Nothing is more frustrating than looking up a password for a
website that I haven’t been to in a few months. Once I get in, which isn’t a
given, then I have to remind myself what I'm suppose to do or not do in order
to have a successful outcome. And for some folks that describes their
interaction with our COBRA website. So what to do?
What if we recorded videos that our clients could click on
and watch. They could see how to interact with the system and do what they need
to do. Well, guess what? That is exactly what we've done. Please visit our
website: abgncs.com/Watch and click on any of our tutorials.
Also, if you forget your password
just call our COBRA department and we will help you with that! Oh, and you don’t need a password to just watch the
videos!
Friday, December 27, 2013
Wednesday, November 20, 2013
‘Tis the Season – For Annual Notice Distribution
For many people this time of the year is spent coordinating Thanksgiving cooking with family members, and laying out a plan of attack for their Black Friday shopping. But for plan sponsors of qualified retirement plans some time should be spent on ensuring any, and all annual notices are distributed to plan participants.
Qualified retirement plans with a December 31st
plan year end may need to issue one or more annual notices to plan participants
by December 1st. Failure to issue a required annual notice can put
the plan’s qualified status in jeopardy. Below you will find the most common
notices applicable to defined contribution plans:
-
401(k)
Safe Harbor Notice: All
eligible participants in a safe harbor 401(k) plan must receive an annual
notice that describes the safe harbor matching contribution formula or safe
harbor non-elective contribution formula.
-
401(k)
Automatic Enrollment Notice: If the plan provides that employees will be automatically
enrolled, the plan sponsor must give eligible participants an annual notice
that describes the circumstances in which eligible employees are automatically
enrolled and the level of pay that will be automatically contributed to the
plan.
-
Qualified
Default Investment Alternative Notice (QDIA): A defined contribution plan that permits participants
to direct the investment of their account balances may provide that if a
participant does not give an affirmative investment direction, the portion of
the account balance that is not given direction will be invested in a qualified
default investment.
Alliance Benefit Group North Central States, Inc.
understands that this may seem like a daunting task for plan sponsors. Because
of this, led by our Compliance Team, ABGNCS packages all required notices with delivery
instructions in the “year end packet”. In addition, ABGNCS assigns a dedicated
administration team to each plan in order to assist plan sponsors with
administration questions.
To learn more about Alliance Benefit Group North
Central States, Inc. and the services we provide please visit www.abgncs.com or email info@abg-mn.com.
Happy Holidays!
The Author: Seth Holstad
Account Executive
Friday, October 11, 2013
How a Required Minimum Distribution (RMD) Works
There comes a point where the IRS requires that a
participant or beneficiary must take funds out of a retirement plan or risk
significant excise taxes. This is
referred to as a Required Minimum Distribution (RMD) and is required within a
certain period following the participant’s attainment of age 70 ½, or if later,
the year in which the participant retires.
However, if the participant is a 5% owner of the business sponsoring the
retirement plan, the RMDs must begin once the participant is age 70 ½,
regardless of whether the participant is retired. This affects participants in qualified plans,
403(b) plans, 457 plans, and IRA owners (including SEPs, SARSEPs and SIMPLE
IRAs).
The first RMD must be taken for the year in which the
participant turns age 70 ½. RMDs are
required to be taken by December 31st, however, the first payment
can be delayed until April 1st of the year following the year that a
participant attains age 70 ½. Of note,
if a participant delays his or her first payment to April 1st, there
will be two payments required in that year – the second payment will be
required by December 31st that same year.
RMDs are calculated by dividing the prior December 31st
account balance by the life expectancy factor in the IRS published Tables. A participant can request a distribution that
is higher than the RMD amount, however, if the participant fails to withdraw a
RMD, fails to withdraw the full required amount, or misses the deadline for
withdrawal, the amount not withdrawn is taxed at 50%.
Although the IRA custodian or retirement plan
administrator may calculate the RMD amount, the participant is ultimately
responsible for calculating the amount of the RMD. Required Minimum Distribution amounts cannot
be rolled over into another tax-deferred account.
Please consult your tax advisor with questions
surrounding RMDs or visit the IRS website and other useful industry resources
via http://www.abgncs.com/RetirementIndustryLinks.aspx.
