Should We Have a Retirement Plan Committee?

May 21st, 2018 by Jonathan Leidy

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For the vast majority of plans, the short answer is most emphatically “yes.”

If you are an employer, or employee who has decision-making authority over your company’s retirement plan, there is a strong chance that you are a 401(k) plan fiduciary.  You have a legal obligation to operate the plan solely in the interests of the plan participants (people with retirement account balances) and their beneficiaries (people who may inherit those retirement account balances).  Two additional primary responsibilities are to manage the plan for the exclusive purpose of providing benefits, and paying reasonable plan expenses.[1]

Many HR professionals, Controllers, CEOs, CFOs, and Presidents are unfamiliar with the significant amount of liability to which they are exposed with their duties as a 401(k) plan fiduciary. Establishing a retirement plan committee might be a useful component when it comes to effective oversight of your company’s retirement plan. Read the rest of this entry »

RPM Q1 2018_Pulse Image_Blog Article 2_Motivating Savings with Financial Wellness and Plan Design

On average, 42% of Americans make money-related resolutions at the beginning of each year.  However, in less than 6 months, half of the “once dedicated” abandon their goals.[1] But, as we all know, it takes longer than 6 months to reach a meaningful retirement savings objective.

So, how can you, as a plan sponsor, sustain that resolution momentum so that your employees continue to save for retirement? In this article we will discuss holistic ways to promote financial wellness among your employees as well as plan design tips aimed at increasing participation and savings rates. Read the rest of this entry »

Items Your Annual Retirement Plan Review May Be Missing

February 20th, 2018 by Jonathan Leidy

RPM Q1 2018_Pulse Image_Blog Article 3_Items Your Annual Retirement Plan Review May Be Missing

As a plan sponsor, you are probably no stranger to the annual retirement plan review. And believe it or not, it is that time of year again! Although you may meet quarterly or semi-annually with your advisor, a yearly plan assessment is an opportunity to evaluate the entire health of your plan.

Many times, the focus of an annual review has to do with investments and fund line-ups; and while this is important and should absolutely be addressed, your review should go further.

Your review should assess five major areas: plan design, retirement readiness, fiduciary oversight, service provider due diligence, and investment due diligence. Read the rest of this entry »

RPM Q1 2018_Pulse Image_Blog Article 1_What is Benchmarking and Why Should You Do It

WHAT IS 401(K) BENCHMARKING AND WHY SHOULD YOU DO IT?

Simply stated, benchmarking is the process of reviewing and evaluating your company retirement plan. It involves taking a look at what you are offering your employees today and deciding if it’s appropriate or needs some updating.

There are four main areas to focus on when assessing your retirement plan:

  1. Plan Design
  2. Service Providers
  3. Funds
  4. Fees

Each aspect of your plan requires a slightly different set of questions. In order to be able to go into the appropriate level of detail about each section, we will break this into a two-part series, beginning with Plan Design and Service Providers; but don’t worry, we will discuss Funds and Fees in a separate article. Below we are going to share some best practice questions to help you get started on your benchmarking analysis. Read the rest of this entry »

What Does It REALLY Take To Retire?

November 17th, 2017 by Jonathan Leidy

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What does it really take to retire?

As a plan sponsor, your employees rely heavily on your guidance. After all, you manage the plan that may offer their best chance for a successful retirement.

When the 401(k) plan was introduced in the mid-80s, it was not intended as a stand-alone solution; it was intended to be a part of a three-pillar system along with defined benefit (DB) plans and social security. However, as time passed, 401(k)s and other defined contribution (DC) plans became the primary savings vehicle for Americans.

Saving for retirement now rests predominately on your employees and they look to you for guidance. Read the rest of this entry »

Auto Features Gain Further Traction in Retirement Plans

November 8th, 2017 by Jonathan Leidy

If you’ve been considering adding Auto Features, like auto-enrollment and auto-escalation, to your retirement plan, you’re not alone.

Per recent studies by Deloitte and others, over 65% of all new plans are being installed with auto-enrollment. Of these plans, more than 60% are also deploying auto-escalation, i.e. annual increases to the initial auto-enrollment amount. And, as noted below, participants are overwhelmingly in favor of these “do it for me” features.

It is important for plan sponsors to note that Auto Features often engender some additional administrative attention. Further, retirement plan committees are finding that, in order to have a meaningful impact, the starting percentage for auto-enrollment needs to be higher than the historical default of 3% of salary.

However, when it comes to ensuring your participants are ready to retire, Auto Features can play an extremely significant role.

Auto-Escalation GraphII

 

Benchmarking Your Company’s Financial Wellness Program

October 12th, 2017 by Jonathan Leidy

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Financial wellness is more than just a buzzword or a “feel-good” benefit: when effectively implemented, it can be a powerful tool to help employees take control of their financial lives and help your company reach organizational goals.

This article will share insights on program partners and workplace benefits, as well as benchmarking tips and strategies that seek to improve financial wellness and increase employee engagement. Read the rest of this entry »

Understanding Corrective Distributions

August 21st, 2017 by Jonathan Leidy

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Money Back is Good, Right?

Refunds can be great if you are referring to tax returns, or money back from an unfulfilling purchase. However, when it comes to your company’s retirement plan, refunds or corrective distributions are red flags indicating a deeper problem. They can be an administrative nightmare for plan sponsors and cause undue stress to highly-compensated employees who may be forced to refile their taxes.

What are Corrective Distributions?

Employees within your workforce are divided into two groups: highly-compensated employees (HCE) and non-highly compensated employees (NHCE).

HCE Table

Both groups have a desire to retire and contribute what they can to the company’s defined contribution plan, however their difference in pay will affect the amount which they can put away annually.

As a check on plan design equality, the IRS requires that both HCEs and NHCEs contribute to their 401(k) plans at similar percentages. If owners and managers contribute at far higher rates than their workers over the course of the year, the amount these executives have “over paid” will be refunded, which poses a problem for all parties involved. Read the rest of this entry »

Pulse Image_Article 1 - Benchmarking - Q2 2017_Ready

As people age, it becomes increasingly important that we all go to the doctor for regular checkups; checkups can lead to valuable changes in our lives… everything from the addition of a daily multivitamin to identifying the early stages of cancer. No one can make us go to the doctor, but it’s critical to prioritize monitoring and checking up on our health.

In the 401(k) industry, it is becoming more apparent that plans need to be reviewed regularly (at least annually) and more thoroughly in order to adequately address fiduciary responsibility and duties. However, many companies haven’t made benchmarking a priority even with recent 401(k) lawsuits.

If you have not yet made benchmarking your retirement plan a priority, here are four reasons why you should: Read the rest of this entry »

Portico Principal Jonathan Leidy Featured on HR Solutions

November 12th, 2014 by Jonathan Leidy

HR Solutions, a leading provider of best-of-breed services in human resource administration and management, featured comments from Jonathan Leidy, Portico principal, regarding the value to employers of offering a 401(k) match.

Of course, offering a match is universally valued by employees, often times more than increased current compensation.  However, it can have additional benefits for employers beyond  simple employee attraction and retention, not the least of which is an increased level of retirement readiness among their employees.

To see Leidy’s full comments and to read the rest of the article follow this link:

http://bit.ly/1pSEKg7

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