October 10 2018

Participant Loans: Are They Right for Your Plan?

There was a time when a good friend convinced me to go with a car lease instead of a purchase. I never had leased a car, but she pointed out all of the great reasons why leasing was better. I ran out and leased a high-end SUV for three years. When my...

June 13 2018

Deductible Employer Contribution Limits in 401(k)s and Other Defined Contribution Plans

This is the first in a two-part series about deductible contribution limits to qualified retirement plans.  The second part next week will cover arrangements that include defined benefit plans.  Contributions made by a business to a qualified retirem...

May 09 2018

Get a Fidelity Bond to Insure against Fraud and Dishonesty – and Because It’s the Law

Most qualified retirement plans need a fidelity bond.  This has been the rule for more than 40 years. Even so, it is not the kind of thing the typical plan sponsor spends a lot of time focusing on. A what bond? Fidelity who? We run across a number of...

April 11 2018

Avoid the ADP Test with a Safe Harbor 401(k) Plan

The  ADP test  for 401(k) plans is like a mosquito:  it is annoying and has no known benefit to society.  The worst outcome of a failed ADP test is you have to  refund  excess contributions to  Highly Compensated Employees .  At a minimum, you’ve was...

April 04 2018

How to Avoid 401(k) Administration Mistakes

Here’s a public service announcement for all plan sponsors of 401(k)s.  Remember the quote from "Jerry Maguire," “Help me help you?”  It’s been 22 years since that movie, but it still holds true today. Third party administrators (TPAs) are the people...

March 07 2018

If You Defer Too Much in a 401(k), Your Money Will Be Cheerfully Refunded

When an employee contributes too much to a 401(k) plan, a common fix is for the excess amount to be refunded to the employee. The technical term for this kind of refund is “corrective distribution.” At this time of year, plan sponsors may be scrambli...

January 24 2018

Compensation: What's in a Name?

With the new year having just begun, our retirement plan clients are busily working on compiling the information we need to do their year-end calculations.  One of the most critical pieces of data we need is compensation paid to each employee for the...

December 20 2017

Investment Considerations for Cash Balance Plans

Cash balance plans have gained in popularity over the last number of years because of the tax savings opportunities available to high-earning business owners and executives. Cash balance plans offer characteristics of both defined contribution plans,...

November 22 2017

Charging Fees to Terminated Plan Participants Okay in Some Cases

When an employee leaves a small company, the expectation is that he will withdraw his 401(k) money at the same time.  While former employees of larger companies often leave their 401(k) money in the plan until retirement, small companies have less to...