Tag Archives: 401(k) Plans

IRS Establishes Pilot Penalty Relief Program for Late Form 5500 – EZ Filings

That’s the collective sigh of relief by those business owners who, for whatever reason, haven’t filed Form 5500-EZ for their retirement plans. It’s a big deal especially for those business owners with so-called Solo-K plans. 401(k) plans were introduced in 1978, but it took a tax change starting in 2002 to allow business owners to … Continue Reading

Retirement plan beneficiary designations shouldn’t be one and done

What did Amy Winehouse, Jimi Hendrix, Heath Ledger, and Whitney Houston have in common? No. not just being in the celebrity spotlight, but rather, estate planning done wrong or not at all. You can add one more celebrity to the list who Darla Mercado writes about in her InvestmentNews article, He needed a script: Actor … Continue Reading

Automatic Enrolment in the United Kingdom: Lessons for the United States

England and America are two countries separated by a common language. –George Bernard Shaw It’s not just the language that separates us and the British. It’s our attitude towards automatic enrollment in retirement savings plans. Spelling aside, automatic enrolment has been the law in U.K. since October, 2012. Here in the U.S., the Pension Protection … Continue Reading

Roth 401(k) In-Plan Conversions: Where Are We Now?

It’s been almost 10 months since Roth 401(k) in-plan conversions were added as part of the American Taxpayer Relief Act of 2012. After an initial flurry of media attention and a slew of industry publications, there hasn’t been much attention paid to this new tax planning technique. Could it be, perhaps, our attention has been … Continue Reading

The Impact of the Supreme Court Same-Sex Marriage Decision on Retirement Plans: The Cliff Notes Version

If you’re anywhere near a retirement plan, you have probably received a ton of emails from law firms and 401(k) providers on the recent Supreme  Court decision involving same-sex marriages. With the caveat that I’m not an attorney, here’s my Cliff Notes version on the June 26, 2013, United States Supreme Court ruling in U.S. … Continue Reading

“Reasonable Compensation”: A Matter of Perspective Between S Corporation Shareholders and the Internal Revenue Service

Most business owners think they are undercompensated. The Internal Revenue Service does too for many business owners who are shareholder-employees in an S corporation. Their perspective is not exactly the same. The focal point is a sometimes hotly contested issue called "reasonable compensation", and the IRS has come out the big winner.  Here’s the story. … Continue Reading

Managing the 401(k) Data Deluge and How to Avoid Problems

No, that’s not the Matrix pictured on the right. It’s simply a visual representation of a special report by The Economist a little over three years ago, Data, Data Everywhere, In that report, The Economist reported that Wal-Mart handled more than one million customer transactions every hour, feeding databases estimated at more than 2.5 petabytes. … Continue Reading

Retirement Plan Beneficiary Designations and the Law of Unintended Consequences

For many participants in a 401(k) or pension plan, filling out that beneficiary designation is a one and done activity. Then, forgotten, but sometimes changing circumstances intervene to invoke the Law of Unintended Consequences. As in a recently decided case in which a U.S. Court of Appeals held that a pre-nuptial agreement does not waive … Continue Reading

The language of savings

As 401(k) plans have matured, so has the academic research around it. The relatively new field of behavioral economics which blends micro-economics and psychology is being used to help employees make better decisions about their 401(k) plans. But for those of us in the financial service business, the underlying process of helping employees save for … Continue Reading

Marshmallows and 401(k) Plans

When I was a right-brain undergraduate and long before my left-brain discovered ERISA, I took a number of psychology courses. In one of those courses, we discussed the famous marshmallow experiment conducted by social psychologist Walter Mishchel at Stanford in the 1960s. It went something like this. Mishcel put marshmallows in front of a room … Continue Reading

The 401(k)/403(b) Investment Manual: Book Review

In the almost 7 years I have been writing this blog, I have written a number of book reviews about 401(k) plans and investing that have tracked the retirement plan industry. Josh Itzoe’s Fixing The 401(k) in 2009 Pat Huddleston’s, The Vigilant Investor: THE VIGILANT INVESTOR: A Former SEC Enforcer Reveals How To Fraud Proof-Your Investments in 2011 … Continue Reading

ERISA, take me back to 1982

I’m a big NBA fan, and I love those time traveling Kia commercials featuring Blake Griffin, the All Star forward of the Los Angeles Clippers.He’s in his Kia Optima and says, "Kia, take me back to 1992." There he meets himself and learns valuable life lessons. I can also imagine time traveling. Not with a … Continue Reading
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