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Plan Resources

Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

november 2018


HOW AND WHEN TO PAY PLAN EXPENSES WITH PLAN ASSETS

Some retirement plan expenses can be paid for with plan assets — but many can’t. Which are the “reasonable and necessary” retirement plan expenses that can be paid out of plan assets?

Generally, services required to maintain the plan’s compliance and administration can be paid from plan assets. Obvious examples include the annual nondiscrimination testing and preparation of the annual Form 5500. Another example is a plan amendment or restatement that is required because a legislative change.

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Participant Memo

november 2018


Tips to Weather a Turbulent Market

With the recent market volatility, it’s understandable that you may be concerned about your investments. Volatile markets can make you wonder if you’re on track to meet your retirement goals. Don’t be discouraged and most of all, don’t panic. Instead, be proactive! Consider the following steps you should be taking in both up and down markets:

  • Review Your Portfolio. Know your investment mix and be sure you are invested in the appropriate asset classes (based on your risk tolerance and time horizon to retirement). Times like these reinforce the need to diversify (while diversification does not guarantee against loss of principal, it can help spread your risk among different asset classes and market segments).

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

October 2018


HOW DO YOU MONITOR A DASH? EVALUATING CASH EQUIVALENT FUNDS

As you read your plan’s lineup, you see the following scores:

Periodically you review your plan’s fund lineup; you place some funds on Watchlist, you replace under-performers and you continue to monitor those funds that score acceptably. But, you see a dash next to your cash fund and wonder, what should you do? Traditional evaluation metrics can be difficult to apply to cash funds. You can look at returns, but without an appropriate benchmark or a way to directly measure the risk taken by the fund, the market value performance number can be difficult to interpret. Perhaps fees can provide the answer, but there are wrap fees, investment management fees and trustee fees, all assuming there is a stated fee to review in the first place. What is a fiduciary to do?

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Participant Memo

October 2018


Skip the Line, But Don’t Skip the Match!

October's Participant Memo is a flyer encouraging participants to not leave any retirement money on the table by not meeting the employer's match. 

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

september 2018


USE PLAN ANALYTICS TO EVALUATE YOUR RETIREMENT PLAN

Your retirement plan is a valuable resource for your employees and serves as a vehicle to attract and retain top talent. Ensuring plan success is crucial. Examining plan analytics can help evaluate its success. Plan analytics you should explore:

 • Median age, tenure and savings rates of plan participants 

   These analytics can be helpful to determine which age groups are not strongly participating and may be encouraged to do so via on-site               meetings, focused mailings and other communication and education.

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Participant Memo

August 2018


Is it Time for a Retirement Plan Check-Up?

It’s important to conduct regular check-ups on your retirement plan to make sure you are on track to reach your retirement goals. Below are a few questions to ask yourself, at least annually, to see if (and how) they affect your retirement planning. 

1. Review the Past Year

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

August 2018


COLLECTIVE INVESTMENT TRUSTS — THE FASTEST GROWING INVESTMENT VEHICLE WITHIN 401(K) PLANS

For almost a century, collective investment trusts (CITs) have played an important role in the markets. They were originally introduced in 1927. A 2016 study showed that they are the fastest growing investment vehicle within 401(k) plans, with 62 percent of asset managers believing their clients will shift from mutual funds to CITs.¹
Investopedia defines collective investments trusts as a fund that is “operated by a bank or trust company and handles a group of pooled trust accounts.” The CITs “group assets from individuals and organizations to develop a larger, diversified portfolio.”2 They differ from mutual funds in that they are comprised of pooled trusts not pooled securites.

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Participant Memo

July 2018


Good Health is the Best Wealth

Believe it or not, staying healthy just might make you wealthy. With small lifestyle changes and healthy choices, you may reduce your annual healthcare costs and increase your income. These lifestyle changes can be as simple as limiting your salt intake or taking your prescribed medication regularly.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

July 2018


Exchange Your Old Retirement Solutions for New Ones

An exchange is a turnkey solution for businesses that allows you to provide the benefit of a retirement plan while offloading much of the administrative and fiduciary responsibilities at a potential cost reduction. A team of professionals work together on your behalf so you can focus on running your business, not your retirement plan.

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Participant Memo

JUNE 2018


Save Early, Reach Your Goal

Contributing to your employer’s retirement plan as soon as you’re eligible is crucial to meeting your retirement goals. The earlier you start saving, the more time compounding interest has to work on your behalf. Putting off contributions today means increased contributions to reach the same goals tomorrow

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

JUNe 2018


Are You prepared for an IRS Audit?

The Internal Revenue Service’s (IRS’s) Employee Benefit Audit Program is used to audit and enforce. The IRS’s emphasis, with respect to defined contribution plans is on compliance with the requirements of the Internal Revenue Code (the Code), the plan’s tax qualification and administration of all plan documents. In the event of noncompliance with regulations, the IRS can impose taxes, penalties and interest. Most IRS audits are selected at random, but certain audit triggers exist that plan sponsors should be aware of. If the IRS suspects noncompliance, the chances of an audit will increase substantially. Answers to certain questions on the Form 5500 may also trigger an audit.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

may 2018


Have You Conducted A Fee Equalization / Levelization?

Fees in defined contribution (DC) plans can be complicated. Historically, fees have not been fully and simply disclosed, but the industry is changing towards greater and more understandable disclosure. Simply put, there are two basic types of fees: administrative and investment-related. The investment-related fees are deducted from earnings on participant accounts and will vary from one investment to the next. These fees are paid to the firms that are making decisions about how the various funds are invested in the market. Participants will pay different investment-related fees, as the fees are based on where the participant chooses to invest their assets.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

april 2018


What Happens When You Deposit Employee Deferrals Late?

