Workers Stressed About Retirement A recent Employee Benefit Research Institute survey found that 31% of American workers feel very or somewhat stressed about preparing for retirement. Approximately 41% have tried to calculate how much they’ll need to save for retirement. Other steps taken to prepare for retirement included estimating how much income they would need in retirement each month...

The IRS developed the Employee Plans Compliance Resolution System (EPCRS) to help plan sponsors avoid plan disqualification by making it easier for them to correct a wide variety of retirement plan qualification failures. If plan sponsors follow the established guidelines, they may be able to bring their plans back into compliance without losing valuable tax benefits. Types of Qualification...

The IRS recently published a memorandum outlining new audit procedures for use by agents verifying whether a plan has followed proper substantiation procedures for safe harbor hardship withdrawals. To view the memorandum and the related Attachment, go to https://www.irs.gov/pub/foia/ig/spder/tege-04-0217-0008.pdf.  Plan sponsors may want to review these procedures to anticipate later possible...

A safe harbor design allows a 401(k) plan to avoid annual nondiscrimination testing of employee elective contributions and employer matching contributions. If you are thinking of implementing a safe harbor 401(k) plan, the overview that follows may prove useful in your decision-making. The Safe Harbor Design Advantage A 401(k) plan generally must undergo actual deferral percentage (ADP) and...

Equity markets continued to rise during the quarter, with stocks recording the majority of their gains in late April and May on the back of first quarter earnings, which exceeded expectations. After returning 6.1% during the first quarter of 2017, the S&P 500 advanced 3.1% during the second quarter. Growth-oriented stocks and sectors continued to outperform their value-oriented counterparts,...

Interesting article on Yahoo Finance speaking to a disconnect between employee expectations and job openings. "It's never been harder to fill a job in America"    

As the number of U.S. retirees increases by 1.2 million a year, the resulting population shift will have a dramatic effect on consumption patterns, according to a report from The Conference Board. The report, “The Impact of Demographic Trends on Consumer Spending,” examines how spending patterns will change as people age, and provides perspective on how population-growth trends are likely to...

Establishing eligibility requirements for plan participation requires consideration of both the broad range of available options and the potential effects that different sets of eligibility requirements may have on hiring, retention, and administrative costs. Following is a brief overview of the applicable rules. Conditions of Eligibility Federal law establishes the limits of what conditions may...

The plan’s definition of “compensation” is important for many different aspects of plan administration — including elective deferrals, allocations, and discrimination testing. Plan sponsors need to be certain that the definition of compensation is properly applied. Failure to do so could result in an operational failure and possibly affect the plan’s qualified status. Mistakes may arise because...

On April 4, 2017, the Department of Labor (“DOL”) published a final rule delaying by 60 days the applicability date of the DOL Fiduciary Rile and related exemptions.  The new initial applicability date is June 9, 2017.  This delay may only be temporary, and the expanded definition and principles-based impartial conduct standards may survive the final rule.  It will take some time for further...

Equity markets rose sharply as investor optimism continued, fueled by strong economic data early in the quarter. Following a 3.8% return during the 4th quarter of 2016, the S&P 500 returned 6.1% during the first quarter of 2017. Growth-oriented stocks and sectors outperformed after having underperformed in 2016. Many of the stocks and sectors which had led the market following the election...