AimPoint Pension
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Compass
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Bates & Company, Inc.
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Loan & Distribution Specialist AimPoint Pension
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Defined Benefit Combo Cash Balance Compliance Consultant Loren D. Stark Company (LDSCO)
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Regional Vice President of Sales The Retirement Plan Company
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Qualified Plan Issues in Corporate Transactions: When Does a Transaction Trigger a 401(k) Participant's Right to a Distribution?
Reinhart Boerner Van Deuren s.c. [Guidance Overview] Mar. 28, 2024 "[W]hen considering whether a corporate transaction will result in participants becoming entitled to a plan distribution, plan sponsors should not simply assume that a change in a participant's common law employer will entitle the participant to a distribution.... [W]hen it comes to determining whether participants will experience a severance of employment and be entitled to a 401(k) distribution as a result of a corporate transaction, there may not always be a clear answer." |
IRS Provides Guidance on SECURE 2.0's Terminal Illness Distributions
Mercer [Guidance Overview] Mar. 22, 2024 "[Notice 2024-2] confirms that ['terminally ill individual distributions' (TIIDs)] are available to participants in ... defined benefit and defined contribution plans (including 401(k) plans), 403(a) annuity plans, 403(b) plans, and both traditional and Roth IRAs. The notice also indicates that all participants and beneficiaries in these plans may be eligible to receive TIIDs, not just current employees." Tags: 401(k) Plans • 403(b) Plans and Annuities • Misc. Distribution Issues • Retirement Plan Administration • Retirement Plan Design • SECURE 2.0 |
Retirement Savings Calculator [XLS]
Retirement Management Services, LLC Mar. 22, 2024 "This worksheet helps you determine what percent of pay to save for retirement. These calculators are provided only as general self-help tools. Results depend on many factors, including the assumptions you provide." Tags: 401(k) Plans • Retirement Plan Information for Employees |
Correcting a Common Mistake in 401(k) Plans: Failure to Make Safe Harbor Contribution:
ForUsAll [Guidance Overview] Mar. 21, 2024 "What Is a safe harbor contribution? ... Can you suspend or reduce safe harbor contributions? ... What are the consequences for suspending safe harbor contributions? ... Can you reinstate suspended safe harbor contributions? ... Best practices for avoiding safe harbor contribution errors." |
No, 401(k) Funds Do Not Cost 2% Per Year
Morningstar [Opinion] Mar. 21, 2024 "[E]xpense ratios for 401(k) plans are largely determined by the level of plan assets. Bigger means thriftier. Multinationals have Treasury departments staffed with benefits experts who haggle when negotiating with 401(k) providers. In fact, they often circumvent mutual funds altogether, insisting instead on cheaper collective investment trusts. In contrast, small-company sponsors are often ill-informed and possess little bargaining power regardless." |
Terminating Employees and Benefits to Think About
Foley & Lardner LLP Mar. 20, 2024 "401(k) contributions: severance doesn't Count, but post-termination payments could ... Make sure to read, and maybe follow, any employment or other contract ... Watch out for 409A ... COBRA & other post-termination welfare [benefits]: be careful with your promises." Tags: 401(k) Plans • Health Plan Administration • Retirement Plan Administration |
Does Your Retirement Plan Need a Compensation Review?
KLB Benefits Law Group Mar. 19, 2024 "The definition of compensation in a retirement plan is a pivotal element that affects how deferrals, matching contributions, profit sharing contributions, and plan limits are determined. An error in compensation, even a small one, can result in substantial correction costs that expand dramatically over time. ... It is critical to make sure that the compensation amounts used in calculating plan contributions and plan limits are accurate at all times. What is the best practice to ensure this?" |
How Starter 401(k) Plans Compare to Safe Harbor and Traditional Plans
Employee Fiduciary [Guidance Overview] Mar. 13, 2024 "[SECURE 2.0] created a new type of automatic enrollment 401(k) plan called the 'starter 401(k) deferral-only arrangement' ... meant to be an entry-level option for small businesses who do not already offer a retirement plan. A starter plan is not subject to annual testing like a traditional 401(k) plan or mandatory employer contributions like a safe harbor 401(k) plan. The trade-off is lower contribution limits for plan participants. Small businesses can adopt a starter 401(k) plan starting January 1, 2024." Tags: 401(k) Plans • Retirement Plan Design • SECURE 2.0 |
Text of IRS Publication 560: Retirement Plans for Small Business (SEP, Simple, and Qualified Plans), for Use in Preparing 2023 Returns (PDF)
