The Stranger Things That 401(k) Plan Sponsors Should Be Aware Of
I haven’t watched Stranger Things, but I understand that it’s a show on Netflix set in the 1980s. Other than that and that Millie Bobbie Brown is in the show, I have no idea what it’s about because free time isn’t much of a thing for me. What I do know is that some strange things go on in the retirement plan business that you need to be aware of.

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A 401(k) Plan Sponsor’s Guide To Hiring A Financial Advisor
When it comes to your role as a retirement plan sponsor, outside of hiring a TPA (third-party administrator), the most important plan provider that you need to hire is a financial advisor. Unfortunately, like my favorite cereal, Cheerios, there are just so many varieties of financial advisors that it can be confusing what you should be looking for. So this article is intended to act as a guide for you as you select a financial advisor for your retirement plan or to review the incumbent advisor as part of your fiduciary responsibility.

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401(k) Plan Sponsors Should Avoid These Solutions That Look For Problems
For 24 years, I have helped retirement plan sponsors solve huge problems of their own. From a plan investing with Bernie Madoff to a plan that was late in depositing salary deferrals, I have seen almost every problem imaginable. Sometimes, 401(k) plan sponsors look for solutions for their retirement plan that create problems. This article is a caution that some “solutions” are no solution at all, but may cause problems you don’t need.

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Web access makes it easier to steal
14 years ago, I worked on a union money purchase plan. A participant claimed that their distribution check was stolen and demanded his benefit. The only problem is that the check was cashed at a check cashing place and a camera caught that plan participant cashing in his check. The union didn’t want to prosecute, so I had the participant waive his claim since he was paid.
I started in this business when everything was done by paper or by phone. In 1998, I didn’t think the web would allow such access that loans and distributions would be requested online. In 2000, I was just lucky to get my 401(k) balance by source and fund. Easier web access is only going to increase theft. These attempts will be far more successful than those who claim my Wells Fargo bank account was frozen since I don’t have any.
As a plan sponsor, you need to be more vigilant about the capabilities of your plan providers to detect fraud and do your job to avoid these thefts.
Make sure your plan is efficient
When you start fixing up the house and replacing appliances or items like the front door or the roof you realize that the replacements are more energy efficient. Replacing that old refrigerator or that washing machine can lead to some savings on your energy bills.

When it comes to retirement plans, there are so many of them that are inefficient in either their cost structure or plan design. While cost structure is disclosed to plan sponsors (who have the duty as fiduciaries to determine their reasonableness), plan design inefficiency is something that won’t be discovered until the plan goes through an independent review (like my Retirement Plan Tune-Up) or takes the plan to another third party administrator (TPA). Inefficient plan designs come in all sorts, but it wastes money like that 40-year-old furnace I replaced 11 years ago.

An inefficient plan design wastes money because it either makes less cost-effective contributions or it doesn’t maximize tax-deductible contributions to highly compensated employees. So it either wastes money in unnecessary contributions or is inefficient for tax savings.

In terms of wasting money, it could be a defined benefit plan that has outlived its usefulness or it could be a 401(k) plan with a new comparability plan design and a safe harbor matching contribution (because unlike a safe harbor 3% profit sharing contribution, you cannot use the safe harbor matching to offset any new comparability contributions to non-highly compensated employees like you could with the safe harbor 3% profit sharing contribution). A plan that doesn’t maximize contributions could be a 401(k) plan that consistently fails discrimination testing and doesn’t implement a safe harbor plan design or a plan that doesn’t offer a new comparability profit sharing allocation to highly compensated employees when the plan sponsor can afford it.

Retirement plans are a great employee benefit for retirement savings, but you should never forget the tax savings component it has.

So when I consistently state the claim that plan sponsors need to find a quality TPA that is not predicated on price but predicated on its competency and knowledge of cost-effective, retirement plan design.
When you look for new appliances, you always look for those with an Energy Star sticker. When shopping for TPAs, look for those who would deserve a Tax Star sticker (if one existed, don’t steal my idea!).
IRS announces 2023 limits
The Internal Revenue Service announced the 2023 contribution limits for retirement plans.

The salary deferral limit for 401(k) and 403(b) plans will have a $2,000 increase to $22,500, and the catch-up provision for participants aged 50 or over will increase from $6,500 to $7,500. That means participants age 50 and over may have salary deferrals totaling $30,000.

The amount individuals can contribute to their SIMPLE retirement accounts is increased to $15,500, up from $14,000.

Annual IRA contributions increased to $6,500 from $6,000, and the catch-up provision remained unchanged at $1,000.