Category Archives: General

Compensation considerations for qualified plan sponsors

An often overlooked aspect of qualified plan administration is “compensation.” At last count, it was conceivable that a qualified plan sponsor might need to deal with as many as eight different definitions of compensation in order to keep a plan … Continue reading

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Resolving IRS (and DOL) Penalties for Late Form 5500 Filing

Recently, a number of employers have received letters from the IRS assessing penalties ($25 per day) for the late filing of Form 5500 for the employer’s plan(s). The letters generate two important questions for the employer: 1- May the employer … Continue reading

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Five Plan Design Considerations

1. If your plan is top heavy (most likely requires a 3% contribution to non key participants if the key employees are benefitting from the plan), you should adopt the Safe Harbor NEC plan design (3% contribution to all eligible … Continue reading

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Plan Termination Primer – Considering a Plan Termination

This section is strictly for review purposes. It is not to be used as a legal or consultative opinion as to the decisions you make regarding plan design, service providers, or the termination process. Before terminating your plan, please make … Continue reading

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Timing of Amendments to 401(k) Plans

We often receive questions whether a certain plan feature can be added or removed from a plan at any time during the plan year. This article will provide general guidance as to the timing rule for plan amendments and review … Continue reading

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Reporting Plan Mergers to the IRS

The enactment of EGTRRA may result in the merger of a plan sponsor’s money purchase and profit sharing plans. It may be useful to examine the most efficient means of reporting such activity on Form 5500. The merger document must … Continue reading

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In-Service Non-Hardship Employee Withdrawals

WHAT ARE IN-SERVICE NON-HARDSHIP EMPLOYEE WITHDRAWALS? Some companies allow active employees participating in a qualified employer retirement plan to withdraw a portion of their plan’s account balance upon request, without demonstrating a specific financial need. WHEN SHOULD YOU CONSIDER IN-SERVICE … Continue reading

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Understanding the Roth 401(k)

AS THE NAME suggests, a Roth 401(k) combines features of the traditional 401(k) with those of the Roth IRA. It’s offered by employers like a regular 401(k) plan, but as with a Roth IRA, contributions are made with after-tax dollars. While … Continue reading

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Hardship Loans v. Hardship Distributions

Many employees are tapping into their 401k plan accounts to make ends meet during these challenging times. Recent data available show an undeniable uptick in distributions when employees leave their companies, loans when they are employed, and hardship distributions when … Continue reading

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Safe Harbor 401(k) Plan

The Safe Harbor 401(k) Plan allows eligible employees to contribute a portion of their own salary to a retirement plan. Employers contribute either matching or non-elective amounts to the plan on behalf of eligible employees. Employer contributions are tax deductible … Continue reading

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