Supreme Court Rules that Plan Sponsors Have Duty to Monitor Investment Options

On May 18, 2015, the U.S. Supreme Court issued its opinion in the Tibble v. Edison Int’l case. In 1999 and 2002, Edison International added 6 retail mutual fund options to the available investment options for the company’s 401(k) plan. All 6 mutual funds had virtually identical institutional-class mutual funds that charge lower investment fees. …

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Language Barriers of 401(k) Disclosure

I would like to address disclosure versus communication. They are two very different things, but they shouldn’t be. Have you ever tried to read ERISA or DOL regulations? The average person doesn’t read this stuff. Lawyers read it because it is in their language. Lawyers are the ones who write this stuff. Imagine a Company …

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Reduced Corrective Contributions

During April 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-28 that made amendments to the safe harbor corrective contributions for employee benefit plans. The Employee Plans Compliance Resolution System (EPCRS) allows plan sponsors to correct certain failures and thereby, continue to provide employees with retirement benefits. The IRS received numerous comments requesting special …

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Internal Control for Plan Management

Plan administrators are faced with numerous rules and restrictions put in place not only by those in charge of retirement plan regulation, but also as stipulated in the plan document itself. Strong internal controls are essential for the administration of any plan to ensure accurate financial reporting, protection of plan assets and compliance with all …

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401K Plan Fee Assessment

When companies are selecting the services for their 401K plan, are they assessing the fees that they are paying for these services? As it has been required for these fees to be more transparent, this is something every company with a plan should be evaluating. The question becomes what is the best way to assess …

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Warning Signs Your Employer May be Misusing Your 401(k) Savings

I was browsing the United States Department of Labor (“DOL”) website the other day and I came across an interesting article that talked about employer abuse of employees’ 401(k) contributions. I haven’t really thought much about this before as I have fortunately always worked for employers that I feel are trustworthy and ethical. However, the …

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IRS Examinations of 401(k) Plans

Every American knows the instant anxiety associated with receiving a letter from the Internal Revenue Service (“IRS”). That anxiety might be overwhelming if the letter is a notification that your company’s employee benefit plan has been chosen for examination. The IRS understands this and has provided an online resource guide specifically geared to educating employers …

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Exploring Roth In-Plan Conversions

Brief History The Economic Growth and Tax Relief Reconciliation Act of 2001 authorized the establishment of Roth 401(k) accounts beginning January 1, 2006, which are post-tax retirement account. The next big thing to happen to Roth accounts was the American Taxpayer Relief Act of 2012, which opened the doors to in-plan Roth conversions. Effective immediately …

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DOL Guidance on Missing Participants

In a previously issued blog titled “Have lost Participants in your 401(k) Plan?”, the topic of missing participants was addressed prior to the Department of Labor (DOL) issuing any guidance on fiduciary responsibility of plan sponsors in that respect. The guidance issued by the DOL in Field Assistance Bulletin (FAB) No. 2014-01, outlines fiduciary duties …

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Different Types of Distributions on a 401(k) Plan

If your company has a 401(k) plan, one of the areas to understand is if your plan allows for different types of distributions, what they entail, and some key items to note regarding each type. The main types of distributions are hardships, termination/rollovers, and in-service. Hardship distributions Not all plans allow for hardship distributions; however …

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