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Secure Your Legacy: Why You Must Add a Beneficiary to Your Retirement Account Now!

Designating a beneficiary for your retirement account is a crucial step in ensuring your hard-earned savings are distributed according to your wishes. Here's why it's essential and the potential pitfalls of not having a designated beneficiary: 

Why You Must Add a Beneficiary

1. Control Over your Assets: Naming a beneficiary ensures that your retirement assets go directly to the individuals or entities you choose, without going through lengthy and potentially costly probate process. 

2. Ease for Your Loved Ones: A clear beneficiary designation simplifies the process for your loved ones during an already difficult time. It helps avoid conflicts and confusion about who should receive your assets. 

3. Tax Benefits: Beneficiaries may receive favorable tax treatment. For example, a spouse can roll over the account into their own IRA, potentially deferring taxes further. 

Potential Issues Without a Designated Beneficiary

1. Probate Process: If no beneficiary is named, your assets may have to go through probate, which can be time-consuming and expensive. This delay can prevent your loved ones from accessing funds when they might need them most. 

2. State Default Rules: In the absence of a beneficiary, state laws will determine how your assets are distributed, which may not align with your wishes. This could lead to unintended recipients receiving your funds. 

3. Increased Tax Burden: Without a designated beneficiary, your retirement assts may be subject to higher taxes, reducing the amount your loved ones ultimately receive. 

Take Action Today!

Ensuring your beneficiary designations are up to date is a simple yet vital step in securing your legacy. Regularly review and update your designations to reflect life changes such as marriage, divorce, or the birth of a child. 

Scott Higgins | AIF ®, CFP®,CPFA®, NSSA®

Financial Advisor 

Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun Fact, Scott has a hobby of filling growlers with coins!

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #7548811.1

Top 5 Administrative Failures in Employer-Sponsored Retirement Plans and How to Prevent Them

Managing an employer-sponsored retirement plan can be complex, and even well-intentioned plan sponsors can encounter administrative failures. Here are the top five common failures and practical suggestions to prevent them:

1. Failure to Follow Plan Terms

Failure: Not adhering to the specific terms outlined in the plan document, such as compensation definitions or eligibility criteria. Prevention: Regularly review and understand the plan document. Ensure clear communication between HR, payroll, and plan administrators.

2. Missed Enrollment of Eligible Employees

Failure: Failing to enroll eligible employees in the plan, leading to missed contributions and potential compliance issues. Prevention: Implement automated enrollment processes and conduct periodic audits to ensure all eligible employees are enrolled.

3. Incorrect Loan Repayments

Failure: Not properly withholding or collecting loan repayments, resulting in defaulted loans and potential tax penalties. Prevention: Establish robust loan administration procedures and regularly monitor loan repayments to ensure compliance.

4. Late RMDs (Required Minimum Distributions)

Failure: Failing to distribute the required minimum amounts to participants who have reached the age for RMDs, leading to penalties. Prevention: Set up automated reminders and tracking systems to ensure timely distributions.

5. Inconsistent Record-Keeping

Failure: Inaccurate or incomplete record-keeping, which can lead to errors in contributions, distributions, and compliance testing. Prevention: Maintain meticulous records and conduct regular audits to ensure accuracy and completeness.

By addressing these common administrative failures, plan sponsors can enhance the efficiency and compliance of their retirement plans, ultimately benefiting both the employer and the employees.

Scott Higgins | AIF ®, CFP®,CPFA®, NSSA®

Financial Advisor 

Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun Fact, Scott has a hobby of filling growlers with coins!

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #7548809.1

Pre-Tax vs. Roth Retirement Savings: What’s the Difference?

When it comes to saving for retirement, choosing between pre-tax and Roth savings options is one of the most important decisions you’ll make. Both have unique benefits, and understanding their differences can help you make a choice that aligns with your financial goals and tax strategy. Let’s break it down:

Pre-Tax Retirement Savings

Contributing to a pre-tax account, such as a traditional 401(k) or IRA, means your contributions are made before taxes are deducted from your income. Keep in mind the annual contribution limits differences in an individual IRA or Roth and those of an employer sponsored retirement plan such as a 401(k).

Key Benefits: 

• Immediate Tax Savings: Your taxable income is reduced in the year of contribution, potentially lowering your tax bill.

• Tax-Deferred Growth: Investments grow without being taxed until you withdraw them in retirement.

