Madison Pension ServicesNewsletters Archives - Page 6 of 6

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.

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

September 1, 2015 401(k), fiduciaries, retirement plan, retirement plan sponsors, Tibble vs. Edison

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.

Retirement Plan Sponsors: Are You Continuously Monitoring Your Investments?

August 12, 2015

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.

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

May 20, 2015

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

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Important Plan Restatement Deadline as Per the Pension Protection Act

February 15, 2015

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?

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Designing A Retirement Plan From The Ground Up

October 15, 2014

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

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Retirement Plan Guidance For Your Clients

August 15, 2014

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?

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