Internal Revenue Service [IRS] [Official Guidance] Mar. 12, 2024 44 pages; Mar. 7, 2024. "What's New: [1] Compensation ... Elective deferral ... Defined contribution ... Defined benefit ... SIMPLE plan salary reduction contribution ... [and] Catch-up contribution limits for 2023 and 2024 ... [2] Required minimum distributions (RMDs).... [3] Plans established after end of taxable year.... [4] Increased small employer pension plan startup cost credit.... [5] Employer contributions credit.... [6] Small employer military spouse participation credit.... [7] Designated Roth nonelective contributions and designated Roth matching contributions." Tags: 401(k) Plans • SIMPLE 401(k), SIMPLE IRA Plans • Simplified Employee Pensions (SEPs) |
DOL and IRS Issue Guidance on DC Plan Emergency Savings Accounts
Mercer [Guidance Overview] Mar. 12, 2024 "DOL's guidance takes the form of 20 wide-ranging FAQs posted on the agency's website covering multiple aspects of PLESA administration. IRS's guidance in Notice 2024-22 focuses on reasonable measures sponsors can take to limit employees' manipulation of the employer match on PLESA contributions. IRS is accepting written comments on its notice through April 5, and both agencies have indicated that more PLESA guidance is coming." Tags: 401(k) Plans • Retirement Plan Design • SECURE 2.0 |
IRS Issues Favorable Initial PLESA Guidance on Match Restrictions (PDF)
Groom Law Group, via Taxes the Tax Magazine [Guidance Overview] Mar. 12, 2024 "[Notice 2024-22] is the first step into making these accounts viable, providing for allowable and prohibited restrictions for anti-abuse measures. But there remain a number of complexities and open issues to be addressed for these accounts that would benefit from simple, flexible rules, with a good faith implementation standard to bring these accounts into existence for 2024." Tags: 401(k) Plans • Retirement Plan Administration • Retirement Plan Design |
A Look at the Proposed Long-Term Part-Time Employee Regs
Hodgson Russ LLP [Guidance Overview] Mar. 8, 2024 "Plans that are already subject to the LTPTE rules should already be working with their service providers to be certain administrative processes, if necessary, are in place to ensure compliance ... Plan amendments may be needed to reflect plan operations with respect to the LTPTE rules. Technically, plan amendments are not required until December 31, 2026, but the adoption of plan amendments prior to the final amendment deadline might be prudent.... [P]lans should be maintaining records as to how they are complying with the LTPTE rules." Tags: 401(k) Plans • Retirement Plan Administration • SECURE 2.0 |
Employer Simplifies 'Confusing' 401(k) Match Formula to Boost Employee Savings
PLANSPONSOR; free registration may be required Mar. 8, 2024 "Dawn made the change based on feedback from employee surveys -- in two successive years -- which showed its 401(k) plan participants were confused by the employer's old formula ... Using Dawn's prior formula, the 401(k) matched 100% of a participant's first 3% of retirement contributions and 50% of the next 2% ... Confused participants were less engaged with the retirement plan and 'more hesitant to come participate,' [Dawn Foods' Brian Coleman] says" Tags: 401(k) Plans • Retirement Plan Design |
SECURE 2.0 Defined Contribution Retirement Plan Provisions Snapshot (PDF)
Multnomah Group [Guidance Overview] Mar. 6, 2024 8-page chart lists and describes SECURE 2.0 provisions and effective dates. Tags: 401(k) Plans • 403(b) Plans and Annuities • Retirement Plan Administration • Retirement Plan Design • SECURE 2.0 |
New Clarity Regarding Plans Affected by the Automatic Enrollment Requirements Beginning in 2025
KLB Benefits Law Group [Guidance Overview] Mar. 4, 2024 "The statute provides that if the multiple employer plan was established before the enactment date, then the participating employer is not required to include an EACA, even if the employer joins the multiple employer plan after December 31, 2024. In many situations, the date of a plan's establishment may be hard to ascertain. What is the establishment date for merged plans, or for plans that result from a spinoff of assets? Does 'established' refer to the adoption date or to the effective date of the CODA feature?.... RS issued some clarification on these conundrums in the form of Q&As in Notice 2024-02" |
SECURE 2.0 Adds Flexibility for Switch from SIMPLE IRA to Safe Harbor 401(k)
Conrad Siegel Actuaries [Guidance Overview] Mar. 1, 2024 "Before SECURE 2.0, an employer had to wait until the end of the year to switch from a SIMPLE IRA to a 401(k) plan.... Now, under SECURE 2.0, an employer can replace its SIMPLE IRA with a safe harbor 401(k) at any point during the year. For a mid-year transition, the employer contribution obligation for the year is prorated. Any employee SIMPLE IRA deferrals count toward the 401(k) limit." Tags: 401(k) Plans • Retirement Plan Design • SECURE 2.0 • SIMPLE 401(k), SIMPLE IRA Plans |
