Compensation Applied Incorrectly Costs Big Bucks
Translating the legal definition of “compensation,” as captured in the defined contribution (DC) plan document, to payroll programming is complex. When it is applied incorrectly, it leads to high costs to calculate and fund missed compensation deferrals or contributions, along with the costs to correct the error via the Internal Revenue Service Employee Plans Compliance […]
2019 DC Trends Survey
Defined contribution plan sponsors are continuing their intense scrutiny of fees, according to Callan’s 2019 DC Trends Survey, while also adding participant communication and financial wellness as top priorities for this year
DC Plan Sponsors and Participants Get Disaster Relief
In response to Hurricanes Florence and Michael, and the 2018 California wildfires, the Internal Revenue Service (IRS) and Department of Labor (DOL) have extended relief to those affected by the disasters from certain defined contribution (DC) plan requirements. Individual relief for those impacted by the hurricanes: Hurricane victims will have easier access to DC plan […]
Baby Steps on Auto Portability
The Department of Labor (DOL) has issued a proposed rule addressing “auto portability,” a mechanism intended to automatically reconnect defined contribution (DC) plan participants with accounts they may have inadvertently left behind or forgotten about after leaving an employer. America’s highly mobile workforce drives millions of job changes each year. Rolling balances between plans is a source […]
Cybersecurity for DC Plans
Callan’s experts describe the best ways for defined contribution (DC) plans to prepare for what will be an almost inevitable cyberattack.
Regulation Moves to Expand MEPs
President Trump issued an executive order in August directing the U.S. Department of Labor (DOL) to examine policies that expand the circumstances where employers, especially small- and mid-sized businesses, may sponsor or adopt a multi-employer plan (MEP) as a workplace retirement savings option, subject to appropriate safeguards. In response, the DOL issued a proposed regulation on October 23 […]
What Has Changed Over the Years with DC Plans
Callan just opened the 2019 Defined Contribution Trends Survey, the 12th we have conducted in its current incarnation, and we thought it would be helpful for plan sponsors to see how the industry has evolved over time. Below are some highlights from a predecessor version of the survey published in 1992 and 1998
IRS Eases Restriction on Student Loan Repayment in 401(k) Plans
The IRS released a private letter ruling (PLR) this week outlining how employers can provide a student loan repayment benefit as part of their 401(k) plan. This is a welcome development, as what is known as the contingent benefit rule has caused some confusion as to whether a student loan repayment program could be linked […]
Choices for the ‘Distribution Phase’ of DC Plans
View Our Paper It may be hard to believe, but the 401(k)—the most popular type of defined contribution (DC) plan—turned 40 this year. Up to now, the retirement industry has focused on improving the “accumulation phase” of DC plans. But as DC plans enter middle age, the retirement industry should start thinking more about the […]
DC Plans Can Help with a Demographic Crisis
With Social Security facing a demographic crisis, defined contribution plan sponsors should focus on the “decumulation” phase of their plans, when participants are drawing down their assets for income in retirement