BenefitsLink logo
EmployeeBenefitsJobs logo

Subscribe to Newsletters

Search the News

Featured Jobs
Client Service Representative for Retirement Plan
401(k) Administrator
Pension Assistant
ESOP Administrator
DC Plan Administrator
Client Relationship Manager
Search all jobs
Get the BenefitsLink app for iPhone and iPad LinkedIn

Benefits in the News > By Subject >

401(k) plans

View Recent Headlines Now Viewing Excerpts and
Recent Headlines

College Professors Give Themselves a 'B' Grade in Financial Literacy
"[N]early one third (29 percent) of professors aren't sure of the investment mix of their retirement savings, suggesting they don't know if the investments they selected align to a specific financial goal and timeline.... When it comes to the financial wellness of non-faculty employees, 64 percent say they often worry about their financial situation, compared to 44 percent of professors." (Fidelity)
The Top Three Retirement Plans for Small Businesses
"The 401(k) Plan offers the most flexibility (and high contribution limits) ... SEP IRAs are pretty easy to start and 100% funded by the employer.... The SIMPLE IRA is a solid, affordable option." (Butterfield Schechter LLP)
Embezzlement of 401(k) Deferrals by COO of Architecture Firm is (Doubly) Costly
"[T]he Second Circuit Court of Appeals ... ruled: [1] Restitution and forfeiture are authorized by separate statutes with different purposes; [2] The court could not find any statutory authority to reduce a criminal forfeiture by restitution paid or payable; and [3] 'Criminal forfeiture is a form of punishment' and distinct from civil remedies to make victims whole. Result[:] the errant fiduciary had to pay twice the amount taken from the retirement plan." [U.S. v Bodouva, No. 16-3937 (2d Cir. Mar. 22, 2017)] (Stinson Leonard Street)
Anthem Workers Advance Challenge to 401(k) Plan Fees
"The proposed class action accuses the committee of including high-fee mutual fund share classes in Anthem's 401(k) plan and paying excessive record-keeping fees to Vanguard Group Inc. A federal judge largely denied the committee's motion to dismiss on March 23, saying that choosing high-fee share classes when identical lower-fee classes were available could constitute fiduciary breach under [ERISA]." [Bell v. Pension Comm. of ATH Holding Co., No. 15-2062 (S.D. Ind. Mar. 23, 2017)] (Bloomberg BNA)
Hey Millennials, How Much of Your Pay Should You Be Saving?
"So, you are a Millennial who is employed but hasn't started to save yet. The 'experts' tell you that you need to start saving like yesterday and you need to save as much as possible. This post will walk you through how to use our Actuarial Budget Calculator for pre-retirees so that you (or your financial advisor) can develop a spending/savings budget that will help you accomplish your financial goals." (Ken Steiner, FSA Retired)
The Educated Participant: How Employers Can Improve Retirement Readiness
"After plan sponsors recognize that their participants need more help, the next question is almost always: Do we expose ourselves to liability for participant investment losses if we voluntarily provide participant education? Fortunately, the [DOL] provides a number of protections for plan sponsors who provide education or more personalized advice, and the safe harbor for participant-directed investments may provide additional protection." (PenChecks)
Merrill Lynch and Morgan Stanley: A Tale of Two Fiduciary 401(k) Business Models
"While Merrill Lynch is offering advisers servicing 401(k) plans a fairly high level of discretion, Morgan Stanley is substituting some adviser discretion for more risk at the firm level ... The firms, each with adviser forces of greater than 14,000, are the first among their wirehouse peers to outline changes to how their representatives can conduct fiduciary 401(k) business as the [DOL's] fiduciary rule looms." (Pensions & Investments)
Five Reasons Millennials Aren't Saving for Retirement
"They take jobs without retirement benefits.... They aren't eligible for the 401(k) plan.... They fail to sign up.... Parenthood and homeownership responsibilities ... Low salaries." (U.S. News & World Report)
Three Things to Know About DC Plan Participants Under 30
"A majority identify as 'do it for me' investors.... In general, they expect their employers to take responsibility for helping them save and invest for retirement.... They are among the strongest proponents of the 'automatic 401(k).' " (J.P. Morgan Asset Management)
A New Measure of Financial Literacy: The Personal Finance Index (PDF)