Plan Sponsor Considerations for Roth Employer Contributions
Watkins Ross Mar. 1, 2024 "Even if you currently allow Roth deferrals, you are not required to offer Roth Employer contributions. You can offer this option even if your plan does not offer Employee Roth deferrals. An employee must irrevocably elect Roth treatment for matching and nonelective contributions before they are allocated to their plan account." Tags: 401(k) Plans • 403(b) Plans and Annuities • 457 Plans • Retirement Plan Design • SECURE 2.0 |
IRS Provides Guidance on Hodgepodge of Secure 2.0 Provisions
Morgan Lewis [Guidance Overview] Feb. 29, 2024 "[Notice 2024-02] was issued just days before some of the provisions were first effective and includes guidance on a wide range of matters.... This [article] focuses on the changes most relevant to large plan sponsors with more than 100 participants -- i.e., automatic enrollment changes, de minimis financial incentives, an exception to the 10% tax for terminally ill participant withdrawals, an automatic enrollment error correction, the Rothification of employer contributions, and amendment deadlines extensions." Tags: 401(k) Plans • Retirement Plan Administration • Retirement Plan Design • SECURE 2.0 |
Addressing the Burden of Missing Participants
Definiti Feb. 29, 2024 "Plan sponsors must distribute retirement benefits, per the plan document's lost-participant and distribution language, regardless of whether the terminated participant has completed and returned the associated forms.... [The authors] recommend tackling missing participants proactively -- per the plan document and in compliance with IRS and DOL requirements -- and implementing best practice activities[.]" |
Should You Be Judging Your Plan’s Success Based on Benchmarks?
PlanPILOT Feb. 29, 2024 "As a fiduciary, plan sponsors are required to ensure the plan is working and meets the needs of its participants. Does your plan? It may meet certain benchmarks, but what is the basis for these benchmarks? In other words, the benchmarks may be measurable, but are they meaningful for you and the participants in the plan?" |
The Price of New York Life's 401(k) Lawsuit: $19M
InvestmentNews; subscription may be required Feb. 28, 2024 "New York Life has agreed to pay $19 million to end a lawsuit over the company's use of its own investment products in its 401(k) plans. The agreement ... will bring to a close a three-year old case that accused the insurance company of breaching its fiduciary duty to its employees." [Krohnengold v. New York Life Ins. Co., No. 21-1778 (S.D.N.Y. Aug. 10, 2022; proposed settlement agreement filed Feb. 26, 2024)] Tags: 401(k) Plans • Fiduciary Duties • Retirement Plan Investment Costs • Retirement Plan Investments |
Pension-Linked Emergency Savings Accounts: An Overview for Plan Sponsors
Reinhart Boerner Van Deuren s.c. [Guidance Overview] Feb. 27, 2024 "When added to a defined contribution plan, PLESAs can allow non‑highly compensated employees to contribute to short‑term 'side car' accounts for use in financial emergencies. Although PLESAs are intended to encourage greater plan participation and retirement savings among lower‑income workers, plan sponsors have thus far been reluctant to add the feature over questions on implementation and administration." Tags: 401(k) Plans • Retirement Plan Design • SECURE 2.0 |
PLESA, Can I Have Some More?
Jackson Lewis P.C. [Guidance Overview] Feb. 27, 2024 "[T]he DOL recently issued guidance regarding PLESAs in the form of FAQs. There are no earth-shattering revelations ... but there are a few nuggets to glean ... Although this guidance is welcome, it is unclear whether employers will embrace PLESAs given the administrative burden associated with them and the difficulty of explaining them to participants." Tags: 401(k) Plans • Retirement Plan Design • SECURE 2.0 |
IRS Provides Proposed Regulations for Long-Term Part-Time Employees
TRI-AD [Guidance Overview] Feb. 26, 2024 "Even though written plan amendments do not have to be made until the end of the 2026 plan year, plan sponsors are required to operate their plans in compliance with these LTPT employee requirements starting with the 2024 plan year. Section 403(b) plans must implement these provisions for plan years beginning in 2025." Tags: 401(k) Plans • Retirement Plan Administration • Retirement Plan Design • SECURE 2.0 • SECURE Act |
Proposed Regs Issued for Long-Term Part-Time Employee Participation in 401(k) Plans
Boutwell Fay LLP [Guidance Overview] Feb. 26, 2024 [P]eriods beginning before January 1, 2021, are not taken into account; the preamble to the regulations explains that this a mandatory requirement, and plan sponsors may not voluntarily credit additional service to employees for purposes of an LTPT employee determination.... ... If a plan sponsor mistakenly did not provide LTPT employees eligible as of Jan. 1, 2024, the opportunity to defer on that date, the plan sponsor may need to take corrective action under [EPCRS]." Tags: 401(k) Plans • Retirement Plan Administration • SECURE 2.0 • SECURE Act |