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At DWC, all of our consultants keep their fingers on the pulse of industry news and regulatory developments. We have assembled this collection of articles to serve as a resource for our clients and partners. Click on a category to show the current list.

Please do not use this information as a substitute for legal advice. Contact your ERISA consultant or attorney with plan specific questions.

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MOST RECENT ARTICLES

Marketing’s Fiduciary Responsibility

... When most of us hear the words, “Fiduciary Responsibility” it is likely we think of the legally-driven need and commitment to keep a retirement plan in compliance. Or perhaps you may think of the duty an investment advisor has to put their client’s interest above all others. While others still may associate the term with a Board of Directors reviewing a large buyout offer and making a decision that is best for their stockholders. But I would guess that few of us think of our marketing efforts when we hear the term, Fiduciary Responsibility. Maybe we should.(read more...)

No Need To “Press Your Luck” When It Comes To Government Audits

Few things instill that dreaded feeling quite like an official letter from the Department of Labor (“DOL”) or Internal Revenue Service (“IRS”). Your heart creeps up to your throat; your head begins to spin; and panic sets in as you wonder what in the world you are going to do now. It doesn’t have to be this way; and we will explore how to turn these feelings of dread into ones of confidence.(read more...)

Family Feuding About Benefits

Two sensitive subjects you prefer to avoid getting stuck in the middle of with your employees ... 1. Death of a family member. 2. Getting a divorce. Unfortunately, both are likely to come up at some point in the life of a qualified retirement plan, often at the same time. We read about the rules that are designed to protect participants, but those rules also extend to beneficiaries, spouses and former spouses. As much as we would probably all prefer to stay out of those discussions, understanding the basics can help you cool down potentially heated conversations. (read more...)

COLLECTION

Articles & White Papers

401(k) or 403(b)—Tomāto, Tomäto?

The last few years have brought significant changes to the 403(b) world. The IRS' first update to the regulations in more than 40 years directly imposed new plan document and oversight requirements and indirectly created(read more...)

A Rose Employee By Any Other Name

As companies adapt to an ever-changing business environment, it sometimes calls for the use of different types of work arrangements. Some may rely on more part-time workers, while others may choose to work with independent contractors.(read more...)

Accidents Will Happen

If you are a music fan, you may be familiar with the Elvis Costello song "Accidents Will Happen." While Elvis certainly didn't have 401(k) plans in mind when he wrote that song, he certainly could have.(read more...)

Alphabet Soup of Automatic Enrollment - Comfort Food or Empty Calories

A traditional 401(k) plan allows an eligible employee to elect to defer a portion of his or her salary into the plan, typically on a tax-deferred basis. Automatic enrollment plans, on the other hand,(read more...)

Amendments & Restatements - Mandatory

From time-to-time, all qualified retirement plans are required to be updated to reflect recent legislative and/or regulatory changes. Some of these updates are made through plan amendments, but others require plan documents to be completely re-written (a process know as 'restating' the plan). The following is a list of the various amendments and restatements that have been required since 2003.(read more...)

Amendments & Restatements - Voluntary

One of the foundational rules of retirement plans is that they must be operated in strict accordance with the terms of the written plan document. Both the IRS and the courts adhere to this rule. The United States Supreme Court even went so far as to say in one of its opinions that a plan sponsor's intentions as to how the plan should operate are irrelevant if they are different than what is reflected in the plan document. That means that plan documents must be formally amended when plan sponsors wish to change provisions. Examples of changes requiring plan amendments may include accelerating plan eligibility for new hires or changing the manner in which a profit sharing contribution is allocated among participants. Depending on the type of change and the date it is to be effective, there are specific requirements as to when the plan amendment must be signed by the plan sponsor. Those requirements apply equally to full plan restatements.(read more...)

Automatic Enrollment Redux

The Pension Protection Act of 2006 created two new types of automatic enrollment features—the Eligible Automatic Contribution Arrangement ( "EACA") and the Qualified Automatic Contribution Arrangement ("QACA"). Though these arrangements were initially available for plan years beginning in 2008,(read more...)

Bad Things Happen. How To Be Prepared.

We see it every day. The news is continually buzzing about the most recent data breach or public relations scandal.(read more...)

Cheap Tech

Evangelists. That's what we really are. Retirement evangelists. Every day we consult with our clients about the importance of saving for retirement.(read more...)

