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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?

…to short-term employees. The plan is structured to allow employees who terminate for any reason at any age to access their retirement monies. This allows employees to rollover their account balance to an IRA or to a new employer’s plan. Traditional plans typically restrict access…

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

Bringing in a new employee at any level can decrease productivity temporarily while that employee learns the job. Using key retirement plan features to retain managers and trained employees can help maintain productivity levels. Including plan features that employees want, such as a variety of…

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

…percentage of compensation or a dollar amount) to older employees, employees with more years of service, and/or employees who are performing the most important functions for the business. Because younger employees have a longer time horizon in which to grow their assets, cross-tested plans effectively…

What is a Safe Harbor Plan?

minimum match of 100% of the employee’s contributions up to 1% of salary plus 50% of the employee’s contributions that exceed 1% of salary but do not exceed 6% of salary. Safe Harbor Contribution Requirement for Plans without Qualified Automatic Contribution Arrangement These safe harbor…

Executive Benefit And Director Plans 101

Because there are no coverage, eligibility or participation requirements, an employer can decide to provide nonqualified deferred compensation benefits only to a select group of executive or highly compensated employees. This allows the employer to provide rewards and incentives based on an employee-by-employee approach, offering…

When to Set Sail with Safe Harbor

a plan measures up. Here they are in a nutshell: The ADP test – which stands for “Actual Deferral Percentage” looks at how the deferral rate for highly compensated employees compares to that of non-highly compensated employees. Typically, the deferral percent for highly compensated employees…

Employer Connect: When to Set Sail with Safe Harbor

employees. This includes those employees who don’t defer. A quick note: Safe Harbor contributions must always be 100% vested. That means that employees can count these contributions in their balances without forfeiture upon termination of employment. Adopting a Safe Harbor provision can help your plan…

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…

What Is A Section 79 Plan?

for employees. Self-employed individuals, partners and owners of S corporations are not employees. For an owner to participate the sponsoring employer must be a C Corporation. MUST EVERY EMPLOYEE BE INCLUDED IN THE PLAN? Non-discrimination rules do apply. 70% of all full time employees must…