Plan Sponsors & Fiduciary Governance

There’s a lot of buzz going on in the industry about the proposed fiduciary rules and what they might mean going forward. The proposal aside, many plan sponsors don’t understand that they are indeed already a fiduciary. Anyone who has the authority to exercise discretion or appoint a fiduciary is also a fiduciary for the plan.

If you sponsor a plan, you are always a fiduciary. There is no getting around it. However, you may share your fiduciary responsibilities with others in order to reduce your exposure. Typically, your investment advisor is a fiduciary, as well as those who have been appointed to the investment committee.

Some plan sponsors would be surprised to learn that the custodian of the assets, their payroll provider, attorney, accountant and recordkeeper are typically not fiduciaries unless they have contracted to be.

All plan fiduciaries must exercise due diligence when reviewing decisions made by another fiduciary. Also, due to the requirement for fiduciaries to conduct regular reviews of investments, they are not able to rest on investment decisions made by a former fiduciary. Fiduciaries must take an active role regarding the plan.

There are a few ways to protect yourself if you are a plan fiduciary and there is a breach. You may purchase fiduciary liability insurance, contract with others to become co-fiduciaries, and there is also the required ERISA fidelity bond based on plan assets.

Stay tuned for further developments regarding plan fiduciaries!

The Author: Babette Engebretson, QPA, QKA

Compliance Supervisor

abgncs.com

bengebretson@abg-mn.com

Becoming Familiar with the Retirement Website

Have you taken time to explore our retirement website? Here are some key areas to become familiar with the next time you log in.

Managing your account
Take some time to become familiar with the site and understand where your money is invested.

• This tab has resources that allow you to view your current account balance within each investment fund or shown within each source.
• You can also transfer your current funds into new investments, choose to increase your future contribution amount and change your future allocations.
• If you chose to “Invest New Money”, be sure to note the box to change your current balance to match your new elections, if you wish.
• Within the Transfer Funds section, you can click on the funds to read the most up to date fund information provided by Morningstar.

Statements & Requests

Under this section access to your statements is at your fingertips. You can request a statement at anytime. 

• Choose how you want to view your account, then the time period and your statement will appear.
• You can also view recent transactions on your retirement account such as your contributions, employer contributions to your account, or dividends earned.

Profile

Keeping all of your personal information up to date is helpful to you and us. It’s a good idea to include your current email address so you can receive timely communications.

• Update your personal info anytime.
• You can change address, phone number, email address, and marital status anytime.
• You can also update your beneficiaries without filling out any paperwork!
• If you want to change your user ID and password, this would be the place to do it. 

Resources

This tab offers a range of high level and detailed information to help you better understand your retirement and make the most of your plan.

• Here you’ll find important messages about your plan, current fee disclosure and the highlights of your plan document.
• You can also find transfer rollover forms, loan forms, and distribution forms.
• Another great resource is the Retirement Calculator. This calculator will estimate your income and savings that you will have when you retire. The results will identify if your current savings will last through your retirement years and give you a cash flow of what your estimated balance will be for each year.

Become familiar with the retirement plan website to make the most of the retirement planning experience. Having a strong grasp of how your retirement is shaping up can help put your mind at ease. Login to the retirement site at www.abgncs.com to start exploring and using the resources available to you.

The Author: Kasey Wolters

Client Support Associate

abgncs.com

kwolters@abg-mn.com

2014 Year End Processing Deadlines for Retirement Plans

As 2014 comes to a close, our retirement plan administration department would like to thank you for your continued partnership and remind you of the important deadlines for processing your payroll contributions and distributions.

Here are a few important dates to keep in mind to ensure your last payroll files of 2014 are processed in time to reflect on the December 31, 2014 valuation. Please have electronic information to us by December 26, 2014. The dollars for these contributions must be received at the investment company prior to December 30, 2014. If we ACH the money for your account, we need to receive your file by Noon Central Time (CDT) on December 26, 2014.

