One of the most frequent phone calls we receive — whether from a small business owner or an advisor working with one — starts something like this: "I [or my client] want to set up a retirement plan, ...
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Retirement Plan Design
Extra! Extra! Stay up to date on the latest news about the DWC team.
The retirement plan landscape is ever evolving. We distill the details so you don’t have to!
We’ve corralled the best news from inside the beltway – not only regulations, but also new legislation from Congress as well as relevant guidance from the IRS and Department of Labor. In true DWC fashion, we don’t just repackage a recitation of the rules, we provide our thoughts and commentary about what those rules mean to you.
We know cash balance rules can be intimidating! Settle into the Cash Balance Corner and let us break it down for you.
Have 401(k) questions? We have 401(k) answers! We bring you answers to many of the common questions we receive.
A behind-the-scenes look not at how the sausage is made, but why we make it the way we do. (Hint: It’s all about the best interests of the client.)
We’re all about learning from other people’s (alleged) mistakes. We might not be attorneys, but we still follow benefits-related cases and summarize lessons and key take-aways. No hourly fee needed for these insights!
A deeper dive into retirement plan topics doesn’t have to be headache-inducing. Our Pension Primer articles provide depth of information without depth of jargon!
Which retirement plan design is right for you? With so many design options it can be difficult to keep them all straight. We've taken all the guess work out of it with our Plan Design Comparison ...
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Want to maximize the value of your HR dollar in your defined contribution or defined benefit plan? You need a cost benefit analysis.
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Thousands of 401(k) plans are designed each year to promote savings in the most cost-effective manner. Most are established as stand-alone plans and will remain that way for their entire existence. ...
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Outside the complex world of qualified plans, the term “nondiscrimination” can take on many different meanings based on many different points of view. Fortunately, in the qualified plan world, the ...
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Sponsoring a retirement plan can provide significant benefits to a company (and its participants). But with great benefits comes great responsibility…responsibility to follow all of the various ...
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Sponsoring a retirement plan can provide significant benefits to a company (and its participants). But with great benefits comes great responsibility…responsibility to follow all of the various ...
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DWC
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Adding an Employee to Your Cash Balance Plan? You Should be Thinking This Article is "Just What I Needed"
Sponsoring a retirement plan can provide significant benefits to a company (and its participants). But with great benefits comes great responsibility…responsibility to follow all of the various ...
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DWC
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Overtime Is Up and Bonuses Are Down: Will This Year's Irregular Compensation Impact our Retirement Plan?
Facts We sponsor a 401(k) plan for our employees and provide a company matching contribution to those who defer. Our plan specifies that in calculating that match, we only consider employee base pay ...
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Facts All year long we've been leaving little rock 'n' roll Easter eggs in our Cash Balance Corner feed. ICYMI: Each post title incorporates one of our favorite songs. And for our 20th century rock ...
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Facts Like many businesses, we had to furlough some employees earlier this year in response to the coronavirus shutdowns. We’ve been fortunate enough to bring back a few of these employees, but a ...
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DWC
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Are There Plan Design Options We Should Consider as Part of the Mandatory Cycle 3 Plan Document Restatement?
Facts We’ve been following your recent posts about how making even small changes to certain plan provisions can make managing the plan easier without sacrificing our objectives. Making life easier, ...
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Wow! We have covered a lot of ground over the last few entries, learning about how cash balance benefits are earned and funded. So far, our plan sponsor Robert Smith, Inc. has dealt with the ...
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Facts We’ve been following along with the last few Questions of the Week and think we’re pretty comfortable with how we want to set up eligibility for our 401(k) plan. We’re definitely looking to ...
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Facts We are looking to set up a 401(k) plan for our company. Our workforce includes both hourly and salaried employees as well as full-time, part-time, and seasonal workers. For now, we really want ...
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Thanks to the last few CB Corner entries, we now know that our plan sponsor Robert Smith, Inc. has a wide range of options when it comes to making contributions to its cash balance plan.
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Facts We’ve sponsored our 401(k) plan for several years now, and it’s been very well-received by our employees. Believe it or not, though, one of the biggest challenges we have had is around when ...