The Author: Patty Richeson, QKA
Wholesale Retirement Plan Consultant
Wednesday, October 2, 2013
Retirement Autopilot
To do more to help employees save for their future,
many employers are incorporating automatic features into their retirement
plans. These features can help employees start saving earlier, save in greater
amounts and manage their savings more wisely, while also allowing employees to
manage their own investments. Studies suggest that automating retirement plans significantly
increase the percent of eligible workers who participate in such plans, which
increases employees’ retirement savings and financial security.
Whether you already have a retirement plan or are
considering starting one, automatic features offer many advantages. Learn more about these automation options here: http://www.abgncs.com/AutoFeatures.aspx.
So what are these automatic features? And how do they work?
Automatic
Enrollment is an automatic contribution arrangement (ACA) that
can be used as a feature in a retirement plan to allow employers to enroll
employees in the company’s plan automatically upon meeting eligibility
requirements. Approximately 30% of eligible workers do not participate in their
employer’s retirement plan. Studies suggest that automatic enrollment could
reduce this rate to less than 15 percent, significantly increasing retirement
savings.
Automatic
Escalation is another plan design option which may be added to a
retirement plan in conjunction with automatic enrollment. Automatic escalation allows a plan sponsor to
increase participant deferrals annually by a set increment, most commonly 1%.
Plan sponsors electing this design feature typically do so to assist their employees
with retirement readiness.
The Author: Abby Murray
Interactive Media Coordinator
Wednesday, September 25, 2013
Tax-Favored Accounts Aren’t Ageists; I Promise.
Having worked with tax favored accounts since the mid-80s,
I have always enjoyed the education of young people newly coming into the workforce.
I love explaining how utilizing a flexible spending account (FSA) or health savings
account (HSA) actually puts money in their pocket for Starbucks, dinner out,
gifts, etc. I get great satisfaction when their eyes light up and they get it.
Imagine my horror when I am told by my wife that our
24 year old son is not paying for his bus pass with pre-tax dollars. Imagine my
irritation when he tells me it really isn’t my concern. Ugh! Are you serious?!
This is what I do! Imagine a knee surgeon being told by his son that his
ruptured ACL is none of his dad’s concern.
I told my son that the $30 he is giving Uncle Sam (bus
pass is $100) could by a few burgers, beers or flowers for his Mom! It’s half of a video game; x12 it is $360. He
told me it is a hassle to stop the pre-tax deduction. Advice from another
learned 20-something, no doubt. But I’m not taking it personal. I remember my
Dad telling me that I should max out my 401(k). I probably should have listened
to him back then. My son will learn. He’ll meet some gal - she’ll explain
how he can be smarter with his money.
In the meantime, I’m stepping up my education efforts.
That gal may be in one of the groups to whom I explain pre-tax deductions.
She’ll love our new smart app that can take pictures of receipts and submit via
phone. She’ll see the value in a dollar and will eventually convince him. Yup...I’m going to be out there trolling for
the newbies explaining how they can save money even though some people “JUST
DON’T GET IT!”
The Author: Roger Jorgensen, RHU, REBC
Director of Marketing - HSA, FSA, HRA & COBRA
Wednesday, September 18, 2013
What Makes an Exempt Employee, Exempt?
An exempt employee is
an employee that is exempt from both minimum wage and overtime pay. In order to
qualify as an exempt employee, the FLSA has created regulations for both the
job duties and weekly salary amounts that must be met. An exempt employee
cannot be deemed exempt based on their job title; it must be based on the
duties of their position. There are several types of exempt employee
categories that the employee’s job duties may fall under: executive,
administrative, professional, computer and outside sales employees.
In addition to the
job duties, the employees must meet certain salary requirements. The employee
must be paid a salary of no less than $455.00 per week or an hourly rate of
$27.63, but these salary requirements do not apply to outside sales employees,
teachers or doctors. They must also be paid for the entire salary for any
week in which the employee performs any work. This is regardless of how
many days or hours are worked. There are only a couple
circumstances in which an employer may make a deduction from pay, but in order
to do so, the employee must be absent from work for one or more full days for
personal reason other than sickness or disability.
The Department of
Labor (DOL) has several tools and resources available to assist employers in
making this determination. For more
facts on the different types of exempt employees and the salary requirements,
visit the link below. This DOL site also
includes a test to help you decide if your employees meet the qualifications of
“exempt.”
http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.pdf
The Author: Alysha Frie, FPC
Payroll Sales Consultant
Subscribe to:
Posts (Atom)