• Ideal for Higher Earners: If you’re in a high tax bracket now and expect to be in a lower one during retirement, this option may save you money in the long run.

Consideration: 

• Withdrawals in retirement are taxed as ordinary income.

• Required minimum distributions (RMDs) begin at age 73, forcing you to take taxable withdrawals.

Roth Retirement Savings

Roth contributions, available in accounts like a Roth 401(k) or Roth IRA, are made with after-tax dollars. While there’s no immediate tax deduction, the long-term benefits can be substantial.

Key Benefits: 

•  Tax-Free Withdrawals: Qualified withdrawals of contributions and earnings are completely tax-free in retirement.

•  No RMDs for Roth IRAs, Roth 401(k), Roth 403(b) and 457(b): You’re not required to take distributions during your lifetime, allowing your savings to grow    tax-free indefinitely.

•  Flexibility for Lower Earners: If you’re in a lower tax bracket now, paying taxes upfront may make sense.

Consideration: 

• Contributions don’t reduce your taxable income in the year they’re made

• Recent tax rule changes no longer require RMDs from Roth 401(k) 403(b) 457(b) accounts similar to Roth IRAs.

Which Option is Right for You?

The best choice depends on your current tax situation, future income expectations, and retirement goals:

• If you anticipate being in a lower tax bracket in retirement, pre-tax savings may provide greater benefits.

• If you’re in a lower tax bracket now or want to hedge against future tax increases, Roth savings can offer tax-free income in retirement.

• A mix of both accounts can give you flexibility and diversification to manage taxes effectively in retirement.

• If a high income earner, there are no income limits to make Roth contributions to 401(k), 403(b), and 457(b) accounts.

• If you’re a younger age, a Roth may be advantageous with a longer timeframe to potentially benefit from compounding returns.

Final Thoughts

Understanding the differences between pre-tax and Roth retirement savings is key to building a tax-efficient strategy for the future. By weighing the pros and cons of each option, you can choose a path that helps increase your savings and decrease tax burdens

Julia Sanders | AIF ®,  CPFA®

Retirment Relationship Manager 

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #7281457.1

Empowering 401(k) Plan Sponsors: Navigating Success in 2025

As we step into 2025. 401(k) plan sponsors find themselves at the forefront of a rapidly changing landscape marked by new regulatory requirements, advancements in technology, and evolving employee expectations. At Rose Street Advisors, our mission is to help you stay ahead, ensuring your retirement plan remains competitive, compliant, and effective. Here are the key focus areas for 2025: 

1. Adapting to SECURE 2.0 Updates

With the complete implementation of SECURE 2.0 provisions in 2025, plan sponsors must prioritize compliance with new rules, such as expanded catch-up contributions and automatic enrollment requirements. Collaborate with your advisor to ensure timely plan amendments that align with these updated guidelines. These changes present an opportunity to enhance plan design for participants.

2. Embracing Flexible Fiduciary Practices

Achieving fiduciary excellence requires ongoing evaluation of your plan’s operations, investment lineup, and participant experience. Given shifting market dynamics, now is the time to reassess the performance and fees of your investment options and adjust the plan design to meet employee needs.

3. Enhancing Financial Literacy Through Technology

A standout trend in 2025 is the increased emphasis on personalized financial education. Employees seek interactive, accessible resources to guide their retirement decisions. Consider mobile apps, webinars, and AI-driven tools that resonate with a digitally savvy workforce. Better education leads to better engagement—and ultimately, better retirement readiness.

4. Automation and Plan Design Optimization

Automatic features, including enrollment, escalation, and re-enrollment, remain regulatory favorites. These features not only align with industry best practices but also significantly boost participation rates. Evaluate how incorporating these features, along with well-chosen QDIAs, can simplify the participant experience and increase overall plan effectiveness.

5. Strengthening Cybersecurity Measures

As the use of digital platforms grows, the importance of robust cybersecurity cannot be overstated. Implement advanced measures to protect participant data and ensure your service providers meet stringent security standards. A secure plan inspires trust and safeguards your organization against potential liabilities.

6. Benchmarking for Competitiveness

With economic pressures and increased transparency, regularly benchmarking your plan against peers is crucial. Review fees, performance, and participant outcomes to ensure your plan stays competitive. This analysis also helps negotiate better terms with providers and enhance the overall value of your plan.

7. Streamlining Administrative Processes

Simplify plan administration by leveraging modern tools and outsourcing where appropriate. Efficient processes save time, reduce errors, and allow your team to focus on higher-level strategic initiatives.

