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401(k) plans

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[Discussion]Mid Year Change from a Safe Harbor Qnec to a Safe Harbor Match
"We have a plan that currently is a safe harbor 401(k) using a QNEC. The plan now wants to change mid year to a safe harbor using a match. I do not believe this is possible, since it reduces the amount of the required QNEC. Notice 2016-16 indicates that changing types of safe harbor plans mid-year is prohibited and uses the example going from a tradition 401(k) to a QACA 401(k). Most literature out there cites this as the only prohibition, but the IRS Notice indicates that this is an example, which would seem to indicate that there are other prohibited changes. Is there anyone out there that has dealt with this question?" (BenefitsLink Message Boards)
The DOL 401(k) Audit: How to Reduce the Odds and Prepare (Just in Case)
"Depending on the reason for the audit, the DOL can request various types of information. [What follows] is a list of some items the [DOL] could require. If the DOL comes for a visit, would you be able to access these items for the DOL auditor?" (ForUsAll)
[Discussion]New Partner Eligibility to 401(k)
"A law firm with one owner currently has a 401(k) with a service eligibility requirement of the next entry date following three months of service, with the entry dates being January 1 and July [1] The law firm will be bringing in two partners who have not been employed before by the law firm, but will become partners immediately. The firm is interested in allowing these two partners to participate in the 401(k) plan immediately, or at least the beginning of the calendar quarter following their employment. It would require a plan amendment and they don't want this change to apply to non partner employees. There is a chance that employees who had worked for the new partners in another law firm could also become employees in this existing law firm who would not be partners, so it opens up a can of worms. The 401(k) plan has no match, so other than administrative fees, there would be no downside to adding employees with a more liberal entry requirement." (BenefitsLink Message Boards)
[Discussion]Failure to Stop Deducting 401(k) Deferrals
"An employee submitted an election to stop making 401(k) contributions shortly before her hardship distribution. Payroll continued to withhold the 401(k) and did stop it until about 2 months later. How does one correct this? This happened during 2016 tax year" (BenefitsLink Message Boards)
[Discussion]403(b) and 410(B) Coverage Tests
"I have a 403(b) with elective deferrals, discretionary matching and profit-sharing contributions. The plan meets the universal availability requirements while excluding student employees and employees who regularly work less than 20 hrs per week. Question is: are these employees also considered excludable for purposes of applying the coverage and discrimination tests. I haven't found specific guidance in the regulations as it relates to 403(b)s specifically. It would seem intuitively that these employees would also qualify as 'excludable' for coverage and discrimination testing purposes as for matching purposes they would never receive a match as a result of being excluded under UA rules." (BenefitsLink Message Boards)
A Fiduciary Rule Guide for Advisors
"The rule expands the 'investment advice fiduciary' definition under [ERISA] of 1974. If this sweeping regulation (1,023 pages in length) is not stopped outright, it will automatically elevate all financial professionals who work with retirement plans or provide retirement planning advice to the level of a fiduciary, bound legally and ethically to meet the standards of that status. While the new rules are likely to have at least some impact on all financial advisors, it is expected that those who work on commission, such as brokers and insurance agents, will be impacted the most." (Financial Planning)
Assessing Americans' Financial and Retirement Security
16 pages. "45 percent of U.S. households are financially secure and on track for a secure retirement. 20 percent need to take some modest actions to be financially secure. 35 percent of Americans need to significantly improve their financial security.... [S]mall, consistent actions by households can dramatically improve their financial and retirement security in a matter of years." (American Council of Life Insurers [ACLI])
[Discussion] Excess Safe Harbor Matching Contribution for One Participant: Where Does It Go?
