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Part-Time Employees in 401(k) Plans Bookmark

Part-time employees may play an important role in your business, which can be a good thing for your bottom line - and can allow welcome flexibility for your employees, too. Many companies, from manufacturing to healthcare, are reaping the benefits of a multifaceted workforce.

But, if you are offering your employees a 401(k) plan as part of your benefits package, it's not safe to assume your part-timers are automatically exempt from the plan. IRS regulations govern this aspect of retirement plans, with formulas for determining minimum age and service requirements, and other stipulations related to part-timers.

This month's newsletter spells out some of the most important need-to-know facts about your part-time team members and your 401(k) program. We hope you'll take a close look, then give us a call. We're here to help you navigate the complexities.

The Right Combination for Your Retirement Plan Bookmark

Although not a new design, there has been renewed interest in the "combo plan" as a way for higher income business owners to turbocharge their retirement savings. The term "combo plan" generally refers to the combination of a defined contribution plan (usually a 401(k) profit sharing plan) and a defined benefit plan (usually a cash balance plan). The combined benefits in both plans are tested together to allow certain owners or key individuals to receive significantly larger amounts without breaking the bank in contributions to the employees.

Timing is Everything Bookmark

For years now, we have been hearing from the Department of Labor (DOL) about the importance of depositing employee 401(k) deferrals and loan payments as quickly as possible. While that continues to be the case, it seems that there is not nearly as much commentary about when to deposit company matching or profit sharing contributions. That is about to change with this article.

Year-End Compliance Testing Overview Bookmark

The end of the calendar year is fast approaching which means the plan year end for many qualified plans. It will be time for plan sponsors to collect complete employee data to enable their service providers to perform the numerous compliance tests required to retain the plans taxqualified status.

Hardship Distributions from 401(k) Plans Bookmark

It's four o'clock on Friday afternoon and there's a knock on the door of the Human Resource Manager's office. It's Zachary, a fairly new employee who entered the company's 401(k) plan last month. He's been deferring $40 a week into the plan, which means he has accumulated $160 by now. But last night his cable TV was shut off because he couldn't afford to pay the bill and from his 23-year-old point of view, retirement seems like a long way off.

The Ultimate Plan Sponsor Checklist Bookmark

While they don't have a book called Retirement Plan Sponsorship for Dummies, they should. So in the interim, here is a checklist that plan sponsors should review that can help them develop good practices and avoid unnecessary liability in their stewardship of retirement plans for their employees.

Ready or Not, Here it Comes...the PPA Plan Restatement Bookmark

It's time again to participate in that never ending ritual of qualified retirement plan restatements. As legislation affecting retirement plans is enacted, the Internal Revenue Service (IRS) requires all plan sponsors to restate or "rewrite" their plans to conform to current law.

The Continuing Evolution of the Safe Harbor 401(k) Plan Bookmark

The safe harbor 401(k) plan roared onto the scene in 1998 as a new design that allowed company owners and other highly compensated employees to maximize their salary deferrals even when other employees contributed at relatively low levels. Over the last 16 years, these plans have continued to evolve through a series of new laws and IRS pronouncements.

Cross-Testing: The Right Tool for Many Jobs Bookmark

As the national economy continues its recovery, more and more businesses are beginning to see their financial situations improve to near pre-recession levels. Companies that have not thought about making profit sharing contributions for years are starting to consider their options.

The Budget Ceiling & Tax Reform May Affect Your Plan Bookmark

Retirement plan industry expert speakers have been talking about how potential tax reform may affect employer sponsored retirement plans, such as 401(k) plans, for the last many years. However, there are now a number of converging factors that increase the likelihood of major tax reform actually happening. Given this, it makes sense to take a brief look at what’s driving the discussions on Capitol Hill and highlight several of the key proposals.