"[E]mployers should take the following steps ... [1] Confirm that your 401(k) plan allows for Roth contributions to accommodate the mandatory requirement for high earners.... [2] Ensure payroll systems can track employee compensation to identify those exceeding the $145,000 threshold and adjust contribution limits based on age and eligibility.... [3] Verify if Roth recharacterization options are available to correct potential testing failures."  MORE >>

"[T]rusts that include minor children or disabled beneficiaries can significantly benefit from the life expectancy payout option. By structuring these trusts correctly, planners can ensure that distributions are calculated based on the life expectancy of the oldest trust beneficiary, thereby potentially extending the tax-deferral period for younger beneficiaries.... [P]lanners should consider strategies that utilize the benefits of Roth conversions, which can offer tax-free growth and no required minimum distributions during the account holder's lifetime. "  MORE >>

"The limitation on the annual benefit under a defined benefit plan ... is raised from $275,000 to $280,000. The limitation on annual additions to a participant's account under a defined contribution plan ... is raised from $69,000 to $70,000. The annual compensation limit ... is raised from $345,000 to $350,000. The compensation limit for a highly compensated employee ... is raised from $155,000 to $160,000."  MORE >>

"[M]any of the Justices seemed comfortable with the view that, because litigation is expensive, it ought to be a bit hard, or at least not easy, to plead a case.... [A]dopting respondents' view, and affirming the Second Circuit's decision, would essentially collapse prohibited transactions into fiduciary breaches, when clearly Congress had something else and more protective in mind in categorically prohibiting a wide range of activities with related parties." [Cunningham v. Cornell Univ., No. 21-0088 (2d Cir. Nov. 14, 2023; cert. pet. granted No. 23-1007; oral arg. Jan. 22, 2025, transcript and audio)]   MORE >>

"[N]ot all recordkeepers plan to integrate the technology into their practices, as some worry about accuracy, reliability, and ethics concerns. According to findings, 73% of target-date managers will not incorporate AI into asset allocation selection, glidepath personalization, or glidepath design. Another 67% will not use AI in risk management."  MORE >>

"While there seemed to be great excitement about an employer match to the 401(k) plan based on an employee's student loan payments, plan sponsor interest in adoption it has been minimal, at best, and seems to be waning.... Only four companies in a recent PSCA Question of the Week have implemented this design feature, and those who will not add it increased from two-thirds to three-quarters."  MORE >>

This chart compares the 4 common types of plan designs often utilized by small employers.  MORE >>

"While paying unreasonable plan expenses is a breach of fiduciary duty, picking providers solely or mainly because they are low in fees can also breach a fiduciary duty.... Prudence requires the plan fiduciaries to document decisions and the basis for those decisions. So in hiring any plan provider, a fiduciary should survey several potential providers. By doing so, a fiduciary can document the process and make a meaningful comparison and selection."  MORE >>

"Companies should keep in mind that an individual can simultaneously qualify as a covered employee by being one of the five most highly compensated employees for the tax year and a covered executive officer from a preceding tax year.... Companies should carefully track the basis for including an individual in their covered employee population to ensure they know which covered employees must remain covered or fall out of coverage year-to-year.... The applicable definition of 'compensation' should ... be carefully reviewed when making these determinations each year."  MORE >>

"[N]on-qualified deferred compensation plans can be expensive for employers to maintain. There are ways to reduce costs associated with maintaining and offering such a plan, such as limiting or eliminating notional investment options or rates of return under the plan, 'freezing' the plan to new participants and/or future deferrals, or terminating the plan entirely"  MORE >>