5 Questions to Consider Before Beginning a Payroll Implementation

Planning a payroll implementation? Here are some items to consider!

Who should be involved?

After you have decided to change payroll providers and have chosen a partner that best fits your needs, the next step is to decide who needs to be involved. Consider these questions to help make those decisions:

·         Who will be importing and preparing your payroll?

·         Will supervisors or managers need to be involved in the process at all?

·         How many people do you want to have trained on the new system?

Once you've answered these questions, you'll know who will need to be included in each stage of the process. 

How long will the implementation take?

Depending on the size of your company an implementation can take anywhere from 2-8 weeks, from the first kick-off call to when your payroll goes live with the first check date. Be sure to work with your payroll partner to give yourself enough time to get everything set up and running smoothly. You will want to create a realistic timeline that both parties are committed to.

What Information needs to be gathered beforehand?

If you have been processing payroll you've probably noticed that there is much more to payroll than just tracking each employee’s hours! Make a list of everything that is needed to process your company’s payroll. A few examples are garnishments and levy information as well as scheduled earning and deduction information.   

Will there need to be any new hardware installed?

Many times if you are changing your payroll provider you may also upgrade your time keeping system. If so, make a check list and timeline of what needs to be done and how long it should take to complete those tasks.

Who will be trained and how much training is needed?

Decide who will need to be trained on your new process for payroll and if supervisors or managers will need training on any new devices that will be implemented. Consider how your process will change, who will be involved, and what those roles will be. Then allocate time needed to train them. Also, make sure that the payroll provider you select is willing to dedicate time to the training as you need it! 

The Author: Amber Borland, FPC

Implementation Specialist - Payroll

abgncs.com/payroll

aborland@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services. 

Time to Review Your Retirement Plan Options. It's Plan Document Restatement Time!

We knew it was close, now it's time to consider better options for your retirement plan with your plan document restatement!

AllianceBenefit Group North Central States, Inc. sponsors a pre-approved plan document and therefore it is likely that your retirement plan document is subject to an IRS mandatory restatement. This IRS mandatory restatement is referred to as the PPA restatement due to the Pension Protection Act and has a 2 year window for restatement that is open now and will end on April 30, 2016. 

Since your plan needs to be restated anyway, now would be a great time to add some additional features without incurring additional amendment charges. Some examples of items to consider are as follows:

·       Does your plan offer Roth deferrals? These are after tax dollars that can be deferred into the plan and could be beneficial to some of your employees. Providing the flexibility to manage their own distribution tax risk is an important feature for some plan participants and may encourage participation. For some employees, adding Roth offers the equivalent of an increase to the 402(g) contribution limit since the taxes have already been paid. 

·       Do you want a retirement plan that provides a high level of participation? An automatic enrollment plan may be right for you. There are different options to choose from when adding this feature:

1)     A basic automatic enrollment 401(k) plan must state that employees will be automatically enrolled in the plan unless they elect otherwise and must specify the percentage of an employee's wages that will be automatically deducted from each paycheck for contribution to the plan. The document must also explain that employees have the right to elect not to have salary deferrals withheld or to elect a different percentage to be withheld.

2)     An eligible automatic contribution arrangement (EACA) is similar to the basic automatic enrollment plan but has specific notice requirements. An EACA can allow automatically enrolled participants to withdraw their contributions within 30 to 90 days of the first contribution.

3)     A qualified automatic contribution arrangement (QACA) is a type of automatic enrollment 401(k) plan that automatically passes certain kinds of annual required testing. The plan must include certain features, such as a fixed schedule of automatic employee contributions, employer contributions, a special vesting schedule, and specific notice requirements.

·       Are there any other features that you would like to consider for your plan? Now is the time to discuss your questions and concerns with your advisor and/or your administrative team at Alliance Benefit Group. 

If Alliance Benefit Group North Central States is not your document provider, you may want to discuss these options with the party responsible for providing that for your plan. ABGNCS will need a copy of your document once it is restated so that we can update our recordkeeping software with any changes. 

