Category Archives: Uncategorized

WSJ: In retirement savings, the poor get poorer

When it comes to Americans’ retirement account balances, happy days are here again—but only for some. Average retirement-account balances have actually shrunk for people at the higher and lower ends of the income scale, while the percentage of Americans who have retirement accounts continued a recent decline.

According to a new report from the Federal Reserve, the average balance in Americans’ retirement accounts—a category that includes Individual Retirement Accounts (IRAs) as well as 401(k)s, 403(b)s and Keogh plans—rose 10% over the past three years, from $183,400 in 2010 to $201,300 in 2013. The median balance, meanwhile, was up 25%, from $47,200 to $59,000. The report looked at families whose “head is between ages 35 and 64”—a group whose members are generally “established in their careers” but are “too young for full retirement.”

The rise in balances reflected “a combination of resurgent stock markets and increased contributions by those who participated in retirement plans,” the report said. (U.S. stocks rose considerably faster than savings balances over that same period—the S&P 500, for example, rose 47% between the end of 2010 and the end of 2013.)

Continue reading at the Wall Street Journal’s MarketWatch blog.

Retirement Plan Deadlines – September 2014

Retirement plan administrators and 401(k) plan sponsors should be aware of the following September 2014 administrative deadlines for defined contribution plans:

Defined Contribution Retirement Plan Deadlines

September 15

  • Money Purchase Plan Contributions
  • Form 5500 and Plan Audit
  • Annual Benefit Statements
  • Deductible Contributions

September 30

  • Summary Annual Report

Please contact Kelly Parker for 401(k) plan information.

Are You Too Late? 401(k) Audits are Due July 31

For 401(k) plans with a 12/31 year end, the audit due date is July 31st, a Thursday this year. If you have recently found out your employee benefit plan requires an audit, you can visit the IRS website to find the forms needed for an extension:—Plan-Sponsors—Filing-Requirements.

Extensions are available for 2.5 months if extension request is filed. For a December plan year end, this would be on October 15th.

Piercy Bowler Taylor & Kern can assist you with this extension and the 401(k) audit. Avoid fees and penalties and file the extension by July 31st. Contact Kelly Parker for more information.

EB News: Help your employees make the right 401(k) investment choices

From Employee Benefit News (By Robert C. Lawton): As a retirement plan sponsor, you commit to annual (at a minimum) employee education sessions. One topic that should be covered during your sessions is how participants can become good 401(k) plan investors. In order to invest successfully in their 401(k) plans, participants should:

  • Commit to a regular savings program. Participants should not vary their contributions based on market or economic activity and should plan on contributing to their 401(k) plan for their entire careers.
  • Increase their contributions. Participants need to average 15% in annual additions into their 401(k) plan accounts. Most won’t be able to start contributing at this level and will need to increase their contributions gradually. Increasing contributions can often be done painlessly any time participants receive salary increases.

Continue reading at Employee Benefit News.

Retirement Plan Deadlines – August 2014

Retirement plan administrators and 401(k) plan sponsors should be aware of the following August 2014 administrative deadlines for defined contribution plans:

Defined Contribution Retirement Plan Deadlines

August 14
•Quarterly Benefit Statements

August 15
•Form 5500 and Plan Audit
•Annual Benefit Statement

Please contact Kelly Parker for 401(k) plan audit information.

EB News: IRS targets Roth feature in 401(k) plans

Posted June 16, 2014 by Bernard E. Kaplan, JD, LLM

The IRS employee plans compliance unit has recently launched a Roth compliance check questionnaire program aimed at helping the IRS understand compliance related to the Roth deferral provision in 401(k) plans. It is intended to verify whether the plans randomly selected comply with the Tax Code as it relates to the Roth provisions, as well as identify any noncompliance issues. If noncompliance is discovered, the IRS may launch a plan audit or advise the employer to seek voluntary correction through the IRS.

It is important to respond to the questionnaire in a timely and accurate manner. Failure to do so could trigger an audit.

Continue reading at Employee Benefit News.

What the EBSA Will Ask for in a 401(k) Plan Audit: Documentation You Need

Post Courtesy of Keith R. McMurdy, partner, Fox Rothschild LLP

When clients get an audit request letter from the EBSA, they usually call me surprised at the amount of information being requested. It is not just the shock of being audited that impacts them, but the amount of information they need to provide. Sometimes, the requested documentation may not be available, which creates its own set of issues. But for planning purposes, I thought it would be beneficial to lay out the list from the most recent audit request I reviewed.

Plan sponsors of defined contribution plans will likely be required to produce the following in response to an audit:

  1. Plan documents and all amendments, including trust documents and summary plan descriptions (which reminds us these should exist and amendments should be formally written and adopted)
  2. Summary annual reports for the period under review
  3. Fiduciary insurance and bond policies

To read more to go Employee Benefits Report