26 pages. "U.S. adults are split 50/50 between those who could and those who could not answer over one-half of the P-Fin Index questions correctly.... Personal finance knowledge is lowest in the area of comprehending risk; on average, 39% of these questions were answered correctly.... While 10% of young adults (under age [45] have a relatively high level of financial literacy, 30% have a relatively low level." (TIAA Institute and Global Financial Literacy Excellence Center (GFLEC))
Interesting Angles on the DOL's Fiduciary Rule, Part 41
"[T]he delay of the new fiduciary rule does not mean that we are 'rule-less.' Instead, the 'old' rule, and exemptions, which have been place for decades, will continue to apply. Does that mean that we are back in the 'good old days' where we won't need to pay attention to the application of the fiduciary rule to IRAs? ... Over the past few years, a tremendous amount of attention has been paid to the meaning and consequences of being a fiduciary ... And, with this newfound attention, it is possible that many common practices will, when closely examined, result in fiduciary status under the old rule." (
[Guidance Overview] The Paradox of Participant Loans in Default: A Taxable Distribution of a Loan Balance Still Considered to Remain Outstanding
"[K]eeping two sets of books is sometimes a legitimate practice, required precisely to comply with IRS rules that regulate different aspects of each set of books. For example, the difference between deemed distributions of loans in default and the actual loan offset requires a double set of books.... The first set of books is needed to comply with the taxable distribution rules and the second one to comply with the top-heavy test and the maximum available loan computations." (Belfint Lyons & Shuman, CPAs)
The Top Four Lies Told by 401(k) Providers
"[1] Your 401(k) plan is free ... [2] I can setup your 401(k) plan in 15 minutes ... [3] Index funds deliver only average returns ... [4] I will eliminate your fiduciary liability." (Employee Fiduciary)
Active Management vs. Passive Asset Management in 401(k) Accounts
"Recent research suggests [that] active management is unlikely to produce returns that beat passive index investing. [One study] looked at the composition of target date funds that would be hypothetically used in retirement accounts (i.e. 401(k)s). The passive indexes were comprised of common industry benchmarks with modest fees deducted, and several methods of choosing active managers were pitted against the passive returns." (ForUsAll)
Bank of America Prevails in 401(k) Asset Transfer Case
"Bank of America Corp. prevailed against employees who challenged a $3 billion transfer from the company's 401(k) plan to its cash balance defined benefit plan ... The employees failed to establish that BofA retained any profit as a result of the transfer, Judge Graham C. Mullen [held]." [Pender v. Bank of America Corp., No. 5-238 (W.D.N.C. Mar. 17, 2017)] (Bloomberg BNA)
Using an All-Index-Fund Lineup in 401(k) Plans
"Arguments for using only index funds: Less volatility ... Elimination of advisor conflicts ... No more poorly performing funds ... Simplicity ... The end of fund changes ... Better performance ... Closet indexers ... Higher level of fiduciary compliance? ... Arguments for using actively managed funds: Less than 100% of every market downturn ... Inefficiencies still exist ... Misperception of active management ... Animal spirits." (Lawton Retirement Plan Consultants)
[Guidance Overview] IRS Publishes Audit Guidelines for Hardship Withdrawals from 401(k) and 403(b) Plans
"The IRS audit guidelines only relate to the documentation requirements that apply to safe harbor hardship withdrawals, but are likely to also be relevant to non-safe harbor hardship withdrawals." (Miller Johnson)
DC Plan Executives Should Offer 'Enhanced Active Choice' to Build Trust
"Plan sponsors must increase trust among participants to improve participation and increase contribution rates because traditional strategies ... have limitations ... Using principles of behavioral psychology ... enhanced active choice seeks to create in participants a desire to avert a feeling of regret, which leads to a wish to exert greater control over their actions. In turn, this attitude leads to greater trust." (Pensions & Investments)
Why You Shouldn't Stick With Your 401(k) Plan's Default Settings
"Sticking with a low default savings rate might cause you to miss out on part of the 401(k) match your employer offers.... [T]he more money you save up to the annual contribution limit, the bigger the dollar value of your tax break.... [C]heck out whether the target-date fund's underlying investments, the rate at which the fund grows more conservative and the fees charged suit your risk tolerance and investment needs." (U.S. News & World Report)
