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MEPs Might Just Be the Answer

…address many common concerns One way that federal law enables employers to avoid missteps is through the use of multiple employer plans, or MEPs. Simply put, MEPs allow unrelated employers to combine their plans under a single MEP “sponsor.” Typically, the sponsor will make this…

IRS SECURE 2.0 “Grab Bag” Guidance – Roth Employer Contributions

…guidance: Sponsors may but are not required to include in their plan any type of Roth contribution – employee elective, employer matching, or employer nonelective. The rules currently (pre-SECURE 2.0) applicable to employee elective Roth contributions also generally apply to the new Roth employer contributions….

Meet Your Fiduciary Obligations . . . With a Little Help

…greatest standard of care—or risk personal liability if they fall short. Employers Are Fiduciaries By default, employers (plan sponsors) are fiduciaries of the retirement plans that they maintain. First, Section 3(16) of the Employee Retirement Income Security Act of 1974 (ERISA) defines “plan administrator” as…

IRS SECURE 2.0 “Grab Bag” Guidance – Other Issues

…credit for small employers SECURE 2.0 provides a new small employer (100 employees or less) tax credit for defined contribution (DC) plans that provide that military spouses are, within two months of hire, immediately eligible for and fully vested in employer non-elective and matching contributions…

A SIMPLE Switch

…maintained by the employer Must file a Form 5500 annually Voluntary employee deferrals Mandatory employer contributions (generally, 3% match or 2% nonelective) Immediate vesting for contribution types Additional information at IRS SIMPLE 401k facts Safe Harbor 401(k) No limit on number of employees Voluntary employee…

Employer Connect: When to Set Sail with Safe Harbor

…highly compensated employees can’t be more than two points more than that of the non-highly compensated employees to pass this test. The ACP test – which stands for – Actual Contribution Percentage – compares employer matching contributions between these two groups. And the Top-Heavy test…

March 1st and Excess Salary Deferrals

…could be a critical notification deadline in the case of an excess deferral, depending on a plan’s terms and conditions. If a 401(k) plan participant makes salary deferrals to more than one plan of unrelated employers during the same tax year, it is possible to…

Understanding Forfeitures

…can Redistribute the forfeited amount to the remaining eligible participants. Or they can Apply the forfeited money towards reasonable plan expenses. This reduces the employer’s out of pocket expense of maintaining the plan. Or the forfeited money can be used by the employer to reduce…

Best Practices for After-Tax Contributions and IRS Form W-2

…question is “maybe.” Your client will want to discuss this question with his employer and tax advisor for a definitive answer. Generally, according to the instructions to IRS Form W-2, Wage and Tax Statement, an employer may, but is not required to, report non-Roth, after-tax…

Emergency Savings Accounts May Change Mindset and Retirement Outcomes

…in individual account plans like 401(k), 403(b) and governmental 457(b) plans under the following structure. Optional automatic enrollment At the employer’s discretion, automatic enrollment can apply with deferrals beginning at 3% and capped at $2,500 (or a lower amount at the employer’s discretion). The $2,500…