…of the year count. That’s important because it can include former employees if they still have an account balance. This reality, plus the annual plan cost of carrying former employees, encourages many plan sponsors to force out former employees with small balances. The Department of…
…requirement of participants to certify in writing or by other electronic means that they do not have sufficient cash or liquid assets reasonably available to address the hardship. Prior to making a hardship distribution, the recipient must agree to preserve source documents and to make…
…orders in a number of states. With the economy teetering and the future uncertain, Congress passed the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, an unprecedented economic stimulus bill, which was signed into law on March 27. In addition to one-time cash…
…equity asset class, and invest through funds which partly or fully target infrastructure. Ideally, infrastructure investments provide pension plans long term, regular cash flows to meet longer term liabilities with the possibility of inflation protection. However, there are also rightful concerns over delays and cost…
…the provider must sell bonds at a loss and this loss is passed on to the participant. Conversely, if the participant waited 12 months, likely, some bonds would mature during that time at face (or book) value, and the cash could then be used to…
It’s no secret that saving money is challenging. Some may even argue it’s impossible considering the economic world we live in today. Even with all the budgeting and cash flow tracking apps available, many people struggle to change their spending habits on a daily basis….
…gift card. Whatever the incentive, they cannot be paid for with plan assets. The term “de minimis” is not defined; a suggested safe amount is $25. Clarification is needed on whether the amount should be treated as compensation. Plans can increase the cash out limit…
…casual use of a loan while still making it available for situations of real need. Loans are meant to be repaid, of course. Hardship withdrawals, by contrast, are not. They are allowable early withdrawals and absolutely reduce an employee’s retirement account balance. The use of…
…consultants and a key tool to have in your arsenal. With a Defined Contribution plan, it’s the employees who make many of the contributions and take on the investment risk. Their retirement benefit is their accumulated balance. With a Defined Benefit plan, the employer makes…
…to address this emergency savings problem while ensuring Americans continue to save for a secure retirement following an emergency. The legislation creates a new category of distribution in a 401(k) or similar plan that would allow workers who have a certain balance in these accounts…
…matching and other employer contributions as Roth amounts Effective immediately, this feature permits participants to treat matching and other employer contributions as Roth contributions. This provision will be popular among higher-income participants with large balances in qualified arrangements pursuing a Roth strategy. Clearly, this provision…
Cybersecurity is an epic concern not only in the United States, but globally, as well. Today’s hackers are modern day Willie Suttons, targeting high-balanced financial accounts because, “That’s where the money is.” Due to the massive amount of assets in retirement plans, regulatory agencies are…