Looking Ahead

As 2025 unfolds, the ability to anticipate and adapt to changes will define the success of your 401(k) plan. At Rose Street Advisors, we specialize in breaking down complexities and providing tailored guidance. Whether it’s navigating new regulations, enhancing participant engagement, or leveraging technology, we are here to elevate your retirement program.

If you’d like specific updates or additional insights for 2025, let us know!

Scott Higgins | AIF ®, CFP®,CPFA®

Financial Advisor 

Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun Fact, Scott has a hobby of filling growlers with coins!

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #7528894.1

Understanding the New Catch-Up Contributions and Retirement Plan Limits for 2025

Enhanced Catch-Up Contributions for Ages 60 - 63

Starting in 2025, individuals aged 60 to 63 will benefit from increased contribution limits. This change is part of SECURE Act 2.0, designed to help older workers boost their retirement savings as they approach retirement. The new provision allows these individuals to contribute up to $10,000 or 150% of the standard catch-up contribution limit, whichever is greater12. For example, with the standard catch-up limit for those aged 50 and older set at $7,500 for 2025, the enhanced limit for those aged 60-63 will be $11,2503.

This increase provides a significant opportunity for older employees to enhance their retirement savings, potentially lowering their taxable income and improving their financial security in retirement. It’s important for plan sponsors to communicate these changes effectively to eligible participants, ensuring they understand the benefits and how to take advantage of them.

New Retirement Plan Limits for 2025

In addition to the enhanced catch-up contributions, the IRS has announced new contribution limits for various retirement plans for 2025. Here are the key updates:

•  401(k), 403(b), and Governmental 457 Plans: The annual contribution limit for employees participating in these plans will increase to $23,500, up from $23,000 in 202434. This adjustment reflects the cost-of-living increases and provides participants with an opportunity to save more for retirement.

•  IRA Contributions: The limit for IRA contributions remains unchanged at $7,0003. However, the catch-up contribution limit for individuals aged 50 and over remains at $1,000, with an annual cost-of-living adjustment3.

•  Combined Contribution Limits: For employees aged 50 and older, the total contribution limit, including catch-up contributions, will be $31,000 for 401(k), 403(b), and governmental 457 plans3. For those aged 60-63, this limit increases to $34,750, considering the enhanced catch-up contributions3.

Implications for Plan Sponsors

As plan sponsors, it’s essential to update your plan documents and communicate these changes to your participants. Here are a few steps to consider:

1. Update Plan Documents: Ensure that your plan documents reflect the new contribution limits and enhanced catch-up provisions. Recordkeepers and TPA’s are all handling this differently and amendments must be made by December 31, 2026. This may involve working with your plan administrator or legal counsel to make the necessary amendments or have some kind of documentation on file until plan document language is available.

2. Educate Participants: Provide clear and concise information to your participants about the new limits and how they can maximize their contributions. Consider hosting informational sessions or webinars to explain the changes and answer any questions.

3. Review Payroll Systems: Ensure that your payroll systems are updated to accommodate the new contribution limits and catch-up provisions. This will help prevent any issues with contribution processing and compliance.

4. Encourage Participation: Use this opportunity to encourage eligible employees to take full advantage of the increased limits. Highlight the benefits of maximizing their contributions, such as potential tax savings and increased retirement security.

By staying proactive and informed, you can help your employees make the most of these new opportunities and enhance their retirement readiness. The changes for 2025 represent a significant step forward in supporting older workers and ensuring they have the resources they need for a secure retirement.

1: Kiplinger 3: IRS 4: The Motley Fool 2: CNBC

Julia Sanders | AIF ®,  CPFA®

Retirment Relationship Manager 

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #7281457.1

Unlocking the Best Safe Harbor 401(k) Design: Options That Maximize Benefits & Compliance

