“Decumulation”: It’s here now for individuals approaching retirement

“Decumulation” is a word that has now entered the lexicon of those individuals approaching retirement. The definition of which is the conversion of retirement plan assets accumulated during an employee’s working life into pension income to be spent during retired life.

It’s a new risk for the record number of those moving from the accumulation phase of their lives to the distribution phase. The actuaries call it “longevity risk”. But those of us in the financial service industry simply call it “running out of money”.

Department of Labor targets retirement plans with missing participants

By Andrew S. Williams, Esq. on November 8, 2017 Posted in 401(k) Plans, 403(b) Plans, 457 Plans, Defined Benefit Pension Plans

It’s a familiar story: you or your retirement plan’s third party administrator (TPA) need to make a benefit distribution to an ex-employee. But the employer’s records are out of date and the former employee cannot be located. Worse yet, the missing participant has attained age 70½ so the plan is required to make minimum distributions (RMDs) but cannot do so.

Can you sit back and wait for the missing ex-employee to come forward and claim their benefits? If they never show up, can you forfeit their benefits? Continue Reading

Group Health Plan Audit Requirements: Who do you trust?

By Andrew S. Williams, Esq. on October 4, 2017 Posted in ERISA, Welfare Benefit Plans

Is a self-funded group health plan with more than 100 participants required to have an annual audit? There seems to be a difference of opinion among professionals on this question. Let’s start with the rules on group health plans and other “welfare plans.”

SIMPLE vs. 401(k): November 1 Deadline Approaching

By Jerry Kalish on September 7, 2017 Posted in 401(k) Plans, SIMPLE-IRAs

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 notice to their employees that 2017 will be the last year for the SIMPLE-IRA and will be replaced by 401(k).

The White Rabbit and ERISA

By Jerry Kalish on August 14, 2017 Posted in 401(k) Plans, 403(b) Plans, Cash Balance Plans, Defined Benefit Pension Plans, ERISA

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.

October 1 401(k) Safe Harbor deadline gets closer

By Jerry Kalish on August 11, 2017 Posted in 401(k) Plans

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 2017, the maximum is $18,000 plus a $6,000 catch if age 50 or older.

Seven ways a fiduciary can follow “Procedural Prudence”

By Jerry Kalish on August 7, 2017 Posted in 401(k) Plans, 403(b) Plans, Fiduciary Matters

“Procedural Prudence” is not a new concept. It’s 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 ERISA fiduciary litigation.

Cash Balance Pension Plans continue double digit growth

By Jerry Kalish on August 4, 2017 Posted in Cash Balance Plans

To no one’s surprise, the recent Kravitz Cash Balance Research Report indicates that the number of new Cash Balance plans increased 17% in 2016, outpacing the 3% growth of 401(k) plans. And also no surprise that 92% of the cash balance plans are sponsored by companies with less than 100 participants.

Red flags on Form 5500 alert Internal Revenue Service and Department of Labor to plan issues

By Jerry Kalish on July 31, 2017 Posted in 401(k) Plans, 403(b) Plans, Cash Balance Plans, Defined Benefit Pension Plans

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

Can you put your retirement plan on autopilot?

By Andrew S. Williams, Esq. on July 20, 2017 Posted in 401(k) Plans, Fiduciary Matters

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.