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. 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
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
The sound you may have heard recently was the sigh of relief when the IRS announced Revenue Procedure 2015-32. The Rev. Proc. made permanent a pilot program that ended Tuesday, June 2 that provided administrative relief for delinquent Form 5500-EZ for owner-only plans with over $250,000 in plan assets. Business owners will be able to … Continue Reading
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 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
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
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
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 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
That’s not my metaphor which is why it’s in quotes. It belongs to Eve Tahmincioglu, the Career Diva, about whom I wrote in 2008. Eve wrote a blog post about the increasing number of 401(k) loans, It’s for retirement stupid…, which very directly expressed her sentiments. Just to reinforce it, her parting words were People, … Continue Reading
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
Some of the most difficult and contentious provisions of the Affordable Care Act (“ACA”) are the employer mandate and upcoming reporting requirements effective in 2015. “Difficult” because the employer mandate requires applicable large employers, generally those with 50 or more “full-time” employees, to offer coverage to full-time employees and dependents (other than spouses). If the employer … Continue Reading
As we near the end of the year, many business owners rush to establish retirement plans to capture calendar fiscal year tax deductions. If you’re one of those small business owners, you may also be eligible to receive a tax credit for expenses you incurred to implement your plan. What’s the difference between a tax … Continue Reading