In our research, late deposit of contributions is a frequent error made by plan sponsors and is a key priority of the Department of Labor (DOL). In our experience, during every plan audit conducted by the DOL, the investigator looks to see if contributions have been deposited in a timely manner. A number of years ago, the DOL revised the instructions to Form 5500 requiring plan auditors to review and confirm that contributions are made in a timely manner. For this reason, it is unlikely that late deposit of contributions will go undetected in the case of plans subject to the audit requirement.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

march 2018


The Explosion of Bitcoin

From Wall Street Journal articles and editorials in Barron’s, to Facebook posts and holiday dinner conversations, Bitcoin is everywhere. This is not surprising when you consider Bitcoin’s exponential growth in 2017. In a year where the market saw new highs, one of the top performing mutual funds returned 105.73 percent¹, and a top performing stock in the S&P 500 saw 132.3 percent growth (NGR)², Bitcoin’s growth made these all pale in comparison. (S&P 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. You cannot directly invest in the index.) Up 1,390.0 percent in 2017³, we feel that Bitcoin’s performance and proliferation is unquestionable.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

february 2018


IRS Retirement Plan Announcements For The Recent Hurricanes and California Wildfires

Recently, many individuals have been significantly impacted by hurricanes and California wildfires. Through several announcements the Internal Revenue Service (IRS) has provided relief for qualified individuals in retirement plans. In addition, President Trump signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 (“Act”), which provides tax relief for individuals affected by Hurricanes Harvey, Irma and Maria (“HIM”). Below is a summary of the recent communications, including new information from a recent IRS Announcement for Hurricane Maria and the California Wildfires, election forms, and other resources to help you take the appropriate next step for your plan.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

November 2017


When we think of employee benefits in today’s traditional landscape, we don’t typically include wellness within that core definition. Instead, wellness is often considered a standalone strategy. But this can be a disastrous scenario, considering how employee benefits and well-being go hand in hand. Most employees think of the two as the same and expect well-being initiatives to be included in their workday through fitness trackers, standing desks, flex time, healthy food options, etc.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

October 2017


The number of notices and disclosures required to retirement plan participants has increased while methods to access information changed drastically. Many people receive their news and information on electronic devices through apps and social media. What remains the same is the Department of Labor’s (DOL’s) guidance about permissible methods to provide notices electronically. There is a disconnect between how people are accustomed to receiving information (electronically) and what is permissible under ERISA.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

September 2017


Globalization of the world economy has increased exposure to international investments, yet equity portfolios in general remain largely home biased today. This may be a good time for participants to reevaluate their asset allocation to see if they may be exhibiting a home country bias— or displaying overly optimistic expectations about the domestic market and/or pessimism about foreign markets.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

August 2017


If you have ever opened a brokerage account with an advisor, you know the first step is gathering information to determine the risk profile and appropriate investment allocation for the individual. In order to determine the appropriate allocation for a client, financial advisors will inquire about income level, savings rate, net worth, time horizon, spending needs, investment knowledge and most importantly risk tolerance. Based on this information the advisor will recommend a tailored allocation to help individuals reach their objectives while maintaining an appropriate risk level to help ensure clients remain invested through market downturns.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

July 2017

Time is a powerful modifier of perception and purpose. No need to look any further than the frequent rumblings surrounding fixed income in the current rising interest rate environment. That isn’t to say the frequently touted “bond bubble” and rising interest rate topics are unimportant or overstated, it’s merely a reaction to the volume and misappropriation of focus often exhibited in these ongoing conversations. Monitoring the trajectory of rising interest rates is a good idea, however letting it affect the way you invest in fixed income may not prove additive in the long term.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

June 2017


We are now in the eighth year of an equity bull market, making this the second-longest upswing in American history.¹ Additionally, the bond market has been in a secular bull market since 1982 as rates on the 10-year treasury fell steadily from above 14 percent to below 2 percent last year.² The recent strong returns we have experienced may be difficult to sustain due to equity valuations, near-record corporate profit margins, and low interest rates. This is not to say we are in a bubble or an imminent bear market looms, however now may be a good time to reset long-term investment return expectations for participants. In fact, California’s state public pension system, Calpers, recently lowered their expectations for long-term investment returns from 7.5 percent to 7 percent.³ Even those reduced projections may prove optimistic.

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Retirement Times: News and Updates for Retirement Plan Sponsors and Fiduciaries

MAY 2017


The term “alternative investments” may conjure images of classic automobiles, fine wine, rare art and valuable jewels. Some may think about the Honus Wagner baseball card that sold for $3.12 million at auction in 2016. Or about the 1962 Ferrari 250 GTO that sold at auction for a whopping $34.65 million in 2014. Or maybe they set their sights even higher and think about the Hope Diamond, with an estimated value of $200-$250 million.

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Higher Education Litigation Update

May 2017


In the past few weeks, lawsuits were launched against twelve higher education institutions: Yale, NYU, Emory, MIT, Vanderbilt, Johns Hopkins, University of Pennsylvania, Duke, Cornell, Columbia, Northwestern, and University of Southern California. The law firm of Schlichter, Bogard & Denton filed 11 of the 12 putative class action suits, claiming breach of fiduciary duty under the Employee Retirement Income Security Act (ERISA) for providing a substandard plan model that allowed the plan participants to incur excessive fees.

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