Now that you’ve set up your organization’s retirement plan, it’s important to understand what responsibilities the plan sponsor and the plan administrator must do in order to run the plan successfully.
As important as retirement planning is, it’s surprising that more people do not know how much their 401(k) savings plan costs them. In fact, according to a survey by the National Association of Retirement Plan Participants (NARPP), nearly 58% of plan participants do not know how much they’re paying in plan fees. Additionally, of the participants that did report knowing how much they’re paying, only a quarter of them know how those fees are calculated.
When Congress passed the Pension Protection Act (PPA) in 2006 the primary focus was on defined benefit plans designed to protect pension plans funded by employers. Defined contribution plans like 401(k) plans, however, were also largely affected by the legislation. In fact, the act created plan incentives to help employers and employees reap more benefits from 401(k) contributions.
With changing markets, the current political landscape, and new industry regulation, it’s important for 401(k) plan sponsors to actively manage sponsor plans. Today’s employee faces more challenges than ever before; in fact, retirement, once considered the pinnacle of financial goal-setting, is now one of a myriad of issues the modern employee faces. Additional monetary concerns like student loans and the cost of housing are now common issues employees juggle alongside retirement.
A cash balance pension plan is a type of pension plan provided by employers to employees of a company. This type of plan credits an employee’s account with a set percentage of his or her yearly compensation plus interest charges. A cash balance plan is often referred to as a ‘hybrid’ pension plan because the plan acts like both a defined benefit and defined contribution scheme.
As the holidays approach, it’s time for businesses to consider what year-end, Christmas, or holiday bonuses they’ll give to employees. Providing year-end bonuses can be a great way to motivate employees and reward top performers. Along with deciding criteria for employees to earn bonuses, many businesses need to factor in the effect of bonuses on overall yearly compensation and taxation requirements.
Retirement savings plans are designed to help employees save money to enable a comfortable, secure lifestyle during retirement. From the business sector to NGO organizations many different retirement plans exist. Most commonly people are familiar with 401(k) typically offered by corporations to its employees and IRA’s (both roth and traditional) which are more widely accessible. For nonprofit organizations there are unique plans available in creating retirement savings plans.
When the first 401(k) retirement plan was established back in 1980, it was envisioned as the third pillar of the retirement savings trinity. Social Security would account for basic expenses, your pension plan would help you maintain your current standard of living, and your 401(k) would provide discretionary funds (i.e. “fun money”). Together, these three would provide hard-working Americans with a variety of vehicles to save for a comfortable retirement.
With so many retirement options available, it can be difficult determining which plan makes best financial sense to you and your family. Today, we’re helping you sort through the confusion to decipher your employer’s 401(k) plan. Should you utilize your employer’s 401(k) retirement plan? In short, the answer is a resounding: YES.
As a small business owner one of the biggest joys can be seeing your company grow and expand. As your business increases, however, there are additional variables to consider. You may need to start hiring more people to take over duties and responsibilities and it’s important to start the on-boarding process in an efficient and effective manner for all parties. Considering your benefits approach when it comes to new hires and protocols is an important first step.
Once a staple of the American workforce, benefit Plans – more commonly referred to as pension plans – are quickly becoming the lesser known and least utilized retirement fund. In comparison to more popular retirement funds like 401(k) plans and IRA’s, the benefit plan is lagging behind. In large part the decline of benefit plans can be attributed to companies moving away from these sort of long-term benefits to employees and moving towards more flexible savings options. Before we get much farther into our discussion of Owner-Only Benefit Plans, it’s important to fully understand what this type of plan is.
There are five common types of business structures: sole proprietorships, corporations, S corporations (S Corps), partnerships, and limited liability corporations (LLC). Determining which company structure is best can be tricky. Today’s post examines these common business structures to explore which is best for your company.
After the ensuing chaos of The Great Depression of 1929, when unregulated and high-risk stock market investments resulted in the Stock Market Crash that destroyed millions of investors and left most corporations without any income to continue paying workers, 13 to 15 million Americans were unemployed, and approximately half of the banks in America failed. In part of the reconstruction efforts, President Franklin Delano Roosevelt set about to create a remedy for American workers and in 1935 signed into law the Social Security Act. As a wage earning American citizen, it is important that you understand why Social Security is in danger of Privatization.
It may be surprising to learn that although the landscape has changed drastically over the past 40 years, regulations pertaining to retirement plans have not. Since 2010, the Department of Labor (DOL) has been working to redefine and clarify what the term ‘fiduciary’ means under the Employee Retirement Income Security Act (ERISA), in April, the final rule was released. The new definition specifically looks at the distinction between providing investors ‘education’ and ‘advice’. The new rules set forth by the DOL redefines who is classified as a fiduciary and what responsibilities accompany that title.