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Defined Benefit vs. Defined Contribution: A Cash Balance Plan Primer

DWC 07/9/20
  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 decisions about your company retirement plan. Because a cash balance plan is a type of defined benefit (DB) plan, we'll start with a primer on the ...
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Should We Include Government-Mandated Coronavirus PTO When Calculating Company Contributions?

DWC 04/21/20
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 legislation, they qualify to receive compensation during their leave from work.
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How Do We Stop Our Discretionary Matching Contribution?

DWC 03/26/20
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 focused on doing what I can to ensure adequate cash flow to maintain operations, including making payroll.  That might mean we make the decision to ...
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Can We Suspend our Safe Harbor Contribution Mid-Plan Year?

DWC 03/24/20
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 risk.  We currently sponsor a 401(k) plan for our employees and provide a safe harbor contribution equal to 3% of employee compensation.
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How Can We Create More Flexibility in our Cash Balance Plan Contributions?

DWC 03/17/20
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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When the Grass Isn't Greener with More Plans, There's a Fix for That!

DWC 03/13/20
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 problem when it comes to 401(k) plans.  Well, as usual, the devil’s in the details, so we thought it was worth diving into what happens when this is a ...
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Have the Rules for Safe Harbor 401(k) Notices Changed?

DWC 03/3/20
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 necessary that this same information be provided to participants each and every year.
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What New Tax Credits are Available for Adding an Automatic Enrollment Feature to our Plan?

DWC 02/4/20
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 enrollment features in their plans.
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Am I Now Required to Include Part-Time Employees in my 401(k) Plan?

DWC 01/28/20
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 plan has always required employees to reach age 21 and complete a year of service before becoming eligible.  Traditionally, this has meant that ...
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Is It Too Late to Set Up a Retirement Plan to Get a Tax Deduction for Last Year?

DWC 01/21/20
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 resolutions, my CPA reminds me once again of all the tax benefits, personal and corporate, that a qualified retirement plan can offer.  Finding ...
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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.