Deloitte’s 2015 Annual Defined Contribution Benchmarking Survey, the number of employers completely covering the cost of fees declined … Continue Reading

Tempus fugit: October 1 deadline to set up new 401(k) plan fast approaching

As the sign under the clock pictured above says, tempus fugit, or ‘time flies’ translated from the Latin. This being The Retirement Plan Blog there’s an ERISA connection, of course.  Much of  ERISA involves meeting deadlines. This one is about establishing a new retirement plan. Before 401(k) plans were invented, an employer with a calendar year … Continue Reading

ERISA Plans Do Have Their Limitations

That’s limitations as in “limitation periods”. A recent court case reminds ERISA plans to have such limitation periods and to communicate it to someone claiming a plan benefit. Let’s start with the basics. What’s a “limitation period”? In layman’s terms, it’s a law set forth in a State statute of limitations that sets time limits … Continue Reading

Employees contribute more to 401(k) plans, but number of new plans declines

Employee Benefit Advisor, for whom I serve on the Editorial Advisory Board, recently reported that DC Plan Participation Rates, Account Balance Increase. The reporter, Paula Aven Gladych cited the Deloitte 2015 Defined Contribution Benchmarking Survey that by focusing on “ease of use” retirement plan participation rates have increased from 2013 to 2014. Such features include: … Continue Reading

Legal Advice on Your 401(k) Plan – Is It Confidential?

Let’s say you have a concern about how your 401(k) plan is operating.  Maybe participant loans aren’t getting repaid or a service provider has neglected to allocate forfeitures on an annual bases.  So you consult a lawyer.  The lawyer writes a memo outlining the situation and advising on corrective steps.  You drop the memo in … Continue Reading

How the re-proposed Fiduciary Rule came to be

As everyone in the ERISA world knows,  the Department of Labor (DOL) on April 20, 2015 published a proposed regulation in the Federal Register relating to the definition of fiduciary within the meaning of ERISA section 3(21)(A)(ii). ERISA section 3(21)(A)(ii) is that part of the definition of fiduciary that addresses investment advice for a fee … Continue Reading

The Fiduciary Hierarchy

The recent Department of Labor’s re-proposed Fiduciary Rule has generated many opinions on how it will affect fiduciary service models. One constant, however, cuts through all of the debate: the Plan Sponsor still has the fiduciary responsibility to select and monitor those service providers. But as you can see, there is a hierarchy of service … Continue Reading

What We Can Learn From Australia’s Superannuation

Superannuation is what Australia calls its retirement system, and they are doing something right. According to the 2014 Melbourne Mercer Global Pension Index (8o-page report if downloaded), an annual study that ranks national retirement systems based on the relative importance of adequacy, sustainability, and integrity, Australia only trails Denmark graded A, and tied with the … Continue Reading

Hey! What’s My Number? How To Improve The Odds You Will Retire In Comfort (Book Review)

Let’s say, for example, you’re concerned about not having enough money saved for retirement. You’re certainly not alone based on the myriad number of polls, surveys, and studies that have been in the news. So where do you start? You might start at Amazon and search under “Retirement Savings”. At this frozen moment in time … Continue Reading

The Dirty Dozen Tax Scams for 2015: Infographic

Every year around this time, the Internal Revenue Service publishes a list of the year’s “Dirty Dozen Tax Scams”. Here they are as an infographic courtesy of  The Accounting School Guide. Source: AccountingSchoolGuide.com You can find more detailed information from the testimony of the IRS’ Timothy P. Camus before the Committee on Finance U.S. Senate … Continue Reading

Illinois Secure Choice Savings Program?

Illinois legislation, the first in the country, recently authorized a new state sponsored retirement savings vehicle called the Secure Choice Savings Program (Secure Choice). The program is aimed at upwards of 2 million Illinois workers who are not currently covered by an employer provided retirement plan. There are at least 16 other states considering legislative … Continue Reading

What Advisors Need to Know About Retirement Plans: Presentation to Illinois CPA Society

I had the opportunity recently to make a presentation on qualified retirement plans to the Illinois CPA Society (ICPAS). Actually, it was using PowerPoint to begin a dialogue with the members of the ICPAS Investment Advisory Services/Personal Financial Planning Forum The ICPAS describes their Forums as being “composed of members with shared interests who interact … Continue Reading
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