"Small SH 401K, member of an LLC maxed out his deferrals/match and after year end, it was determined that his compensation was below 401(a)(17), which resulted in an excess SH match of under $1,300. Does this money go back to the plan sponsor or is it forfeited? If it is forfeit/suspense account, how can it be used in the future? Perhaps Profit Sharing? Plan expenses?" (BenefitsLink Message Boards)
Three Participant Loan Errors That Might Be Occurring in Your Retirement Plan Right Now
"Failing to administer the proper payment frequency ... Failure to administer the maximum loan limit correctly ... Failure to administer loan repayments properly during and after an employee's unpaid leave of absence." (Cammack Retirement Group)
"We administer a SHM 401K. Auto enrollment, default deferral 4% in order to get the 4% SHM. it has come to light that a couple of the eligible employees were not given the opportunity to enroll in 2016. Accountant seems to believe these people are due a QNEC; how is a QNEC determined in such a case? Would the employer in this case be obligated to make the 4% contribution as well as a 4% match?" (BenefitsLink Message Boards)
[Guidance Overview] Hardship and Loan Relief Extended to Hurricane Irma, Along with Relief for Single Employer DB Plans
"[E]mployers who sponsor 401(k), 403(b) and 457(b) plans may receive these requests [for hardship withdrawals] and can choose to provide this relief even though the employer and its plan are not located in one of the affected areas, because the relief is extended to employees and former employees who have lineal ascendants... who had a principal residence or place of employment in one of the designated counties. For a hardship distribution provided under this relief, the employer is not required to stop the employee receiving the hardship distribution from making elective deferrals for six months as is required for other hardship withdrawals." (Winstead PC)
Participants Are Driving a New Era of Menu Design
"For those impending retirement participants there is an increase in certain trends, offering insight into how plan sponsors can prepare investment menus to provide the value and options needed to act in participants' best interest. [1] Participants are more engaged.... [2] Participants' needs have changed.... [3] Participants can take legal action." (Manning & Napier)
[Discussion] Matching Contributions Made to Separate Plan; Destroys ERISA Exemption?
"If a 501(c)(3) organization sponsors a 403(b) deferrals-only program plus a separate Code section 401(a) qualified plan to which it makes matching and non-elective contributions, is there any defensible argument that the deferrals-only program is exempt from ERISA (and exempt from 5500 and plan audit)?" (BenefitsLink Message Boards)
[Discussion] Effect of Rollover Contributions on 403(b) Plan's Non-ERISA Status
"A 501(c)(3) organization has a non-ERISA deferral-only plan and meets the DOL safe harbor rules. If the plan/investment arrangement permits rollover contributions, will the plan be subject to ERISA?" (BenefitsLink Message Boards)
[Official Guidance] Text of IRS Announcement 2017-13: Relief for Victims of Hurricane Irma (PDF)
"This announcement provides relief to taxpayers who have been adversely affected by Hurricane Irma and who have retirement assets in qualified employer plans that they would like to use to alleviate hardships caused by Hurricane Irma. In addition, this announcement provides relief from certain verification procedures that may be required under retirement plans with respect to loans and hardship distributions.... The [DOL] has advised Treasury and the IRS that it will not treat any person as having violated the provisions of [ERISA] solely because that person complied with the provisions of this announcement." (Internal Revenue Service [IRS])
Lawsuit Alleges Voya Charged Big Fees to Small 401(k)
"Voya Financial Inc. is accused in a new lawsuit of charging excessive record-keeping and administrative fees to a small 401(k) plan... The participant seeks class treatment for 47,000 plans and 4.5 million individual investors. Based on certain fees charged to the plan, Voya 'potentially earns over $1 billion in excessive compensation at the expense of the individual plans and their participants,' the lawsuit said." [Goetz v. Voya Financial, Inc., No. 17-1289 (D. Del., complaint filed Sept. 8, 2017)] (Bloomberg BNA)
401(k) Contribution Limits: A Walk Down Memory Lane
"[T]he 401(k) plan has become the primary tax-deferral retirement savings vehicle in the United States... [This article looks] at the historical limits [to] see how they have evolved from allowing employees to defer up to the annual addition limit to limiting employee contributions to a portion of the permitted contribution total, then gradually increasing the gap between the total contribution limit and the deferral limits." (Belfint Lyons & Shuman, CPAs)
Proposed Legislation Would Allow Penalty-Free 401(k) Withdrawals for Victims of Hurricanes Harvey and Irma
"Federal lawmakers are considering a proposal to allow victims of Tropical Storms Irma and Harvey to withdraw money from their retirement accounts to rebuild their homes and lives without incurring penalties. Rep. Kevin Brady, R-Texas, is one of several lawmakers reportedly considering introducing a bill that would tweak the current tax code to aid victims." (USA TODAY)
401(k)/403(b) Loan Borrowers: Check Your Paystubs!
