Proposed Changes to Exempt Status

The DOL released proposed changes to the Exempt Status wage test recently. The current regulations state an employee must pass the Salary and Duties tests to be considered an exempt employee. The salary basis test today requires the base salary of an employee to be at least $23,600. The proposed changes for the salary basis test are to raise that amount to $50,440. That is a 113% increase that will more than likely be effective 1-1-2016.

Other proposed changes include increasing the HCE salary levels, determining if non-discretionary bonuses should be included in calculating the standard salary, and provisional changes to the Executive, Administrative and Professional workers classifications. The increase to the salary test also will include annual automatic increases based on the Consumer Price Index.

If you would like to read more about this, visit the proposed rule-making site for the DOL here.

The DOL is accepting comments through September 4, 2015, all employers are encouraged to share their opinions about these proposed changes here.

Important Date:

August 1, 2015  - Minnesota increased minimum wage to $9.00 for large employers and $7.25 for small employers.   

Need a guide to each state? Find it here 

Contact Us:

If you have questions regarding the information provided in this post, you can contact us at 800-880-4015, or email us at info@abg-mn.com.

ACA Reporting Requirements for Control Groups

Control Groups & 2016 Reporting Requirements We’ve heard so much recently about the ACA, ObamaCare, Heath Care Reform, or whatever you choose to call it. Today, this law states that if you are an employer that is fully insured and have under 50 FTE’s, you don’t need to file. If you are self-insured, you have to file regardless of your FTE count. But did you know that if you are a member of a control group, you could be required to file forms 1094 and 1095 in 2016? No? Let us break it down for you. In the eyes of the IRS, a control group is considered a single employer. So, if you are a member of a control group (classified below) and collectively have 50 or more FTE's, you will be required to file these forms without facing a penalty from the IRS. In most cases, if you are a control group, you are probably aware of it. But are you set up and prepared to file your forms 1094/1095? If you answered no, contact us today to learn what ABGNCS can offer. If you answered yes but still want our help, we are here for you to take the worry away.  CONTROL GROUP DEFINED A control group, as classified under §414(c) of the IRS Code, exists when any two or more entities are connected through ownership. There are three types of control groups: 1) Parent-subsidiary, 2) Brother-sister, and 3) a combination of the above. A parent-subsidiary controlled group exists when one or more chains of corporations are  connected through stock ownership with a common parent corporation. In addition, 80% of  the stock of each corporation is owned by one or more corporations of the group, and the  parent corporation must own 80% of at least one other corporation. A brother-sister controlled group is a group of two or more corporations, in which five or fewer common owners (a common owner must be an individual, a trust, or an estate) own, directly or indirectly, a controlling interest of each group and have “effective control” (generally more than 50% of stock). A combined group consists of three or more organizations that are organized as follows: Each organization is a member of either a parent-subsidiary or brother-sister group; At least one corporation is the common parent of a parent-subsidiary, and; Is also a member of a brother-sister group. CONTACT US To learn more about how ABGNCS can support you in your reporting requirements, contact us at 800-880-4015, or email us at info@abg-mn.com.

Do my 401(k) forms look different – YES they do!

ABGNCS has enhanced our forms for more automation!  Let's discuss some of the benefits of now having your retirement plan forms available online.

Quickly accessible.  You have 24/7 access to forms with the plan sponsor login, under the forms tab on the main page.

Pre-populated option.  When you select an employee, it populates all of their demographic information, eliminating many of the errors that could arise.  By having the forms prefilled, you can be sure we will know exactly what participant the form is for, without having to worry about illegible handwriting. In addition, distribution forms will pull the balance information, saving the sponsors and participants time and increasing accuracy.

Simplified navigation. The new forms have more defined sections, which make them easier to navigate.  With bolded titles and clearly labeled sections, we’re confident participants will have a much easier time completing these forms more accurately.

Clear delivery selections. Participants will find delivery options for distributions are clearer and easier to select. These are very important for your participants to be aware of.  Delivery options include:

• Standard delivery – This means the distribution check will be sent through the United States Postal Service.  This could take 7-10 business days to receive. 
• Overnight delivery – Once the check is requested from the trust company it will be sent overnight to your selected destination.  There is an additional fee of $20.00 for this service.
• ACH/Direct Deposit – This will be direct deposited into the selected account.  There must be a voided check included to have direct deposit.

