Can you avoid an annual audit? Breaking down the 80-120 rule
Corporate retirement plans with more than 100 participants are generally required to have an audit of the plan done. While having your 401(k) plan audited by a qualified, independent public accountant is a relatively straightforward affair, audits do incur annual hard dollar costs and consume staff time. Therefore, for those plans approaching the level of […]
What to do with terminated employees in your 401(k) plan
Just because an employee is no longer with your organization, it doesn’t mean that your fiduciary responsibilities are complete. You and your company, as fiduciaries, are obligated to manage any remaining 401(k) balances of former employees. One of the many reasons to keep an eye on terminated employees with balances is that they count towards “eligible […]
401k Hardship Loans – A double edged sword
Some 401(k) plans allow participants to take loans, and others do not. It is quite a controversial subject, with some arguing participants should be empowered to access their savings, while others prefer a more paternalistic approach to help ensure retirement dollars are there for retirement. Regardless of your perspective on this topic, there are certainly […]
Automatic Plan Features
Over the past few decades the rise in Defined Contribution plans has shifted the burden for retirement planning and saving away from employers to fall squarely on the employees’ shoulders. It’s a responsibility that can be intimidating for those who feel ill-equipped or lack the foresight to adequately prepare. Thankfully, just as the retirement landscape […]
Participation: The First Step to Unlocking Your 401(k)’s Potential
While 401(k) plans can be a key component of your employees’ retirement savings, they only work if employees participate in your plan. Indeed, a Vanguard paper on this topic found that participation and savings rates were the primary determinants of 401(k) savers’ success, trumping investment returns and fees. Unfortunately, too many employees who are eligible […]
The QDIA – The Qualified Default Investment Alternative
Inertia is a strong force. It is why many retirement plan participants never make changes to their savings rates and investments within their plans. Unfortunately, this can lead to some bad outcomes. It isn’t unusual to hear stories of people who have contributed to their plans for years, but who never made an affirmative decision […]
Indexing Works: Just Look at the Numbers
While the philosophical debate continues to rage on about the merits of active management, we’d rather focus on the data. After all, it’s the data that drives our decision-making process as retirement plan advisors and fiduciaries. Morningstar, an independent provider of investment research, publishes a semiannual report that analyzes the performance of active strategies against […]
401(k) Administration: Who Are All These People, What Do They Do, and Why?
Running a 401(k) plan has never been simple, and the landscape continues to evolve. Between new regulations, enhanced technology, and rising expectations around fiduciary oversight, employers today interact with more service providers than ever. Understanding who these providers are and what they do is essential to keeping your plan compliant, efficient, and cost‑effective. At the […]
Fees, Fees, and more fees…
The rent in your 401(k) plan is likely too high. Even worse, a lot of the time neither employers nor employees know just how much they’re paying, to whom, or even that they’re paying at all. Focusing on the fees in your 401(k) is critical. Fees reduce your overall return and affect your bottom line. […]
Elements of a Successful 401(k) Plan
As the primary retirement savings vehicle for many employees, it’s crucial to get a 401 (k) plan right. Yet, offering and maintaining a plan can be cumbersome. To help meet the fiduciary obligations and ease the administrative burdens, here are four essential elements for a successful 401(k) plan. Education: Employees in a 401(k) plan bear […]