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.