Cheap Tech - Cutting Through The Clutter

Communication is the key to what we do every day, and we have to be ready to shift on the fly as our audience changes: that board of directors voting on whether to select us as their new provider;(read more...)

Cheap Tech - Head In The Clouds

While we've spent our fair share of this column writing about some of Apple’s innovations, there’s another technology giant that continues to push us ever onward.(read more...)

Cheap Tech - King of the Tech Jungle

When it comes to technology, one of the most important considerations is access to information where you want it when you want it.(read more...)

Cheap Tech - No Lemons

This cheap tech won't necessarily help you earn more bread, but it could save your bacon. Lemon Wallet is part Passbook and part CardStar, mixed together and improved.(read more...)

Cheap Tech - Original Jobs Creator

Since the last iteration of this column appeared in print, the world lost one of its true visionaries with the passing of Steve Jobs. Apple, under Jobs’ leadership, revolutionized technology over the past decade and paved the way for the cheap technology we feature in this column.(read more...)

Cheap Tech - PowerPoint Killer

Social media continues to be an extremely cost-effective means of getting your message out to a lot of people with relatively little effort. But now that more and more people are using social media,(read more...)

Cheap Tech - Simian Surveys and Other Pursuits

Downloads and apps can help keep your business running smoothly for little or no money.(read more...)

Cheap Tech - Smart Tech Comes With Coffee

We all communicate for a living, some of us better than others. Although many of us are fairly effective communicators, our effectiveness is only as good as the messages we receive.(read more...)

Cheap Tech - Your Newscast Starring You

A self-proclaimed television studio in your hands, TouchCast takes the era of DIY internet video to a whole new level.(read more...)

Compensation Jeopardy

Employees work; they get paid. Easy peasy. Not so fast. According to the IRS, using incorrect compensation amounts to calculate retirement plan benefits and conduct annual compliance testing is one of the most common errors they see. How can such a straight-forward topic be that confusing? Find out in this episode of Compensation Jeopardy! Be sure to phrase your responses in the form of a question!(read more...)

Compliance Deadlines

01/311099R's Due to the Participants (From Trustee/Custodian). The custodian/directed trustee of the plan delivers the 1099R's direct to the participants. Please note, some custodian/directed trustees deliver the 1099R attached to the check.(read more...)

Control Yourself: Plan Compliance and Internal Controls

The phrase 'internal controls' is one I've heard throughout my 26-year marriage to an internal auditor. (I was never quite sure what it meant, but I knew he was always looking for them!)(read more...)

Cornucopia of 401(k) Goodness

Following a relative lull in 401(k) guidance in recent months, the Treasury Department made up for lost time by publishing a bumper crop of new releases, including at least five Notices and four Revenue Rulings.(read more...)

Doing M&A the Right Way

Congratulations! You're buying (or selling) a company! Call your lawyer; call your accountant; call your … Third Party Administrator?(read more...)

Don’t Be The Next Target for a Data Breach

The TJX Companies, Target and AT&T are just three of the big names to have been victims of massive data breaches in which sensitive personal and financial information was compromised.(read more...)

Family Feuding About Benefits

Two sensitive subjects you prefer to avoid getting stuck in the middle of with your employees ... 1. Death of a family member. 2. Getting a divorce. Unfortunately, both are likely to come up at some point in the life of a qualified retirement plan, often at the same time. We read about the rules that are designed to protect participants, but those rules also extend to beneficiaries, spouses and former spouses. As much as we would probably all prefer to stay out of those discussions, understanding the basics can help you cool down potentially heated conversations. (read more...)

Fiduciary

You are a fiduciary if you exercise any discretionary authority/control related to the management of the plan. For small plans, the CEO or owner (s) is a fiduciary, as they are typically making the decisions on the company's behalf (regardless if they believe an outside trustee or advisor has been hired). (read more...)

Four Marketing Questions To Ask Yourself

You're busy. I get that. There are clients to see and things to do. But at some point, you might want to stop and ask yourself these questions.(read more...)

Highly Compensated & Key Employees

Retirement plans are required to satisfy a series of nondiscrimination tests that are designed to ensure that benefits are provided proportionately to a broad based group of employees and not just to the sponsoring company’s so-called highly compensated employees and/or key employees. (read more...)

