IRS UPDATE IRS Tips on Correcting Plan Mistakes The IRS has compiled a list of common plan mistakes it encounters during examinations and in its voluntary correction programs. It may be helpful for plan sponsors to be familiar with these common mistakes and IRS tips for self-correction to avoid making similar mistakes. On the IRS [...]
Investment Menu: Best Practices Due to regulatory changes, market instability and large numbers of investment options, plan sponsors have been devoting more attention to their plans’ investment menus. A recent commentary from Vanguard identifies five best practices to assist plan sponsors in evaluating their menus while effectively communicating their plans to participants. To develop a [...]
Sponsors of 401(k) plans have been permitted to amend their plans to accept Roth (after-tax) contributions since 2006. Plan participants can benefit from having their Roth contributions grow with tax-free earnings, and their contributions can be distributed to them at retirement with no future income tax liability. Unlike a Roth IRA, participation has no income [...]
DOL UPDATE New Participant Fee Disclosure Timing Relief Under the DOL’s fee transparency regulations, plan administrators must provide a disclosure of plan and investment information, including an investment comparative chart, to eligible employees and beneficiaries once every 12 months. The original disclosures were due by August 30, 2012, and each annual disclosure thereafter would be [...]
More than 75% of those contributing to an employer-sponsored retirement savings plan receive matching contributions, and more than three-fourths of those participants contribute enough to receive the full match, according to TIAA-CREF’s Perfect Match Survey. But, only 72% of women and 64% of workers earning less than $35,000 annually receive the entire match. Many people [...]
President’s 2016 Budget Proposal The president released his fiscal year 2016 budget proposal during first quarter. Unlike other retirement plan-related proposals introduced this year, the president’s budget proposal appears to combine retirement savings provisions with tax reform initiatives that would reduce the revenue impact of retirement savings. Retirement savings tax incentives are the second biggest [...]
Having an effective employee engagement strategy is the most important component of a successful retirement plan, according to a recent white paper. The impacts of plan design, plan management, and investment solutions are all reduced without one. Engaging employees involves three major factors. First, plan sponsors need to understand that different employee groups, based on [...]
Workers between the ages of 37 and 50 are poorly prepared for retirement, according to the 15th Annual Transamerica Retirement Survey of Workers. Only 24% of Generation X (those born between 1965 and 1978) reported that their greatest financial priority is saving for retirement. One-third of survey respondents expect a decline in their standard of [...]
If your plan uses electronic delivery of required disclosures to employees, you are likely simplifying the disclosure process, making information delivery more reliable and reducing plan administration costs, according to the Principal Financial Group. Principal’s Electronic Delivery of Participant Disclosure Materials is a guide for plan sponsors to the Department of Labor (DOL) and Internal [...]
