Employees & Short-Term Value

In today’s world of instant gratification, it’s no wonder that workers value short-term benefits the most. According to a worldwide study of more than 10,000 workers conducted by Mercer, a salary increase was preferred over all types of benefits. While saving for retirement may seem to some like saving for a stranger, U.S. workers did rank DC […]

Corrective Distributions

The 401(k) plan has emerged as the most popular form of retirement plan in the United States. This trend will likely continue for some time for a number of reasons. One is the cost savings to employers, since deferral contributions are paid by employees. Another is the fact that 401(k) plans are more easily understood […]

Profit Sharing Plans: Better Ways to Use Them and Why

A Profit Sharing Plan is another special type of defined contribution (DC) plan under which employers, rather than employees, are the ones making contributions. After the company makes its annual contribution, the total contributions are then allocated to individual employee accounts, generally using the “comp-to-comp” method, but several other methods are also available. Because the […]

Safe Harbor Plans: Costly When Poorly Designed

A safe harbor provision simply means that you will not violate a statute or regulation as long as certain conditions are met. In other words a free pass for nondiscrimination testing for 401(k) plans. Traditional Safe Harbor Costs In order for 401(k) plans or other qualified plans to enjoy tax preferred status, they must comply […]