Tag: 401(k)

On November 1, 2018, the Internal Revenue Service (IRS) released Notice 2018-83 announcing cost-of-living adjustments affecting dollar limits for pension plans and other retirement-related items for tax year 2019. Many pension plan limits will change next year because the increase in the cost-of-living index has met the statutory thresholds that trigger their adjustment. Other items,…

On August 31, 2018, President Trump signed an executive order directing the Departments of Labor and Treasury to make it easier for employers to offer retirement and savings programs. The majority of workers are employed at small businesses where they are less likely to have access to 401(k) plans and other retirement plans than workers…

In its March 15, 2018, decision, the U.S. Court of Appeals for the Fifth Circuit overturned the U.S. Department of Labor’s (DOL) Fiduciary Rule that expanded the definition of an investment advice fiduciary under the federal Employee Retirement Income Security Act (ERISA). Under the Fiduciary Rule, investment brokers were going to be required to put…

Mark Twain said, “Supposing is good, but finding out is better.” When it comes to fees employers pay on qualified retirement plans, the U.S. Department of Labor (DOL) wants employers to maintain documentation regarding certain transactions related to retirement plans administration. In fact, the DOL’s Employee Benefits Security Administration (EBSA) is studying disclosures currently required…

Question: How should an employer correct an employee’s 401(k) contribution that is mistakenly deleted from a payroll process? Answer: Depending on the timing between the error and the correction, the employer may be able to make the correction within the next pay period. If the error only spans a single calendar/tax year, then it should…

Question: Under the Family and Medical Leave Act (FMLA), do employers continue to make matching 401(k) contributions during an unpaid leave? Answer: While not required under the Family and Medical Leave Act (FMLA), retirement accounts, such as 401(k) matching contributions, are maintained in accordance to your Summary Plan Description and typically do require continued matching…

Question: Can a part-time employee who recently started receiving Social Security benefits continue to participate in our 401k retirement plan if there is nothing in the plan document to prevent participation? Answer: If the employee is still actively working and eligible to contribute under the terms of your Plan, then neither the employee’s age nor the fact…

Question: What are an employer’s responsibilities to its 401(k) plan if the employer terminates the contract with the third party administrator managing the plan? Answer: As the 401(k) plan sponsor, the employer is required (by ERISA) to provide fiduciary oversight to the plan.  The employer never loses that fiduciary responsibility, even if the company uses…