When it comes to offering a retirement plan that’s both attractive to employees and compliant with IRS regulations, Safe Harbor 401(k) plans are a top choice for many employers. These plans simplify administration by eliminating the need for annual nondiscrimination testing, while also providing employees with valuable contributions that are immediately theirs. But did you know that there are different types of Safe Harbor 401(k) plans to choose from? Each has its unique structure, advantages, and requirements, making it important to understand which one best aligns with your company’s goals. Let's explore the key Safe Harbor plan designs and how they can benefit both you and your employees. 1. Basic Safe Harbor Match  The “Basic Safe Harbor Match” is a straightforward option where you, as the employer, match 100% of the first 3% of employee contributions, plus 50% of the next 2%. This plan encourages employees to save more for retirement while ensuring that your plan remains compliant with IRS rules. All contributions are immediately vested, making it an attractive choice for employees. 2. Enhanced Safe Harbor Match For companies looking to offer a more generous benefit, the “Enhanced Safe Harbor Match” is ideal. It typically involves a 100% match on the first 4% of compensation, although it can be higher. Like the Basic Match, it’s simple to administer, and the immediate vesting of contributions makes it a strong tool for attracting and retaining talent. 3. Nonelective Safe Harbor Contribution  If your goal is to provide a retirement benefit to all eligible employees, regardless of whether they contribute, the “Nonelective Safe Harbor Contribution” is a great option. This plan requires you to contribute at least 3% of compensation to every eligible employee's account, irrespective of their participation in the plan. It’s a robust benefit that demonstrates your commitment to your employees' financial futures. 4. Qualified Automatic Contribution Arrangement (QACA)  The QACA Safe Harbor plan adds an automatic enrollment feature, making it easier to boost participation rates. Employees are automatically enrolled at a contribution rate starting at 3%, which increases by 1% each year until it reaches at least 6% (but not more than 10%). Employer contributions can either follow a match formula—100% on the first 1% and 50% on the next 5%—or be set as a 3% nonelective contribution. Unlike other Safe Harbor designs, QACA allows for a vesting schedule of up to two years, providing some flexibility. Choosing the Right Safe Harbor Plan Selecting the right Safe Harbor 401(k) plan design depends on your company’s specific needs and objectives. Whether you want to encourage employee contributions, ensure broad-based retirement savings, or increase plan participation through automatic enrollment, there’s a Safe Harbor design that fits. By understanding the nuances of each option, you can create a retirement plan that not only meets compliance requirements but also serves as a valuable benefit to your employees.

Scott Higgins | AIF ®, CFP®, CPFA®

Financial Advisor 

Since 2012 at Rose Street, Scott has been responsible for helping the firm’s individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun fact, Scott has a hobby of filling growlers with coins! Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #6879522.1

Compliance Testing & Filing Form 5500

Have you received an email asking for the annual census and compliance questionnaire to be submitted? Or maybe you’ve already done that, and have been asked to sign the Form 5500 for your retirement plan offering? These are very important pieces of administering your company/organization’s retirement plan. Let’s talk about why.  As we navigate through the complexities of managing retirement plans, there are essential tasks that cannot afford to slip through the cracks. Among these, two crucial elements stand out: compliance testing and filing Form 5500. Today, we're here to offer a friendly reminder of their importance and why they should be at the top of your to-do list. Understanding Compliance Testing Compliance testing is an essential part of ensuring that your 401(k) or 403(b) plan remains compliant with IRS regulations. These tests assess whether your plan is operating within the legal limits set by the IRS, particularly regarding nondiscrimination and contribution limits. ADP/ACP Testing: The Actual Deferral Percentage (ADP) and Actual Contribution Percentage (ACP) tests evaluate whether contributions made by highly compensated employees (HCEs) are within acceptable limits compared to those made by non-highly compensated employees (NHCEs). Top-Heavy Testing: This test determines whether key employees hold a disproportionate share of plan assets, ensuring that the plan does not unfairly favor highly compensated individuals. Coverage Testing: Coverage testing verifies whether a sufficient number of non-highly compensated employees are benefiting from the plan, preventing discrimination against lower-paid employees. The Importance of Form 5500 Filing  Form 5500 is the annual report that must be filed with the Department of Labor (DOL) to provide information about the operation, funding, and administration of your retirement plan. It serves as a vital tool for the government, participants, and beneficiaries to monitor plan compliance, financial conditions, and investments. Transparency: Form 5500 promotes transparency by requiring plan sponsors to disclose comprehensive information about the plan's operations, investments, and financial health. Legal Requirement: Filing Form 5500 is not optional—it's a legal requirement for most retirement plans. Failure to file can result in severe penalties, including hefty fines imposed by the IRS and DOL. Participant Protection: Completing Form 5500 ensures that participants and beneficiaries have access to critical information about their retirement plan. The Summary Annual Report (SAR) must be provided to plan participants and beneficiaries each year. A Friendly Reminder and Action Plan As a plan sponsor, it's crucial to stay proactive and ensure that compliance testing and Form 5500 filing are on your radar. Here's a simple action plan to help you stay on track:
  1. Mark Your Calendar: Set reminders well in advance of the deadlines for compliance testing and Form 5500 filing to avoid last-minute rushes. Attached is a compliance calendar for Defined Contribution (DC) and Defined Benefit (DB) Plans, for a calendar year plan, that you may use for reference.
  1. Engage with Experts: Consider partnering with retirement plan consultants or third-party administrators who can guide you through the compliance process and ensure that all requirements are met.
  1. Stay Informed: Keep yourself updated on changes to IRS and DOL regulations that may impact compliance testing and Form 5500 filing requirements.
  1. Take Action: Don't procrastinate! Start preparing for compliance testing and Form 5500 filing well ahead of the deadlines to avoid unnecessary stress and potential penalties.
In conclusion, compliance testing and Form 5500 filing are not tasks to be taken lightly. They play a critical role in maintaining the integrity and legality of your retirement plan while safeguarding the interests of plan participants. By prioritizing these responsibilities, you demonstrate your commitment to upholding the highest standards of fiduciary duty and ensuring a secure financial future for all. Click HERE to access the 2024 RSA Compliance Calendar

