Testing – it’s complicated! Every year nondiscrimination testing must be performed on your Defined Benefit Plan. What’s involved with nondiscrimination testing? We’ll provide insight on timing to satisfying the IRS Code, and include a discussion of contributing factors that can cause the plan to fail…
…gains for investors. Still, compliance remained for many a nebulous area; after all, most if not all firms claim to be acting in their clients’ “best interests” in the first place. A recent study by investment consulting firm Callan, “2018 Defined Contribution Trends,” reports: Plan…
…need. Plan designs can vary in important ways. For example, depending on the plan: contributions can be discretionary or mandatory. They can favor older employees over younger ones. They can accumulate a balance like a 401k or a promised benefit as in defined benefit plan….
…prior year. We can help clients navigate the 80/120 rule based on their annual IRS Form 5500 filing information. For purposes of the 100 participant rule, a participant is defined as any employee of the sponsor who is eligible to participate in the plan, AND…
…respect to who can be the plan sponsor (as defined in ERISA Section 3(16)(B))—it must be an employer or a “group or association” of employers[3]. Many in the industry assume that service providers will be able to sponsor their own PEPs—perhaps this will end up…
…a child’s college, or other reasons. A 2014 study by financial services firm TIAA-CREF found that 29 percent of Americans with a 401(k) or other defined contribution retirement plan said they had taken out a loan from that plan … and that 43 percent of…
…which have been made include: improvements in Social Security; auto-enrollment and other automated features in defined contribution plans; cost-efficient investment alternatives; and state and federal proposals to expand savings. It is therefore important to address the collective retirement savings gap on all fronts. 1The National…
…and how can plan sponsors help today’s employees? Plan sponsor decisions matter Defined contribution plans—and 401(k) plans in particular—have undergone a dramatic shift since their creation nearly 30 years ago—evolving from what was once considered a supplementary retirement benefit to become the primary source of…
There are a variety of different types of employer contributions out there, and like everything else, they all have upsides and downsides. According to the Profit Sharing Council of America’s 61st Annual Survey, the average employer contribution made to a Defined Contribution retirement plan equals…
…otherwise mandatory 20% withholding tax does not apply. And while individuals who are aged 72 usually must take a Required Minimum Distribution (RMD) from their defined contribution (DC) plans and IRAs, the Act waives RMDs for calendar year 2020 for DC plans, including 401(k), 403(b),…
…usually defined by how much insurance the business owner wants for him or herself. Everyone will be offered the same multiple of salary. Option 1, permanent insurance, will produce the largest reportable economic benefit added to the taxable income of the employee, Option 2 will…
…of compensation. Each group receives a different level of contributions. While the classes of employees must be defined in the plan document, the actual contribution percentage can be decided at the end of each plan year. The plan generally provides higher contributions to older, higher-paid,…