Internal Benchmarking for Continuous Improvement

External benchmarking helps the plan sponsor identify areas where their plan is behind peers in the industry and sets goals for plan growth and improvement. Internal benchmarking helps plan sponsors measure internal changes over time, and can help determine if the plan sponsor is meeting the goals for plan growth and improvement. Identifying similar plans will be most useful in external benchmarking. Some of the … Continue reading Internal Benchmarking for Continuous Improvement

Understanding Fees and Avoiding Fee-based Litigation

There are many different fees presented in DC plans and may include investment management fees, management fees, administrative fees, revenue sharing fees and more. It is imperative that plan sponsors are aware of the various fees charged to either participants or plan sponsors. These fees can be charged as asset-based, dollar-based or a combination of the two. Plan sponsors can develop a written fee policy … Continue reading Understanding Fees and Avoiding Fee-based Litigation

Healthcare Update

Healthcare costs often represent the largest retiree expense. Additionally, healthcare costs are increasing at a rate faster than the CPI (inflation). One 2016 study found that a healthy retiring couple would need $275,000 for out-of-pocket medical expenses over the course of their retirement. Creating awareness around healthcare costs is a critical goal.¹ A retiree needs to ask three questions: How much money do I need? … Continue reading Healthcare Update

Financial Wellness “To” and “Through” Retirement

Many employer survey results indicate that 92 percent are expanding financial wellness programs; one-third of the workforce is 50 or older; and 73 percent are planning for increased healthcare costs due to an aging workforce.¹ Holistic planning is critical. In addition to any DC assets, the following factors can also be considered: outside assets, income forecasting, and leveraging retirement income/savings to increase Social Security benefits. … Continue reading Financial Wellness “To” and “Through” Retirement

Above and Beyond: The Latest in Menu Innovations

North Carolina has nine DB plans with assets of $93 billion and three DC plans—a 457(b) plan with 53,080 participants and $1.3 billion in plan assets, a 401(k) plan with 247,114 participants and $9.2 billion in plan assets and a 403(b) with 1,186 participants and $11 million in plan assets. The State does not offer self-directed brokerage accounts or managed accounts in their plans. In … Continue reading Above and Beyond: The Latest in Menu Innovations

Lessons from Behavioral Economics for Public Pension Plans

Everyone has behavioral biases. Many people have a bias for the present over the future, for inattention and for heuristic thinking (stimulating interest as a means of furthering investigation). Retirement planning is complex with different designs offered— defined benefit (DB) versus defined contribution (DC) versus hybrid plans. Additionally, there are supplemental DC plans and pre-tax versus Roth options. Participants are asked to think about how … Continue reading Lessons from Behavioral Economics for Public Pension Plans

Are Your Participants Experiencing a Fee Imbalance?

Subsequent to the 2012 implementation of ERISA fee reporting regulations (ERISA 408(b)(2) & 404(a)(5)), the Department of Labor (DOL) began to consider the appropriateness of the allocation of plan fees among participants. This is a subject that generally had not been on the radar screen of many plan fiduciaries, but once identified, tends to generate considerable traction due to its obvious validity. Ironically, advisors’ diligent … Continue reading Are Your Participants Experiencing a Fee Imbalance?

HSAs: A Tax Trifecta Investment Opportunity

When it comes to fiscally frugal health insurance options, health savings accounts (HSAs) aren’t exactly new to the game. They’ve been around since 2003 and have only increased in popularity among employers, politicians and certain types of employees. In recent years, however, the growth in popularity of HSAs is due less to the accounts’ function from a cost-saving benefit plan and more to its utility … Continue reading HSAs: A Tax Trifecta Investment Opportunity

Retirement Plan Loans

What is a Roth 401(k)? Is it Right for Me?

Roth 401(k) Basics Elective deferral contributions to a traditional retirement plan are contributed on a pre-tax basis and help lower your current taxable income. Roth elective deferral contributions, however, are much like a Roth IRA in that contributions are made on an after-tax basis.  Money in the Roth account and any earnings will be distributed tax-free if withdrawn after age 59½, death, disability and at … Continue reading What is a Roth 401(k)? Is it Right for Me?