You may have seen it on a recent invoice or heard it come up in conversations about your 401(k) plan, but cross-testing your 401(k) plan’s profit sharing contribution (a.k.a. New Comparability) often results in an additional fee levied by your TPA so perhaps it’s worth understanding more about it so you can decide whether it’s worth the cost! Company contributions are tested each year for Non-Discrimination Traditionally, allocating a profit sharing contribution is based on either a flat-dollar amount or a uniform percentage of eligible compensation. In order to demonstrate that the allocation ..read more

Has your CPA been telling you for years that you need to set up a retirement plan but you’ve been so busy with the business that you don’t remember until you get their email asking for your financial reporting? And this year was the year you were going to do it, right? But now the year has closed and you’re going to have to hear the same speech again unless you open a SEP.   Or do you?!                                                          &n ..read more

For companies with fewer than 100 employees, choosing to adopt a SIMPLE IRA program makes a lot of sense. Essentially no cost to adopt or maintain, participants get to choose their own investment strategy, and a maximum expense to the company (ahem, “benefit to the employee”) of only 3% of compensation, no annual disclosures to participants or the IRS; what’s there not to like? While the primary reasons plan sponsors tend to prefer a SIMPLE are the ease of setup and that inexpensive 3% company benefit, the administration of a SIMPLE plan is also no small chore and mirrors almost exactly what i ..read more

You may not be surprised to learn how common it is for business owners to finally put pencil to paper in an effort to get their new 401(k) plan in place only after they’ve wrapped up their tax return that’s been extended until September. Unfortunately, a significant number of these business owners come to find that the difference between a 401(k) plan with a safe harbor provision versus one without may be the difference between a retirement plan that’s worth sponsoring or electing to continue to postpone and the deadline for starting a new plan with this provision is October 1st for plans usin ..read more

Whether you have a plan already or are considering your options for how to structure a new program for your company, it’s important to understand what a 401(k) plan is able to do and where it might fall short of expectations. We have already developed a decent analysis of the pros and cons of all types of qualified retirement plans (some you may have never heard of!) and their myriad options, so once you’re done here you might consider jumping over to our Retirement Plan Comparisons page. Before going through your qualified plan options, though, it would be helpful if you already decided you w ..read more

For many whose lives have been turned upside down by a natural disaster, often the majority of their savings is tied up in their retirement account. Without a homeowners insurance policy, or if the damage is minimal enough that making a claim isn’t worth the risk of increased premiums, one may find that what they have been able to amass in their 401(k) is their best alternative to taking a loan and adding to their monthly expenses. The only way to access retirement savings while retaining employment is, as the name implies, through an in-service distribution such as one for hardship. Unfortuna ..read more

*NOTE- Regulatory guidance on the information contained in the article remains pending as of its posting date and is subject to change and/or clarification* UPDATE Aug 28, 2023:  Effective date has been delayed two years, now required after December 31, 2025 In case there’s any confusion about how Federal and State governments think retirement plans can be improved in future years, it’s two things: More auto-enrollment and more Roth (i.e., post-tax) contributions. This blog attends to one expansion of the increased appetite for Roth contributions, the new requirement for “Catch-up” contri ..read more

Have you ever wondered what the third-party administrator (TPA) of your retirement plan does for you? Are you at a loss for a way of figuring out whether or not they’re doing a good job? Do you know the name of your TPA or whether you even have one at all? Well, you’re not the first to ask! While maintaining a 401(k) plan may not be that difficult, it turns out that proving to the IRS that you’ve been doing it right this whole time requires knowledge most business owners and HR specialists don’t have and, to be honest, don’t have the interest in developing. This is where your TPA comes in! We ..read more

*NOTE- Regulatory guidance on the information contained in the article remains pending as of its posting date and is subject to change and/or clarification* In case there’s any confusion about how Federal and State governments think retirement plans can be improved in future years, it’s two things: More auto-enrollment and more Roth (i.e., post-tax) contributions. This blog attends to one expansion of the increased appetite for Roth contributions, the new requirement for “Catch-up” contributions from some employees to only be allowable on a Roth basis. First, some important housekeeping (becau ..read more

Plan Year End Form 5500 Due Date        Extension – Special          Extension – Form 5558 12/31 7/31 9/15 10/15 1/31 8/31 10/15 11/15 2/28 9/30 11/15 12/15 3/31 10/31 12/15 1/15 4/30 11/30 1/15 2/15 5/31 12/31 2/15 3/15 6/30 1/31 3/15 4/15 7/31 2/28 4/15 5/15 8/31 3/31 5/15 6/15 9/30 4/30 6/15 7/15 10/31 5/31 7/15 8/15 11/30 6/30 8/15 9/15   Retirement plans need to file a tax return? I thought the point was to ..read more