We are continually looking for ways to streamline our forms and improve the user’s experience. When using online forms, you will always be sure you are receiving the most current balance and fund information and accessing the most up to date improvements.

Enhanced Forms

• Enrollment / Election Forms 
• Rollover Forms
• Distribution Forms
• Hardship Forms
• Loan Application
• Fund Change Form
• Beneficiary Form

We encourage you to go out to the plan sponsor website and take a look at the updated forms.  As always, please let us know if you have any questions!

The Authors from our Retirement Team:

Abbey Hullopeter, Client Support Associate
Amber Sorenson, Account Manager
Brittany Miller, Account Manager

abgncs.com

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

Keeping Your 401(k) Distribution Safe & Sound

A Participant requests a distribution, is there an alternative to mailing a paper check?

Yes! Taking a distribution or loan from a 401(k) account can seem to take a lot of time, but did you know an ACH or direct deposit of those funds to a checking or savings account is an option? 

• ACH/ Automatic Clearing House: a secure, nationwide electronic funds transfer network that allows credit and debit entries to personal bank accounts by all U.S. financial institutions. It is an alternative to a written check.
• Direct Deposit: The deposit of electronic funds directly into a bank account as a form of payment rather than a paper check.

An ACH or Direct Deposit of distribution or loan proceeds is reliable and often the quickest delivery option for a 401(k) distribution or loan. 

If a participant does not have a personal checking or savings account it is recommended that he/she sign up for one if planning a distribution of a 401(k) account and want ACH or direct deposit as the delivery method.  If a participant does not have a checking or savings account, a paper check will be the default delivery option.

ACH or Direct Deposit is only allowable into an account that is owned by the Participant!

A general rule every plan sponsor and participant should know - interest in a 401(k) account, including the “vested interest,” may not be alienated. This means that the account interest may not be sold, used as collateral for a loan (other than for a plan loan to the participant), given away or otherwise transferred (except at death to a beneficiary).

Why: The 401(k) plan has to distribute the balance to the participant, so that he/she can be properly taxed on a distribution and the 401(k) plan does not violate the anti-alienation rules. 

Fine Print:
(G) Assignment or Alienation. Except as provided in Code §414(p) relating to QDROs (or a domestic relations order entered into before January 1, 1985) and in Code 401(a) (13) relating to certain voluntary, revocable assignments, judgments and settlements, neither a Participant nor a Beneficiary may anticipate, assign or alienate (either at law or in equity) any benefit provided under the Plan, and the Trustee will not recognize any such anticipation, assignment or alienation. Except as provided by Code §401(a) (13), a benefit under the Plan is not subject to attachment, garnishment, levy, execution or other legal or equitable process.

The participant will need to provide a voided check copy or other proof of ownership to the account your funds are to be electronically transferred to.

Why:  The owner of an account- (if NOT the participant) - has no rights to the money at the time of distribution, so the plan cannot distribute to him/her, even if, the participant wants to transfer the funds to him/her.

I hope this has been informative - explaining why proof of ownership and depositing funds into YOUR checking or savings account is so important!

The Author: Amy Newman

Lead Transaction Support Associate
abgncs.com

anewman@abg-mn.com

What is the HSA “Catch-Up” Contribution?

Getting older does have its benefits! Did you know if you are 55 years of age or older you are eligible to contribute even MORE to your health savings account (HSA)? 

The catch-up is an additional $1,000 that you can contribute to your HSA once you reach age 55, increasing not only your HSA balance, but your tax savings as well. 

An HSA owner becomes eligible to contribute the full $1,000 catch-up amount within the year they turn age 55. It doesn’t matter if your birthday is on January 1st or December 31st the full amount is allowed. The HSA catch-up is allowed each year until you reach age 65 or are enrolled in Medicare benefits. 

In addition, if you and your spouse are both over the age of 55, each of you may contribute the additional $1,000 catch-up amount. In order for this to occur, the catch-up will need to be done in separate health savings accounts established in the name of each spouse. It is not compliant to contribute the catch up amount to an HSA account that is not in the participant’s (account owner’s) name. 

If you would like to learn more about health savings accounts (HSA) or catch-up contributions please visit us at www.abgaccess.com.

Thank you and have a wonderful day!

The Author: Stacie Ravenhorst, CFC

Implementation Specialist

abgncs.com/hsafsahra

sravenhorst@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.

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