Smallest Companies Have Highest-Performing 401(k) Plans
"Certified Public Accountants, as an industry, had the highest median plan score, while the Legal and Insurance industries had the second- and third-highest scores, respectively. The Educational Services industry was ranked last, followed by Accommodation and Food Services.... None of the 26 examined industries has a median participation rate of less than 86 percent.... 401(k) plans in the Financial Advice/Investment Activities industry have the second-lowest median rate of return." (Judy Diamond Associates)
House Democrats Denounce DOL Rule Delay as Comment Period Closes
"[A] letter from 40 House Democrats [to the DOL] said that the Trump administration DOL was trying to undo in a matter of weeks a measure that had been carefully constructed over the course of more than six years by the preceding Obama administration. The lawmakers also characterized the stated reason for the delay -- to give the agency time to reassess the rule's impact and consider modifying or repealing it -- as 'specious' since the Obama DOL already vetted it." (InvestmentNews)
Managing Critical 403(b) Issues Through Proper Allocation of 3(16) and 3(21) Fiduciary Responsibility
"[T]he complex nature of handling 403(b) plans -- and, in particular, the unique manner in which the fiduciary rules apply to them -- make these plans uniquely suited to customized fiduciary services.... Allocated fiduciary services are especially critical in the growing movement toward 403(b) MEPs, both of the ERISA and non-ERISA types. It takes a special expertise to manage the 'legacy' contract issues in a coordinated and meaningful way [among] a significant number of employers between which employees can often transfer." (Business of Benefits)
[Guidance Overview] New IRS Audit Guidelines for Safe Harbor Hardship Distributions
"[M]any third party administrators offer streamlined hardship withdrawal services and do not maintain source documents or summaries. Employers using such services should ask the third party administrator if it will be modifying its services in light of the new IRS guidance. If not, the employer should maintain summaries to meet the new guidelines in the event of an IRS audit." (Wilkins Finston Friedman Law Group LLP)
[Opinion] ERIC Comment Letter to DOL Supporting Extension of Applicability Date of Fiduciary Rule (PDF)
"Not only is the plan sponsor harmed by the uncertainty on the state of the rule, but also the participants who may see a sudden decrease in important services if the plan sponsor is not provided adequate time to replace those services.... [ERIC] strongly encourage[s] the DOL to provide a new implementation date that allows for adequate time for service providers to notify plan sponsors of changes in services as well as adequate time for plan sponsors to implement any changes in retirement plan services." (The ERISA Industry Committee [ERIC])
[Guidance Overview] IRS Clarifies Permissible Substantiation Procedures for Hardship Withdrawals
"[B]efore relying on an employee's summary of the underlying documents, the plan must first [1] notify the requesting employee of various items of information, and then [2] obtain both general information concerning the participant and his or her request and more specific information concerning the event cited as justifying the hardship withdrawal.... Plans that have been relying on employee self-certifications should certainly do so. By providing the appropriate notice and obtaining the specified information, such self-certifications may be continued." (Spencer Fane)
TPA Alpha: A New Approach to Evaluating TPAs
"Much like investment managers, there are TPAs that underperform the market and deliver negative Alpha; some that are level with the market and deliver no Alpha; and other quality TPA firms that outperform the market with regard to services and capabilities that can deliver positive Alpha. If a similar premise was utilized in selecting TPAs, then the firm that has the highest probability of delivering positive Alpha would be the most obvious and prudent choice. How can this evaluation be conducted?" (Jason Brown and Patrick Shelton, via
An Overview of Recent Litigation with Respect to In-House Funds