Is It Time To Reinvent The 401(k) Or Our Expectations Of It?

The 401(k) plan was officially created by the Revenue Act of 1978 with the first proposed regulations coming in 1981, but cash or deferred arrangements ( "CODA") existed for decades prior. Both the 401(k) and its predecessors were intended to be savings plans(read more...)

Limitations

Detailed information on contribution limitations for calendar and non-calendar year plans.(read more...)

Lost Participants

Since a plan sponsor can not force out a participant without an acknowledgment, what are the requirements prescribed by the IRS for Search 'Lost Participants'?(read more...)

Marketing’s Fiduciary Responsibility

... When most of us hear the words, “Fiduciary Responsibility” it is likely we think of the legally-driven need and commitment to keep a retirement plan in compliance. Or perhaps you may think of the duty an investment advisor has to put their client’s interest above all others. While others still may associate the term with a Board of Directors reviewing a large buyout offer and making a decision that is best for their stockholders. But I would guess that few of us think of our marketing efforts when we hear the term, Fiduciary Responsibility. Maybe we should.(read more...)

No Need To “Press Your Luck” When It Comes To Government Audits

Few things instill that dreaded feeling quite like an official letter from the Department of Labor (“DOL”) or Internal Revenue Service (“IRS”). Your heart creeps up to your throat; your head begins to spin; and panic sets in as you wonder what in the world you are going to do now. It doesn’t have to be this way; and we will explore how to turn these feelings of dread into ones of confidence.(read more...)

Nondiscrimination Testing – ADP & ACP Tests

Nondiscrimination Testing – Compensation Ratio Test

Nondiscrimination Testing – Minimum Coverage Test

Nondiscrimination Testing – Overview

Nondiscrimination Testing – Top Heavy Determination

Off Calendar Plan Years

Plan sponsors of defined contribution plans have a plethora of compliance and administration requirements, but those plans that decide to use an off calendar year end face additional compliance/administration issues.(read more...)

Plan Documents: More Like Guidelines or Actual Rules?

Spend any amount of time dealing with retirement plans, and sooner or later the plan document will become a topic of conversation…maybe not an overly exciting topic, but an important one nonetheless.(read more...)

Profit Sharing

Profit sharing plan designs include the following: Traditional Profit Sharing Formula, Integrated Profit Sharing Formula, Age Weighted Profit Sharing Formula and New Comparability (Cross Tested) Profit Sharing Formula(read more...)

Record Retention

As the regulatory environment in which businesses operate becomes increasingly complex, the need to maintain thorough records of various activities becomes increasingly important. Employee benefit plans are no exception. Both the Internal Revenue Service ("IRS") and Department of Labor ("DOL") have rules that provide some basic guidance on record retention. Both agencies impose these requirements directly on plan sponsors; so even though service providers may store certain records as a convenience, sponsors remain legally obligated to hold on to all relevant records.(read more...)

Related Companies - Who Is In Control?

It seems that businesses of all sizes are more frequently being structured using multiple companies and/or that business owners are acquiring interests in other companies.(read more...)

Safe Harbor - Plan Design

The four safe harbor plan design options are categorized as: Traditional - Participants must enroll in the 401(k) feature (as in make the decision to defer into the plan)(read more...)

Sailing from Safe Harbor to Perfect Storm

It seems that every week there are more stories in the financial press describing employers that are reducing or eliminating contributions to their retirement plans.(read more...)

SIMPLE IRA versus Safe Harbor 401(k) Profit Sharing

Please note, if you are making this comparison with a profit sharing safe harbor 401(k) plan in place already; it is rare for a company to transition to a SIMPLE IRA. This is simply because the plan sponsor retains more corporate tax flexibility in addition all participants can defer more to a traditional profit sharing 401(k) plan.(read more...)

Some Good Deeds Do Go Unpunished

Over the last 10 years, employers have increasingly relaxed the eligibility requirements for employees to make salary deferral contributions into the company 401(k) plan.(read more...)

Sometimes Simple Isn't

One of the most frequent phone calls we receive--whether from a small business owner or an advisor working with one--starts something like this.(read more...)

The $64,000 Question – How Does My Investment Professional Get Paid?

Plan sponsors have many plan-related decisions to make. As fiduciaries, sponsors must make all of those decisions in the best interest of plan participants and with the exclusive purpose of providing benefits to them. Hiring an investment professional (or any other service provider) is one of those fiduciary functions, and understanding how he or she is paid is a critical component in making a prudent selection.(read more...)

