December 2019 1st: Participant Notices – Annual notices due for Safe Harbor elections, Qualified Default Contributions (QDIA), and Automatic Contribution Arrangements (EACA or QACA). 31st: Participant Notices – Annual notices due for ERISA 404(c) and Fee Disclosure. 31st: Discretionary Amendments – Deadline to adopt discretionary plan amendments for calendar-year plans. If changes have been made...
On November 6th, 2019, the IRS announced the cost of living adjustments affecting the dollar limitations for retirement plans. Contribution and benefit increases are based on a calculated change in the Consumer Price Index and are intended to allow participant contributions and benefits to keep up with the “cost of living” from year to year. Here are some highlights from the 2020 changes: The...
Domestic Equity markets posted modest gains during the third quarter of 2019 with the S&P 500 Index increasing 1.7%. Market volatility persisted throughout the quarter with major domestic indices reaching all-time highs in July before reversing in August on the back of geopolitical issues and escalating trade tensions. Trade pressures eased in September and equities rebounded, leaving the...
During the second quarter of 2019 domestic equity markets built on the solid gains experienced in the first quarter. The S&P 500 Index overcame a sharp mid-quarter decline resulting from increased trade tensions, reaching a new record high and ending the quarter with its best start to a year in over two decades. Large-cap stocks outperformed their small-cap counterparts during the quarter,...
The economy continues at its strong pace, keeping unemployment at its lowest rate in nearly 50 years. While this is usually good news, employee financial vulnerability is clouding this sunny forecast. The repercussions are impacting their ability to save for retirement. Millennials are the most stressed by their financial situations, followed by Gen X and Baby Boomers according to PWC’s...
All 401(k) plan contributions have deposit deadlines, and it’s up to 401(k) fiduciaries to meet them. Yet, many are unclear about the deadlines applicable to their 401(k) plan. That confusion can easily lead to late contributions. Most of the confusion surrounds the deadline to deposit amounts withheld from employee wages, i.e., 401(k) pre-tax, 401(k) Roth, and/or participant loan repayments....
Permitted Disparity Other than the desire to provide a retirement plan to benefit all employees, a very common question is asked, “What can be done for the owners or highly compensated group (HCE)?” Since Social Security limits the amount of compensation that is used to calculate benefits (called the wage base), those that earn over the wage base can expect that their benefit in retirement will...
September 2019 15th: Money Purchase Pension, Target Benefit Pension, and Defined Benefit Plans — Required contribution to Money Purchase Pension, Target Benefit Pension, and Defined Benefit Plans (8-1/2 months after plan year-end) and 2018 employer profit sharing and match contributions for those sponsors who filed a corporate tax extension. 30th: Summer Annual Report — Summary Annual Report due...
Domestic equity investors have been on a wild ride in recent years with the S&P 500 Index experiencing periods of 20% and 15% growth, followed by 10% and 20% declines, respectively, during the 18-month period prior to January 1, 2019. During the first quarter of 2019 domestic equity markets were once again on the move with the S&P 500 Index rallying 20% from its low on December 24, 2018,...
With the future of Social Security in question, it is becoming ever increasingly important for workers to self- prepare for post-retirement living. Studies show that approximately one out of every three eligible workers choose NOT to participate in their employer-sponsored 401(k) plan. Offering automatic enrollment in your 401(k) plan is a way for you, as Plan Sponsor, to help lend a hand to...
With the prevalence of data breaches in today’s news, now is as relevant a time as ever to remind employees about protecting their retirement accounts from potential fraud. What steps can employees take to help secure their accounts? Strong password management. Many times, the retirement plan account password is the same, or very similar, to another password in an account that may have been...
May 2019 15th: Deadline for participant-directed plans to supply participants with the quarterly benefit/disclosure statement including a statement of plan fees and expenses charged to individual plan accounts during the first quarter of this year. July 2019 1st: EACA ADP/ACP Corrective Testing - ADP/ACP refunds are due to highly compensated employees (HCEs) to avoid a 10% excise tax on the...
Qualified plans must perform annual testing to be sure that the plan doesn’t unfairly discriminate in favor of "highly compensated employees" (HCEs) or exceed the contribution limits set forth by the IRS. Depending on your plan provisions, it isn’t just one calculation, but a series of tests that show that your plan is not discriminatory. If your plan is audited, the auditor is looking for proof...
As the availability of Roth options in retirement plans and Roth contribution percentages continue to rise, it’s important to be able to distinguish the differences between pre-tax and Roth contributions. Employer-sponsored retirement plans offer many advantages to participants; the ability for accounts to grow on a tax-deferred basis, the chance of receiving employer contributions in the form...
In 2018, the 401(k) plan celebrated its 40th birthday! Though extremely popular today, 401(k) plans came about almost by accident. IRC Section 401(k) was passed into law as part of the Revenue Act of 1978 and was included to limit executive compensation. However, in 1980, Ted Benna of the Johnson Companies used the provision to create and get IRS approval of the first 401(k) plan for his...
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