"[T]he employer deducted none of the loan repayments from Ms. Frias' paychecks while she was on leave. Ms. Frias did not know of this failure until she returned to work ... She immediately made a $1,000 payment ... and authorized an increase in her repayments ... [T]he plan's record keeper accepted all loan repayments and in July 2014 wrote Mrs. Frias that her loan had been repaid in full. But in 2012 Mutual of America issued a Form 1099-R, reporting a deemed distribution because of the late ... loan repayment.... The tax court disagreed with Ms. Frias that a deemed distribution should not have been reported because she was on an unpaid leave of absence." [Louelia Salomon Frias v. Comm'r, TC Memo 2017-139 (July 11, 2017)] (Foley & Lardner LLP)
The State of Consumer Retirement Advice (PDF)
"Respondents reported preferences for receiving advice through email and 1:1 sessions. Least preferred channels included snail mail and annual info sessions.... The majority of respondents (53%) report receiving absolutely no advice on their retirement investments.... Less than half of respondents correctly identified the definition of a fiduciary." (Betterment For Business)
How to Optimize Your Small Business Retirement Plan
"[1] Stay up to date on compliance ... [2] Increase plan effectiveness by lowering fees.... [3] Improve the monitoring of investment options ... [4] Drive better employee participation and engagement ... [5] Make your plan even more tax efficient." (ForUsAll)
Mid-Year 401(k) Testing -- How to 'Use' and 'Misuse' Projected 401(k) Test Results
"If the sole purpose for running a mid-year test is to use it as a tool to limit your HCEs so that they can scale back their contributions, ... think again. The only thing that this accomplishes is having these employees fail to maximize their contributions. If you don't fail or generate refunds, you're simply not maximizing benefits and you will almost always shortchange the HCEs and they will leave money on the table that could have been in the plan." (Pentegra Retirement Services)
[Discussion] Participant's Loan in Arrears When Leave of Absence Begins
"If a participant is on an authorized non-military leave of absence from her employer, Q&A-9 of Treasury Regulation Section 1.72(p)-1 provides that her participant loan repayments may be suspended for up to one year. What if the participant's loan repayments were in arrears prior to the commencement of the leave of absence? Q&A-10 of Treasury Regulation Section 1.72(p)-1 permits a plan administrator to allow for a cure period ending not later than the last day of the calendar quarter following the calendar quarter in which the required installment payment was due. Does the suspension permitted under Q&A-9 apply in this scenario, which would actually result in the cure period being extended by up to one year? Or is the suspension permitted under Q&A-9 applicable only where the loan was otherwise current when the leave commenced?" (BenefitsLink Message Boards)
[Discussion] Spousal Death Benefit Rollover to a 401(k)?
"A participant's wife -- who worked for Company A and has an account in Company A's 401(k) plan -- has died. The participant is the designated beneficiary. The participant (in the 401(k) plan sponsored by his employer, Company B) would like to roll over his wife's account into his plan. Will Company A's plan accept a rollover of the spousal death benefit, or instead must this participant roll over the death benefit into an IRA?" (BenefitsLink Message Boards)
Comprehensive FAQs for Employers on Hurricanes and Other Workplace Disasters
"This list of frequently asked questions was originally prepared ... in response to Hurricanes Katrina, Rita and Wilma. It has been updated several times over the course of the past 12 years, most recently in the aftermath of Hurricane Harvey striking Texas and Louisiana in August 2017, and in anticipation of Hurricane Irma striking Florida in September 2017. This article addresses many employment-related issues facing employers in the wake of hurricane-related disasters; ... in addition to federal laws, [it covers] certain state laws, especially those in the Gulf Coast area." (Fisher Phillips)
Retirement Account Loan Strategies
"[T]hings you should do before submitting your loan request[:] [1] Model the loan to make sure it doesn't put too much of a strain on your current cash flow.... [2] Compare this to your budget and adjust spending as needed. [3] Run a retirement projection to see if you are on track to reach your retirement goals. If not, determine what changes you can make now to get on track." (Financial Finesse)
[Discussion] Section 4979 Excise Tax on Excess Contributions Due to ADP Failure
"Does the IRC section 4979 excise tax on excess contributions apply only for one year or does it instead apply for each subsequent year until the ADP failure is corrected? I find lots of commentary saying a 6% excise tax on excess contributions into an Individual Retirement Account applies every year until correction, but I've found nothing suggesting this is the case for the 4979 excise tax." (BenefitsLink Message Boards)
[Discussion] Hardship Distribution for an Alternate Payee?
