Annual Work For You
When To Restructure Your Plan
Get Valuations On Those LLCs And Real Estate
Watch Out For These Rules/Pitfalls
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Annual Work For You

  1. What work will you the retirement plan sponsor and trustee have to do for the retirement plan each year?
  2. How do we communicate with you?
  3. How vital is it that you do the work, and turn it in timely?
  4. How about my work for 401k plans?

What work will you the retirement plan sponsor and trustee have to do for the retirement plan each year?

  • Once a year, we send out our census and trust forms for the current plan year for you to complete;  1)the census form asks you to fill in all of the employees, including those not on the plan and those who work for other companies you are involved with, showing their names, dates of birth, dates of hire, dates of termination, hours worked, and compensation paid for the year; for hours worked, we are looking for three categories: worked less than 500 hours, work between 500 and 999 hours, and worked over 1000 hours, 2) the trust balances form asks you to list all of the investment accounts that are part of the retirement plan, showing the fair market value at the plan year end, and then coming to a total at the bottom of the page; 3) the inflow/outflow page asks you to show what money went into the plan as a contribution for the current plan year (and we count contributions made after the end of the current plan year that are to be deducted for tax purposes for the current company tax year)
  • We will send out amendments and notices during the year, and ask that you promptly take care of signing such amendments and notices, and distributing them as necessary
  • Once a year we send out valuations and government reporting forms for the plan, covering the current plan year, and we ask that you sign these forms and distribute them as necessary; in some cases, the government forms are sent electronically to the government
  • If anything happens in your business or in the retirement plan that you think might be of interest to us, please inform us by email

How do we communicate with you?

  • In most cases, we will get an email address for you, and communicate with that email address
  • Sometimes we will send out letters by regular mail

How vital is it that the plan sponsor and trustee do the work, and turn it in timely?

  • We must have you complete and send to us the annual census and trust forms for the current plan year no later than one month after the end of the current plan year – if you send it to us six months later, you may be causing yourself some hardships (for example, we may have to do an amendment to make your plan perform the way you want, but if you didn’t get us the data on time, it may be too late to avoid paying money for additional benefits)

Work For 401k Plans

  • The work required on 401k plans at your office is very much a function of us setting up procedures to simplify the process; there are a lot of “banking records” to make, which are best done at the institution doing the investments. The expenses charged for this “banking records” by institutions tends to grow very large after a few years. We recommend you consider transferring out as much of the money as you can to a Frozen Money Purchase Plan, which can reduce your fees to 1/5 of what they are now, while maintaining as good, and perhaps better, employee control over their funds.
  • A second area of concern for 401k plans is passing tests: there are two options, 1) adopt one of three Safe Harbor approaches, and make sure you send out the Safe Harbor Notices to all employees in the first part of the year so they have a chance to get matching funds, or 2) to test the plan annually in January to see if it passes the ADP/ACP tests, and either refunding deferrals by the high paid participants until the plan passes, or putting in company matching funds until the plan passes the ADP/ACP tests.
  • There is not much competition for large institutions to charge large fees for 401k plans as they become mature; however, there are ways to reduce the amount exposed to these large percentage fees, and you owe it to yourself and your plan participants to reduce these fees, especially when you realize the participants bear much of these fees.
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