Greg Judd

Basically, Kip's covered it. The filings are about plans, vs funding methods. That's the organizing principle. Practice is another matter. Firms submit in a wide variety of ways. Much would depend on your organization's operating style; for example, are you buying/selling entities (with their own plans) regularly?

wow, 2 - 3% fees.... re: the legality of the plan, & the propriety of the fees, what was it deep throat said? Oh yea - 'follow the money'....

Thanks John. Your assessment seems exactly right: sounds like theirs is a very straightforward, nothing-but-positive-news-for-employees communication.I love happy endings! If anybody else has seen employers doing offsets that pass statutory muster, but need careful communication to employees, please chime in.

John, I'm interested in the sponsor's plan for communicating this design to employees. I'm looking at an employer who I believe is doing a 'safe' thing, but communicating it in a way that makes it seem they're doing something impermissable (predicating PS on employee deferrals - basically what KJohnson cautions about).

Regina, Based on what (very) little I know of NMSN, despite the best intentions of workgroups to achieve true administrative standardization, states can & do vary with respect to their administrative requirements for enforcement of these orders. Probably best to contact whomever has issued the order to get what little they may know (& be prepared for uncertainty at their end, too).

Rare indeed, but not entirely unheard of (if we're counting self-funded sponsors), and could be wise-or at least not catastrophically unpredictable- depending on your industry, the nature of your plan design, & workforce & turnover. think "employers with very predictable turnover patterns, generous benefits (in an industry with tradition of generousity), & little or no employee contributions for coverage". Not many of those left, but they're out there....

b2kates has it, basically.pre-tax contributions are simply a tax-favored way for employees to pay their pre-determined share of health plan costs. Any constraints on the tax status of contributions are usually aimed at preventing 'unfair' tax deferral/avoidance. If the person's eligibility for pretax contributions dovetails with their eligibility for medical coverage, should be no waiting period issues for reactivating pretax contributions. MSMA, sounds like you're thinking of healthcare and/or dependent care spending accounts, which are often conceptually lumped with pretax contribution plans and are governed by overlapping federal tax statutes (tho others may be involved than Section 125). Still, the statutory limits on plan re-entry may be narrower than your example suggests (tho as a plan administrator you may impose limits like that in your example).

GB, this list's a bit dated (1998?), & broader than your specific request, but includes several of the biggest benefits consulting firms:top 50 consultants' list Most lists I see are self-reported (BI's list, for example) so results are akin to a survey vs anything "auditable". Another challenge: finding breakouts of revenues for benefits consulting specifically, vs all other advice-giving activity. Good luck!

Points all well taken. My point was that polls regarding employees' opinions of their health plans are frequently of dubious value, mainly because people generally don't pay enough attention to the features of the plan they're enrolled in (or where applicable, the plans in which they may choose to enroll) to register an informed opinion. To paraphrase Alain Enthoven, people spend more time - and devote more effort to- choosing a wine for dinner than they spend choosing a health plan. They don't value protection against large unexpected charges for medical treatment appropriately - just as you mentioned in an earlier post. With healthcare at 1/8 of US GDP & climbing, I'm definitely in favor of any measures which re-calibrate social value scales in this area! & Larry, re: With a topic as ripe as this, we may just be getting warmed up!

Brings to mind the recent EBRI research that revealed while employees enrolled in managed care plans overwhelmingly gave high quality marks to the health plan they 'participated' in, significantly fewer than half understood they were, in fact, enrolled in a managed care plan (!)

Can anyone here seriously justify dwelling longer than 20 minutes on a matter that concerns all of $50 (& yes, I know, it's not the amount, it's the principle of the thing )?

Clarity being in the eye of the beholder in this case Ask employees if they don't instinctively flinch nowadays at phrases like 'consumer-driven'.... In the 'everything old is new again' department, corridor deductible plans were employed in the early days of individual & group plans that went beyond hospitalization benefits. Regardless one's feelings about the validity of the famed RAND study, it's hard to dismiss the notion that decisions to spend one's 'own' $ make one a more vigilant shopper - if not necessarily a more effective/efficient one. truer words cannot be spoken on this subject. I've always been fond of stacking up 'gotta have' frivolities like monster-screen tvs against outlays health plans require. These days, the healthcare industry makes that easier - merely stack the charges for 'medical treatments' like lasik, liposuction, or botox against deductibles/copays for health-preserving/restoring treatments.

