This issue’s topics include:

RMDs and “lost” participants

Steps to comply with your fiduciary duty

Losing contact with former participants who have vested benefits remaining in your plan can be problematic for both the former participants and the plan sponsor. The issue becomes more urgent when it’s time for them to begin receiving their required minimum distributions (RMDs) the year after they hit 70½. This article takes a look at why it’s a problem and what plan sponsors can do about it.

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How plan eligibility can help achieve recruitment goals

In a tight labor market, employees may feel more confident about finding another job if they’re unhappy with the one they have. For plan sponsors, 401(k) plan participation eligibility requirements take on greater significance in this market. In general, employers can require a new hire to wait a year before being eligible to participate in a qualified retirement plan, in addition to requiring that the employee be 21 years old. This article discusses the pros and cons of giving new employees the opportunity to enroll in the plan immediately.

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Plan advisor fiduciary category status: It’s more than numbers

Like so many other facets of retirement plan management, the role of plan advisors who help you with plan investments is governed by ERISA. And it may seem that many plan sponsors speak in ERISA code sections. For plan sponsors, the question is: Do you need a 3(38) fiduciary, or is a 3(21)ii fiduciary more fitting? This article reviews the duties of each and why a plan sponsor may choose one or the other.

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Should your 401(k) vest now or later?

Survey data from the Plan Sponsor Council of America (PSCA) indicates that roughly 40% of 401(k) plan sponsors provide immediate vesting on their matching contributions. In theory, employers that offer immediate vesting on matching 401(k) contributions might have a leg up on other companies when recruiting workers in a tight labor market. This article discusses why immediate vesting is an important aspect of your recruiting strategy.

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Compliance alert

This feature lists a few key year-end tax reporting deadlines for December and January.

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notebook reading employee benefits to discuss plan eligibility and recruitment goals

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 Employee Benefit Plan Services, please feel free to contact me directly.

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