Choosing a beneficiary

Choosing a beneficiary for your 401k is a task that should not be taken lightly. Failing to name a beneficiary could cause a nightmare for your loved ones. It is important to consider who you want the beneficiary and to make sure it is updated whenever significant life events happen. Don’t miss: 5 tips to …

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ESOP case update

Last year I wrote an article that outlined several cases involving the Department of Labor and ESOP trustees. There have been some recent updates to these cases which again do not favor the trustees. Brundle v. Wilmington Trust In this case, Wilmington Trust (WT) was hired as an independent third-party trustee for a potential purchase …

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5 tips to avoid common audit prep mistakes

Generally, if your company has 100 or more active participants, The Employee Retirements Income Security Act of 1974 (ERISA) requires an annual audit of plan financial statements. Whether this is your first plan audit or have endured plan audits for years, being prepared and gathering all the necessary documents and reports for your auditors can …

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Profit sharing plans

A profit sharing plan is beneficial for an employer as it is flexible, allows for good cash flow management, and rewards employees for the company’s success. Profit sharing contributions are discretionary, and, therefore, the amount and timing of the contributions can vary year-to-year. There is no minimum or maximum contribution required by law. Accordingly, the …

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Plan terminations and partial plan terminations

Many plan participants may be surprised to learn that their employer can discontinue their 401k plan at their own discretion. The IRS considers a plan terminated once an official date of termination is established by the sponsor, the benefits and liabilities under the plan are determined, and all assets are distributed as soon as administratively …

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Timely remittances: what exactly does “timely” mean?

In recent years, the timely remittances have become quite the hot topic with the Department of Labor (DOL). The guidelines say that employers are required to remit employee deferrals to the plan no later than the 15th business day of the month following the payroll date. The DOL has not provided a safe harbor for …

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Fiduciary review of investments

Fiduciary responsibilities are often overlooked and underappreciated, and in-house executives and employees at your company tasked to watch over the company retirement plan may lack the qualifications to fully perform in a fiduciary role(s). That’s why when it comes to your obligations as a trustee, it’s a good idea to discuss bringing on fiduciary support …

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Safe harbor 401(k) plans – the basics

In a broad sense, the 401(k) is an investment vehicle for the masses. 401(k) plans offer millions of employees nationwide the ability to contribute directly from their paycheck into tax-advantaged investment accounts, and employers have the option to match a percentage of employee contributions (and many do). Properly utilized, the 401(k) vehicle is a stellar …

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What is a qualified non-elective contribution – QNEC

When it comes to your employee benefit plan, there are countless terms and acronyms thrown around, whether it be by HR, your third-party administrator (TPA), investment advisors or your auditors. One term you may come across is QNEC. This term is not very well-known, as many plans do not come across QNECs, but it’s important …

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Qualified domestic relations order tax consequences

Divorces can cause years of planning, saving and growth to be washed away in the blink of an eye, leaving you reevaluating the retirement that you had once planned. A qualified domestic relations order (QDRO) is a judgment, decree or order for a retirement plan to pay child support, alimony or marital property rights to …

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