GB's marked the best place to start; by unwrapping the marketing labels from what's really going on ( & isn't that the best place to start talking about any insurance contract? ) I can't supply a good starting block, but "employees pay a much larger share of the first dollars of charges for covered health treatment" seems common to all things labelled 'DC health plan'. The differences lie in what kind of mechanism (or mechanisms) are put in place to help employees with the paying those first dollars of charges and/or minimizing their sting (by 'better' choices of healthcare providers, whatever that might mean).

My greater concern would be that the manager may misuse the information, drawing uninformed conclusions from something like a 'raw' 401k account balance, eg "wow, [employee name] has $500,000 in their account, so they won't be financially devastated by termination." Assuming you don't find a legal bar to the manager's access to account info (my feeling is you won't find anything clear-cut), why not prepare a "reasons to be cautious when using benefit plan info in making personnel decisions" memo? I'm envisioning a brief bullet point/checklist kind of thing to alert the manager that they should focus any termination decision on job performance issues, & not on an employee's extraneous circumstances - whether they have to do with finances, or age, or gender, etc.

Didn't miss it this time, GB. No real-world analysis is value-free. If the broker's actively involved in the analysis/recommendations process, s/he may help shape the decision to their benefit - by demonstrating their business acumen & service-forward approach, if nothing else. If they aren't involved, whether the choice helps/hurts them is a matter of chance.

Our experience has been a bit different. Presidents/CEOs of firms "large enough" to have HR/benefits staff (we've found no hard & fast headcount threshold) may be the driving force for 401k implementation - or not. Further, where they are, they often look to HR/benefits staff to present them with a selection of service & vendor alternatives, vs doing the investigating & making that selection themselves. More & more brokers find that their hr/benefits contacts look to them to provide help beyond their 'traditional' service functions. Many don't have and/or aren't prepared to develop cross-functional expertise themselves, but do want to contribute to the overall success of their client's benefits program if they're able to. So, they seek out working relationships with capable retirement plan service providers.

GB - I swung - & missed completely! So badly, I think my bat went into the stands. Other than referencing Section 125, & those irrelevant Q&A's, all I did was distract the unwary. Still, it's curious that something so basic would be made available so haphazardly (some proposed stuff available, some not).

What's to understand? Click the links (the underlined words); they take you to what look like 1.125-2 Q&A 7(a) and (B)(2) revisions that pertain to the topic. Found via benefitslink's search tools. Of course, if the linked pages aren't what's under discussion, I'll head back to the peanut gallery.

for not understanding at all, you made some very good guesses! Thanks! Interested in your notes in #s 3 & 4: are the opportunities that "cross the divide" (health/disability/life brokers finding 401k opportunities in their client base) too few & far between? There are still a fair # of small businesses ( <500 employees) that sponsor health benefits but haven't bitten the 401k bullet. Many of these have brokers handling their group health business who can't /don't /won't pursue retirement side opportunities, or whose working relationships with 401k specialists is catch-as-catch-can.

Forgot to mention I heartily agree with JimJ's assessment of the available expertise. The defined contribution marketplace has been largely an order-taker's business, saleswise, until fairly recently; well-schooled sales/marketing people were a rarity, & are still fairly uncommon.

Interesting topic. Doubly so considering when it was opened, & the fact we're still circling it. Re: "developing the model..." We're very selfishly interested in how you go about deciding which brokers are worth your time investment. We provide information that helps providers understand who's working with whom in the employee benefits industry. While many of our clients 'get' the value of grooming high-yield relationships, many others surely would benefit from better understanding their markets. acvertainment section> Any thoughts much appreciated.

Is this the proposed regulation in question? proposed regulation If so, please all tip a cap to Mr. Baker once again. He's provided some pretty effective search tools for us - worth getting acquainted with. If not, I'm slinking back to my cave....

re: John G's comment: "Nicki, you can do the math using an HP 12c calculator or any general spreadsheet. " Financial Engines' free tools enable you to do similar projections, with special twists & turns of their own, such as identifying particular investments & sums to start with & amounts to add to them. (I'm not a FE employee, nor a paying customer, I just like their calculation toys). As John & others have remarked, the future will be what it will be; the projections just help you get your mind around the possibilities.

Grrrrr--sorry to hear this (angry to hear this). You're right though; there are many employers who back their good intentions with real assets - they put their money where their mouth is. Here's hoping your next employer is among them!

Can't agree. How can one legitimately participate if one illegitimately became an employee? If the person was only an employee by virtue of fraud, they weren't eligible to be a participant in the firm's benefit plan. So, they couldn't "really" accrue any benefit. Rationally, it's a do-over. Further, if our legal system says otherwise, our legal system is defective. Only my opinion, of course.