"Can an alternate payee (ex-spouse) request a hardship distribution from a plan? The plan document is silent. The AP first wanted a loan, which obviously cannot be done because payments cannot be made via payroll deduction." (BenefitsLink Message Boards)
Retirement Plan Participation: The More Things Change, the More Things Stay the Same
"[P]lan participation rates have improved from 65% in 2000 to 79% in 2016. That's a rise of more than 20%.... [M]ore than 20% additional people are saving for retirement in these plans today than were saving just 15 years ago.... In 2016 nearly half of plan sponsors defaulted participants at 4% or more -- double what it was 10 years ago. And 20% of plan sponsors defaulted participants at 6% or more -- three times what it was 10 years ago.... [But it's] striking ... that participation rates for people in plans with voluntary enrollment are pretty much the same today as they were back in 2000." (Vanguard)
[Discussion] Correction of Excess Contributions by Payroll Adjustment?
"Several plan participants made excess contributions to the plan during the 2015 and 2016 plan years, to the extent their deferrals were based on commissions -- which are not a form of eligible compensation under the plan document. Distributions would be one way to correct the excess contributions. But could the plan sponsor refund the excess contributions (adjusted for earnings) to these participants through payroll, particularly if the correction would be made within the same plan year as the error?" (BenefitsLink Message Boards)
[Discussion] Contributing to SEP and Profit Sharing Plan in Same Year
"I have a client that had a business with employees and maxed out his profit sharing/401(k) for 2016 ($59,000). He sold the business and terminated the plan during 2016. He then received 1099 consulting income from the company that purchased his business. Can he contribute under a SEP with respect to the consulting income, and maximize that contribution for 2016 also?" (BenefitsLink Message Boards)
MIT Retirement Plan Lawsuit Over Excessive Fees Advances
"Federal Magistrate Judge Marianne B. Bowler recommended Aug. 31 not to dismiss several of the workers' claims under [ERISA] ... that MIT acted imprudently by allowing higher-cost, retail-class mutual funds instead of identical, lower-cost alternatives, such as institutional share class, separate accounts, or collective trusts. In her 59-page report, Bowler also declined to dismiss the participants' claims that MIT paid excessive administrative fees for record-keeping services." (Bloomberg BNA)
Millennials Look to Do Well, and Good, with Pension Investments
"Eighty-two percent of millennials say they'd prefer investments in their retirement plan's portfolio that promote the health and wellness of consumers and employees ... That's 10 percent more than baby boomers surveyed; 77 percent of Generation X felt the same way." (Bloomberg BNA)
Generation Z on Track Toward Retirement Success (PDF)
"[S]tandard 401(k) plan practices create obstacles to the retirement success of workforce entrants. Employers eager to attract enterprising workers should consider plan features and communication methods that appeal to an eager Generation Z... On average, Gen Z members believe young workers should save 28% of income for future use. 83% say it's important to save, and 76% want to be more financially educated.... 50% believe it's right to save for retirement in a 401(k) when they have a job, 12% of 22-23-year-olds are already enrolled in a retirement savings plan." (EACH Enterprise)
[Discussion] Amount Available for Hardship Distribution Following a Loan
"Plan allows loans and hardship distribution only from employee deferrals (no gains). Employee contributes $10,000, balance is $12,000. Then receives a loan for 50% vested balance ($6,000 total). In the employee's situation, he would qualify for up to $10,000. But I believe the employee can receive no more than $6,000 as a hardship distribution. Agree?" (BenefitsLink Message Boards)
[Discussion] Mid-Year Change to Safe Harbor Plan
"Can I do an amendment today to make eligibility in a safe harbor plan immediate, and avoid the need to provide 30 days advance notice? I say yes, because IRS Notice 2016-16 says the new notice period does not apply unless we are changing information in the required content of the safe harbor notice, and eligibility is not required content." (BenefitsLink Message Boards)
[Discussion] Automatic Enrollment Date Later Than Participation Date?
