While Pooled Employer Plans (PEPs) and Multiple Employer Plans (MEPs) got the lion’s share of attention last year with the passage of the SECURE Act (Setting Every Community Up for Retirement Enhancement) – and understandably so – another type of plan is also gaining traction…
…in order to claim an exemption from ERISA: Participation must be voluntary. All rights under the annuity contracts or custodial accounts must be enforceable by the employee or beneficiary (not the employer.) Involvement of the employer must be limited to certain restricted activities. The employer…
…is of course a solid option as well, but by its very definition, an employer may not realize the collective bargaining power that the economies of scale can afford them in a GoP, PEP, or multiple employer plan (MEP). Another not insignificant detail when it…
…Russell 1000 Value index, have been hurt by economic slowdowns and manufacturing shutdowns during the pandemic. Growth stocks have been trading at record multiples, including the key measures of price-to-earnings and price-to-cash flow. Those who believe that these multiples have created a “bubble” that is…
…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…
…any calendar year for which the plan is deemed disqualified. IRS Example: Pat is a participant in the XYZ Profit Sharing Plan. The plan has immediate vesting of all employer contributions. In calendar year one, the employer makes a $3,000 contribution to the trust under…
…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…
…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…
…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…
…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…
…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…
…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…