One type of distribution your 401(k) may allow for is a hardship distribution, and while the criteria can vary from plan to plan, most are generally similar. A hardship distribution is used to satisfy the immediate and heavy financial need of the participant, the participant’s spouse or the participant’s non-spouse, non-dependent beneficiary. Common examples of …
Required minimum distributions (RMDs) are minimum amounts certain participants (or retirement account owners if the participant has passed) must take as distributions from their account on an annual basis. Generally, RMDs begin the year in which the participant reaches the age of 70 ½ or the year in which the participant retires, provided they are …
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 …
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 …
If you are about to undergo a 401K audit, there are many things that can be done to ensure that the audit goes smoothly. This means getting audit packages ready early on, being in contact with the individuals that are involved and following up on open items. When these simple steps are followed there will …
Employee benefit plans are often a side note in the day-to-day transactions of a business, lacking the constant oversight and review given to the operational activities. Also, benefit plans involve the majority of the employees in a company in some way or another. These and many other reasons make benefit plans susceptible to fraud. As …
We recently had some questions about how blackout periods work, and I learned a lot by consulting some of our TPA (third party administrator) colleagues and the DOL website. A blackout period is basically a time that participants temporarily lose control of their retirement accounts. During this period, no changes can be made to investment …
Another year end has passed and now you are probably compiling and sending the 401(k) files to your third party administrator for them to complete their compliance testing, and other plan financial reports. Many of these documents will then be requested by your 401(k) plan auditor. Additionally your auditor will be requesting other Plan documents …
As we enter January of every year, it is time to start thinking about personal income taxes. While this is not a favorite to many, there are many important tax reporting forms that individuals must be on the lookout for over the next coming months. One of these is Form 1099-R – Distributions from Pensions, …