"Client has approx. 5,000 employees. Very high turnover within the first 90 days of employment (about 40%). Client permits date of hire enrollment so 401(k) sign-up happens during completion of new hire paperwork. Can automatic enrollment be added to the plan that such that participants become automatically enrolled on the first of the month after their 90th day of employment? Anyone who has made it through the first 90 days and hasn't completed a 401(k) election would be automatically enrolled." (BenefitsLink Message Boards)
Defined Contribution Plan Participants' Activities, First Quarter 2017 (PDF)
12 pages. "In 2017:Q1, 1.3 percent of DC plan participants took withdrawals, about the same share as in 2016:Q1. Levels of hardship withdrawal activity also remained low. Only 0.4 percent of DC plan participants took hardship withdrawals during 2017:Q1, the same share as in 2016:Q1.... Only 1.1 percent of DC plan participants stopped contributing in 2017:Q1, the same pace as in 2016:Q1.... At the end of March 2017, 16.6 percent of DC plan participants had loans outstanding, compared with 17.0 percent at year-end 2016. Nevertheless, loan activity continues to remain elevated compared with about eight years ago[.]" (Investment Company Institute [ICI])
[Guidance Overview] Retirement Plan Relief for Hurricane Harvey
"[IRS Announcement TX-2017-09] provides ... relief postponing numerous deadlines to January 31, 2019.... Announcement 2017-11 simplifies and streamlines loans and hardship distributions in the wake of Harvey.... The relief related to hardship distributions applies to plans that the law allows to provide for hardship distributions.... The documentation relief applies to all types of plans eligible to make plan loans, including qualified plans, 403(b) plans, and governmental 457(b) plans.... The Announcement does not provide any relief for 457(b) plans sponsored by tax-exempt organizations. While the Announcement does not expressly mention 409A plans, it is likely that the IRS would find that Harvey is an unforeseeable emergency permitting distributions under those plans.... The DOL issued a press release outlining several points relating to Hurricane Harvey[.]" (S. Derrin Watson, via ERISApedia)
[Official Guidance] Text of IRS Announcement 2017-11: Retirement Plans Can Make Loans, Hardship Distributions to Victims of Hurricane Harvey (PDF)
The relief provided under this announcement is in addition to the relief already provided by the [IRS] ... for victims of Hurricane Harvey.... [A] qualified employer plan will not be treated as failing to satisfy any requirement under the Code or regulations merely because the plan makes a loan, or a hardship distribution for a need arising from Hurricane Harvey, to an employee or former employee whose principal residence on August 23, 2017, was located in one of the Texas counties identified for individual assistance by [FEMA] because of the devastation caused by Hurricane Harvey or whose place of employment was located in one of these counties on that applicable date or whose lineal ascendant or descendant, dependent, or spouse had a principal residence or place of employment in one of these counties on that date.... [A] retirement plan will not be treated as failing to follow procedural requirements for plan loans (in the case of retirement plans other than IRAs) or distributions (in the case of all retirement plans, including IRAs) imposed by the terms of the plan merely because those requirements are disregarded for any period beginning on or after August 23, 2017, and continuing through January 31, 2018, with respect to loans or distributions to individuals described in [this Announcement] above, provided the plan administrator (or financial institution in the case of distributions from IRAs) makes a good-faith diligent effort under the circumstances to comply with those requirements." (Internal Revenue Service [IRS])
Most Plan Sponsors Remain Highly Satisfied with Their Plan Advisors, But About One-Third May Be at Risk
"Reducing business costs related to having a plan is the top concern for plan sponsors, with 31 percent citing it as an area of focus. Other important themes for plan sponsors include managing their fiduciary responsibility (23 percent), preparing employees for retirement (22 percent) and the risk of litigation and liability (18 percent).... Plan design activity continues to increase and reached a new high at 92 percent, with plan advisors seen as the primary influencer of these changes. Importantly, 79 percent of plan sponsors reported that participants were satisfied with the changes." (Fidelity)
Tibble v. Edison: Lessons for Plan Fiduciaries (PDF)
"Plan fiduciaries have no right to take advantage of revenue sharing and should choose the class share that is in the plan's best interest.... In the case of institutional-versus retail-class shares, because they are identical but have lower fees, a prudent fiduciary should know immediately that a switch is necessary ... This marked just the second time that a 401(k) fee case has figured damages." [Tibble v. Edison Int'l, No. 7-5359 (C.D. Cal. Aug. 16, 2017)] (Lockton)
[Official Guidance] Text of DOL Proposed Extension of Transition Period and Delay of Applicability Dates for BICE and other PTEs
