Archive for the ‘Employee Benefits’ Category
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
The Social Security Administration (SSA) recently announced cost-of-living adjustments (COLAs) for 2012. The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not drained by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.
Continue reading “COLA 2012 Updates” »
Most adults have completed a beneficiary designation at some point. We complete the forms when we are hired or become eligible for the company 401(k) Plan and then we forget about them. But your beneficiary designation for your retirement plan is a critical part of your tax and estate planning. While many of us make sure that other important documents such as wills are updated on a frequent basis, we often overlook our retirement account beneficiary designations.
Continue reading “Beneficiary Designations – Are Yours Current?” »
by Stacey L. Spencer, QKA | Manager, Employee Benefits Group
317.260.4421
Women often reach retirement age with fewer pension benefits and retirement assets than men. All workers need to save more for retirement, but women face added challenges because they have lower earnings, experience higher job turnover, and have a longer life expectancy. Women generally begin retirement with smaller pensions than their male counterparts but usually live longer than men. Social Security is intended to be a supplemental source of income in retirement, but too many women are forced to rely on it as their sole source support in retirement. As a result of these issues, elderly women in the United States have one of the highest poverty rates of any industrialized nation.
Chief among the reasons that women save less than men is that women earn less than men; lower earnings equal lower retirement savings. The Equal Pay Act was passed in 1963 and yet almost half a century later, women make only 77 cents for every dollar earned by men. According to the National Women’s Law Center, “This persistent pay gap translates to more than $10,000 in lost wages per year for the average female worker.”
Continue reading “Women Facing Poverty in Retirement?” »
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
The retirement plan industry is overloaded with hidden fees and as a result, employers often think they are getting 401(k) administration for free. But in reality, the administration fees are concealed in the insurance contracts or mutual funds. This is a result of companies that offer "bundled services". A bundled service provider is when one vendor provides all investment, recordkeeping, administration, and sometimes payroll services. Bundled service providers are popular with small plans because their fees appear to be lower because administration fees are offset by higher investment management fees. Bundled services by their nature are priced as a package and cannot be priced on a per service basis.
Continue reading “401(k) Plan Fees – There’s No Such Thing as a Free Ride” »
by Stacey L. Spencer, QKA | Manager, Employee Benefit Services Group
There are many ways mistakes are made when it comes to administering a 401(k) plan. Keeping up to date on the regulations, while trying to do your ‘real’ job, can result in overlooking basic administration duties. The IRS has identified that one of the most common mistakes employers make is making certain that all eligible employees have been given the opportunity to make an elective deferral election. Sounds pretty basic…
Continue reading “Are You Including All Eligible Employees in Your 401(k) Plan?” »
A Solo 401(k) plan, also called a self-employed 401(k), an individual 401(k), or a Uni-K, works the same as the traditional 401(k) plans offered by larger companies. A Solo 401(k) allows sole proprietors or solely owned corporations with no other employees to save for retirement both as an employer and an employee, often enabling owners to contribute more than would otherwise be possible under an individual retirement plan. Spouses may also contribute under a Solo 401(k) if he or she earns income from the business.
This plan is funded with two sources of contributions. The first source is a salary deferral contribution that can be as much as $16,500. The second source is a discretionary profit sharing contribution that can be as much as 25% of compensation or 20% of self-employment income. These combined sources are limited to 100% of compensation up to $49,000. If the owner is at least age 50, he or she can contribute an additional $5,500 catch-up contribution outside these limits.
Continue reading “Self-Employed 401(k) Plans” »
by Stacey L. Spencer, QKA | Manager, Employee Benefits Group
One of the most aggravating issues facing employers and retirement plan practitioners is the issue of lost participants. Lost participants are terminated participants whose current address is unknown and who have a vested account balance remaining in the plan.
Continue reading “Lost Participants and How to Find Them” »
by Stacey Spencer, QKA | Manager, Employee Benefit Services
In this tough economy, many employers are looking for ways to decrease expenses. One option is to pay certain retirement plan expenses from the plan assets. Fees related to the administration of the plan can generally be paid from plan assets if 1) they are prudent and reasonable, 2) permitted under the plan document and 3) the expense policy is clearly communicated to employees through the Summary Plan Description.
Continue reading “Payment Options for Retirement Plan Expenses” »
by Stacey L. Spencer, QKA, Manager, Employee Benefit Services Group
Every year it is important that you review the requirements for operating your 401(k) retirement plan. The Internal Revenue Service (IRS) has released a list of the 10 most common mistakes made in the administration of 401(k) Plans. This checklist offers a starting point for developing internal controls regarding plan compliance procedures. If you would like assistance in establishing or reviewing your company’s internal controls, please contact us to schedule a free review.
by Stacey L. Spencer, QKA, Manager, Employee Benefits Services Group
Effective January 14, 2010, the Department of Labor (DOL) has established a final safe harbor rule as to what constitutes a timely deposit of participant contributions to small employee benefit plans (those with fewer than 100 participants). To be considered timely, employee contributions, including plan loan repayments, must be made to the plan by no later than the seventh (7th) business day following the time the employee could have otherwise received cash. Continue reading “New Retirement Plan Deposit Rules” »