"There have been a number of recent lawsuits brought against financial services companies alleging prohibited ERISA 'self-dealing' with respect to the use of proprietary funds and services for plans they maintain for their own employees.... [T]hese cases also typically involve allegations of breaches of ERISA's loyalty and prudence standards ... [This article reviews] the issues presented by these cases for plan fiduciaries -- both fiduciaries of financial services company in-house plans and 'regular' plan fiduciaries." (October Three Consulting)
[Guidance Overview] DOL Issues Temporary Enforcement Relief for Fiduciary Rule Non-Compliance
"[FAB 2017-01] provides no protection or assurances against action by other regulators or the private sector. Unless the DOL issues a class exemption providing relief for prohibited transactions occurring during a 'gap period' (or a 'reasonable period' after the decision not to delay the Rule is published, if this should occur), the enforcement policy alone won't provide relief for 'conflicted' advice to IRAs or for excise taxes resulting from prohibited transactions involving ERISA plans. The DOL has no jurisdiction over the enforcement of the prohibited transaction rules for IRAs, or the assessment of excise taxes, which is handled by the IRS in all cases." (Drinker Biddle)
[Guidance Overview] Internal Memo Reveals IRS Expectations for Hardship Distributions
"According to the IRS, documenting an immediate and heavy financial need ... can be evidenced by either source documents, (e.g., estimates, contracts, bills, statements), or a summary of information from source documents. Whichever approach is taken, there must be sufficient detail to support the need for a hardship distribution." [Article includes a checklist of specific information needed for each type of hardship request.] (Ascensus)
Four Questions to Guide Your Fee Evaluation Process (PDF)
"[1] Who is receiving compensation from your plan? ... [2] What are the fees and expenses associated with your plan? ... [3] How do your fees and expenses compare to other service providers or investment options? ... [4] Why is the compensation warranted?" (TIAA)
[Guidance Overview] IRS Provides New Guidelines for Documenting Hardship Distributions
"The memorandum requests that field agents follow a 2-step approach in determining if a hardship distribution was made on account of a deemed immediate and heavy financial need ... [If] the notification provided to employees in Step 1 or the information reviewed in Step 2 is incomplete or inconsistent on its face, the agent may ask for source documents from the employer or third-party administrator." (EisnerAmper)
How to Service Small Retirement Plans and Still Make a Profit
"Outsourcing ongoing investment monitoring and education meetings, taking work on a project basis and charging a flat fee are ways advisers can help small plans while making revenue." (InvestmentNews)
Merrill Lynch Outlines Plans for Its 401(k) Fiduciary Platform
"Merrill Lynch Wealth Management outlined plans [on March 15] to transition its defined contribution plan business over to a fiduciary model, coming several months after the firm announced similar plans for its retail retirement business and as the implementation deadline for the [DOL's] fiduciary rule approaches.... The announcement also follows on Merrill's decision to disallow use of commissions in the vast majority of advised IRAs in response to the fiduciary regulation." (InvestmentNews)
[Guidance Overview] IRS Views on Self-Certification of Financial Hardship
"In cases where any participant has received more than two financial hardship distributions in a single plan year, the guidelines advise agents to request source documents supporting those distributions if a credible explanation for the multiple distributions cannot be provided.... [P]lan sponsors may wish to consider limitations on the number of financial hardship distributions that a participant may take or to apply a more stringent process for approving requests for financial hardship distributions where more than two requests are made in any plan year." (Benefits Bryan Cave)
[Guidance Overview] IRS Issues Substantiation Guidelines for Safe-Harbor Hardship Withdrawals
"Although the guidance does not have binding legal or regulatory effect, it nonetheless highlights what auditors of plans offering safe-harbor hardship distributions will be looking for ... and reinforces that plan administrators should be regularly reviewing their record retention practices. It also emphasizes the need for proper documentation and internal controls for such distributions, including, to the extent applicable, understanding between TPAs and employer plan sponsors regarding their respective roles in the review and documentation process, as well as the importance of substantiation before distributions are made." (McGuireWoods LLP)
