This issue’s topics include:
Deciding what to do with orphaned 401(k) plan accounts
Sponsors of qualified retirement plans with orphan accounts need to consider whether such accounts are a problem. This article examines the state of orphan accounts and why the way plans charge administrative fees can help determine whether it’s beneficial to keep them in the plan. A short sidebar discusses the plan sponsor’s fiduciary duty to all plan participants, whether they’re active employees, former employees who have moved on to other jobs, retirees or beneficiaries.
How high can you go?
Participants willing to accept higher default deferral rates
It’s generally accepted that a 3% deferral rate won’t get many employees where they need to be financially as they approach retirement. Most employees will need a figure closer to 10%, yet 3% has traditionally been the most common default deferral rate used by plans that auto-enroll participants. This article highlights why this is changing.
Reimbursement road map for sponsor services
When retirement plan sponsors perform administrative services on behalf of the plan, they can be reimbursed by the plan for those services. This brief article examines why meticulous expense documentation is essential and reviews a recent case on the subject.
Why adding a Roth 401(k) option could boost employee savings
A decade after they first became available, Roth 401(k) plans are now offered by many employers. Employees are also getting on board — particularly the younger ones — even without fully understanding how they work. This article looks at the pluses and minuses of Roth 401(k)s compared to traditional 401(k)s and Roth IRAs and reviews some data that highlights how employees are reacting to the Roth 401(k) option.
This feature lists a few key year-end tax reporting deadlines.
As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please feel free to contact me directly.
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