Newsletters

Cash Balance Plans: Putting More Tax-Deferred Money Away for Retirement

By David Gensler, President

Cash balance plans are the fastest-growing retirement plan in the country—flooding a market saturated with 401(k) profit-sharing plans, which are on a flat to slightly downward trajectory. According to market research, cash balance plans—hybrids of defined benefit (DB) and defined contribution (DC) plans—increased in number by 500 percent during the 10-year period ending in 2011.

So, what’s the big deal with cash balance plans? In a nutshell, they offer business owners the opportunity to avail themselves of considerably higher tax deductible contribution limits compared to 401(k) plans, reducing their tax bill and allowing them to accumulate more retirement wealth at an accelerated rate.

Read More

Six Questions Plan Sponsors Should Ask Following the Supreme Court’s 401(k) Ruling

By David Gensler, President

A few weeks ago, I commented in my last blog on the recent U.S. Supreme Court case, Tibble vs. Edison. In that ruling, the Court clarified that retirement plan sponsors have a fiduciary duty “to continuously monitor” the investments in their company’s 401(k) plans. The Court’s ruling also spelled out the responsibilities of plan stewards, directing them to not only monitor trust investments but also “remove imprudent ones.”

While this certainly was not news to the professionals in the retirement plan field, it may come as a surprise to the business owners that sponsor 401(k) plans.

If you are in this latter category, you may be getting an inkling that your practices as a plan sponsor should change. And you would be on the money. Yet the Court’s ruling did not provide any practical guidance as to what this “duty” actually means. Nevertheless, without committing a lot of time and effort to updating your process, you and your management team can create procedures that will lead to what most observers would view as a robust fiduciary governance program.

Read More

Retirement Plan Sponsors: Are You Continuously Monitoring Your Investments?

By David Gensler, President, Madison Pension Services, Inc.

Imagine if the participants in your company’s 401(k) plan just discovered that the funds supporting their retirement plan haven’t been reviewed in years. Furthermore, what if they also learned that the exact same (but cheaper) fund choices were available but that no action had been taken to make those choices available to them? The resulting reduction in the value of their accounts, the very accounts intended to finance their golden years, would—understandably—be a tough pill for them to swallow.

Indeed, such was the situation that drove Edison International’s employees to take their concerns to court. They brought suit against their employer in 2007 for violating its fiduciary duties with respect to mutual funds added to their 401(k) Savings Plan in 1999 and 2002. The employees, in a lawsuit that ultimately ended up in the U.S. Supreme Court (Tibble vs. Edison), argued that Edison acted imprudently by offering higher-priced mutual funds when materially identical lower-priced mutual funds were available.

Read More

The IRS Performs Audits On Retirement Plans & The DOL Conducts Investigations – What’s The Difference?

 

This Issue’s Contents:

  • What Is The IRS Responsible For?
  • The IRS’s Top Five
  • What Is The DOL Responsible For?
  • The DOL’s Top Five

pdfs_55

Access the Newsletter here

Important Plan Restatement Deadline as Per the Pension Protection Act

 

This Issue’s Contents:

  • Why Does This Need To Be Done?
  • What Happens If It Is Not Done On Time?
  • Won’t This Automatically Be Taken Care Of For My Client?
  • When Should My Client Start Working On This?

pdfs_55

Access the Newsletter here

Designing A Retirement Plan From The Ground Up

This Issue’s Contents:

  • The Law Firm And The Underperforming Associate Attorney
  • The Dilemma: How To Include All Current Employees Without Wasting Money On The Associate
  • Who Will Be Terminated?
  • The Solution

pdfs_55

Access the Newsletter here

Retirement Plan Guidance For Your Clients

This Issue’s Contents:

  • Supreme Court Rules Inherited IRAs Not Exempt From Bankruptcy
  • One-IRA-Rollover Per Year Is Going To Be The Rule
  • Why Do Rollovers At All?

pdfs_55

Access the Newsletter here

Using Retirement Accounts to Fund a Business Startup

This Issue’s Contents:

  • Can Your Clients Really Do This?
  • How it Works
  • What Does the IRS Have to Say?

pdfs_55

Access the Newsletter here