[Guidance Overview] The 2017 Operational Compliance List
"For 2017, the Operational Compliance List includes ... [1] QNECs and QMACs in defined contribution plans ... [2] Extension of temporary nondiscrimination relief for closed defined benefit pension plans ... [3] Partial annuity distribution options for defined benefit pension plans ... [4] Cash balance/hybrid plans final regulations." (Findley Davies | BPS&M)
Retirement Plan Best Practices: Plan Design (PDF)
13 pages. "How you structure your plan can have tremendous impacts on participant outcomes. We'll examine the factors that you should consider as a fiduciary when making decisions about plan design, look at how other plans handle different options, and identify some best practices. The goal of this paper is to help you make the decisions that will lead your participants to retirement readiness." (Arnerich Massena)
ERISA Stock Drop Challenge Targets Allergan
"The complaint suggests defendants 'permitted the plans to continue to offer Allergan Stock as an investment option to participants even after the defendants knew or should have known that Allergan Stock was artificially inflated during the class period,' which runs February 25, 2014, to November 2, 2016." (PLANSPONSOR)
[Guidance Overview] Fiduciary Rules and 401(k) Hardship Distributions: The Latest
"An interesting byproduct of the regulatory process over the past several years is that both advisors and plan-related clients have been sensitized to many of the issues addressed -- albeit sometimes clumsily -- in the fiduciary regulation. For example, should a plan require that its investment advisor act as a fiduciary, even if the regulation ends up not requiring this? If not, why would a plan want to retain someone who is not required to act in the plan's best interest?" (Ferenczy Benefits Law Center LLP)
Five Things Every New CFO Should Know About the 401(k) Plan
"[1] Compliance: Understanding fiduciary responsibilities and liabilities ... [2] Investments: What are the options and are they low cost? ... [3] Overall plan costs: How much does your current plan cost and how much would your ideal plan cost? ... [4] Administrative work: Who is doing what for whom? ... [5] Employee experience: How well is the 401(k) serving the employees?" (ForUsAll)
[Guidance Overview] New IRS Guidance Makes Substantiating Hardship Withdrawals Easier (PDF)
"While not intended to be a statement of law, the memorandum provides IRS examiners with insight as to how to evaluate a plan's hardship withdrawal program. Most importantly, the memorandum provides plan sponsors an alternative, and much less burdensome, process to meet their hardship substantiation obligations." (Lockton)
401(k) Fees: Questions Frequently Asked by Plan Fiduciaries
"What are the basic types of 401k fees? ... How are 401k providers compensated today? ... What's the best resource for finding my 401k provider's fees? ... What's the process for totaling my 401k plan fees? ... How do I benchmark my 401k plan fees?" (Employee Fiduciary)
Survey Reveals Demand for Unbiased Human Investment Advice and Digital Tools as Americans Work to Get on Track
"[L]ess than two thirds (62 percent) of Americans feel confident they're saving enough to retire comfortably -- down from 64 percent a year ago and 72 percent in 2015 ... 39 percent of non-retired Americans believe they should contribute 15 percent or more of their income to retirement, yet only 13 percent are doing so (down two points from 2016) ... Among Americans who are investing, 83 percent see value in information aggregators, as well as retirement calculators (73 percent), technology to connect with advisors (71 percent), digital-human 'hybrid' solutions (69 percent) and robo-advisors (56 percent)." (Capital One)
Why Your Small Business Should Consider Implementing a Retirement Plan
"According to the Freelancers Union, a non-profit organization providing advocacy and health insurance to its members, there are an estimated 54 million independent workers. While millennials get credited for being the driving force of entrepreneurship, about half of new businesses are started by Baby Boomers. Regardless of their generation, 60 percent of independent contractors and small business owners report not saving enough for their retirement." (Butterfield Schechter LLP)
[Guidance Overview] 401(k) and 403(b) Plan Hardship Distribution Substantiation: What Will the IRS Be Looking For?
