Valuable Information on 401ks, Pensions, ESOPs, Form 5500 Preparation + More

Asset allocation: the basics for investors

The investing landscape has changed dramatically over the years. Rather than calling a stockbroker to place an order, most investors now login to their e-broker to place an order. Instead of investing in expensively managed funds, many investors now choose to invest in passively managed exchange-trade funds (ETFs). A broader range of securities is available …

Keep Reading

IRS compliance testing: 415 limits testing

To ensure employee benefit plans do not violate certain standards that the DOL and IRS believe are important, plans are subjected to annual compliance tests. These tests are designed to make sure the amounts employees are deferring is within certain maximum limits and that plans are not operating in a manner that discriminates against certain …

Keep Reading

Opt-out forms: employees decline to participate in 401(k)

You’ve got your process figured out – 401(k) benefit packages are given to employees the date they’re hired, or maybe it’s when they become eligible to participate or perhaps you rely on your TPA to communicate to the employee how to enroll when eligible. You collect all the necessary enrollment forms and get participating employees’ …

Keep Reading

ESOP participants frequently asked questions

If you are a participant in an Employer Stock Ownership Plan (ESOP) that your employer offers, then you probably have a few questions about your rights and benefits as a participant. Here are some of the most common ESOP FAQs. How do I learn more about the ESOP I am in? As a participant in …

Keep Reading

When is a loan considered a deemed distribution?

Many 401(k) plans permit participants to borrow from the plan and it’s becoming a more and more common practice. The plan document must specify if loans are permitted. The majority of those loans are repaid according to the terms of the loan agreement. However, there are instances when a participant defaults – and then it’s …

Keep Reading

Forfeitures – how do they affect you as a plan participant?

401(k) plan forfeitures occur when a participant terminates employment (voluntarily or involuntarily) prior to satisfying the required service years to become fully vested in his/her account. Required service years will vary by plan, but can be found in your summary plan description. The portion of your account subject to forfeitures is the portion that is …

Keep Reading

Understanding automatic enrollment in your 401(k) plan

We’ve all been there: starting a new job. The amount of information and paperwork can be overwhelming. It’s no surprise that reading up on and enrolling in a 401(k) plan isn’t at the top of everyone’s priorities. What may be surprising is that about half of all households age 55 and older have no 401(k) …

Keep Reading

Why did I receive a refund of my 401k contribution?

If you contributed to your 401k plan, then received a refund for a portion of your contributions for that year, chances are your plan failed the annual IRS required compliance (discrimination) testing. This test, or series of tests (based on your plan’s elections), provide for equal tax breaks to all participating employees – not just …

Keep Reading

Plan document: the summary plan description

All 401(k) Plans have a plan document which contains a comprehensive detail of all the rules surrounding the Plan. This plan document can be lengthy and overwhelming and therefore, 401(k) Plans also have a Summary Plan Description (“SPD”) document. The SPD is a concise summary of the Plan’s key features, some of which include the …

Keep Reading

Why there are 401(k) contribution limits

It is essential to save a portion of the money you make to be able to retire at a reasonable age and have the time and money to carry out lifelong aspirations. You hear all the time to contribute to a 401(k) plan, but why are there contribution limits at only $18,000 a year? Plainly …

Keep Reading