The More Things Change, The More They Stay The Same: Timeless Keys To Selecting Plan Service Providers

Our industry has experienced a lot of change in the last 30 years – from service models to systems to sales pitches.(read more...)

The Not-So-Safe-Harbor 401(k) Plan

One of the fundamental requirements of SH plans is that the employer is required to make either a matching or non-elective contribution on behalf of eligible non-highly compensated employees, and the formula must follow what is written in the plan document.(read more...)

The Unbounded Days of Retaining Plan Records

The maintenance of proper records for a qualified retirement plan, while old news under Department of Labor (DOL) regulations, is an important function of which plan administrators should be continuously aware.(read more...)

This Is Going On Your Permanent Record

We've all heard it; we've all been there. 'I don't know where I put it, but I'm sure I can get a copy from [fill in the blank]' followed by a mad flurry of emails and phone calls to past service providers, who may or may not have the information you need.(read more...)

Twenty Questions - Retirement Plan Loan Style

So, your plan allows loans. Simple enough, right? Participants borrow money from their accounts and pay it back. What can possibly make that complicated? Funny you should ask - retirement plan loans are actually your ultimate frenemy. They have advantages, but there is that dark side you need to keep your eye on.(read more...)

We Don't Need No Stinkin' Service Agreements!

While many of us have great relationships with our clients--many may be real life friends and not just business acquaintances--you need to operate your business in a way to maximize its success.(read more...)

We've Got Testing Options Otherwise We'd Exclude You

Anyone who prepares nondiscrimination testing for defined contribution plans is used to dealing with the statutory eligibility and entry requirements of age 21 and one year of service(read more...)

Weakest Link … What’s Yours?

Education matters. Experience matters. Having a good TPA matters. Why is it that many professionals in our industry don’t seem to think there is a difference between having someone just out of high school with only two years of experience administer their plan versus a professional with advanced degrees, professional designations and decades of experience?(read more...)

When Opportunity Doesn't Knock

Any practitioner who works with 401(k) plans eventually will experience a plan that does not timely allow an eligible employee to make salary deferral contributions.(read more...)
FAQs

403(b) Plans

Who can sponsor a 403(b) plan? Why would an organization choose a 403(b) over a 401(k)? These questions are more are answered in this FAQ.(read more...)

Compensation

How do we handle owners with Schedule C or K1 income when it comes to providing compensation information on the annual census request OR for purposes of participating in the 401(k) plan? For most plans that use the W-2 definition of compensation, compensation includes all earned income.(read more...)

Conversions

When is the required Sarbanes Oxley Notice required to be sent? The notice must be sent to all eligible participants in the plan as well as anyone with a balance (including those that have left the company) at least 30 days before the current recordkeeping service provider shuts off access to the recordkeeping system for any inquiry services or transactions for three consecutive days.(read more...)

Deposit Deadline - Deferrals

Both the IRS and DOL consider it a top priority to make sure that contributions employees make to their 401(k) and 403(b) plans are deposited on a timely basis. The first part of this article provides FAQs on the deadlines for depositing employee contributions. The second section reviews the steps required to correct late deposits. (read more...)

Deposit Deadline - Employer Contributions

This article describes the deadlines for depositing employer contributions to the plan.(read more...)

Distributions - Mandatory Cash Outs

There are several important reasons to be aware of former employees with remaining balances in the Plan. One of the most important is that many plans include a provision requiring the former employees with vested balances below a certain threshold must be forced to take their money out of the plan.(read more...)

Distributions - Roth, Hardships, RMD, etc.

This section provides answers for frequently asked questions from plan sponsors, investment advisors, and recordkeeping platforms.(read more...)

EFAST2

Beginning with the plan year 2009, plan sponsors of employee benefit plans are required to file their Form 5500 electronically using EFAST2. This Q&A will address the electronic procedures and the Form 5500 from the plan sponsors perspective.(read more...)

Eligibility/Entry Date

Plan sponsors have several variables when creating their plan document, including: At inception of the plan, you can select 'amnesty' - this means everyone is eligible to for the plan if they are working on the amnesty date (regardless of years worked or hours in the current year)(read more...)