"In order to avoid potential unpleasantries on audit, plans that use an electronic or streamlined hardship distribution request process will need to take certain steps. First, the employer or TPA must provide the employee notice ... Second, the summary of information must include, at a minimum, the information specified in the [two recently issued IRS] memoranda ... Third, if a TPA administers hardship distributions, it should provide a report to the employer at least annually that describes the hardship distributions made during the year." (Jackson Lewis P.C.)
No Political Divide on Retirement Security
"76% of Americans are concerned about their ability to achieve a secure retirement ... More than three-fourths of Americans (77%) say the disappearance of pensions has made it harder to achieve the American Dream, and 71% of respondents say pensions do more to help workers achieve a secure retirement as compared to 401(k) plans. Nearly two-thirds (65%) say pensions are safer than 401(k) plans." (PLANSPONSOR)
Preparing Participants for the Next Market Downturn
"The best time to communicate to participants about how investment returns and market cycles work and the ongoing importance of proper diversification is not when a year like 2008 happens, but when the market is doing well (i.e., right now!). While a significant number of participants did experience the 2008 market correction and (hopefully) behaved prudently to maintain well-diversified portfolios (for those who did, their equity loss was generally recouped by 2012), there are now a number of early career workers who have never experienced a significant market downturn." (Cammack Retirement Group)
[Guidance Overview] Recent IRS Guidance for Hardship Distributions
"The Guidelines indicate that if the employer or administrator received a summary of source documents ... the IRS examining agent should inquire whether the employer or TPA had provided a specified notification to the participant prior to making the hardship distribution. Three of the four items on that notice are tax-related items ... The fourth item requires the participant's agreement to preserve source documents and make them available on request to the employer or administrator, without specifying the consequences of the participant's failure to comply with his or her agreement." (The Wagner Law Group)
Three Common 401(k) Plan Errors (as Told by Employee Benefit Plan Auditors)
"[P]lan administrators and management must clearly understand the definition of eligible compensation, not only when the plan is created, but on an ongoing basis.... Plan sponsors should determine when contributions can be reasonably segregated, and this conclusion should be documented and monitored to make sure remittances are timely and that any late remittances are reported and appropriately corrected.... [P]lan sponsors and third-party administrators should have a formal approval process for hardship distributions, including obtaining documentation of the hardship reason, certification of the unavailability of alternative funding sources, and a procedure to assure employee contributions cease, if applicable." (EisnerAmper)
[Guidance Overview] IRS Issues Memorandum on Substantiation Guidelines for Safe-Harbor Hardship Withdrawals from 401(k) Plans
"Although the Memorandum is not formal guidance, it does provide information on what the IRS considers sufficient substantiation and documentation for a hardship withdrawal.... [T]he Memorandum does not address substantiation of non-safe-harbor hardship withdrawals, although the employer should consider applying these standards for any hardship withdrawal." (Sherman & Howard)
What Your 401(k) Investment Committee Should Focus On
"Investment option costs (and performance) ... Provider costs (and performance) ... Feature utilization and plan design ... Employee communications ... Investment committee fiduciary responsibilities ... Documentation of discussions and decisions." (Lawton Retirement Plan Consultants)
[Guidance Overview] New IRS Memorandum Is a Hardship Act to Follow
"Many plan sponsors who have used this type of all-electronic hardship application process have faced pushback from the IRS during audits.... The IRS cautioned that an electronic application process could be insufficient, because employees may leave employment or fail to keep copies, thus making their records inaccessible in the event of an IRS audit. This new guidance suggests a more flexible approach to the all-electronic hardship withdrawal process." (Eversheds Sutherland)
[Guidance Overview] Fiduciary Rule -- Not Delayed Yet
"[T]he proposed delay will not be effective until the DOL issues a final rule. Until then, April 10, 2017, is still the rule's applicability date. As such, firms are advised to carefully consider their compliance strategies, business models, and communications with their representatives, employees, clients, and potential customers. Important here will be developing contingency plans to address the possibility of an April 10 or delayed effective date." (Morgan Lewis)