Be sure to let ABGNCS know if you have any questions. We’re here to help!

The Author: Babette Engebretson, QPA, QKA

Compliance Supervisor

abgncs.com

bengebretson@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services. 

Future You Will Thank You For Stashing More Money in Your HSA

The benefits of saving money in your Health Savings Account (HSA) go beyond health savings and can also help you be prepared for life at retirement. Not only can you use your health savings on health related expenses, but you can also use your investments similar to the way you would use a retirement plan.

Consider This Scenario:
The average healthy couple at age 65 today will incur over $200,000 in out-of-pocket medical expenses not covered by Medicare during their retirement years. A HSA is the best place to save for those expenses because it can be truly tax-free. At retirement HSA dollars can be used for non-medical expenses too. HSA dollars will simply be taxed just like a 401(k). As you can see, investing now will be a win-win down the road.

Investing Your HSA
The primary use of an HSA is always to pay for current out-of-pocket expenses and deductibles related to a high-deductible health insurance plan. It’s important to reserve enough cash in the account to cover the maximum out-of-pocket deductible for two consecutive years before any excess money is actually invested. Remember, investments available in the HSA are not guaranteed and can experience losses when the markets are not favorable.

Investment Options
The investment menu is very similar to that of a typical 401(k) plan. There are many different mutual fund investment options available representing the three primary asset classes: Cash, Bonds, and Stock. The Cash (Money Market) Fund pays a stated interest rate, similar to a savings account at a bank. Several different Bond Fund options seek to provide a higher fixed-income rate-of-return than a simple savings account, but can lose money in certain circumstances noting that bonds are typically much less risky than stock investments. Most of the mutual fund investment options available in the HSA are Stock (Equity) Funds, and each represents a different type of stock market investment or philosophy to allow for broad diversification. 

Choosing Your Lineup

Other than the Cash (Money Market) Fund option, the mutual fund investment options in the HSA are not intended to be used individually. The recommended method is to maintain broad diversification by taking advantage of all of the investment options available according to a strategy that makes sense. 

If all of the mutual fund investment options available in the HSA are the building blocks, the following example “Asset Allocation Strategies” are the blueprints that you can use as a basis for your own personal investment strategy based your own individual risk-tolerance and time-horizon.  

Remember, your own personal risk-tolerance and time-horizon will be different for HSA investments than for other retirement investments because you may need to spend your HSA dollars for health-related expenses before you retire.

Think About It 

Hopefully this overview has you thinking about investing your HSA. The information is very basic, so if you’d like more detailed information on HSA investing follow this link to Frequently Asked Questions for HSA Investing or contact your retirement advisor. Participants can manage their investment options within the participant website. This helpful guide to ManagingYour HSA Investment Account will help make the most of the online tools available. 

Thanks to Nick Austin for the educational investment information.

The Author: Cole Thompson with Nick Austin

Marketing Specialist

abgncs.com

cthompson@abg-mn.com

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services. 

It’s Beginning to Look at Lot Like………….Enrollment Time!!!!

You thought I was going to say the name of a popular wintertime holiday didn't you? From the looks of the retail stores it seems that may be true, but for many it’s Flexible Spending Account enrollment time.

It’s fast approaching, so before you can cozy up next to the fire with a cup of cocoa and listen to your favorite Bing Crosby or Alvin and the Chipmunks Album, you have to decide what you’re going to incur in medical or dependent care expenses for the New Year.

So how can you predict the future? Last I checked, you can’t, but here are some tips to help you forecast your medical and dependent care expenses:

Dependent Care Expenses: For me this is simple. With a young child at home I know that I will surpass the $5,000 per year IRS maximum allowed amount. It may be a little easier to estimate dependent care expenses since you most likely know exactly what dependent care expenses you’ll have for the upcoming year and it’s really rare to leave money behind in this account. Just remember each employer has different guidelines on the time-frame to submit claims, so check out the fine details for your plan (or just give us a call, we are here).

