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In the end, it costs more.
 There is nothing wrong with being thrifty. You should never pay the full price for something that you can get at a discount. Being thrifty is different from being cheap. Being cheap is about not wanting to pay for something just because you don't want to pay for it. I was a Vice President at my former Synagogue and nothing irritated me than members who didn't want to pay their dues when everyone knew they could afford to pay for it. When it comes to sponsoring a retirement plan, plan sponsors have a duty to pay only reasonable plan expenses, which means they have to be thrifty. Paying reasonable plan expenses isn't about paying as little as possible, so it means that plan sponsors don't need to be cheap. Quite honestly, they can't afford to be cheap because being cheap can cost a plan sponsor a lot more in the long run.
To read this article, please click here.
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You Can't Afford To Neglect These Parts Of Your 401(k) Plan
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Do it at your own risk
 We all know from your health, that if you neglect certain things, that it will hurt you later down the line. Whether it's your heart or your teeth, neglecting important health issues is only going to make the situation worse. The same can be said about being a 401(k) plan sponsor, there are certain things you might be neglecting that will negatively impact your plan and may cause you some pecuniary liability. This article is all about plan tasks that you're probably ignoring.
To read the article, please click here.
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Organization For 401(k) Plan Sponsors To Limit Their Liability.
Plan sponsors should be organized.
 Organization tools always pop up for sale after New Year's because a lot of people want to try to keep their resolutions. My local Costco always trots out the plastic bins and organizational stands and carts this time of year. One of the most fascinating and profitable stores is The Container Store, which sells all things in organizational and cleaning tools. If you're a 401(k) plan sponsor, there is no Container Store in handling your role as a plan fiduciary. However, you have this article that will tell you why you need to be organized and what you should keep organized.
For the article, click here.
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The biggest SECURE Act change of all.
Much bigger than a MEP.
 The biggest change under SECURE Act is the treatment of long-time, part-time employees under your 401(k) plan. Going forward, it will change how you see the 401(k) plan and how you will have to start measuring if you have long term, part-time employees.
Under current law, your 401(k) plan can exclude part-time employees from participation if these employees don't complete 1,000 hours of service in a year. The SECURE Act will require you to extend participation to any part-time employee who has worked at least 500 hours in each of the immediately preceding three consecutive 12-month periods (for salary deferral purposes only). That means you won't have to provide matching or other employer contributions to these part-time employees. These changes are effective for plan years beginning after December 31, 2020, but you won't have to consider hours of service before 2021 as part of this eligibility calculations.
That means that the change will take a couple of years before these part-time employees can be considered eligible. Before that time, your 401(k) plan will have to be amended to incorporate these new eligibility rules and you will need to update your payroll and/or human resources information systems to identify and track this new class of part-time employees for eligibility purposes.
I can't predict sporting events or the lottery, but I can tell you that this change will cause a lot of plan sponsors to make mistakes by failing to count hours and cover these part-time employees. So I think you need to start counting hours and keeping tabs who will be eligible.
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There is a cost to free plans
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A 401(k)m plan costs more, but lets you save more.
 There is nothing wrong with free unless there is a hidden cost involved. Small business plans that don't require filing a Form 5500 is great until you realize the cost in saving for retirement plans.
SEPs are a nice plan, but there is no opportunity for salary deferrals and you have to give the same percentage contribution to all your employees. A Simple IRA is nice too, but the deferral limit is a lot less than a 401(k) plan and again, contributions must be pro-rata, which means no greater percentage of contributions to you as owners. A solo 401(k) plan is nice too, but it's obsolete the moment you hire an employee.
Whatever your situation is as a plan sponso
r, you do yourself a disservice by not looking at all the different options of retirement plans out there and seeing what fits you.
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Check out That 401(k) Podcast.
The podcast you should listen to if you have the time.
 Please check out That 401(k) Podcast, where I co-host with Dan Venturi of Bright Worxx. We tackle important 401(k) subjects for both plan sponsors and plan providers. In addition, we talk about all the events I'm hosting. as well as important cultural allusions.
Find it
here and on Apple Podcasts
here.
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The Rosenbaum Law Firm Review, February 2020
734 Franklin Avenue, Suite 302
Garden City, New York 11530 Phone 516-594-1557 Fax 516-368-3780
Attorney Advertising. Prior results do not guarantee similar results.
Copyright 2020, The Rosenbaum Law Firm P.C. All rights reserved.
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