Category Archives: 403(b) Plans

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403(b) Crunch Time Series #2: Complying With The 403(b) Contribution Limits

This is the second post in our 403(b) Crunch Time Series, the purpose of which is to help 403(b) plans get ready for the January 1, 2009 compliance deadline for the new Internal Revenue Service regulations. On Tuesday, Bob Toth , our guest blogger, wrote about Avoiding Problems with Custodial Accounts. Now it’s my turn, … Continue Reading

403(b) Crunch Time Series #1: Avoiding Problems With 403(b) Custodial Accounts

Yesterday, I introduced our forthcoming 403(b) Crunch Time Series. It will be geared towards helping 403(b) plans get ready for the January 1, 2009 compliance deadline for the new Internal Revenue Service regulations. During this series, I’ll be joined by Bob Toth as a guest blogger. Bob, a Partner in the Baker & Daniels law firm, has … Continue Reading

The bailout bill, the stock market, and 401(k) plans: what’s ahead for us?

See full-size image. I was certainty premature yesterday in thinking the bailout bill was going to pass when I wrote the bailout bill is like a Christmas tree – something for everyone including retirement plans. And I wasn’t alone. The stock market reacted with the largest one day drop in its history. No one knows the … Continue Reading

Bailout bill is like a Christmas tree – something for everyone including retirement plans

The bailout bill working its way through Congress now has something for everyone – including retirement plans. The legislation is being called TARP, ("Troubled Asset Relief Program"), and it’s an acronym that some retirement plans will get to know better. In addition to bailing out financial institutions, TARP also permits the Treasury to protect "the retirement security of … Continue Reading

403(b) and 401(k), “same, same, but different”

See full-size image. "Same, same, but different" is a familiar saying in Thailand, and as shown on the left, the subject of a book of objects photographed in Thailand by Thomas Kalak, the photographer from Munich. It means, I understand, similar but not exactly the same. Kinda like, 403(b) plans and 401(k) plans.   And that’s a good jumping off point … Continue Reading

Which way to the best retirement plan?

Just recently, I thought that it might be the dog days of summer as far as setting up a retirement plan is concerned. But it may be the “retirement plan season” is here after all – at least in the minds of our fellow bloggers at Slate magazine’s BizBox blog. Their post today is What Retirement … Continue Reading

“Why do spouses have to be the automatic beneficiary of a retirement plan?”

That’s a question posed to me the other day in an email from one of this blog’s readers. It’s an interesting question, both from a historical standpoint and in the current political environment in which women’s issues are an important component. So here’s the answer for all to see. Let’s set the dial on the … Continue Reading

Now that we know exactly when 401(k) contributions have to be deposited, just who’s responsible for it?

We finally got clarity about when 401(k) contributions must be deposited when the Department of Labor (DOL) on February 28 announced a proposed safe harbor of 7 business days.  But it’s the DOL’s directive in Field Assistance Bulletin (FAB) No. 2008-01 on fiduciary responsibility for collection of delinquent contributions that will have more impact on … Continue Reading

“Should I stay or should I go?” The factors influencing an employee’s decision to retire

It was 1982, and many of today’s baby boomers were listening to the song, “Should I Stay or Should I Go” that was on The Clash’s album, Combat Rock. According to NME, Mick Jones, the lead guitar on the song, wrote it about singer Ellen Foley, who sang the backing vocals on Meatloaf’s Bat Out … Continue Reading

Enough already about the Baby Boomers, what about Generation X?

View larger image. Lost in the mass media focus on the Baby Boomers retiring is Generation X, the generation that follows. Depending on how they are defined, it’s the people born between 1965 and 1985 (age 23 to 43). I’ve written about them before, Not my generation that nobody seems to want. The "nobody" referred … Continue Reading

What every fiduciary should know about their brokers … and also their custodial banks, and financial contracts

I’ve got that queasy feeling again in my stomach. The recent collapse of Bear Stearns gave me flashbacks to the 1990s during which we struggled with insolvency issues affecting ERISA plans. If you were around back then, you’ll remember the insurance companies that failed or were seized by insurance regulators as a result of failed … Continue Reading

U.K. defined contribution plan sponsors trying to offload fiduciary risk

Retirement plans in the U.K. and this country are a lot alike. Employers in both countries have shifted from defined benefit plans to defined contribution plans. Employers in both countries use a trust-based system complete with fiduciary responsibilities. And employers in both countries are understandably trying to limit their exposure to fiduciary liability. U.K. employers, … Continue Reading

Good news: “Household wealth rises as retirees age”, or is it?

This is one of those Good News/Bad News stories. The Wall Street Journal on March 27 reported that “Household Wealth Rises as Retirees Age” citing a paper posted on the Federal Reserve’s website. The Journal quotes the authors as saying that adjusted for inflation, The median’s household’s wealth declines more slowly than its remaining life … Continue Reading

Divorce: the next Boomer frontier and its impact on retirement

Add one more trend to Boomer demographics. Recent research has revealed that Boomers continue to push the limits regarding the prevalence of divorce. While just 33% of married adults from the two preceding generations has experienced a divorce, almost half (46%) of all married Boomers have already been divorced. They will be almost certain to … Continue Reading

April 1 is deadline for RBD for RMD

One of those wonderful tax benefits that a qualified retirement plan and IRA provide is the tax deferral of contributions and earnings. But nothing lasts forever including the payment of benefits (and the taxes thereon).  So the tax laws require RBDs and RMDs. That’s tax talk for  “required beginning date” and “required minimum distribution” respectively. … Continue Reading

“Decumulation”: a concept about which you will hearing more

See full-size image. “Decumulation”, in definitional terms, means the conversion of pension assets accumulated during an employee’s working life into pension income to be spent during retired life. But in practical terms, decumulation embodies a significant new risk for the record number of future retirees moving from the accumulation phase of their lives to the … Continue Reading