Tax planning as in life can be a series of trade-offs. Whether to have a SIMPLE-IRA vs. a 401(k) plan is one of those trade-offs. And if you currently have a SIMPLE-IRA and want to change to 401(k), then you’ve got a November 1, 2017 deadline approaching. That’s the date by which employers have to provide … Continue Reading
It occurred to me after my last post, October 1 401(k) Safe Harbor deadline gets closer, that the White Rabbit could relate to ERISA.… Continue Reading
That’s No. 3 in my Pension Plan Procrastination Perils Proper Personal Planning list. If you want to set up a new Safe Harbor 401(k) plan for 2017, it has to be done by October 1. A Safe Harbor plan permits owners and other Highly Compensated Employees (HCEs) to maximize their contribution regardless of how much the Non-HCEs contribute. For … Continue Reading
“Procedural Prudence” is not a new concept. It underlies one of ERISA’s bedrock requirements. A fiduciary must discharge its duties prudently with care, skill, and diligence. It’s the process by which a fiduciary can accomplish this. In other words, it’s the “how” a decision gets made which is what the courts have focused on in … Continue Reading
For calendar year ERISA plans, today is the due date for filing their 2016 Form 5500 unless extended. While the vast majority of employers will meet that deadline, some will have red flags on their returns that could pique the interest of the Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”).… Continue Reading
Consider a typical retirement plan sponsored by a private employer. The employer is a fiduciary to the plan along with employees who individually serve as trustees or members of the plan’s investment or retirement committee.… Continue Reading
July 31st, is of course, the due date (unless extended) for calendar year ERISA plans required to file Form 5500 for the 2016 plan year. And, as in the past, there will be many plan sponsors who must indicate on the 5500 they have outdated fidelity bonds or none. Here’s a timely reminder why they … Continue Reading
Or six alliterative reasons why waiting until the last minute to establish a retirement plan can be costly. And by last minute, I mean year-end.… Continue Reading
Many 401(k) plan sponsors have wisely selected investment professionals to assist in selecting the plan’s investment menu, typically a listing of various mutual funds. Other plan sponsors may allocate this duty to company officers and other key employees.… Continue Reading
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
The Department of Labor (“DOL”) will be increasing penalties, in some cases substantially, for violations of ERISA. Here’s why and how it will impact ERISA plans that are not in compliance. Background In 2015, Congress passed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 as part of the Bipartisan Budget Act of … Continue Reading
A recently filed lawsuit rekindled some old concerns about self-directed brokerage accounts. What are they? Let’s start at the beginning.… Continue Reading
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
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
My apologies to William Camden for dragging him into ERISA. The proverbial saying in the headline, “An ynche in a misse is as good as an ell” appeared in his Remaines concerning Britaine published in 1637. It was an early forerunner of what we now know as “A miss is as good as a mile.” … Continue Reading
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
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
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
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
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
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
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
