…be on the way in the form of auto-portability – the standardized and automated movement of an inactive participant’s retirement account from a former employer’s retirement plan to their active account in a new employer’s plan. In 2017, the Employee Benefit Research Institute (EBRI) stated…
…highly compensated employees can’t be more than two points more than that of the non-highly compensated employees to pass this test. The ACP test – which stands for – Actual Contribution Percentage – compares employer matching contributions between these two groups. And the Top-Heavy test…
…and may result in significant penalties, including possible loss of the plan’s tax-qualified status. Seven-day safe harbor. Employers that sponsor small plans (those with fewer than 100 participants) can avoid potential problems by satisfying a seven-day safe harbor rule. Under the safe harbor provision, employers…
…can Redistribute the forfeited amount to the remaining eligible participants. Or they can Apply the forfeited money towards reasonable plan expenses. This reduces the employer’s out of pocket expense of maintaining the plan. Or the forfeited money can be used by the employer to reduce…
…two years of service. Make it easier for military spouses to save within their employer retirement plans Ensure that small businesses can take full advantage of the start-up credit when participating in a multiple employer plan (MEP). Direct Treasury to provide education to small businesses…
Employers that sponsor 401(k) and other defined contribution retirement plans should review their fiduciary liability policies to make sure they provide adequate protection. Here’s some information you may find helpful when you check your coverage. Fidelity Bonding Is Not Fiduciary Liability Insurance Retirement plan fiduciaries…
…purposes of budget scoring. As a result of this budget gimmick, premiums for single-employer plans have been increased to “pay for” unrelated programs. “These increases add uncertainty and make plans more expensive,” the letter states. “Essentially, they are tax increases on employers that sponsor defined…
…that most employers do not regularly redesign their plans.) Even if your employer does not have the most progressive plan design, there are still ways that you can make the plan work better for you. The shift towards individual participants taking more ownership of one’s…
…On the optional side, employers now have the option to eliminate the requirement that participants take a plan loan before qualifying for a hardship distribution. However, to qualify for a hardship distribution, participants must still take all available distributions from all of their employer’s tax-qualified…
Momentum for government-facilitated automatic Individual Retirement Account (auto-IRA) savings programs appears to be growing – and, in our opinion, that is a very good thing. The programs are aimed at private sector workers without access to an employer-sponsored retirement plan to instead have access to…
It has been well documented that growth in average employee pay in the United States has struggled to keep up with inflation. Data from the Bureau of Labor Statistics (BLS) indicates that from 2013-2018, average weekly earnings after inflation (real earnings) increased at only a…
…of workers equals employers’ demand for workers. If the market’s hourly wage (where supply equals demand) is $7.40 and the minimum wage is raised to $8.00, there will be a surplus of workers and employers may have to cut back on hours and/or employees. Second,…