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Is There a Plan Design that Combines the Benefits of Automatic Enrollment and Safe Harbor?

DWC 10/15/19
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 employees to save for retirement.  Automatic enrollment would help with participation, but we would have to set the default rate too high in order for ...
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What is Automatic Enrollment and How Does it Work?

DWC 09/17/19
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 encourage our employees to save for retirement.  I’ve heard a lot about something called automatic enrollment and how it can be a great tool to get ...
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Your Safe Harbor Actually Isn't? We've Got a Fix for That!

DWC 08/22/19
We’ve been through a few Corrections of the Quarter together now, and we appreciate you being along for the ride.  We feel this is pretty good stuff but, at the heart of it all, we’re pension geeks (no point in hiding it).  And while the rules and regulations get us going, we have a geeky passion for the opportunity to find creative solutions.
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What is the Deadline to Implement a Retirement Plan for the Current Year?

DWC 08/13/19
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 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; ...
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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 ...
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Safe Harbor 401(k) Match vs. Nonelective: Two Words for the Same Thing or Two Different Options

DWC 06/11/19
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 to become eligible for the plan, and they are asking me questions about the company matching contribution.  From what I can tell, we make a ...
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What Does Safe Harbor Mean, Exactly?

DWC 05/28/19
Facts When we set up our new 401(k) plan last year, we decided not to add a safe harbor provision because we were not in a position to commit to the required contribution.  Then we heard our TPA say something about our deferral deposits fitting within the safe harbor deadline.  Now I’m just confused.
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DWC News Update: House Passes the SECURE Act

DWC 05/24/19
-A breakdown of breaking news from DWC's Managing Partner, Keith Clark If you are reading the mainstream press, the SECURE Act being signed into law is just around the corner.  While the overwhelming bi-partisan approval in the House of Representatives is an important (and increasingly rare) development, there are still a number of steps that must ...
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Top Heavy vs. ADP: What's the Difference?

DWC 05/7/19
Facts As a plan sponsor, I do my best to review the annual compliance reports my TPA sends to me, but to be honest, it might as well be written in a foreign language.  For example, several of our participants were recently required to receive corrective refunds due to contributing too much for 2018.  I thought it was because our plan was top heavy ...
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How Can We Pass Nondiscrimination Testing with Low Non-HCE Participation?

DWC 01/22/19
Facts I am fed up with sponsoring my current retirement plan.  My wife and I contribute the maximum amount we can in deferrals each year.  Due to low participation by our employees, we fail ADP testing every year and have to take refunds.
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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.