Newsdash Insight on Plan Design & Investment Strategy from PLANSPONSOR
January 21st, 2015
Benefits & Administration
Debt Stands in the Way of Retirement Readiness
Eighty-one percent of working age people surveyed by HSBC Bank said saving for retirement is not their main priority. Other priorities included paying off debts (24%), saving for children’s education (8%), and saving for a rainy day (8%) or a vacation (6%). The survey found major life events have affected the retirement saving of more than three quarters (76%) of pre-retirees.Read more >
A strong majority of U.S. households—including those with and those without retirement plan accounts—disagree with proposals to remove or reduce tax incentives for retirement savers using defined contribution (DC) accounts, according to new survey findings by the Investment Company Institute (ICI). Eighty-eight percent of households disagreed with the notion that the government should take away the tax advantages of DC accounts, and 90% disagreed with reducing the amount that individuals can contribute to DC accounts. These percentages are up from 86% and 83%, respectively, one year ago.Read more >
Ask the Experts
Going from No HCEs to Having HCEs
“I have worked with a small private tax-exempt that, since its inception many years ago, has had no concerns regarding nondiscrimination testing for its 403(b) plan, since it employed zero highly compensated employees (HCEs). However the organization is growing, and, given the most recent raise for the executive director, she is expected to exceed (barely) the HCE compensation threshold for 2015. Is there a transitional period to pass testing? The plan utilizes a non-safe harbor match that would likely fail ACP testing, I suspect that they would be reluctant to change a plan design that they have enjoyed for many years, for financial and other reasons.”Read more >
Sponsored message from Financial Engines
PLANSPONSOR interviews Christopher Jones, Chief Investment Officer at Financial Engines.Read more >