Julia Sanders | AIF®, CPFA®

Retirement Relationship Manager  Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia's daily role at the firm energizes and reinforces her commitment to client-focused work.  Investment Advisory Services Offered Through M Holdings Securities, Inc. A Registered Investment Adviser, Member FINRA/SIPC. Rose Street Advisors LLC is independently owned and operated. File #: 6672972.2
Over the last couple of years, we have had more and more conversations around how to increase employee participation in 401(k) plans from an employer standpoint. As a plan sponsor, HR professional, and/or business executive, it’s important to educate employees on the benefits offered and provide the right tools and resources to help employees save for retirement. From the employee’s perspective, some of the questions employees have been asking are:   • "If I choose a deferral percentage, what is the actual amount I am contributing?”   • "How much will be taken out of my paycheck?"   • "If I increase my contribution 1%, how will that affect my paycheck and my retirement account?" These types of questions are just a couple of examples that show that retirement savings is not the easiest thing to understand. Without fully understanding the specifics of their retirement benefits offered, employees are less likely to participate. The question then becomes: what can you do as the employer, to show employees the benefits you are offering to them and the value it can bring to their future if they choose to participate? Encouraging employees to save for retirement is crucial for their long-term financial freedom and well-being. As a guide to retirement for employers, an employer may consider the following to achieve this goal:

1. Increase Financial Literacy

    •  • Many employees lack understanding of financial concepts like investing, budgeting, and saving. Offer workshops, online courses, and educational resources to enhance their financial literacy.
    •  • By increasing knowledge in retirement savings, employees can make informed decisions and gain confidence in retirement planning. 
        •  

2. Transparent Communication

    •  • Clearly communicate retirement plan details, including dollar amounts deducted from paychecks. 
    •  • Explain the impact of contributions on take-home pay. Transparency reduces anxiety and empowers employees to make informed choices. 
        •  

3. Provide Access to Advisors

    •  • Offer access to licensed and authorized financial advisors, who specialize in retirement planning. According to Fidelity's 2023 Plan Sponsor Attitudes Survey, one of the most valued benefits of having a plan advisor is that 44% improved participant outcomes. One of the top measures to underscore advisor value is 37% reported increases in employee participation level.
    •  • Employees may hesitate to seek professional help due to perceived costs or lack of awareness. Educate them about the value of expert guidance and the costs that are covered under the plan.  
        •  

4. Automatic Enrollment and Escalation:

    •  • Consider implementing automatic enrollment in the retirement plan(s). New employees are enrolled by default unless they opt-out. 
    •  • Gradually increase contribution rates over time (auto-escalation). Employees adjust to smaller paycheck deductions without        feeling overwhelmed. 
        •  

5. Matching Contributions

    •  • Offer matching contributions to incentivize employees. Consider dollar-for-dollar matches or partial matches. 
    •  • Clearly communicate the matching policy and emphasize the "free money" aspect. 
        •  

6. Regular Reminders

    •  • Send periodic reminders about retirement savings. Highlight the dollar impact and emphasize the long-term benefits. 
    •  • Use channels like emails, internet announcements, or company newsletters. 
        •  