39 pages. "This document proposes to extend the special transition period under sections II and IX of the Best Interest Contract Exemption and section VII of the Class Exemption for Principal Transactions in Certain Assets Between Investment Advice Fiduciaries and Employee Benefit Plans and IRAs. This document also proposes to delay the applicability of certain amendments to Prohibited Transaction Exemption 84-24 for the same period.... The Department is particularly concerned that, without a delay in the applicability dates, regulated parties may incur undue expense to comply with conditions or requirements that it ultimately determines to revise or repeal. The present transition period is from June 9, 2017, to January 1, 2018. The new transition period would end on July 1, 2019.... Comments must be submitted on or before [Sept. 15, 2017]." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
Is an Irrevocable Election Not to Participate Truly Irrevocable?
"The one-time election is, indeed, irrevocable for the employee's entire working career with the plan sponsor.... [T]his can also be a difficult employee relations issue, as there are situations that arise where employees who made a one-time election not to participate in the plan many years ago come to regret that decision." (Groom Law Group and Cammack Retirement Group, via PLANSPONSOR)
[Discussion] ADP Testing in a Controlled Group
"I have a controlled group of two plans. Plan A has deferral and profit sharing and plan B is deferral and match. They have always passed combined 410(b) testing by including the participants from the other plan. They use top-paid group, so HCE's vary from year to year. Some years there are none in Plan B and some years there are 2 or [3] Some years the ADP test fails separately, but combined with the two plans, it will pass. If Plan B would go to a safe harbor match, how does that affect Plan A and the ADP testing? Is it even allowed?" (BenefitsLink Message Boards)
[Discussion] QNECs Needed for Missed Deferrals in Prior Years. OK to Use Them in ADP/ACP Test?
"I have a 401(k) plan in which deferrals were missed for a participant in 2015 and 2016 plan year. We found out about it during 2017. The employer has calculated the missed deferrals and the matching amount along with earnings. [1] Can this QNEC amount be included in an ADP\ACP test? [2] If so, can the 2015 and 2016 QNEC amounts be use for the 2017 ADP\ACP tests, or instead can they be used only for their respective plan year tests. In this case, the plan already has completed 2015 and 2016 testing, so these amounts were not used in any earlier testing year." (BenefitsLink Message Boards)
Important Facts About 401(k) Plans (PDF)
14 pages. "[1] 401(k) plans are the largest share of DC plan assets, with more than two-thirds of DC plan assets held in 401(k) plans. [2] More than one-third of 401(k) plan participants are younger than 40.... [3] Most 401(k) plan participants receive plan contributions from their employers.... [4] Equities figure prominently in 401(k) plans, and younger 401(k) plan participants are highly engaged in equity investing. [5] 401(k) plan participants have concentrated their assets in lower-cost funds. [6] Fewer than one in five 401(k) plan participants have loans outstanding." (Investment Company Institute [ICI])
[Discussion] Company with SIMPLE IRA Program Acquires Company with 401(k) Plan
"Company A sponsors a SIMPLE IRA program. Company B sponsors a safe harbor 401(k) plan. Company A acquired 100% of Company B through a stock acquisition in July 2017. Both companies want to maintain their plans as is. I'm aware of the transition rules for coverage testing, but could the separate plans continue as is past the transition period as long as they meet coverage?" (BenefitsLink Message Boards)
[Discussion] ADP Testing for Controlled Group
"Company X and Y form a controlled group. X has a 401(k) plan, Y does not. To pass coverage for the Company X 401(k) plan, the Ratio Percentage Test passes by disaggregating otherwise excludable employees of both companies while treating employees of Company Y as not benefitting. Question: When performing ADP test for the Company X 401(k) plan, am I required to carve out the otherwise excludible employees, or can I run an aggregated test including all eligible employees of Company X?" (BenefitsLink Message Boards)
[Discussion] Employee Missed Deferral Opportunity for One Pay Period
"A glitch caused one participant's deferral to be missed for one payroll cycle. The issue was caught within 30 days. Under the new rules, client issues notice to employee with no corrective contribution. The plan does not offer match so no missed match. The question is in regards to missed earnings -- do we have to determine or track them, if the employee decides to make a catch-up contribution for the missed deferral?" (BenefitsLink Message Boards)
Corporate DC Plans Report Flat Fees
"[Defined contribution] plans have a median record keeper, trust and custody fee of $59 per participant, a slight increase from $57 in 2016. The asset-weighted average expense ratio for DC plans is currently 0.41%, consistent with the ratio reported in NEPC's 2016 survey (0.42%). However, both the median fee and average expense ratio have dropped substantially since NEPC first conducted this study in 2006, when fees were $118 and the expense ratio was 0.57%." (NEPC)
Retirement Plan Fees Level Out. How Does Your 401(k) Compare?
