Take CARES – Impact to employee benefit plans

In response to the impact of COVID-19 Congress placed into law the Coronavirus Aid, Relief and Economic Security Act or the “CARES Act”. What does this 883-page law mean for retirement plans and their participants?  The CARES Act includes provisions that expand the availability of retirement funds to those who have been impacted by COVID-19. …

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Retirement plan and IRA cost of living adjustments for 2020

The tax law places limits on the dollar amount of contributions to retirement plans and IRAs. IRC Section 415 requires the limits to be adjusted annually for cost-of-living increases. Don’t miss: Important information when changing plan administrators The below table shows a three-year comparison (starting in 2020) of certain retirement plan limits. Plan sponsors should …

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Locating lost 401k plan participants

For many employers, finding missing participants can seem an impossible task. Nevertheless, employers are required to take all reasonable actions to locate a missing participant. Employers have a fiduciary obligation under ERISA to locate or “make a reasonable effort” to find a missing participant of a terminated defined contribution plan. Failing to do so could …

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What employers need to know about 401(k) compensation

When administering their 401(k) plan, one of the most common mistakes that employers make is allocating plan contributions to a participant account using the incorrect employee compensation. The most common occurrence is when an employer mistakenly excludes forms of compensation such as bonuses, overtime, or commissions that are defined as eligible compensation in the company’s …

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Profit sharing plans

A profit sharing plan is beneficial for an employer as it is flexible, allows for good cash flow management, and rewards employees for the company’s success. Profit sharing contributions are discretionary, and, therefore, the amount and timing of the contributions can vary year-to-year. There is no minimum or maximum contribution required by law. Accordingly, the …

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Plan terminations and partial plan terminations

Many plan participants may be surprised to learn that their employer can discontinue their 401k plan at their own discretion. The IRS considers a plan terminated once an official date of termination is established by the sponsor, the benefits and liabilities under the plan are determined, and all assets are distributed as soon as administratively …

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Fiduciary review of investments

Fiduciary responsibilities are often overlooked and underappreciated, and in-house executives and employees at your company tasked to watch over the company retirement plan may lack the qualifications to fully perform in a fiduciary role(s). That’s why when it comes to your obligations as a trustee, it’s a good idea to discuss bringing on fiduciary support …

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Safe harbor 401(k) plans – the basics

In a broad sense, the 401(k) is an investment vehicle for the masses. 401(k) plans offer millions of employees nationwide the ability to contribute directly from their paycheck into tax-advantaged investment accounts, and employers have the option to match a percentage of employee contributions (and many do). Properly utilized, the 401(k) vehicle is a stellar …

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What is a qualified non-elective contribution – QNEC

When it comes to your employee benefit plan, there are countless terms and acronyms thrown around, whether it be by HR, your third-party administrator (TPA), investment advisors or your auditors. One term you may come across is QNEC. This term is not very well-known, as many plans do not come across QNECs, but it’s important …

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Qualified domestic relations order tax consequences

Divorces can cause years of planning, saving and growth to be washed away in the blink of an eye, leaving you reevaluating the retirement that you had once planned. A qualified domestic relations order (QDRO) is a judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to …

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