Newsletters

A SEP-IRA or a Solo 401(k) Plan – Which is Better?

By: David I Gensler, MSPA, MAAA, EA

Fortune Magazine recently ran an article touting the benefits of a Solo 401(k) over a SEP-IRA for sole proprietors or single member LLCs with no employees. And for those of you who are sole proprietors or single member LLCs who are looking to maximize your contribution (and thus your tax deduction), the Solo 401(k) is probably the way to go. The article does an excellent job of detailing the distinctions between the two types of retirement plans. I have some thoughts of my own to add. But first, let’s analyze each type of plan. Read More

Has It Really Been Forty Years?

By: David I Gensler, MSPA, MAAA, EA

Madison Pension Services first opened its doors on July 1, 1978. Being an actuary, it is not hard to figure out that July 1, 2018 will represent our fortieth year in business. Forty years is a long time and it has gone by in the blink of an eye. For you millennials and Gen Xers, let’s take a look back at what life was like in 1978. Read More

What People Fear the Most

By: David I Gensler, MSPA, MAAA, EA

When I looked at various top ten lists of what people fear the most, public speaking was invariably number one. Also making the top ten list was a fear of heights, flying, snakes, spiders, zombies and clowns. But I noticed that a new fear had emerged. And as baby boomers age out of the work force, it seemed to be moving up the list rather rapidly (although I doubt that it will ever replace the fear of public speaking as number one). That fear is the very real concern about running out of money in retirement. Read More

What are the three most common errors that CPAs find when they conduct plan audits?

By: David I Gensler, MSPA, MAAA, EA

CPAs are tasked with auditing plans that (generally) have more than 100 participants. So they get to see just about everything – the good, the bad and the ugly. Auditors test a sample of the Plan Sponsor’s employee population when auditing a plan. Once they discover an error, they must determine what their next step should be. It might involve testing a larger sample of the plan’s population or requesting additional information. Either of these steps can ratchet up the cost of audit. Read More

The (Potential) Dark Side to 401(k) Auto Enrollment – The Participants Seem to Take on More Debt

By: David I Gensler, MSPA, MAAA, EA

Auto-enrollment has resulted in millions of people who were not previously putting savings into their company’s 401(k) plan, now actively participating in it. That is a good thing. However according to a recent article in the Wall Street Journal, many of these workers seem to be offsetting those savings over the long term by taking on more auto and mortgage debt. And that may be a good thing as well. (No, the previous sentence is not a typo.) Read More

WHAT TOOK SO LONG? – IT WAS BOUND TO HAPPEN SOONER OR LATER

By: David I Gensler, MSPA, MAAA, EA

A scheme using what appears to be stolen identity information has resulted in a lawsuit by the Attorney’s office in Colorado. Their goal is to recover $2 million in losses from participants’ 401(k) accounts. Read More

FOR GOVERNMENTAL OVERSIGHT OF RETIREMENT PLANS, YOU NEED TO WORRY ABOUT THE AGENCY WITH THE THREE INITIALS – SPOILER ALERT; IT’S NOT THE IRS

By: David I Gensler, MSPA, MAAA, EA

Governmental oversight and compliance of retirement plans has largely shifted away from the IRS over to the Department of Labor (the DOL). At the American Society Of Pension Professionals and Actuaries (ASPPA) national conference in Washington, two speakers, J.K. Nowiejski and Heather Agribo made it abundantly clear that the DOL means business. They cited some daunting statistics. In 2016, the DOL’s Employee Benefit Security Administration (EBSA – remember, the government loves acronyms) engaged in the following enforcement activities: Read More

Participants are Responsible to Verify Plan Loan Repayments – So Says the Tax Court

By: David I Gensler, MSPA, MAAA, EA

 

A recent tax court ruling, Louelia Salomon Frias v. Commissioner, illustrates the importance of verifying that loan repayments are actually being made. Moreover, it is the participant’s responsibility to do so.

The Facts

The participant, Louelia Salomon Frias was a participant in her employer’s 401(k) plan. On 07/27/2012, she signed a loan agreement to borrow $40,000 from her account, which she would repay over two years through bi-weekly payroll deductions. She then went on an approved maternity leave. Read More

Tibble v. Edison – The Gift That Keeps On Giving

By: David I Gensler, MSPA, MAAA, EA

A lawsuit that began in 2011 is finally approaching its conclusion. The plaintiffs claimed that the 17 investment options selected by the plan back in March of 1999 were retail funds instead of lower cost institutional shares. The funds remained in the plan beyond August 16, 2001. That date is particularly relevant since that is as far back as the statute of limitations could go.

The case went all the way to the Supreme Court. While the Supreme Court found neither for the plaintiff nor for the defendant, Read More

What traits in their plan’s advisor do plan sponsors value? Which ones should they value?

BY: David I Gensler, MSPA, MAAA, EA 

Which Qualities Plan Sponsors Do Value

A recent poll of plan sponsors wanted to know which services plan sponsors most value from their advisors. Asked to name their top three, two stood out: Read More