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Facts We have made profit sharing contributions each year, and we plan to continue to do so every year that our financial situation allows. Historically, we have contributed the same percentage of ...
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In our last episode, we mentioned we would move on to developing an ideal funding policy. Before doing so, we realized there is one more aspect of the maximum allowable contribution we need to cover ...
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DWC
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Can We Tweak our 401(k) to Allow Additional Savings for Reasons More Immediate than Retirement?
Facts Our company takes a holistic approach to the benefits we offer. We want our employees to have access to benefits that assist them with their overall financial security. We offer several health ...
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Facts My company has sponsored a 401(k) plan for many years, and it provides for a discretionary matching contribution. I’ve always sought to build in as much flexibility as possible, so having ...
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Facts We currently sponsor a 401(k) plan and have been debating adding a safe harbor provision for 2021. While the idea of buying our way out of the ADP/ACP tests is appealing, we’re nervous about ...
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Let’s do a little recap. In the last two installments, we discussed what Robert is required to contribute (the Minimum) to his cash balance plan and what he should contribute (the Recommended). Now, ...
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Congratulations on making it through our last installment and to this one. We typically do not like to get that deep into the weeds, but hey, this is actuarial stuff after all, and you can’t always ...
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In our last episode, we showed how the cash balance benefit for our owner, Robert Smith, accumulates over time. In our Perfect World (no offense Huey!), Robert contributes exactly $100,000 to the ...
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Facts We’ve been debating implementing a 401(k) plan for 2020. After much back and forth, we’ve decided its “a go!” for this year. Since we are still in a more relaxed summer vacation mode, we’d like ...
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In our last installment, we took a look at the different ways to define the contribution credits in a cash balance plan. For Robert Smith, the owner and only employee of Robert Smith, Inc., the ...
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Facts We currently sponsor a 401(k) plan for our company. While we certainly want to be able to provide meaningful benefits to the owners, our goal is to encourage all our employees to save more for ...
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Now that we know the basics, we can apply our knowledge to (almost) real life scenarios. We will follow our fictitious company: Robert Smith, Inc., an S-corporation with no employees other than the ...
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Welcome to Cash Balance Corner! We've created this bi-monthly column to teach you everything you need to know about defined benefit and cash balance plans in order to help you make the best possible ...
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Facts We have several employees who have had to take time off from work either because of a loss of childcare or to care for affected family members due to the coronavirus. As a result of recent ...
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Facts My company sponsors a 401(k) plan that provides for a discretionary matching contribution, which we deposit each pay period along with employee deferrals. Given the economic uncertainty, I’m ...
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Facts Given the current uncertainty in the world economy and the unknown ongoing affects of coronavirus, I’m looking at all financial obligations for our company, and for opportunities to reduce ...
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Facts We are considering adopting a new cash balance plan. We really like the higher contribution amounts, but we keep hearing that the contributions are fairly rigid and inflexible.
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In our last Correction of the Quarter, we looked at related companies setting up different types of plans for their respective employees and noted that this sort of structure isn’t “necessarily” a ...
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Facts My company sponsors a safe harbor 401(k) plan and every year my TPA sends me a reminder to distribute a notice to participants. It’s not the biggest hassle but I’ve wondered if it’s really ...
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Facts Our business currently has a retirement plan and we are considering adding automatic enrollment. We have heard that there are new tax credits available to employers who include automatic ...
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Facts As the owner of a beachside hotel, I sponsor a calendar year 401(k) plan for my employees. In the summer we hire many part-time employees to assist with the uptick in guests and activities. Our ...
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Facts Although my New Year’s resolutions include less procrastination it’s likely that by the time Valentine’s Day gets here that good intention will long be in my rear view. As I draft these 2020 ...
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Facts Our business is thinking of setting up a retirement plan. We’ve heard that there are new tax credits offered under the SECURE Act available to employers who set up new plans.
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Facts We are considering adding automatic enrollment to our 401(k) plan. We’ve read some of the other posts on your website about EACAs and QACAs, but that all seems like a lot of extra complexity ...
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Facts We just rehired an employee that used to work for us but who terminated almost 4 years ago. She was eligible for our 401(k) plan during her previous tenure but took a distribution of her ...
