Year End is Quickly Approaching. Here are Some Tips for Retirement Plan Sponsors.

What Does “Year End” Mean to Me as a Plan Sponsor of a Retirement Plan?
For full-service retirement plans, each year as your plan year comes to a close Alliance Benefit Group North Central States, Inc. (ABG) will send you a packet of information called the Year End Packet. This packet includes information detailing what the year end cut-offs are for processing contributions and distributions, vesting updates (if applicable), and notices to be delivered to Participants, including the deadlines to do so. Also included are: 

•          Updated annual Plan limits
•          Important IRS and DOL dates
•          The Data Request

Let’s break down each of these topics to help you understand your responsibilities as the Plan Sponsor, as well as utilize the tools provided.

Processing Cut-Offs
In order for ABG to have all of the year’s information included on the 12/31 statements, we must receive it in time for it to be processed start to finish. This means that if we provided automated clearing house (ACH) for your payroll file, we need to have the payroll file uploaded to us by Noon Central Daylight Time (CDT) of the date noted in the Year End Packet. This allows time for us to receive the confirmation of deposit for the ACH from the custodian and make sure the file is traded before the close of the calendar year.

If you send your own deposits, you have a couple of extra days, but the deposit must be received at the custodian by no later than the second to the last business day of the year. This only pertains to statements -- you can still submit information after the New Year and it will be included in the prior year’s testing.

Distributions need a little extra time due to the processing on our end and your Custodian’s check issuance policies. The distribution cut-off will also be noted in your Year End Packet.

Vesting
Vesting is only applicable if your plan has an “hours of service” requirement for vesting and you do not submit hours each pay period. ABG can still update the hours after the calendar year end but the correct vesting will not be reflected on the 12/31 statements.

Notices to Participants
This category includes notices such as the Participant Fee Disclosure (404(a)(5)), the Qualified Default Investment Alternative (QDIA) notice, Safe Harbor notice, or other communications of that nature. Each of these disclosures needs to be distributed to participants no later than 30 days prior to the beginning of the following plan year. ABG does make note of the deadline for each notice throughout the Year End Packet to ensure that you have that information handy. 

Can ABG mail these to Participants for me?  ABG has recently partnered with a third-party called Media Scope who can mail the notices for you. If you are interested in this service, please reach out to your Administration Team for more information. If your Plan opts to utilize this service, ABG will have you sign an agreement with Media Scope, ask you to “scrub” the Census Notice Report for any erroneous information, and then ABG will provide the scrubbed report and the applicable notices for your Plan to Media Scope. That’s it, you’re done! 

If you do not use the service, you can still use the Census Notice Report from the plan sponsor web to determine who needs to receive the notices. The report can even be exported into an Excel spreadsheet that you could then mail merge to make mailing labels.

Speaking of that, who DOES need to receive the notice(s)?  Obviously any active Participant needs to receive the notice(s) but also anyone who is terminated with money still in the Plan as well as anyone who has met eligibility but hasn’t deferred yet. You also need to provide the notice(s) to any beneficiaries of deceased participants -- basically anyone who has a plan status of Active or Inactive when looking at the Plan Status column under EE Search on the Plans Sponsor web.

Updated Plan Limits
Each year (usually mid-November), the IRS determines what the “plan limits” are for the following year. This includes compensation limits, total plan contribution limits, deferral limits, catch-up contribution limits, taxable wage base, and compensation limits in relation to definitions of an HCE (Highly Compensated Employee) or a Key Employee. ABG will include a chart of all of these limits in your Year End Packet that shows the following year as well as the previous four to five years’ limits.

Important IRS & DOL Dates
ABG also provides a page indicating important dates for the IRS and DOL deadlines, such as the Form 5500 deadline or when excess deferrals due to an ADP failure need to be returned by. Most of these deadlines are relative to the Plan year end date, so they won’t be the same for a plan with a 12/31 year end date as is for a 5/31 year end date, but there are a few that are the same for everyone regardless of plan year end.

Data Request
The data request part of the packet provides information for the Audit Team to prepare the Form 5500 (if applicable) and provides your Administration Team the necessary information to complete the Plan’s compliance testing. It is very important that the Data Request be completed in its entirety and to the best of your ability. Please do not hesitate to reach out to your Administration Team if you have any questions while completing this. It’s much better to get those questions answered right away.

We hope this information is helpful. As always, if you have questions on any of this information, please reach out to your Administration Team at 1-800-898-9344. We’re always happy to help!!

The Author: Michele Etherington, QKA

Senior Account Manager – Retirement

abgncs.com

metherington@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.

Proud to Be Part of This (National Award Winning) Team

Sometimes you have to stop and smell the popcorn popping in the break room on Thursdays. 

It's been about a week since it was announced that Alliance Benefit Group Companies of Minnesota and Kansas (ABGNCS, ABGFS) were awarded the Best-In-Retirement Business IMPACT Award™ from Charles Schwab & Co. Inc. ("Schwab") and it's a proud moment for our entire organization. This has been a fun couple of weeks, Schwab even visited our office and made a video that made us look like we could be the subject of a TV show. Catch it by following this link or tune into TNT on Wednesday nights at 8/7 Central. 