[Guidance Overview] DOL Proposes Delay in Fiduciary Rule Implementation
"The DOL request for delay contains a lengthy description of topics the public could address in their comments.... What timing should be considered if the guidance is delayed further? Six months, 12 months, or longer? Have there already been investment innovations that can be attributed, even partially, to the guidance? Have there been increases or reductions in commissions, fees, or minimum balance requirements? Have financial organizations made changes to products, advisory services, or pricing? To what extent have compliance costs been incurred that cannot be reduced by further delay or revision? Are there specific provisions that could be amended to reduce compliance burdens and minimize disruptions?" (Ascensus)
Plan Sponsors Should Beware the Managed Account Default Option
"Increasingly, sponsors are signing up for managed accounts as the plan's default option ... [and] a growing number of providers offering lower administration fees in exchange for offering the managed account as the qualified default investment alternative. This makes it ever more important that those options are appropriately analyzed, selected and monitored to provide the highest level of service to plan participants. Organizations offering managed accounts face a particular challenge fulfilling their fiduciary duties, because while some employees are actively involved, typically a sizable percentage of employees fail to engage despite picking a self-directed option." (Pensions & Investments)
[Opinion] Year-End 401(k) Matching: A Good Thing?
"One of the benefits of regular contributions to a 401(k) plan is the ability to dollar cost average. The participants lose this benefit for the employer match.... Employees who are looking to change employers will be impacted as will employees who are being laid off by the company. If the annual match is perceived as less generous it might discourage some lower compensated workers from participating in the plan.... There are, however, some valid reasons why a plan sponsor might want to go the annual matching route[.]" (The Chicago Financial Planner)
[Guidance Overview] Guidance to IRS Examiners on 401(k)/403(b) Hardship Withdrawals
"[A recent IRS memo to EP employees] is a welcome glimpse into the IRS's view of what might be acceptable in lieu of obtaining actual documentation upfront.... [E]mployers/TPAs should consider whether they prefer to continue requesting source documentation or align their programs with the memorandum. A possible risk with the alternative approach is the participant misplacing or being otherwise unable to produce the source documentation if requested." (Seyfarth Shaw LLP)
Millennial Wealth Accumulation: A Plan Sponsor's Guide (PDF)
"Members of this generation are less likely to have a pension than previous generations ... The Millennials who are investing to save for retirement may structure their portfolio too conservatively to minimize loss, but this also curtails potential gains in the process.... Millennials have two specific things working in their favor with regard to saving in your sponsored retirement plan, a long time horizon and the magic of compound interest." (Ekon Benefits)
[Guidance Overview] Are You Keeping the Right Documentation for 401(k) Hardship Distributions?
"[In a Feb. 23, 2017 IRS memorandum, Employee Plans (EP) Examinations employees] are directed to obtain 'source documents' such as 'estimates, contracts, bills and statements from third parties.' Second, EP employees are directed to obtain a summary of the information contained in the source documents. The summary should include certain notifications made to the employee before the hardship[.]" (Bradley Arant Boult Cummings LLP)
401(k) Safe Harbor Hardship Distributions: Best Practices and Checklist
"[1] Are you providing proper notice to your employees taking 401(k) safe-harbor hardship distributions? ... [2] Are you keeping proper documentation related to all hardship requests? ... [3] Are your employees taking 401(k) safe-harbor hardship distributions that constitute deemed hardships?" (Butterfield Schechter LLP)

Important word about authorship:
BenefitsLink® ( provides this page for you, containing selected hypertext links to pages on the web that our editors think will be useful or interesting to you. But BenefitsLink is not the author or publisher of those linked pages (except as expressly indicated). You should contact directly the author of any such linked pages for copyright or other information about their contents.
© 2017, Inc.
Privacy Policy