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Facts Our company operates on a calendar tax year, but our 401(k) plan runs on a fiscal year ending each June 30th. It is a real hassle to manage two different year-ends, so we asked our TPA about ...
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DWC
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Is It Possible to Split Eligibility to Allow for Deferrals but to Postpone Safe Harbor Contributions?
Facts We allow new employees to join our 401(k) plan on the first of the month after they are hired. They become eligible to make deferrals and also receive the company safe harbor contribution at ...
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Facts My company sponsors a 401(k) plan, and we fail the annual ADP test pretty consistently. We really want to increase participation; not only to help our test results, but also to encourage our ...
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Facts Our company sponsors a 401(k) plan, but very few of our participants are contributing. We started the plan as an added benefit to help attract and retain employees, but we also truly want to ...
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UPDATE | This QOTW has been updated to reflect changes included in the SECURE Act, signed into law on December 20, 2019. The updated article is available here. Facts Returning from sunny days at the ...
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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 ...
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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 ...
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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 ...
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DWC
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Safe Harbor 401(k) Match vs. Nonelective: Two Words for the Same Thing or Two Different Options
Facts I recently got a promotion at work, and one of my new job responsibilities is to help manage our company’s retirement plan. It is a safe harbor 401(k) plan. A number of our employees are about ...
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Facts I set up a cash balance plan two years ago and have put in the minimum required contribution each year. Now, in my third year, I would like to make the maximum deductible contribution, which is ...
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Facts We set up our company 401(k) plan soon after we started the business. At the time, being able to afford to make a match or profit sharing contribution seemed so distant as to not be worth ...
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Introduction Whether you are starting a new plan or reviewing your current plan design, the key to success is access to knowledge for selecting the best plan.
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Can We Change our 401(k) Plan Eligibility Requirements to Exclude Employees Who Have Already Joined?
Facts Our company has quite a few employees who only work a few hours each week. When we setup the 401(k) plan, we wanted to allow all our employees to save, so we set the eligibility requirement at ...
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Facts Our 401(k) plan provides for a matching contribution of 50% of the first 6% deferred by each participant (for a maximum match of 3% of pay per year). We deposit the matching contributions to ...
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Facts When certain employees terminate employment with our company, we agree to continue severance payments for a period of time after they leave. Some of these employees have asked us to continue ...
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Facts Our company has a safe harbor 401(k) plan. In addition to employees making deferrals, we make a company contribution equal to 3% of each person’s compensation. We deposit both types of ...
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Facts Our company has a 401(k) plan that provides a matching contribution equal to 100% of the first 4% that each employee contributes. We set it up that way to ensure that our highly compensated ...
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Facts Our business is considering setting up a 401(k) plan for our employees. We know that it can include both employee contributions and company contributions, but we keep hearing about all sorts of ...
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Facts Our company pays a number of different types of bonuses—signing bonuses, spot bonuses, holiday bonuses, production bonuses, etc. You get the idea. We know that bonuses paid once the employee ...
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Facts I am self-employed, and my company does not have any employees. Occasionally, my spouse will help out with various projects but does not work for the company full time. It is likely that I will ...
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You are currently maximizing the contributions to your 401(k) profit sharing plan. While this level of savings is beneficial, you still want to be able to save more, plus you are looking for ...
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Facts We are planning to establish a new 401(k) plan for our employees. Between getting set up with a recordkeeper, selecting the investment menu, working with our TPA to prepare the plan documents ...
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"Much has been written lamenting the near extinction of the corporate pension plan," Chris Carosa writes in a book excerpt posted to FiduciaryNews.com. "Are reports shaded by rose-colored glasses? ...
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Facts Our 401(k) plan requires employees to work for us for six months before they become eligible to join. Pretty much all of our employees have been full time and have worked continuous, ...
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More and more small, professional companies are interested in new comparability, or cross-tested, plans.
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Facts 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 ...
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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 ...
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At the end of August, I made my first trip to Burning Man, an annual event held in the Black Rock Desert of northern Nevada. With 10 guiding principles, it involves art, music and free-spiritedness. ...
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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 ...
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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 ...
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