Prime Capital Retirement

My favorite question this week: We bumped over the 100 employee limit, so what happens with our SIMPLE? Fortunately, the Code provides a grace period of two years, unless the limitation is exceeded through an acquisition. And there are many reasons to like SIMPLEs: no loans, no 5500s, and easy payroll integration. With other retirement plans, employees can certainly save more than the $16,000 SIMPLE limit. But SIMPLES make sense for many small businesses and, as applicable, you avoid the growing state mandates. #SIMPLEplan #Fiduciary #FiduciaryFriday #FF101824

Should we return to traditional pension plans as the backbone of retirement savings? An increasing number of voices and trends seem to be?leaning toward, if not advocating for, this position. An example is retirement income solutions for DC plans (401k, 403b, and 457). IBM's recent decision to revamp its cash balance plan is another. Criticisms of "401k world" include: 1) leaving the lowest income workers behind with their inability to save, 2) the foolishness of providing daily liquidity to potentially reactive investors, and 3) the failure of Open Architecture to provide improved investment results. Such a return makes sense with meaningful change in the law: isolate pension plan assets and insulate the company balance sheet from the pension liability. To me, it's the latter issue that's resulted in CFOs wanting to jettison the pension plan—that liability can seriously impair a company's balance sheet and dwarf the results of operations. And yet, this oversight from sophisticated financial players is needed while keeping the retirement plan savings system private. Secure 3.0, anyone? #401k #PensionPlans #RetirementIncome #Fiduciary #FiduciaryFriday #FF062824 #FF101124

What if a company’s 401k match could be used to fund an HSA or allocated to repayment of student loans instead? Under a recent private letter ruling (PLR) the IRS agreed to allow this: employees will direct which benefits receive the company contribution. And I’m not sure what to think… I’ve grown accustomed to believing that retirement savings is so overlooked and the time value of money almost always means: fund your retirement accounts Early if not Often. But I think I have to side with trusting people to understand their own situation and the freedom to choose. The trend consideration is also interesting, especially since the Abbott PLR in 2018 helped pave the way for Secure 2.0’s provisions that allow matching on student loan payments. #TotalRewards #Secure2 #Fiduciary #FiduciaryFriday #FF100424

The best part of attending the Iowa SHRM Conference? Seeing these 3 familiar faces- Shout out to the Prime Capital Financial rockstars—Darin Henderson, AIF? Payton Thielmann and Scott Liggett, J.D., AIF? Their expertise and dedication are what truly set Prime Capital apart in the industry. If you're curious about what makes this team exceptional, I’d love to introduce you! Don’t hesitate to reach out—let’s connect. #IowaSHRM #PrimeCapitalFinancial #Leadership #EmployeeBenefits #FinancialPlanning

Is this the beginning of the end of the forfeiture litigation? This week, PLANSPONSOR reported on the dismissal of the litigation against Thermo Fisher Scientific: "Robinson’s decision stated that the Department of the Treasury and Congress have 'long understood' that forfeitures in defined contribution plans could be either: reallocated to the remaining participants under a nondiscriminatory formula, used to reduce future employer contributions, or used to offset administrative expenses. In addition, Robinson wrote in the ruling that, generally, decisions concerning the design, establishment or modification of an employee benefit plan are settlor functions, not fiduciary functions, because they do not 'implicate program management,' whereas transactions that deal with a pool of assets, like selecting investments, are fiduciary in nature." But the All Clear ought not be sounded. Last year, the Department of Labor brought an action against a plan sponsor for using forfeitures that conflicted with plan documents. That sponsor was ordered to restore more than $500,000 to the plan and was hit with $57,500 in penalties. This week's article is a cautionary tale, and retaining a trusted professional to advise retirement plan committees on these matters shouldn't be underestimated. #401kLitigation #ClassAction (even if Dimou was amended) #Fiduciary #FiduciaryFriday #FF120823 #FF051724 #FF080924 #FF092724