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The 401(k) Turns 40

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The 401(k) Turns 40
In 2018, the 401(k) plan celebrated its 40th birthday! Though extremely popular today, 401(k) plans came about almost by accident. IRC Section 401(k) was passed into law as part of the Revenue Act of 1978 and was included to limit executive compensation. However, in 1980, Ted Benna of the Johnson Companies used the provision to create and get IRS approval of the first 401(k) plan for his company. For this he is often referred to as the father of the 401(k).At its inception, employees could contr...
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Know Your Options

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Know Your Options
If your plan offers a Roth 401(k) provision, your participants might ask, “Which one is better for me?” As the availability of Roth options in 401(k) plans and Roth contribution percentages continue to rise, it’s important to be able to guide participants in making the right choice.401(k) plans offer many advantages to participants; the ability for accounts to grow on a tax-deferred basis, the chance of receiving employer contributions in the form of a match or non-elective con...
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It's Testing Season!

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It's Testing Season!
Qualified plans must perform annual testing to be sure that the plan doesn’t unfairly discriminate in favor of "highly compensated employees" (HCEs) or exceed the contribution limits set forth by the IRS. Depending on your plan provisions, it isn’t just one calculation, but a series of tests that show that your plan is not discriminatory. If your plan is audited, the auditor is looking for proof of this compliance.Since most retirement plans operate on a calendar year basis...
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Helping Hands

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Helping Hands
One of the most prevalent and difficult challenges for many twenty somethings these days is the repayment of their, often substantial, student loan debt. Statistics show that the average college graduate with a bachelor’s degree left school in 2016 with $28,446 in student loan debt.  While paying off this mountain of debt is certainly a difficult task on its own, doing so and contributing toward retirement can be a seemingly insurmountable challenge. But, there’s hope. A recent ...
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Port in the Storm

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Port in the Storm
Natural disasters can cause upheaval in many aspects of victims’ lives and this destruction often extends to financial matters. What should otherwise be routine compliance for plan deadlines can prove difficult in these extreme events and the government tends to grant temporary relief in such cases.The Department of Labor announced Oct. 26th that it has published employee benefit plan compliance guidance and relief for victims of recent Hurricanes Florence and Michael. The relief incl...
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'Tis the Season

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'Tis the Season
It’s the time of year when Plan Sponsors scramble to deliver the myriad notices required to be given to their participants.  Even with the help of service providers, the sheer number of notices can be overwhelming.  Below is a summary of the notices that may apply to a calendar year 401k plan.Safe Harbor Notice – December 1st marks the deadline to distribute a notice of intent to use a safe harbor formula in the 2019 plan year. This notice must be provided to part...
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