7. Financial Wellness Program

    1.  • Provide financial wellness programs that cover retirement planning that include personalized advice and tools. Many recordkeepers and/or advisors have partnerships with these types of programs. 
    2.  • Encourage employees to set specific savings goals and track progress. Vestwell's 2024 Savings Trends Report shows increased demand for other workplace financial benefits that can be fulfilled through a financial wellness program. According to the study, the 3 most important items to a saver's financial situation are:
    3.  
       1. Saving for retirement - 52.5%        2. Paying off debt (mortgage, student loans, credit cards, etc.) - 26.4%        3. Saving for Healthcare Expenses - 8.8%
        •  

8. Visual Tools and Calculators

• Encourage employees to use the interactive tools or calculators, offered by most recordkeeprs, that allow employees to see the impact of different contribution levels.  •  Visualize how adjustments affect take-home pay and retirement savings.    Remember, a well-designed retirement savings program not only benefits employees but also contributes to a more engaged and financially secure workforce. By emphasizing dollar amounts and providing educational resources, employers can empower their employees to save effectively for retirement.   I understand that every organization is different and there's not a one-size-fits all when it comes to retirement benefits. Take this as an opportunity to review the employee participation in your retirement offering and in what areas can be improved upon to help your employees save for retirement.

Julia Sanders | AIF®, CPFA® 

Retirement Relationship Manager

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia's daily role at the firm energizes and reinforces her commitment to client-focused work. 

Investment Advisory Services Offered Through M Holdings Securities, Inc. A Registered Investment Adviser, Member FINRA/SIPC. Rose Street Advisors LLC is independently owned and operated.File #: 6476277.1

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All Things 401k | 5 Helpful Ways to Organize Your 401(k) Fiduciary Files

Managing Discover top strategies for maintaining organized 401(k) fiduciary files with best practices for compliance and peace of mind.  As a plan sponsor, one of your primary responsibilities is ensuring that your company's retirement plan operates smoothly and within the boundaries of compliance regulations. This is no small feat, especially when dealing with the complexities of a 401(k) plan. One of the ways to help enable hassle-free management is by maintaining neat and tidy records. This article will provide you with some practical tips and best practices on how to organize and document your fiduciary files.

Why Is Retirement Plan Documentation Important?

First, let's delve into why retirement plan documentation is crucial. Proper documentation serves as evidence of your diligent fiduciary oversight. It helps to show that you are actively managing your company's retirement plan in accordance with ERISA regulations. Moreover, it helps streamline the auditing process and makes it easier to answer inquiries from your plan's third-party administrator (TPA).

Best Practices for Organizing Fiduciary Files

Now, let's explore some of the best methods to keep your fiduciary files in order: 1. Create a Fiduciary File System: Designate a secure location, preferably a locked file cabinet or encrypted digital storage space, for all plan-related documents. This includes the plan document, amendments, participant communications, government filings, and investment reviews. Action item: Create a new master folder and label it “401(k) Plan”. Within this master folder, create subfolders with important categories such as, “Plan Document and Amendments”, “Participant Communications”, “Annual Filings”, and “Investment Reviews”. Ensure that relevant documents are correctly placed within their corresponding subfolders. 2.Implement a Document Retention Policy: Develop a policy that outlines for how long different types of documents should be retained. For instance, the plan document and amendments should be kept permanently, while records related to plan operations should typically be kept for at least six years. 3.Regularly Update Your Files: Make it a habit to update your files regularly. This includes adding new documents as they come in and removing outdated ones based on your retention policy. 4.Use Clear Labeling and Categorization: Clearly label each document with its type and the date it was created or received. Categorize documents based on their nature, such as plan administration, investment management, participant records, and compliance tests. Folder / File Name Examples •Plan Document and Amendments / Plan Document-ABC Company-401k Plan-2010.docx •Investment Reviews / Investment Review-ABC Company-401k Plan-Q1 2024.docx •Participant Communications / Participant Education-ABC Company-401k Plan-Q1 2024.docx 5.Ensure Accessibility While Maintaining Confidentiality: Balancing accessibility with confidentiality is vital when managing fiduciary files. The documents should be readily retrievable as needed, yet stored in a manner that protects sensitive data from unauthorized access. Implement safeguards such as password protection for sensitive documents and restrict access to authorized personnel only. Let’s take the company's census file as an example. This file holds sensitive information like Social Security numbers, dates of birth, salaries, 401(k) deferral amounts, employer match, and profit sharing calculations. This file should be safeguarded with a password and is only accessible to employees who require this information for their roles. For instance, a newly hired temporary employee would not have access to this file, ensuring the information remains confidential.