Health Flexible Spending/Limited Purpose Flexible Spending: This is where being able to predict the future would come in handy. How can you really decide what your medical expenses are going to be? Well we don’t have a crystal ball either, so it’s really just an educated guess. Currently, the IRS maximum pre-tax benefit amount for Health FSA or Limited Purpose FSA for a plan year is $2,500.  Your employer might have a lower maximum benefit amount, so again, check with them for the details or give us a call. Some employers offer a grace period or a carryover to allow participants more options to use up their balances. If your employer doesn’t offer one of these features you need to incur enough expenses during the plan year to cover your election amount. Otherwise, you will lose it. Unused funds are held by your employer and the IRS has strict guidelines on how the money can be spent. Sorry, no lavish parties.

If you currently have money left in your 2014 benefit account, it is still early enough to think about what expenses are coming up for the rest of the year or consider what you might need to incur to spend down your remaining funds. If you need help determining what you can and can’t use your funds on, give us a call at (877) 661-4727.

Hopefully this information has been helpful and hasn't spoiled your upcoming holiday celebrations. 

The Author: April Van Hove, CFC 

Team Lead FSA/HSA Administrator

abgncs.com

avanhove@abg-mn.com

Our Payroll Team is Industry Certified and Ready to Serve

It is very important to us at Alliance Benefit Group North Central States, Inc. (ABGNCS) to stand by our core focus, “We take the worry away.”  For our employees to deliver on this promise, we believe it’s important to be knowledge leaders within the industries we serve. A key contribution to our knowledge base is our commitment to having our employees become certified within those industries.  

For our Payroll Department an important designation is the Fundamental Payroll Certification (FPC). Our Payroll Account Managers are proud to have these three characters displayed behind their names. As a payroll provider, this training helps us be prepared to fully support the payroll process from start to finish. 

What does FPC stand for?

FPC stands for Fundamental Payroll Certification, a professional certification administered through the American Payroll Association (APA).

What is the purpose of the FPC designation?

The FPC is a way for payroll professionals, consultants, analysts and sales representatives to demonstrate their knowledge of basic payroll concepts and systems to establish credibility.

Topics covered on this Exam:

1.      Core Payroll Concepts

2.      Compliance/Research and Resources

3.      Calculations

4.      Payroll Processes, Supporting Systems, and Administration

5.      Payroll Administration and Management

6.      Audits

7.      Accounting

We currently have three employees with the FPC. ABGNCS is proud to have this designation as part of our organization and supports that the rest of our Payroll Team working towards this certification.

These efforts help us keep up with the ever-changing payroll rules and regulations. We’re ready to help answer any questions you may have about your payroll systems. 

The Author: Sarah J. Barnick, FPC

Account Manager - Payroll

abgncs.com/payroll

sbarnick@abg-mn.com

Disclaimer: This blog is of an informative and educational nature, and should not be considered legal, financial or operational advice. Please contact the appropriate parties for those services. Thank you.

5 Things to Consider When Switching Payroll Providers

Processing payroll for your company is one of the most important tasks your organization manages from week to week, and it needs to be completed on time and accurately! That is why there are many things to ponder when you're considering switching payroll providers. Here are five things to think about before choosing a new payroll provider:

1.   How does implementation work? This is going to be the first time that your company and the new provider work together. You're getting to know each other and how you both do business. You will want to make sure that there is a main point of contact to reach out to with questions that you have, who will be a able to provide a quick response. It is also important that the provider has a implementation process to make sure that the project stays on track. Make sure to inquire about the amount of work you are responsible for and how much the payroll provider is handling.

2.   Who will handle payroll processing? It is  important to have someone to reach out to when you need assistance, especially when dealing with a new software solution. In most cases it is nice to have a dedicated person to work with so that you're not training the person each time you call. Be sure to ask the question of who will be processing your payroll, and how will you be able to contact that person. Your time is valuable and you don’t want to get stuck on the phone trying to get through to a real person.

