General News

General News|Jan 21, 2020

Brandon and his guest, Shawn Parker, from MGKS discuss some of the initial implications and opportunities found in the “Setting Every Community Up for Retirement Enhancement Act” of 2019, better known as the SECURE Act, which was just approved by the Senate on Dec.19, 2019.

From the weekly Money Radio segment on January 21, 2020.

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News|Nov 12, 2019

We have a retirement savings crisis in this country. Auto-enrollment has been positioned as a possible solution to ensure everyone has a healthy retirement account when they reach retirement age. But how does it work? Does it work? And how common is it in businesses today? Brandon Oliver gives perspective on this topic.

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General News|Oct 16, 2019

This week on our weekly Money Radio (105.3 fm) segment Peter & Brandon Discussed QACA, the Qualified Automatic Contribution Arrangement a less commonly used type of Safe Harbor 401k plan. Which in some cases could be a better match formula and/or discretionary contribution than the older and more well know safe harbor match/contribution options.

  1. A Third Safe Harbor Option, the QACA
    1. The QACA is a newer type of safe harbor 401(k) plan. Unlike the others, It includes a requirement for the plan to have an automatic enrollment feature. These work by automatically enrolling any eligible employee into the 401k on a certain date, without the need for them to actively enroll in the plan themselves.
  2. QACA Match plans include the following special rules:
    • The QACA safe harbor matching contribution formula is a 100% match on the first 1% of compensation deferred and a 50% match on deferrals between 1% and 6% (3.5% total).
    • The plan’s default auto-deferral rate must start at no less than 3% and increase at least 1% annually to no less than 6% (with a maximum of 10%).
    • QACA safe harbor contributions can be subject to up to a 2 year cliff vesting schedule
  3. There is also a nonelective QACA. It states:
      • The nonelective QACA has a contribution of 3% to all participants, including those who choose not to contribute any amount to the plan.
      • QACA nonelective 3% contributions can also be subject to up to a 2 year cliff vesting schedule
      • Nonelective contributions can also be used to help satisfy Profit Sharing cross-testing. Fulfilling the minimum gateway for 9% profit sharing contributions to owners or other key groups as well as getting a pass for the plan’s nondiscrimination tests.

For more information on if a QACA safe-harbor plan may be appropriate for your company please contact Arcwood or your plan administrator.

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General News|Oct 16, 2019

This week on our weekly Money Radio (105.3 fm) segment Peter Rowe discussed the changes that are being implemented 1/1/2020 to allow business to use ICHRA, Individual Converge health Reimbursement Arrangements again. These can be a valuable tool for small businesses to offer their employees. Allowing them to make tax deductible contributions that their employees can use to buy their own policy’s on the individual market VS needing to offer full group plan. Peter also discussed their uses for larger employees looking to supplement the existing plans.  

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General News|Oct 15, 2019

This week on our weekly Money Radio (105.3 fm) segment Brandon Oliver hosted a discussion on Target Date Funds and how plan sponsors should monitor them.

Some of these best practices included actions plan sponsor & investment committees should follow including:

  • Establishing a process for comparing and selecting TDFs
  • Establishing a process for the periodic review of selected TDFs
  • Understanding the fund’s investments–the allocation in different asset classes (stocks, bonds, cash), individual investments, and how these will change over time
  • Reviewing the fund’s fees and investment expenses
  • Inquiring about whether a custom or non-proprietary target-date fund would be a better fit for your plan
  • Developing effective employee communications
  • Taking advantage of available sources of information to evaluate the TDF and recommendations you received regarding the TDF selection
  • And of course documenting the process

for more information on how to evaluate and monitor your plans target date funds please contact Arcwood Consulting or review the DOL TDF bulletin below.

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/fact-sheets/target-date-retirement-funds.pdf

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General News|Jul 25, 2019

Senate vote on retirement-savings measure not likely this month, so supporters ready push for fall

from: www.investmentnews.com

Jul 23, 2019 @ 2:18 pm

By Mark Schoeff Jr.

When congressional leaders and President Donald J. Trump reached a budget agreement Monday, they closed it off to additional measures, including a landmark retirement-savings bill that is stalled in the Senate.

Backers of the Setting Every Community Up for Retirement Enhancement Act were hoping to get it folded into the $2.7 trillion spending pact, which suspends the debt limit until July 2021, but came up short.

“It was not for lack of trying on our behalf,” said Chris Spence, senior director of federal government relations at TIAA.

The SECURE Act, which would bring about the biggest changes in retirement policy in a decade, would provide legal protections for employers to include annuities in retirement plans, make it easier for small businesses to band together to offer plans, and increase the age for required minimum distributions from 70½ to 72, among other provisions. It was approved 417-3 by the House.

Several senators, including Ted Cruz, R-Texas, and Patrick Toomey, R-Pa., are objecting to the bill for policy reasons unrelated to its retirement provisions. That’s preventing the bill from being passed quickly by unanimous consent. Spokespeople for Mr. Cruz and Mr. Toomey weren’t immediately available for comment.

Getting time for a full debate on the Senate floor looks unlikely before the chamber departs next week for its summer recess.

“We’re not going to see floor time before August,” Mr. Spence said. “We need to come together and regroup to figure out what can be done in September to move this forward.”

Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, hopes that the SECURE Act will be included in appropriations legislation that must be approved this fall to avoid a government shutdown.

One of the points of the budget agreement says no policy changes can be included in government-agency spending bills unless they’re approved by House Speaker Nancy Pelosi, D-Calif., Senate Majority Leader Mitch McConnell, R-Ky., the minority-party leaders in each chamber and Mr. Trump.

“All have said they have no issues with the SECURE Act,” Mr. Richman said. “We continue to remain optimistic that the leadership of Congress and the president see the value of enacting this into law sooner rather than later.”

When the insurance lobby kicked off its campaign to get SECURE approved, they said doing so before August was critical. As the presidential election year gets closer, legislative activity on Capitol Hill is likely to slow.

But SECURE proponents are taking setbacks in stride.

“The bill is a very positive force,” Mr. Spence said. “It’s not a policy issue. We’re getting caught up in the politics of it. It’s got to be a matter of time before it breaks loose and gets over the finish line.”

In the meantime, the lobbying continues. On Tuesday, the American Retirement Association released research showing the retirement-savings gap on a state-by-state basis and asserted the SECURE Act would address the 28.3 million Americans who do not have access to a workplace retirement plan.