Forfeitures occur in an employee benefit plan when participants are terminated from employment, but are not fully vested in the employer’s contribution to their accounts. This can be best illustrated through an example: An employer offers a profit sharing contribution for employees participating in its 401(k) plan. The plan document states that an employee must …
There are a few basic rules the DOL has established when it comes to 401(k) loans. More and more companies are including the loan option in their plans. Listed below are some basic tips on loans. Please remember to review your own Summary Plan Description for specific guidelines related to your plan loans. If your …
Like most people who work in the accounting field, I am a stickler when it comes to spending. I am also a strong believer in the concept of living below your means and that saving early for retirement can go a long way. But I know that everyone is not like me. When I saw …
Whether you’re currently enrolled in a 401(k) plan, or about to enroll in a 401(k) plan, consider the following: The do’s Do participate if there is an employer match, and make sure you receive the maximum match If your employer offers a 401(k) plan, they likely also offer an employer match. The employer match can …
What is a Multiple Employer Plan? A multiple employer plan (MEP) is a type of employee benefit plan where several employers can participate. In certain instances, the employers participating in the plan can operate as one plan. What are the benefits? A significant reason why employers do not offer a benefit plan to their employees …
Many payroll companies and third-party administrators (“TPA”) ascertain Service Organization Controls (“SOC 1”) Reports on the Suitability of the Design and Operating Effectiveness of Controls. These reports summarize the opinion and results of the audit of internal controls in place at the service provider. In addition, these reports provide complementary user entity controls, which list …
There are two common insurance policies that relate to employee benefit plans: an ERISA fidelity bond and fiduciary liability insurance. Both help lower risk but only one of the policies – the ERISA fidelity bond – is required by the Employee Retirement Income Security Act (ERISA) administered by the Department of Labor (DOL). An ERISA …
There are numerous types of prohibited transactions. Prohibited transactions are defined as certain transactions between a retirement plan and a disqualified person (broadly a person with some involvement with the retirement plan) that would cause the plan/plan sponsor to be in violation of Employee Retirement Income Security Act of 1974 (ERISA). One type of prohibited …
Everybody always hears how they need to invest in their 401(k) as soon as they start working. Other than that initial advice, further guidance usually is not provided. Investing in a 401(k) is undoubtedly good advice, but investing in a 401(k) (or anything for that matter) should be a much different experience for someone just …
If your Company sponsors an employee benefit plan (this includes 401(k) plans), an audit of that plan may be required. What triggers the need for an audit? The number of participants. Plans with 100 or more participants at the start of the plan year are considered “large” and generally require an annual audit, while plans …
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