The phones have started ringing, and email boxes are full. Everyone has caught the year-end planning bug! We love the opportunity to help our clients fine-tune their retirement plans and help our strategic partners get their new clients set up for next year. We enjoy it so much, in fact, that to help celebrate our new offices we are offering our clients a free 30-minute consultation this season.
Any of our clients are welcome to make an appointment to come visit our new office and sit down with their administrator, the administration supervisor, and/or our plan design team at no cost for 30 minutes any time between now and the end of 2015. Prospective clients are always offered a free initial consultation.
We can talk about anything at your consultation appointment. We may have identified issues in our Annual Administration cover letter or you may wish to include any of the following items on your agenda:
Compliance check
We can discuss compliance issues that may have been problematic in prior years, or about which you may have concerns:
- Deferral (ADP) or matching contribution (ACP) non-discrimination tests – we can run projections for 2015, discuss alternatives to the testing, or talk about how to possibly mitigate the disparity in the tests.
- Minimum coverage rules – how can you exclude a class of employees from participation in the plan, and if you do, how do you make sure you are following the rules?
- The plan’s top heavy status – we can discuss the consequences of being “top heavy” and/or possible remedies.
Contributions
- Budget – we can discuss the contribution budget you have and illustrate how those contributions might be allocated to you and your employees.
- Matching contribution formulas – if you are not getting the levels of participation you’re looking for, perhaps restructuring the matching contribution formula could help. Allocating 25% on the first 4% of pay deferred is the same as 100% on the first 1% of pay deferred. The 4% option gives the employees the incentive to save 4% instead of just 1%.
- Profit Sharing formulas – there are four different ways to allocate profit sharing contributions; one may appeal to you more than another. We can illustrate how each formula might be allocated to you and your employees.
- Pension add-ons – for business owners looking to save more than the $50,000 available in Defined Contribution plans, many are adding a Cash Balance plan to the mix. Cash Balance plans allow for contributions for the business owner of up to $150,000 in addition to the 401(k) plan’s $50,000. If you’re interested in hiking your contributions and taking advantage of the huge tax savings, we can break down the details for you.
Company changes
Whether your company is growing or shrinking, acquiring or selling, these changes may have an impact on your retirement plan as well as your bottom line! We have experience helping companies through a variety of transactions and offer alternatives for how the retirement plan(s) are handled. If your company is experiencing changes, let us review the new demographics and help you plan accordingly!
- Staff changes – perhaps the person handling your retirement plan is new to your company or has questions about your plan. We would love to meet your new team member and have an opportunity to go through some of the basics of working with your plan and with BRI.
- Ownership changes – if you are adding a partner or buying one out, we are more than happy to discuss a re-design of your plan to meet the needs of your newly re-designed company.
Plan documents and provisions
Perhaps you’ve read about a plan provision and you would like to discuss how that provision might impact you. Add it to your agenda and let’s talk about it!
- Automatic enrollment – the advantages and challenges to enrolling employees in the plan automatically.
- Eligibility – are the right people allowed to participate in the plan at the right time? We can discuss your options.
- Safe Harbor plans cannot be amended during the year, with few exceptions, so if you are thinking of changes for 2016, submit them for amendment at least 2 weeks before the beginning of the plan year.
Fiduciary protection concerns
As the sponsor of a retirement plan, you are a fiduciary. Some of your responsibilities can be outsourced to others, and some cannot. We can discuss your situation and any concerns you may have.
- Trustee – there is a difference between directed or discretionary trustees. We can discuss whether either is right for you.
- Investment fiduciary – it is important that you review your investment mix periodically. Discuss these responsibilities with your advisor.
- Fiduciary warranty – some investment custodians offer indemnification against participant lawsuits claiming you do not have an appropriate mix of investments in your plan. These warranties haven’t been fully tested in the courts, but you can discuss their validity and availability with your advisor.
- ERISA bond – the Department of Labor requires that individual trustees have a bond for a minimum of 10% of plan assets to protect the plan participants from malfeasance.
- Fiduciary insurance – this is insurance similar to a Directors and Officers policy that protects the fiduciary. Check with your insurance agent for more details about what type of coverage is available and whether it might be appropriate for your situation.
- Education – arrange for an informational meeting for your employees, particularly if they have the ability to direct the investments in their own accounts. We can help you contact your investment provider or financial advisor for assistance.
So yes, there is a lot to talk about, and many people wait until year-end to focus on their retirement plan. We are more than happy to help by offering a free 30-minute consultation this year. Take us up on our offer! We encourage you to also invite your strategic advisor(s) to participate in your consultation meeting. Call or click here to request your free 30-minute consultation today!
