Hearing the news of a compliance testing failure sounds rather daunting. The severity of a compliance testing failure varies by case, and correcting it may not be as difficult or costly as it sounds. Throughout compliance testing, traditional 401(k) plans must be tested to ensure that contributions made by and for nonhighly compensated employees (“NHCE”) …
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 …
To attract and retain talented employees, employers should be aware of how their retirement plan provisions compare to other employers. If you are an employer and have not benchmarked your retirement plan provisions, now is a good time to do so. Each year Deloitte publishes the results of its Annual 401(k) Benchmarking Survey. You can …
Most companies implement a 401K Plan in order to assist employees in planning for their future; in doing so, they wish to have high participation. If the current plan an employer has in place is not providing high participation, it may be worth considering amending the plan to adopt auto enrollment. Additionally, they may want …
What is Form 5500? Form 5500 is the annual tax return for your retirement plan that must be filed with the Employee Benefit Security Administration (EBSA), a division of the Department of Labor (DOL). It is required by the Employee Retirement Income Security Act of 1974 (ERISA) to ensure employee benefit plans are operated and …
If your company offers an employee benefit plan that is subject to the Employee Retirement Income Security Act (“ERISA”), for example a 401(k) plan, it is important to remember that your Company is responsible for ensuring that the Plan and any plan transactions comply with the fiduciary standards ERISA has created. Even though a Plan …
Lost participants are those participants who have balances in the plan (unclaimed benefits) or have been distributed an amount from the plan (uncashed benefit checks) and cannot be located. The participant either doesn’t know or forgot they have a balance since their employment was terminated or have relocated with no forwarding address. The participant’s account …
Compensation in its simplest form is pay in exchange for services rendered, although gross pay includes additional forms of compensation aside from the hourly rate paid to employees. In reference to 401(k) plans, the term “pay” becomes more complex. Under the statutory safe harbor regulations an employer is required to include additional forms of compensation …
Some plans allow participants to make Traditional (pre-tax) contributions and also Roth (after-tax) contributions. Making a decision on which contributions are right for you can be a difficult choice, as there are current and future tax consequences that you should consider. With a Roth 401(k), you can eliminate concerns about your retirement tax rates, but …
If you’re like most people, it’s not easy to determine exactly how much you’re being charged for your employee benefit plan fees. Some expenses are disclosed on your statement, but some are not. Instead, they’re deducted from earnings, and only the net earnings amount is shown. New rules issued by the DOL last week will …