Last week, millennials overtook Twitter with plans for their retirement. While some were just straight up depressing, many were sarcastic and even made light of their financial plans.
If your plan offers a Roth 401(k) provision, your participants might ask, “Which one is better for me?” As the availability of Roth options in 401(k) plans and Roth contribution percentages continue to rise, it’s important to be able to guide participants in making the right choice.
HSA vs 401(k)
If your company has decided to offer a high deductible health plan, don’t worry, you are not alone. Recent studies show that an increasing number of employers have elected to offer high deductible health plans (HDHP) either to completely replace or be offered in conjunction with a more traditional Preferred Provider Organization (PPO) plan or Health Maintenance Organization (HMO) plan. When sponsoring a HDHP, employers typically offer their employees the ability to contribute to a Health Savings Account (HSA) to help offset the increased deductible associated with the HDHP. In 2017, 19 percent of all workers were enrolled in
On April 8, 2016 the Department of Labor (DOL) issued final guidance that greatly expands the types of retirement investment advice that will be subject to the fiduciary duty rules under the Employee Retirement Income Security Act of 1974 (ERISA). The so-called "conflict of interest" rule for retirement investments will have a significant effect on those who provide investment advice and sell investment products and services to retirement plans and IRAs. The central focus of the DOL guidance is to protect plan participants from conflicts of interest that could threaten their retirement savings.
If your firm has a profit sharing plan, a 401(k) plan or some other tax-qualified retirement plan, then you have been given a Form 5500 to sign and file every year since your business adopted the plan. While the form looks like most other IRS forms, the information reported on the filing is automatically provided to the Department of Labor (DOL), the IRS and the Pension Benefit Guaranty Corporation (PBGC) by the electronic system that captures the data. This system is known as the ERISA Filing Acceptance System (EFAST2) and is funded and managed by the DOL.
What this tells you is that three governmental agencies have their fingers in the mix and that each has its own agenda in determining what data is collected. Ultimately, though, all of the agencies want to make sure that your plan is being operated correctly and for the sole benefit of your employees.
You may wonder how the government uses the data it collects about your plan on the Form 5500 you submit. Since each agency has its own mandate, we need to look at each one separately.
The IRS is all about tax compliance. It is responsible for the rules that allow tax benefits for both employees and employers, related to retirement plans, including vesting and distribution requirements.
The DOL, through its Employee Benefits Security Administration (EBSA), focuses on protecting the rights and benefits of participants and monitors the decisions and actions of fiduciaries associated with the operation of the plan.
The PBGC was created to protect pension benefits in private-sector defined benefit plans. It guarantees payment of certain pension benefits under plans that are terminated with insufficient money to pay all benefits.
The Form 5500 is an informational return and government agencies use it not only for enforcement but also for statistical analysis, e.g., how many workers are covered by workplace plans, how many small plans are there, how many large plans are there, what does that mean in terms of policy making, etc.
Segments of the US marketplace, such as the energy industry, are now having to make some difficult decisions
with respect to their company retirement plans. It is very important that decisions such as these be made while consulting an experienced ERISA professional for if the retirement plan is not handled correctly, significant liability can be created.
Hidden away and buried deep within the recently-passed and signed federal budget bill is a provision authorizing robocalls to cell phones. This bad provision got pushed through Congress in a rush to avoid a government shutdown.