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The Educated 3(16) Fiduciary

Many financial organizations tout the benefits of their ERISA 3(16) fiduciary services and, frankly, many of these messages can sound irresistibly compelling. But buyer beware; not all 3(16) fiduciary services are created equal. In today’s increasingly litigious environment, it is imperative for plan sponsors to…

How Healthcare Impacts Retirement Savings

Healthcare is generally one of the largest expenses during one’s retirement and costs continue to rise. These costs are rising primarily due to an aging population and longer life expectancy rates. According to Fidelity Investments, an average retired couple age 65 in 2021 may need…

Should a Plan Have an Investment Policy Statement?

To be clear; a retirement plan is not required to have an Investment Policy Statement (IPS). But the more important question is should a plan have an IPS? To use a silly analogy, a person need not have a parachute to jump out of an…

Lifetime Income Illustrations

The primary and, arguably, only reason individuals invest in defined contribution (DC) plans is to eventually have adequate income for retirement. Until recently, it seems the retirement industry has lost sight of that end goal. Many of the machinations of plan committees, plan advisors and

After Tax Contribution Considerations

Pentegra administers many 401(k) plans that include standard after-tax contributions—the non-designated Roth 401(k) type. And one thing we have learned is that after-tax contributions can create problems for the sponsor if the plan is not carefully designed and properly administrated. In a 401(k) plan, standard…

Not All Stable Value Funds Are Created Equal

In turbulent markets, stable value investments can be an attractive choice for retirement plan participants worried about the fluctuations in the marketplace. Like any investment option, stable value funds have advantages and disadvantages. Consequently, there are circumstances where stable value funds may be a great…

Plan Penalties, Costs and 3(16)

The Department of Labor (DOL), Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) have extensive reporting and disclosure requirements for qualified retirement plan officials. These reporting and disclosure requirements serve the important function of educating and supporting participants in their retirement planning journey,…

Automatic Enrollment/Escalation—Is My Plan Grandfathered?

We knew it was coming—some type of auto enrollment and auto escalation mandate for 401(k) and 403(b) plans. Congress has long been a proponent of such automatic arrangements as they have proven they boost plan participation. The first “negative election” plans go back 25 years…

New RMD Rules to Live By

Just when we had figured out the required minimum distributions (RMDs) rules for retirement plan participants—Congress changed them—again! Under the SECURE Act 2.0 of 2022 (SECURE 2.0) there are no less than six changes to RMDs in all. The most talked about adjustment to the…

SIMPLE IRA-to-401(k) Mid-Year Switch Gets Easier in 2024

A frequently asked question by small business owners who sponsor savings incentive match plans for employees (SIMPLE) IRA plans is, “Can I terminate my SIMPLE IRA plan and start a 401(k) plan mid-year?” It’s a straightforward question that, currently, has a problematic answer due to…