Posts Tagged ‘403b’

Hacked! Is Your Retirement Plan at Risk for a Cyber Attack

November 4th, 2018 by Jonathan Leidy

RPM Q4 2018_Pulse Image_Blog Article 3_ Hacked! Is your plan at risk for a Cyber Attack

Is cyber-crime on the rise?

You bet. In 2015, IBM’s chair, president and CEO Ginni Rometty said, “Cyber-crime is the greatest threat to every company in the world.”[1] Last year, billionaire investor and businessman Warren Buffett echoed that sentiment, claiming that “cyber-attacks are a bigger threat to humanity than nuclear weapons.”[2] In short, cyber-crime is extremely dangerous, and many businesses are vulnerable to cyber-attacks — some without even knowing it.

As a result, growing numbers of organizations are taking critical steps to protect their valuable data and PII (Personally Identifiable Information) from hackers and other cyber criminals. Cybersecurity is serious business, and retirement plan sponsors and committees should be aware of the trends and best practices surrounding it. Read the rest of this entry »

Retirement Readiness: A Marathon, Not a Sprint

August 29th, 2018 by Jonathan Leidy

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Training for the Financial Marathon

For many people, their ultimate financial goal is to reach a comfortable retirement with enough reserves to enjoy it. In many ways, achieving Retirement Readiness is just like running a marathon; it’s a long-term undertaking that takes loads of preparation and persistence.

As the sponsor of your company’s retirement plan, you play a crucial role in helping your employees reach these long-term financial goals. Imagine yourself as a trainer; you are there to build a training regimen that enhances your employees’ ability to achieve their goals and keeps them motivated along the way. Read the rest of this entry »

RPM Q3 2018_Pulse Image_Blog Article 1_ A Guide for Employers Dealing with Missing Participants

Locating missing plan participants can be a headache for any employer, but simply ignoring them is not an effective solution either. With the increase in the number of “pre-retired” missing plan participants, governmental bodies are now taking additional measures to provide solid guidance and solutions to help streamline this arduous process for plan sponsors.

The Background

Plan sponsors must understand why locating missing plan participants is important.  First, ERISA requires that plan fiduciaries (e.g., plan sponsors, employers) have a duty of prudence and loyalty to all plan participants and beneficiaries—whether or not the participant is actively contributing to the plan. Read the rest of this entry »

Should We Have a Retirement Plan Committee?

May 21st, 2018 by Jonathan Leidy

RPM Q2 2018_Blog Article_Should We Have a Retirement Plan Committee_ Pulse Image

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 »

What Does It REALLY Take To Retire?

November 17th, 2017 by Jonathan Leidy

Pulse Image_RPM Q4 2017_Blog Article 3_What Does it Really Take to Retire

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

RPM_Q3 2017_Pulse Images_Blog Article 1

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 »