3.   What additional services do they offer? Make a list of "must haves". This could be an Employee Self Service Option, WC Pay As you Go Insurance, HRIS system, remote access to the software, or an HR resource, and the list could go on. Once you have a list, you can compare the options that each provider has and really drill into what is important to you. In addition to the list, are there some services that the provider is able to offer that would help make your life easier? Make sure you ask questions about features that help streamline your payroll process. Also think in terms of the big picture. Is it possible they could provide other benefits including health savings or retirement services? Would it make everyone's lives easier to bundle some of these services? 

4.   How does pricing work? Every payroll processing company has their own pricing structure and a different approach to including or excluding additional services. Make sure you understand what's included and which services will cost you additional money. A quick list of things to ask about is:

a.  How is the tax filing charged? What if there are amended    returns needed?

b.  Reporting -- what reports are included and what reports are additional? Can you write your own, if so is this an additional charge? How will you get your reports? 

c.  What is included in the payroll processing charge? 

d.  Is there a charge for Employee self service?

e.  Is there a charge for additional administrator access to their system?

5.   What do they offer for tax filing services? It is important to ensure that the provider you choose offers everything you need for tax filing, this includes federal, state and any local tax deposits as well as quarterly and annual forms. 

Let us take some of the weight off your shoulders. 

Keep in mind that it is also important that the payroll provider fits the needs of your business and is able to grow with you. If you are interested in payroll services, Alliance Benefit Group North Central States, Inc. would be happy to provide information and offer guidance during your evaluation. 

The Author: Alysha Frie, FPC

Payroll Sales Consultant
abgncs.com/payroll
afrie@abg-mn.com

Disclaimer: This blog is of an informative and educational nature, and should not be considered legal, financial or operational advice. Please contact the appropriate parties for those services. Thank you.

Are you on track to pass your 401(k) testing for 2014?

It’s not too late to “check-in” with Alliance Benefit Group North Central States, Inc. (ABGNCS) to see if your retirement plan is on track for 2014. If your retirement plan year is the same as a calendar year, August and September is a good time to send your retirement administrative team an email requesting a preliminary Actual Deferral Percentage (ADP) test. 

Safe Harbor Plan? No need to worry! You are in position to pass the ADP test. If you are not a Safe Harbor Plan, you may want to pay attention to how much your Highly Compensated Employees (HCE) are deferring.

In 2014, a HCE is anyone who:

1.     During 2013 (year prior to being tested) received compensation in excess of $115,000.

2.     Any employee who, during 2013 or 2014, was a more than 5% owner, or

3.     Any employee spouse, child, grandparent, or parent of a more than 5% owner.

 If your plan is prior-year tested, a passing rate for this group has already been established. Your administrative team can run a preliminary test to see if you are on track to pass the ADP test.

If your plan is current-year tested, then your passing rate for 2014 is a moving target.  You will want to check in with your administrative team at least once during the year to see how you are doing, and maybe even more often.

Another idea you may want to implement to plan for a successful 2014 is using a planning tool:

1.     Create a spreadsheet with all of the 2014 HCEs listed.

2.     Enter their annual salaries.

3.     Enter their annual deferrals.

4.     Enter a formula to divide deferrals by salaries. Each HCE will have a percent here.

5.     At the end, you will add each individual percent and divide by the number of HCEs. This number is key and will let you know if you are on track, or if adjustments need to be made before the end of the year.

Here is an example of a planning tool:

Hopefully the information we've provided will help you plan for testing. Please contact your retirement administration team if you would like to begin the process. 

The Author: Lisa Dahl, QKA

Senior Account Manager
abgncs.com/RetirementAdministration
ldahl@abg-mn.com

Disclaimer: This blog is of an informative and educational nature, and should not be considered legal, financial or operational advice. 

Please contact the appropriate parties for those services. Thank you.