Reduce the Hassle of Compliance Testing

One of the many benefits of maintaining organized fiduciary files is how much easier it makes compliance testing. For example, your plan's TPA usually asks for uploading census data by January 31st to run their compliance tests for the year. By having clean data and organized files, this task becomes significantly less daunting. Instead of spending hours searching for and compiling the requested information, you can access it within a few clicks. This not only saves you valuable time, but it also helps ensure that your TPA has all the necessary information to perform accurate compliance tests.

Structure for Success

Maintaining a well-organized 401(k) is more than just a tidy system of records. It's an outward sign of effective fiduciary oversight, accurate audits, and comprehensive compliance testing. As a plan sponsor, you play an important role in the smooth operation of your company's retirement plan. However, you don't have to navigate this path alone. Partnering with an experienced 401(k) advisor can offer valuable assistance, provide answers to your questions, and help ensure you're on the right track. Remember, the success of your 401(k) plan is not just about its performance but also about its organization and compliance. We are here to provide guidance, help you stay organized, and support the development of a bright financial future for your employees.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun fact, Scott has a hobby of filling growlers with coins!
Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #6188012.1
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent. 

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All Things 401k | Wrapping up 2023: A Comprehensive Guide to End-of-Year 401(k) Tasks

As the end of 2023 draws near, those responsible for their company 401(k) plan have much to consider. With a combination of standard annual tasks and new SECURE Act provisions on your plate, we are here to help you. This article is a helpful guide for wrapping up 2023 smoothly! We will dive into those end-of-year 401(k) tasks that require your attention including plan design review, SECURE Act preparation, Required Minimum Distributions (RMDs), employee deferrals and more. Annual Review An annual review is a great time to kick the tires and make sure your plan is still working well. Assessing key demographics such as participation, deferral rates, assets allocation and loan activity can help shine light on opportunities for the plan. Updates could be necessary to keep your plan in compliance, boost performance and/or better suit your organizational needs. Safe Harbor Considerations If you are considering adding or changing your company match formula, now is a good time to discuss it before December 1st. Both new and existing plans need to finalize any decisions on safe harbor match changes before the deadline. This will allow sufficient time to distribute the required notices. Long-Term, Part-Time Employees Starting January 1st, 2024, new rules go into effect for long-term, part-time employees. The SECURE Act requires 401(k) plans to allow employees who have worked 500 hours or more in the past three consecutive 12-month periods to contribute to the plan. It's important that you track and record the correct hours. Required Minimum Distributions The annual deadline for paying out RMDs is December 31st, so now is the time to get ahead. Take this time to review the list of affected participants. This includes current and terminated participants over the age of 72 (73 if the person reached age 72 after December 31st, 2022). Bonuses If paying year-end bonuses, you might consider checking the definition of compensation in your document. If bonuses aren't included in this definition, there won't be any deductions for 401(k) or 403(b) contributions from the bonus. However, if the plan counts all types of pay as compensation, contributions should be taken from the bonuses. Opt-Out Records While the decision to participate in the retirement plan rests solely with each employee, it is your responsibility to keep accurate documentation. It's essential to keep clear records, indicating that employees were given the choice to defer their participation. Furthermore, any instances where an employee has chosen to defer 0% of their earnings must be meticulously recorded. Expense Account If you have an ERISA spending account, also known as an ERISA bucket or plan expense reimbursement account, review it before the year ends. This account is typically used to cover plan-related costs. However, if there is leftover money in the account, it is often distributed back to the participants. Your plan document should provide details on how this surplus revenue is distributed. Some plans distribute the excess to all participants, while others only disburse it to those who invest in funds with revenue-sharing agreements. Required Notices Remember, December 1st is the deadline for annual participant notices. These notices inform employees about their 401(k) plan's operations, investment options and fees. Ensuring timely distribution helps avoid penalties and maintains your plan's tax benefits. Lean on Your Advisor The end of the year is an exciting time, but it can also be stressful. That is why we work closely with our clients to tackle these end-of-year tasks. Whether it's questions about required notices, compliance deadlines, plan design review or anything else, we're here to help.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun fact, Scott has a hobby of filling growlers with coins!
Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #6006784.1
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent. 

Interested in more?

Let's Talk Proactive HR