‘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 31^st plan year end may need to issue one or more annual notices to plan participants by December 1^st. 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

www.abgncs.com/RetirementAdministration.aspx

sholstad@abg-mn.com

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

http://www.abgncs.com/HSAFSAHRA.aspx

rjorgensen@abg-mn.com