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401(k) Plan Design and Automatic Features

An automatic contribution arrangement (also known as automatic enrollment) is a feature in a retirement plan that allows an employer to “enroll” an eligible employee in the employer’s plan unless the employee affirmatively elects otherwise. “Enroll” in this context means that part of the employee’s…

What is Non-Discrimination Testing?

Nondiscrimination testing is required for qualified retirement plans to ensure that benefits under the plan do not discriminate in favor of officers, owners, shareholders, employees in authority of other employees or any other employee classified as a highly compensated employees (HCEs). WHY WHERE THE NON-DISCRIMINATION…

How Does A Cash Balance Plan Work?

…Using a grandfathered approach, the cash balance plan can incorporate the defined benefit formula as the minimum benefit. This essentially creates a “minimum benefit” based on the prior plan benefit formula. The group of employees that would benefit under such a provision would need to…

Fumbling the Fiduciary Ball

…document should contain a definition of “employee” and provide requirements for when employees can become plan participants eligible to make elective deferrals. Employers can sometimes assume the plan doesn’t cover certain employees, such as part-timers; in other instances, employees who elect not to make elective…

Enhancing Your Bank’s Competitive Position with an Executive Benefit Plan

…choice, a situation that is leading many banks to offer benefit programs that include executive benefit plans as a way of garnering a strategic advantage. Reward Employees Without Impacting Costs on an Organization-Wide Basis Under the Employee Retirement Income Security Act of 1974 (ERISA), qualified…

Driving your Organization’s Success using Benefits as a Recruitment Tool

benefits package may tip the scales for a candidate who’s considering multiple offers. The bottom line— benefits can be a game changer. Competitive benefits not only help with recruitment but can also bolster retention. While a strong benefits package can become expensive, replacing an employee

When to Set Sail with Safe Harbor

…this special status, the IRS put in place rules to assure that plans benefit rank and file employees and not just a company’s owners and highly compensated employees. These are called non-discrimination rules and there are three tests we use each year to determine whether…

How Innovative Plan Design Can Contribute to a Credit Union’s Success

…the different types of retirement plans available.We have identified two basic approaches to developing a business’s employee benefits program. First is the objective approach, wherein one takes into consideration what kind of balancing of benefits is needed for employees; after all, a 50-year-old employee’s needs…

What is a Safe Harbor Plan?

…of employee elective deferrals and/or employer matching contributions (ADP/ACP testing). WHAT ARE THE REQUIREMENTS FOR A SAFE HARBOR PLAN? The primary benefit of a safe harbor 401(k) plan is that the plan is deemed to automatically satisfy the ADP and ACP tests. However, there are…

Executive Benefit And Director Plans 101

Executive benefit plans can be designed exclusively for key employees – providing an optimal solution to benefit limitation issues. An executive benefit plan is a contractual commitment by an employer to a select group of employees to provide supplemental retirement benefits at a future date….

Employer Connect: When to Set Sail with Safe Harbor

…enjoy this special status, the IRS put in place rules to assure your plan benefits rank and file employees and not just company owners and highly compensated employees. These are called nondiscrimination rules and there are three tests that must be performed each year to…

FAQ’s About Required Notices

…plan year. The notice must describe your plan’s safe harbor provisions and the employees’ rights and obligations under the plan. For employees who become eligible to join the plan after the start of the year, notice must be provided not more than 90 days before…