The Shore Tompkins Blog
401(k) Plans
Benefits of Selling Cash Balance Plans (#4 of 4)
As explained in our previous post (#3 in this series), cash balance plans are often easier for business owners (your clients) to understand and offer more flexibility than many other types of retirement plans. And in our second post we clarified how cash balance plans...
Cash Balance Plans: More Understandable, Flexible than Traditional DB Plans (#3 of 4)
Updated 1/1/2019: In our previous post (#2 in this series) we looked at the wealth-accumulation advantages of cash balance plans. Discussing these advantages with business owners (your clients) is essential to selling a cash balance plan. But because clients “live...
Cash Balance Plans Offer Key Advantages (#2 of 4)
Updated 1/1/2019: Our previous post defined cash balance plans and explained their structure and how they work. Now let's focus on the key advantages of using a cash balance plan, and who are its primary candidates. As a financial advisor you’ll want to understand...
Cash Balance Plan Essentials (#1 of 4)
As a financial advisor to owners of independent companies, you’ve heard about cash balance plans. Although the number of these plans has increased sharply in recent years, many business owners and their advisors know relatively little about them. So let’s review the...
Target Date Funds: New Guidance from DOL
In February the Department of Labor's Employee Benefits Security Administration (EBSA) issued new guidance for plan fiduciaries regarding Target Date Funds (TDFs), a relatively new and increasingly popular destination for retirement plan contributions. Although the...
QDIA: Protection for Plan Sponsors
Automatic enrollment (AE) in company retirement plans can help workers increase their retirement savings, but it presents a challenge: How should the employer invest the dollars of employees who do not affirmatively choose an investment vehicle for their contributions...
An Update about In-Plan Conversions to Roth
The Joint Committee on Taxation recently clarified provisions relating to the expanded in-plan Roth conversions. As discussed in our March 11 post, the American Taxpayer Relief Act of 2012 expanded in-plan Roth conversions to include all pre-tax accounts, whether or...
What to Know If You’re a Highly Compensated Employee
If you're an owner or top earner at your company you might think that being an HCE is simply a matter of whether your salary exceeds a certain limit. In fact there's more to it than that. Knowing the details can help owners and other HCEs avoid unwanted surprises. The...
Converting Pre-Tax Contributions to After-Tax Roth
As part of the American Taxpayer Relief Act (ATRA) signed by President Obama in early January, all 401k, 403b, and 457b retirement savings plans now have the option to allow participants to convert some or all of their pre-tax contributions (namely, pre-tax 401k...
Deciding Whether to Make Roth 401k Contributions
In our previous post we looked at the concept of the Roth 401k, which is simply the option to contribute dollars on an after-tax basis to a traditional 401k plan (assuming that the plan sponsor has amended the plan document to allow such contributions, as required by...
Cash Balance Plans
MAP-21 Brings Funding Relief to Plan Sponsors
The Moving Ahead for Progress in the 21st Century (MAP-21) Act allows sponsors of defined benefit pension plans to decrease required contributions over the next several years. The new law changes the interest rate used for funding to be based upon rates over a 25...
Cash Balance Plan Interest Crediting: Changes Coming
Cash Balance Plans (CBPs) have seen strong growth in the past 10 to 15 years: In 2010 there were 7,064 CBPs active in the United States. That's an increase of 810% over the 1,337 counted in 2001. However, some companies have hesitated to offer these hybrid...
Other Retirement Plans
Deciding Whether to Make Roth 401k Contributions
In our previous post we looked at the concept of the Roth 401k, which is simply the option to contribute dollars on an after-tax basis to a traditional 401k plan (assuming that the plan sponsor has amended the plan document to allow such contributions, as required by...
MAP-21 Brings Funding Relief to Plan Sponsors
The Moving Ahead for Progress in the 21st Century (MAP-21) Act allows sponsors of defined benefit pension plans to decrease required contributions over the next several years. The new law changes the interest rate used for funding to be based upon rates over a 25...
QDIA Safe Harbor Upheld in Appeals Court
As noted in our last blog post, for many years retirement plan sponsors have faced a dilemma: How should they invest contributions from employees who won't affirmatively choose at least one investment vehicle for their contributions? More to the point: how to do it...
The Roth 401k: An Option for Higher Earners
When thinking of retirement, most workers (and their employers) probably associate the name "Roth" with the letters "IRA." After all, the Roth IRA has been around since the 1998 tax year and has been widely embraced by many individuals seeking to maximize their...