Cal savers impact

A recent study by Pew came to the conclusion that private pension plans are growing at similar rates in states with or without state run plans. 

I think the takeaway is that companies that want to benefit owners or provide employee benefits know that a custom plan has many more benefits than state run plans. 

Record retention

How long do you need to keep plan records?

Remember that employee that got divorced 15 years ago.  The Ex got a QDRO and you paid them out and they are history right?  Wrong! 

They forgot they got paid and as they approach retirement they come back saying they know they are owed some money.  They may even have a statement showing they were due some money back then.

Now what?  If you have copies of the checks, you are home free!  And maybe even if you have copies of the 1099's.  But if you have no records you are likely to be in litigation and paying out that benefit a second time!

So when it comes to distributions, you need to keep those records for a very long time.

Part Time Employees

Starting in 2021, we need to track hours for employees that work under 1,000 hours.  Historically, these people could be excluded from 401(k) plans. 

However, the law was changed and employees who work 500 hours in 3 cosecutive years after 2020 will now need to be able to defer into the 401(k) plan. There is current proposed legislation that will reduce that to 2 years. 

Both versions will first impact the 2024 year.  And the good news for many employers is that they do not need to make any employer contribution for the—but of course that could change before 2024.