Coming to ABG last year from the advertising industry in Minneapolis, I have seen my fair share of excitement and sorrow over industry awards (mostly sorrow and passive aggressive finger pointing). The excitement surrounding this though is even more special. Perhaps, because our headquarters isn't in a trendy warehouse district or a glassy sky scraper, it's in Albert Lea, Minnesota. A town often referred to as "Mayberry" which happens to be placed at the nexus of the universe, otherwise known and the crossroads of I35 and I90. Possibly, because our people are so humble they pass the credit around like a holiday fruitcake. It's also been fun to embrace the collaboration between our advisor, consulting and recordkeeping divisions. But, the biggest reason I'm so impressed is because if I wasn't here every day to see the impact our 100+ person team has across the national retirement (and health & wellness and payroll and COBRA) community, I would have a hard time believing it. This award helps reinforce that notion. It truly is a great team across the board. For that I wanted to take this week's blog post to thank the team I get to work with every day. 

Good work all. Here's to being recognized and here's to further success in the years to come. Now it's time to get back to work so we can put more hardware in the trophy case, and more importantly help our clients succeed. 

The Author: Cole Thompson 

Marketing Specialist 

abgncs.com

cthompson@abg-mn.com

What is the HSA/FSA Benny Card, and How Can I Use It?

If you have a Health Savings Account (HSA) or a Flexible Spending Account (FSA) with Alliance Benefit Group North Central States, Inc., you likely have a red Benny Card. Some of you may know exactly what to do with this card, but more than likely, most of you have questions on just what this card is for, and how you can use it. I’m here to answer some frequently asked questions to clear up any mysteries for you.

What is the Benny Card?

The Benny Card is a debit card of sorts that goes along with your HSA/FSA account.  Funds that you have in your account can be accessed by using this card, just like a bank debit card. You can only use the card for the amount available in your account.

What can I use the Benny Card for?

As much as we may like to spend our money on the golf outing of the year, or a fabulous new outfit, that’s not the way this card works. You can only use the Benny Card for any eligible medical/dental/vision expenses, such as bills for doctor visits, braces, eyeglasses, and prescriptions. The card will not work for over-the-counter medicines, nor can you use it at an ATM to get cash. If you try to swipe your card for non-eligible expenses, it will be declined.

Where can I use the Benny Card?

You can use your Benny Card at most pharmacies, clinics, dental offices, and vision centers, and if you have a Benny Card attached to your Dependent Care account, a small number of large daycares. If the Point of Sale or POS at which you are swiping your card is a pharmacy, discount store or grocery store, then that POS must be set up with the Inventory Information Approval System, or IIAS. This is a system that helps determine what is HSA or FSA eligible, and helps you as the consumer to only spend your money on qualified expenses, and can save you money and hassle in the long run. 

I hope this information helps clear up some of your questions. If you have questions regarding what is an eligible expense, please click here. Otherwise, if I’ve missed something, we’d love to help. Please feel free to contact us anytime at abgaccess@abg-mn.com, or call us at 1-877-661-4727.

 The Author: Evie Cunningham

HSA Administrative Specialist

abgncs.com/hsafsahra

Disclaimer: This blog is of an informative nature and should not be taken as advice. Please work with the appropriate parties for those services. 

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. 

It’s Beginning to Look at Lot Like………….Enrollment Time!!!!

You thought I was going to say the name of a popular wintertime holiday didn't you? From the looks of the retail stores it seems that may be true, but for many it’s Flexible Spending Account enrollment time.

It’s fast approaching, so before you can cozy up next to the fire with a cup of cocoa and listen to your favorite Bing Crosby or Alvin and the Chipmunks Album, you have to decide what you’re going to incur in medical or dependent care expenses for the New Year.

So how can you predict the future? Last I checked, you can’t, but here are some tips to help you forecast your medical and dependent care expenses:

Dependent Care Expenses: For me this is simple. With a young child at home I know that I will surpass the $5,000 per year IRS maximum allowed amount. It may be a little easier to estimate dependent care expenses since you most likely know exactly what dependent care expenses you’ll have for the upcoming year and it’s really rare to leave money behind in this account. Just remember each employer has different guidelines on the time-frame to submit claims, so check out the fine details for your plan (or just give us a call, we are here).

Health Flexible Spending/Limited Purpose Flexible Spending: This is where being able to predict the future would come in handy. How can you really decide what your medical expenses are going to be? Well we don’t have a crystal ball either, so it’s really just an educated guess. Currently, the IRS maximum pre-tax benefit amount for Health FSA or Limited Purpose FSA for a plan year is $2,500.  Your employer might have a lower maximum benefit amount, so again, check with them for the details or give us a call. Some employers offer a grace period or a carryover to allow participants more options to use up their balances. If your employer doesn’t offer one of these features you need to incur enough expenses during the plan year to cover your election amount. Otherwise, you will lose it. Unused funds are held by your employer and the IRS has strict guidelines on how the money can be spent. Sorry, no lavish parties.

If you currently have money left in your 2014 benefit account, it is still early enough to think about what expenses are coming up for the rest of the year or consider what you might need to incur to spend down your remaining funds. If you need help determining what you can and can’t use your funds on, give us a call at (877) 661-4727.

Hopefully this information has been helpful and hasn't spoiled your upcoming holiday celebrations. 

The Author: April Van Hove, CFC 

Team Lead FSA/HSA Administrator

abgncs.com

avanhove@abg-mn.com