Defined Contribution Plans

This broadly defined station houses posts about topics that encompass all types of employer-provided defined contribution plans — not just 401(k)s. These include plans in other countries, etc.

 

 

 

Defined Contribution Plans

Defined Contribution Plans

By John Iekel7/1/2014 • 0 Comments

Nondiscrimination tests, sometimes described as the “rocket science” of the tax compliance world, can make an employer run afoul. And that’s exactly what happened to 57,277 of the 401(k) plans that Judy Diamond Associates reports in a study it recently released. The study says that the plans in question failed the most recent nondiscrimination tests they conducted in compliance with IRS regulations.  READ MORE

By John Iekel6/27/2014 • 0 Comments

According to Acting Director of IRS Employee Plans Thomas Petit, the IRS still lists 401(k) plans among its top examination priorities. Petit provided that confirmation to attendees of the ASPPA Regional Conference in Chicago. READ MORE

By John Iekel6/24/2014 • 0 Comments

Critics of 401(k)s argue that they will not deliver on what they promised. But MSN Money reports that the Employee Benefits Research Institute (EBRI) has provided empirical evidence that their assessments may be very much off the mark. 
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By Fred Barstein5/22/2014 • 0 Comments

While assets in IRAs are larger than those in DC plans, the vast majority of their growth comes from rollovers, according to research from EBRI. READ MORE

By John Iekel5/16/2014 • 0 Comments

Auto enrollment and escalation can be very useful in boosting plan participation and setting in motion all the good effects that result from that. But like medicines, they should be used properly — and if they’re not, they can cause harm. So argues a new white paper from Milliman, “Auto enrollment: Two Sides to Every Coin.”  READ MORE

By Andrew Remo5/14/2014 • 0 Comments

Lauding the federal Thrift Savings Plan as “one of the most efficient savings plans in America,” Sen. Marco Rubio (R-Fla.) urged that the DC plan for federal employees be made available to private workers nationwide. READ MORE

By John Ortman5/12/2014 • 0 Comments

Maryland Gov. Martin O’Malley (D) has created a task force to explore how his state can improve retirement security for private sector employees, with an eye toward recommending further action. READ MORE

By John Iekel5/9/2014 • 0 Comments

Workers are more concerned about — and more interested in doing something about — their retirement income than they are about financing their health care, a new Towers Watson study reveals. In fact, not only are they more concerned about setting something aside for their retirement, a majority said they are even willing to trade other benefits for guaranteed retirement income later.  READ MORE

By John Iekel5/6/2014 • 0 Comments

The Great Recession wrought a lot of havoc — and 401(k)s did not escape the maelstrom. Many consider the recovery of the U.S. economy to be very gradual; a recent report by Gallup indicates that the same may be said for that of confidence of those not yet retired in 401(k)s as a primary source of retirement income.  READ MORE

By John Iekel4/27/2014 • 0 Comments

More and more employers are making Roth accounts available within their DC plans — and more employees are taking them up on the offer, according to a new white paper from Aon Hewitt. The number of employers that offer Roths within their DC plans more than quadrupled over the last six years, hitting 50 percent by last year. 
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By John Iekel4/25/2014 • 0 Comments

Defined contribution plans that were rewritten between May 1, 2008 and April 30, 2010 and that the IRS pre-approved need to be restated with the IRS. The six-year restatement period begins May 1, 2014 and ends April 30, 2016. READ MORE

By John Iekel4/25/2014 • 0 Comments

In two recent pronouncements, the IRS issued plan document guidance for pre-approved defined contribution plans being restated for the Pension Protection Act of 2006 (Announcement 2014-16), as well as 403(b) arrangements (Revenue Procedure 2014-28). According to the latest ASPPA asap, written by Richard A. Hochman, the guidance is a mixed bag. READ MORE

By John Iekel4/24/2014 • 0 Comments

A recent GAO report found that while 81,000 new employer-sponsored retirement plans were formed during the 3-year period between 2009 and 2011, the overall trend was negative due to plan terminations — even with increased tax incentives. In addition, new plan formation during that period was below 2003-2007 levels. But the news was not all bad: The number of participants grew. READ MORE

By John Iekel4/14/2014 • 0 Comments

The Pension Benefit Guaranty Corporation has proposed allowing an employee to roll over funds from a DC plan into a DB plan.The proposal, which the PBGC issued on April 1 and was published in the Federal Register on April 2, is intended to increase returns by making rollovers easier and removing limits that could inhibit retirement saving.  READ MORE

By Ronald Triche4/12/2014 • 0 Comments

The IRS, in Notice 2014-19 and related FAQs, says that retirement plans have to recognize same-gender spouses and spells out how. The notice and FAQs, which the IRS issued April 4, are a follow-up on Revenue Ruling (Rev. Rul.) 2013-17, which provided general guidance on the tax implications of the Supreme Court’s decision in U.S. V. Windsor (the DOMA case). Notice 2014-19 and the FAQs specifically focus on retirement plans.  READ MORE

By John Iekel4/10/2014 • 0 Comments

Many employers match a certain percentage of what their employees defer into their 401(k)s. In the wake of the recent debacle at AOL, Investment News looked at the advantages and disadvantages of providing the match on an annual basis. READ MORE

By John Iekel4/9/2014 • 0 Comments

Your clients offer 401(k) plans, and all have 401(k) plan committees. Those committees have fiduciary responsibility, and it’s in your clients’ interest to make sure they are fulfilling their duties. They can do that through meetings of those committees and quarterly reviews, our friends at the 401khelpcenter remind us, and offer some tips on those functions. READ MORE

By John Iekel4/8/2014 • 0 Comments

Offering participants too many options can discourage enrollment. But what’s the “sweet spot” in terms of the optimal number of enrollment options? A test by Fidelity found that 78 percent of participants preferred a three-part enrollment option — and that those who chose that option contributed more.

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