Topic Archive: 401(k)

Who Are All the Providers Servicing My Plan & What Do They Do?

DWC | 08/20/19

Facts

I sponsor a small 401(k) plan for my employees.  Sometimes, I get confused about which service provider to go to for different plan-related questions.  Time and efficiency are important to me (and so is cost), and it seems like having all these different providers might be overkill.  Recently, I was talking to a friend who is also a business owner, and she said she’s got one group doing all her plan work from A to Z.

Read More

What is the Deadline to Implement a Retirement Plan for the Current Year?

DWC | 08/13/19

Facts

Returning from sunny days at the beach, I’ve begun discussing my company’s year-end financial projections with my accountant.  Those conversations have been about as fun as a sunburn; it looks like my company and I are looking at a hefty tax bill.  My accountant has suggested on more than one occasion that I consider implementing a retirement plan to help minimize my tax burden, but I’ve just never gotten around to it.  Now, I’m kicking myself.

Read More

Is It Possible to Convert a Pre-Tax 401(k) Account to a Roth Account?

DWC | 08/6/19

Facts

We recently had one of the participants in our 401(k) plan ask if it is possible to convert her balance from pre-tax to Roth.  She has been a participant in our plan for many years and has both her own deferrals as well as company contributions (both match and profit sharing). Based on her current financial situation, she believes it would be more advantageous to convert to Roth so that she can receive distributions tax-free when she retires.

Read More

Can We Require Employees to be Employed at Year-End to Receive a Safe Harbor Contribution?

DWC | 07/30/19

Facts

Our company sponsors a safe harbor 401(k) plan.  Each participant receives a safe harbor nonelective contribution equal to 3% of his or her annual pay.  Our TPA calculates the safe harbor contribution for us after the close of each year, and we deposit it sometime before we file our company tax return for that year.  Each year, we have a couple of participants who terminated employment before year end, and we end up making contributions for them even though they are long gone by the time we make the deposit.

Read More

How Does a Participant's Divorce Affect our 401(k) Plan?

DWC | 07/23/19

Facts

One of the participants in our 401(k) plan is going through a divorce, and we just received a court order directing us to provide a portion of his account to his ex-spouse.  I thought that retirement plan accounts had special protection against legal judgments.

Read More

What Do We Need to Consider When Switching from a SIMPLE IRA to a 401(k)?

DWC | 07/9/19

Facts

We’ve sponsored a SIMPLE IRA for our employees for years and while it’s served its purpose, we are beginning to feel the limitations inherent in the plan.  As we begin to grow, we’d love to be able to add provisions for eligibility and to be able to reward our key performers.  I’m hesitant about making a change from this “known” commodity to a 401(k) plan but feel like we’ve outgrown our current plan.

Read More

The 2019 Retirement Plan Contribution Limits

DWC | 11/1/18

The IRS has released the 2019 contribution limits! Since not everyone was awaiting them quite as eagerly as we were, here is a quick summary.

Read More

Plan Sponsors & Fiduciaries: Here's What You Should Be Watching

DWC | 10/11/18

DWC stays on top of what's trending, and our self-proclaimed pension geeks often offer their insights in industry publications. As we transition into the fourth quarter the theme has been, "What Plan Sponsors Need to Know." Get caught up with this month's round up:

Read More

Delinquent Deposits of Employee Deferrals? There's a Fix for That!

DWC | 09/27/18

While it might not seem like that big of a deal if 401(k) deposits are made a couple days or weeks late, the Department of Labor (DOL) considers those payroll withholdings to be plan money on the deposit deadlines regardless of where the money is physically located.  To the extent those monies are still in the plan sponsor’s control, the delayed deposit is treated as a prohibited loan of plan assets to the plan sponsor, which is a very big deal (not in a good way).  If that wasn’t motivation enough to fix the delinquency, the fact that late deposits must be reported on the Form 5500 each year until fully corrected (which is like waving a red flag in front of a bull, only the bull here is the DOL) certainly should be motivation to fix it.  Pronto!


Read More

Breaking News: The IRS PLR on Student Loan Benefits in 401(k) Plans is Much Ado About Not Much

DWC | 08/21/18

We interrupt your regularly scheduled programming to highlight the IRS’ not-so-ground-breaking entrance into the world of student loan benefits in 401(k) plans.

Read More
The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.