Admit it: Your company, as a 401(k) sponsor, and company decision makers who direct plan operations (including in-house trustees), are ERISA fiduciaries. Don’t quibble about this but take a step back and figure out what to do about it. Some Basic Steps You’ve read about investment advisors who can assist in performing investment duties and … Continue Reading
If you’re an employer who sponsors a 401(k) or profit sharing plan, it’s time to amend and restate your plan. Qualified retirement plans must operate in accordance with their plan documents. Ongoing legal and regulatory changes in retirement plan rules frequently require plan sponsors to amend and restate their plans to keep their documents compliant … Continue Reading
The individual checking his email pictured above is someone who didn’t see the money tree. He’s a graduate student that was part of a research study cited in the Original Research Article, Failure to see money on a tree: inattentional blindness for objects that guided behavior by Ira E. Hyman Jr., Benjamin A. Sarb and Breanne … Continue Reading
That’s not someone from a Sherlock Holmes story. But it could be very well be my old college buddy Bob (not his real name, of course). Bob was of the era in which aspiring stockbrokers went to New York immediately upon graduation to be trained by one of the wire houses. Bob came back home … Continue Reading
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
We just drove past it. The “it” is the March 15 deadline for 401(k) testing to determine whether Highly Compensated Employees (“HCEs”) contributed more than the IRS allows when compared to the Non-HCEs. Looking back, some 401(k) plans passed. Other did not. The ones that did not had some decisions to make. They could Return … Continue Reading
Every year about this time, as we get closer to tax filing time, I get a few calls from those business owners who couldn’t quite get around to setting up a retirement plan before the end of the year. They ask the question with not a lot of hope in their heart: “Can I still … Continue Reading
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
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
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
Most business owners think they are undercompensated. The Internal Revenue Service does too for many business S Corporation owner employees. Their perspective is not exactly the same. The focal point is a sometimes hotly contested issue called “reasonable compensation”. The IRS has come out the big winner. Here’s the story. Since the publication of IRS Revenue Ruling … Continue Reading
Tempus fugit is a Latin expression meaning "time flees", more commonly translated as "time flies’. Today it’s frequently used as an inscription on clocks or artwork like the one pictured here. But this being The Retirement Plan Blog, there is, of course, an ERISA connection. “Timing matters” is one theme that consistently runs throughout ERISA, … Continue Reading
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
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
In case you missed it, April was Financial Literacy Month. So did I and I must admit that I wasn’t even aware that it existed until I saw a recent survey by LIMRA. The survey in the form of a quiz found that A Third of Americans Fail Financial Literacy Quiz. No surprises there. I’m … Continue Reading
Bob Seger and the Silver Bullet Band on their Rock and Roll Never Forgets Tour this Spring. Still The Same. And still the same is the miscommunication that sometimes happens between the employee and the employer about the benefit program. It could be, for example, the Summary Plan Description and plan document don’t gibe as … Continue Reading
That’s a picture from Episode 12, How to Rock a Part Time Job, that ran on the Nickelodeon sitcom, How To Rock, on April 21, 2012. In case you haven’t seen the show, here’s the premise courtesy of Wikipedia: The show centers on Kacey Simon (Cymphonique Miller), a popular girl who was once mean, and … Continue Reading
With apologies to anyone associated with the 1967 ground breaking movie, The Graduate, my headline is a riff on the scene to your right featuring a young Dustin Hoffman as Benjamin, and the late character actor, Walter Brooke, as Mr. McGuire. Mr. McGuire: I want to say one word to you. Just one word. Benjamin: … Continue Reading
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
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
Welcome to FPA/Plans Tools and their new blog to the group of us that blog about retirement plan matters. Their goals are to provide informative content on ERISA cases, as well as their proprietary ERISA Litigation Index, which discusses cases filed in federal court so that advisers and plan sponsors can stay current on litigation … Continue Reading