"The average expense ratio on investments in defined-contribution, or 401(k), plans dropped by a hair to 0.41 percent of assets this year ... That follows three straight years of somewhat deeper declines, spurred in large part by regulatory pressure and a rash of high-profile class action lawsuits alleging excessive fees and plan designs that weren't in savers' best interests. The all-in cost of plans, including fees tied to investment management, record-keeping, and trust and custody services, have also been dropping in recent years. In the latest survey, it flattened out at 0.43 percent, the same amount as in 2016." (Bloomberg)
Why Paying 401(k) Loan Interest to Yourself Is a Bad Investment
"[P]aying yourself 5% loan interest doesn't actually generate a 5% return, because the borrower that receives the loan interest is also the one paying the loan interest. Which means paying 401(k) loan interest to yourself is really nothing more than a way to transfer money into your 401(k) plan. Except unlike a traditional 401(k) contribution, it's not even tax deductible! And as long as the loan is in place, the borrower loses the ability to actually invest and grow the money ... which means borrowing from a 401(k) plan to pay yourself interest really just results in losing out on any growth whatsoever!" (Nerd's Eye View)
Distributed Ledger Technology and Retirement Savings Infrastructure, Part 2
"DLT is being implemented (at least incrementally) by the financial services industry.... An obvious application of DLT is the transformation of 401(k) plan recordkeeping.... An obvious application of DLT is the transformation of 401(k) plan recordkeeping.... The benefits of implementation of DLT at the participant level -- e.g., the ability to move assets between funds or take loans, hardship withdrawals or other distributions -- should be evaluated against this cost." (October Three Consulting)
[Discussion] Treat Required Minimum Distribution as a Qualified Charitable Distribution?
"A 401(k) participant wants to treat her RMD for the year as a qualified charitable distribution. She is eligible for an in-service distribution, so since these rules apply only to IRA's we could transfer her money to an IRA first and she could make the charitable distribution from there. However, isn't the RMD required before the rollover to the IRA? Is there any way around this hiccup?" (BenefitsLink Message Boards)
[Discussion] Handwritten Amendment to Plan Document?
"On November 30, 2016 plan sponsor decides they want to change the safe harbor match formula from plan year to pay period effective January 1, 2017. They call the vendor, vendor says no way it is too late as the safe harbor notice is due the next day. Plan sponsor decides to hand write on the document crossing out plan year and writing in pay period. Required signatures and dates are written in to the margin as well as the execution page making it clear their intent. Plan sponsor changes the safe harbor notice by typing the notice and just changing plan year to pay period. Plan sponsor delivers the safe harbor notice timely with pay period wording. Plan sponsor sends the hand-written amendment and signatures to the vendor. Vendor refuses to honor the hand-written changes. Are handwritten amendments acceptable?" (BenefitsLink Message Boards)
[Discussion] DOL Auditor Wants to See 408(b)(2) Disclosures
"Does anyone have any experience/success with the DOL in narrowing the scope of a national office request for a global review of 408(b)(2) disclosures?" (BenefitsLink Message Boards)

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