Connections for Success

Employee Benefit Plans

01.15.18

Target Date Funds – Confusion?
James G. Quaid

The proliferation of target date fund (TDF) varieties can confuse many plan sponsors. One survey found that while nearly two-thirds of plan sponsors consider investment performance the most important selection criterion when choosing a TDF for their participants, more than half are not confident that they have a solid basis for benchmarking the TDFs against […]

09.05.17

What Is Buried Inside Your 401(k) or 403(b) Plan Fees?
Larry A. Ruff

Do you know and understand what are your 401(k) or 403(b) plan’s fees, and especially, what are inside those buried fees? Broadly speaking, retirement plan fees consist of fees and expenses associated with plan administration services, such as record keeping fees, and plan investment activities, such as investment management fees. But what are the fees buried inside your plan’s investment funds?

08.04.17

Correcting 401(k) Plan Loan Failures Voluntarily
Kenneth J. Kobiernicki

Participant loans are a feature of many 401(k) Plans. Participants may borrow the lesser of $50,000 or 50% of the participant’s vested plan assets. Some 401(k) Plans allow a participant to have multiple loans outstanding at one time. In that scenario, the $50,000 limit is lowered by the highest outstanding loan balance during the one-year period ending on the day before the newest loan.

07.12.17

How to Handle Hardship Withdrawals
Stephanie M. Zaleski

Many 401(k) plans feature a hardship withdrawal option. Both the IRS and DOL maintain strict regulations around these provisions. This article discusses how, in early 2017, the IRS issued updated audit guidelines regarding requirements for hardship withdrawals and guidance for plan sponsors on how to remedy errors in the administration of these withdrawals.

06.06.17

Avoid Litigation with Attention to Common ‘Red Flags’
James G. Quaid

Any size retirement plan can run into serious trouble when sponsors are not careful. With some planning, however, a qualified retirement plan can avoid ERISA litigation. This article reviews some of the most common red flags leading to litigation and reminds plan sponsors of the importance of regularly reviewing fees and expenses.

05.05.17

Helping Soon-to-Be Retirees Understand RMD Rules
James Pellino

Employees who are approaching retirement age may be unaware of their required minimum distribution (RMD) obligations, which begin at age 70½ for both individual IRAs and 401(k)s. This article summarizes what they need to know for financial and tax-planning purposes.

04.04.17

Be Prepared for Your Next — or First — QDRO
Michael J. Kovacs

In the settlement of divorce cases, it is frequent to have the courts order that a portion of one spouse’s pension benefits be assigned to the other (soon to be former) spouse. However, it is up to the plan sponsor or administrator to determine whether the order qualifies as a Qualified Domestic Relations Order (QDRO). This article discusses common errors that plan sponsors encounter when qualifying a domestic relations order and how to handle the rejection of an order.

03.07.17

Fiduciary Duties: Reviewing & Benchmarking Plan Fees
Doug Karasek

Are the services a plan receives reasonably priced? Knowing the answer is a vital fiduciary duty. ERISA expects more from plan fiduciaries than simply shopping around for plan providers offering rock bottom rates. This article summarizes some key areas all fiduciaries must consider when benchmarking costs of their qualified retirement plan. A sidebar discusses a report that suggests ways employers can help current plan participants ease into retirement.

02.07.17

Understand Your Target-Date Fund Series
Larry A. Ruff

Target-date or lifecycle funds first came to market in 1994. Since then, they have experienced much growth with nearly every large financial institution today offering their own version of these funds. Along with target-date funds becoming a fundamental option of 401(k) plans, comes a fiduciary responsibility to monitor and evaluate them, much like other plan investments. This article examines key characteristics plan sponsors and investment committees should know about target-date funds.

01.03.17

Do You Know Where All of Your Plan Participants Are?
Kenneth J. Kobiernicki

It is not uncommon for previously active employed plan participants to fall off the radar screen. They include retirees and former employees that move away without informing the plan administrator. Before anyone realizes it, they become “lost” participants. This article details the steps to take when dealing with these participants.

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