Submitting Your Final Payroll
When submitting your final payroll file of 2014, please take note of the pay period end date. It’s very possible it could reflect a January 2015 date, as not all pay schedules will end on 12/31/2014. If you notice a 2015 end date but would like your contributions processed in 2014, please feel free to contact us prior to submitting the file and we will be more than happy to modify that date to ensure your file is processed in the correct plan year.

Bonuses
Bonus payroll files are just as important and require the same amount of attention as a regular payroll. Please contact us so we can open additional pay schedules and assist you in getting these files uploaded and processed in a timely manner.

Happy New Year
As the year ends, we think about all we are grateful for. Our relationship with you is one thing we treasure. Thank you for the opportunity to serve you. We wish you a happy holiday season and much success in the New Year.

The Authors: Corrine Mattson and Amy Newman

abgncs.com/RetirementAdministration

cmattson@abg-mn.com

anewman@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.

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.

When Clients Succeed, We All Win

We are pleased to share with you that one of our clients was named a finalist for 401(k) Plan Sponsor of the Year in the Corporate 401(k) $50M-$1B category by PLANSPONSOR Magazine. Congratulations Vermeer - well deserved!

Each year, the editors of PLANSPONSOR magazine—the industry’s leading resource for retirement-benefits related news—recognize plan sponsors that demonstrate leadership in providing a more secure retirement for workers.  

Vermeer Corporation was recognized at PLANSPONSOR’s Annual Awards for Excellence dinner in New York City in March, and was featured in the March issue of PLANSPONSOR magazine.  Alliance Benefit Group has long recognized the commitment of Vermeer Corporation and the quality of the retirement program they have implemented.  To witness an industry-leading publication recognizing the strength and leadership of this sponsor is a prideful experience for our teams here on the recordkeeping side of their program. 

If you recall back in 2013, one of our greatest accomplishments was to witness our client, Mayo Clinic Health Systems - Albert Lea (MCHS-AL), receive the 403(b) Plan Sponsor of the Year award from PLANSPONSOR Magazine.

We are thrilled for the accomplishments of our clients and happy to share in the success of their retirement programs.

The Author: Timothy A. Struck, CRPS

Wholesale Retirement Marketing Consultant

abgncs.com

tstruck@abg-mn.com

Does your plan pass? Understanding Annual Nondiscrimination Testing

Test anxiety isn’t just for students.  The words “nondiscrimination testing” can strike fear into even the bravest of retirement account managers and plan sponsors alike.

Plan testing is required each year in order to make sure your 401(k) plan is in compliance with IRS regulations and maintains its qualified, tax advantaged status.  The IRS allows employees to get a tax benefit by not having to pay taxes on contributions or the earnings from contributions until they withdraw the money.  However, in order to get this tax break, the IRS wants to make sure highly paid employees are not getting a better tax break than everyone else.  

Of the required tests, the Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests are more significant because consequences of a failed test need to be addressed within 2 and a half months after the close of the plan year, in order to avoid penalties.  Consequences include corrective distributions or additional employer contributions.  The nondiscrimination rules in regards to these tests require average deferrals and average contributions for the highly compensated employee (HCE) group to be within a certain range of the average deferrals and contributions for the non-highly compensated employee (NHCE) group. 

Clear as mud, right?  Well that's where Alliance Benefit Group comes in to take your worry away.  We will ask you a few questions regarding your plan and have you confirm that the employee information we have in our system is correct.  If we receive this information in a timely manner, it will help us ensure the testing is completed before the deadline.  

In the event the plan fails any of the nondiscrimination tests, we will call you and talk you through the next steps of the correction method and offer guidance on how to avoid testing failures in the future, such as adopting a safe harbor plan or running preliminary tests throughout the year and making adjustments accordingly.

So, if your plan runs on a calendar year, you would have received your questionnaire from us.  If you haven't yet, we need it to be completed and returned to kick off this process.  Please return this to your administration team at your earliest convenience.

The Author: Kelly Wangsness, QKA

Retirement Services Manager

abgncs.com/RetirementAdministration

kwangsness@abg-mn.com