The reconciliation of the tax reform bills working their way through Congress is prompting retirement industry experts to speak up. Many are expressing concern that the unintended consequence of the some of the proposed changes would create a disincentive for some business to offer or maintain 401(k) plans for their employees.
Topic Archive: 401(k)
The IRS has released the 2018 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.
"Bitcoin may be the hottest thing going in the investment world, but 401(k) plan participants aren’t likely to see it on their regular investment menus anytime soon," writes Jasmine Ye Han in Bloomberg BNA.
"The 401(k) service sector has evolved considerably since its introduction in the Revenue Act of 1978," writes DWC Partner Keith Clark in 401(k) Specialist.
Our firm sponsors a 401(k) plan that includes a 3% of pay safe harbor contribution. The plan also includes a profit sharing provision, but the only company contribution we usually make is the safe harbor.
Whether we’re talking fashion or music or architecture or barber shops, it seems things that have faded from existence eventually come back around. See if this cycle looks familiar: cutting edge becomes status quo becomes so last week becomes so [insert decade] becomes retro becomes vintage.
When I was kid, I used to love Schoolhouse Rock during the commercial breaks of Saturday morning cartoons. Even now, I have them all on DVD as well as a CD of covers by various rock musicians, and I still sing along with all of them word-for-word!
If you’ve spent any time working with retirement plans, you know how complicated they can be. It seems like every rule has an exception and an exception to that exception. It is no wonder that accidents occasionally happen despite everyone’s best efforts to follow the rules.
Ever see the movie Men In Black? One of my favorite lines is when Tommy Lee Jones says to Will Smith, “Fifteen hundred years ago, everybody knew the Earth was the center of the universe. Five hundred years ago, everybody knew the Earth was flat; and fifteen minutes ago, you knew that humans were alone on this planet. Imagine what you'll know tomorrow.”
Back in March, Assistant Secretary of Labor Phyllis Borzi testified before a Senate committee, expressing concern about whether open MEPs can be treated as single plans under ERISA since there is no commonality among adopters. A recording of her testimony is here, with the MEP comments beginning around the 36th and 43rd minutes. Some commentators thought the testimony was a sign of what DOL’s official position would be, while others suggested it gave no cause for concern, because the Internal Revenue Code does not require the commonality that Asst. Sec. Borzi described.