…cash while actively managed domestic equity mutual funds experienced a net outflow of $835 billion over the same period. The main advantages of passive funds are cost, simplicity and being in the market. Passive funds track a market index such as the S&P 500, and…
…What is human capital? While most people think of capital as cash, machinery or a tangible object, there is capital that can be attributed to a human being. This capital is known by economists as “human capital.” Human capital is based on the premise that…
Some business owners may come to you asking for information on a 401K or a cash balance plan. They may know of these from prior experience, or friendly advice, or they may have done their homework about different retirement plans. As retirement plan experts, we…
…are generally those that are high priced relative to their book value (i.e. the value recognized on the company’s balance sheet), but are projected to have high earnings growth potential. Value stocks generally trade below their book value and are considered by value investors to…
…performance over a specified period – and long-term incentive pay, which can include stock options, restricted stock, performance shares, performance units and cash. An employee assistance program (EAP). This is a work-based intervention program designed to assist employees in resolving personal problems, such as financial,…
…many employees fail to make an investment election on their own. This creates a need for a default investment in the lineup. A cash fund has no risk, but also has no growth potential. Other investments may have income or growth potential, but expose a…
…Mullainathan confesses that, upon reviewing his own investment portfolio, he realized: “Some of my money was in mutual funds, but I had no sense of how I chose them. And the rest of my money was in cash, earning virtually nothing; how had I let…
…contributions and ACP tests after-tax and employer matching contributions. The Top Heavy Test tests the account balances of key employees vs. non-key employees. Minimum Coverage Test – Tests the population of HCEs vs. NHCEs HOW DOES TESTING THE 401(K) CONTRIBUTIONS WORK? The Actual Deferral Percentage…
…– which determines if the account balances of key employees is greater than 60% of the total assets held by the plan. We know that the goal of many company owners is to maximize how much you can contribute each year to your retirement. So,…
…changing the rules for retirement plans with 100 or more eligible plan participants: Rather than requiring them to file an annual audit, as is now required, the new rule states that plans should only count participants with account balances. Thus, if a large company’s plan…
…the account balances of key employees is greater than 60% of the total assets held by the plan. We know that the goal of many company owners is to maximize how much they can contribute each year to their retirement. So, to avoid uncertainty about…
…research firm Cerulli Associates, with assets rising from $4.6 million as of July 1, 2018 to $10.9 million as of December 31, 2018. But, Cerulli added, the average balance was less than $500, well below the national average 401(k) account balance of $85,000. The IRI…