Fidelity Bond

Is a Fidelity Bond Required? Per ERISA section 412 and DOL Regulation 2580.412-1all defined contribution 'plan officials' who 'handle' plan funds must be adequately bonded against loss by reason of acts of fraud or dishonesty. (read more...)

Forfeitures - Timing and Use

When a partially vested participant terminates employment and takes a distribution of his or her vested balance, the amount left behind is called a forfeiture. Plan sponsors have some latitude in how they use forfeitures, but there are important timing restrictions. If those deadlines are not observed, amounts that can otherwise help employers reduce plan costs can create expensive compliance headaches. This article provides answers to some of the more common questions regarding the timing and use of forfeitures.(read more...)

Form 5500

Is the 2009 Form 5500 the year of the increased fee and revenue disclosures? What are the new questions related to compensation? (read more...)

Form 8955 - SSA

Update June 21st: The IRS listened! The Form 8895-SSA is due the later of January 17, 2012 and the due date that generally applies for filing the Form 8895-SSA. For the 2009 and 2010 filing, the due date is January 17, 2012 (no extensions allowed).(read more...)

Loans

In recent years, IRS and DOL audits have placed an increased emphasis on participant loans. Specifically, they have focused on making sure active participants continue to make their loan repayments in a timely manner, loans are processed according to Section 72(p) and the plans loan policy, as well as ensuring loans are defaulted properly.(read more...)

Ownership Attribution

Although the notion of company ownership seems relatively straight-forward, Congress was concerned that companies could use "creative" ownership structures to avoid certain laws. As a result, they created a series of complex rules that require the attribution of ownership from one person or entity to other people or entities in certain circumstances. As if one set of rules is not enough, they actually created three different sets of rules, depending on the reason for the analysis: determination of highly compensated or key employees, controlled groups and affiliated service groups.(read more...)

Plan Termination

One of the basic requirements a plan must meet in order to be eligible for the various tax benefits available is that it must be established with the intention of it being permanent. In other words, a qualified plan cannot be established as a short-term, temporary tax shelter. One of the basic requirements a plan must meet in order to be eligible for the various tax benefits available is that it must be established with the intention of it being permanent. In other words, a qualified plan cannot be established as a short-term, temporary tax shelter.(read more...)

PPA Restatement FAQ

DWC has prepared this list of frequently asked questions to help you better understand the PPA restatement requirement and how the process will work.(read more...)

Related Companies - Affiliated Service Groups

During the mid-1980s, Congress created a series of complex rules that require all companies in a related group to be combined when determining whether employee benefit plans are providing adequate benefits to enough of the employee population. Although there are many ways in which companies can be related to each other, in this context, we are referring to situations in which two or more businesses have formal working or management relationships.(read more...)

Related Companies - Controlled Groups

During the mid-1980s, Congress created a series of complex rules that require all companies in a related group to be combined when determining whether employee benefit plans are providing adequate benefits to enough of the employee population. Although there are many ways in which companies can be related to each other, in this context, we are referring to overlapping ownership between companies.(read more...)

Required Minimum Distributions

Who is required to receive a required minimum distribution from a qualified plan? Qualified plans are required to distribute an annual minimum distribution to terminated participants who are at least age 70.5 and active participants who own more than 5% of the company who are at least age 70.5.(read more...)

Safe Harbor - Operations

Can a plan cease/stop its safe harbor NEC mid-year?Historically (pre 2009), plans with a safe harbor non-elective contribution can not back out of their 3% committment mid-year unless the company was ceasing to exist (as the IRS considers the safe harbor non-elective contribution as a required contribution at year end).(read more...)

SEP & SIMPLE Overview

What is a SEP-IRA? A Simplified Employee Pension (SEP) is an IRA plan that is initiated by completing Form 5305-SEP for any employer with one or more employees.(read more...)

Single Participant 401(k) Plans

Solok plans are popular for one person business plans as they can maximize the benefits of a defined contribution plan ($49,000 in 2009 if under age 50 and $54,500 if over age 50) or defined benefit plan without having to worry about compliance tests or completing the Form 5500 if the plan has assets of $250,000.(read more...)

Vesting

What are the vesting methodologies? Plans typically choose elapsed time or hours. Elapsed time is the easiest to administer, as with each hiring anniversary, the participant is credited with a year service. The downside to this approach:(read more...)
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