Simple IRA vs 401(k): Should You Consider Upgrading?

As your company evolves, your retirement plan should keep pace. If you're considering upgrading from a SIMPLE IRA to a 401(k), here are the top five advantages and considerations to keep in mind.

Top 5 Advantages of a 401(k)

1. Higher Contribution Limits

Employees can defer up to $23,500 in 2025 (plus $7,500 catch-up if age 50+), compared to $16,500 for SIMPLE IRAs. That means more savings potential for owners and staff.

2. Greater Plan Flexibility

401(k) plan is a more competitive and familiar benefit, especially for high earners or experiences professionals.

3. Enhanced Talent Attraction & Retention

A 401(k) plan is a more competitive and familiar benefit, especially for high earners or experienced professionals.

4. Expanded Employer Contribution Options

Unlike SIMPLE IRAs with fixed formulas, 401(k) plans let you tailor your matching or profit-sharing strategy based on your budget and goals.

5. Long-Term Scalability

401(k)s can grow with your business and integrate advanced strategies like Safe Harbor provisions or Cash Balance plans as your company matures.

Top 5 Considerations or Trade-Offs

1. Increased Administrative Complexity

401(k)s requires IRS filings (e.g., Form 5500), nondiscrimination testing's, and possibly annual audits once your plan grows.

2. Higher Setup and Maintenance Costs

Compared to SIMPLE IRAs, 401(k)s typically involve provider, TPA, and advisory fees, but startup tax credits may offset these costs for small employers.

3. Fiduciary Responsibility

Sponsors of 401(k) plans are fiduciaries, meaning you're responsible for plan oversight, investment selection, and cost monitoring.

4. More Time and Decision-Making Required

You'll need to work with a recordkeeper, advisor, and/or TPA to select features, manage compliance, and communicate with participants.

5. Transition Planning is Key

While SECURE Act 2.0 now allows mid-year transitions to Safe Harbor 401(k)s, timing and communication with employees are still critical.

Ready to Evaluate Your Options?

Let's talk about whether a 401(k) plan makes sense for your team, and how to make the transition smoothly and strategically.

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

Financial Advisor

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. #4515345

Staying Ahead: Key Focus Areas for 401(k) Plan Success in 2025

As 2025 begins, 401(k) plan sponsors are entering another dynamic year shaped by fresh regulatory updates, technological advancements, and the evolving expectations of employees. At Rose Street Advisors, our team remains committed to helping you stay ahead, ensuring your retirement plan remains competitive, compliant, and effective. This blog post highlights key areas to focus on in 2025.

1. Adapting to SECURE 2.0 Updated

The full rollout of SECURE 2.0 provisions continue into 2025. Plan sponsors should prioritize compliance with new rules, such as expanded catch-up contributions and automatic enrollment requirements. Partner with your advisor to ensure that plan amendments are timely and align with the updated guidelines. These changes represent an opportunity to enhance plan design for participants.

2. Embracing Flexible Fiduciary Practices

Maintaining fiduciary excellence requires regular evaluation of your plan’s operations, investment lineup, and participant experience. With 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 growing emphasis on personalized financial education. Employees expect interactive, accessible resources to guide their retirement decisions. Whether it’s mobile apps, webinars, or AI-driven tools, consider these platforms that resonate with a digitally savvy workforce. Better education means better engagement—and ultimately, better retirement readiness. 

4. Automation and Plan Design Optimization

Automatic features, including enrollment, escalation, and re-enrollment, continue to be 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, so does the importance of robust cybersecurity. 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 critical. Review fees, performance, and participant outcomes to ensure your plan stays competitive. This analysis also serves as a tool to 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 any specific updates or additional insights for 2025, let us know!

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

Financial Advisor

Pros & Cons of Loans and Early Withdrawals from Your Retirement Account

When faced with financial needs, taking a loan from your employer-sponsored retirement account, such as a 401(k), can seem like a tempting solution. However, it's important to understand both the advantages and disadvantages, considering both the short-term and long-term impacts.

Short-Term Perspective

Advantages:

1. Quick Access to Funds: a 401(k) loan can provide quick access to cash for emergencies or major expenses without needing to qualify through a credit check.

2. Lower Interest Rates: Compared to other forms of borrowing, 401(k) loans often come with lower interest rates.

3. Paying Interest to Yourself: The interest you pay on the loan goes back into your retirement account, so you're effectively paying interest to yourself.

Disadvantages:

1. Repayment Requirements: You must repay the loan with interest, usually through payroll deductions, which can reduce your take-home pay.

2. Double Taxation: Loan repayments are made with after-tax dollars, and you'll be taxed again when you withdraw the funds in retirement

3. Risk of Job Loss: If you leave your job or are terminated, the loan may become due in full, and any unpaid amount may be treated as a taxable distribution with potential penalties.

Long-Term Perspective

Advantages:

1. Avoiding Penalties: Taking a loan instead of an early withdrawal helps you avoid the 10% early withdrawal penalty and immediate income taxes.

2. Continuing Growth: While the borrowed amount is no longer invested, the remaining balance in your account continues to grow tax-deferred.

Disadvantages:

1. Reduced Retirement Savings: Borrowing from your 401(k) reduced the amount invested for your retirement, potentially compromising your long-term financial security.

2. Lost Compounding: The money taken out as a loan is no longer compounding, which can significantly impact your overall retirement savings over time.

3. Repayment Risk: If you're unable to repay the loan, it may be treated as a taxable distribution, resulting in taxes and penalties.

Considerations Before Taking a 401(k) Loan

• Financial Discipline: Ensure you have a solid repayment plan and the discipline to follow through.

• Alternative Solutions: Explore other borrowing options, such as personal loans or home equity lines of credit, which may have less impact on your retirement savings.

• Impact on Retirement Goals: Consider how the loan will affect your long-term retirement goals and whether it aligns with your overall financial plan.

Should You Take an Early Withdrawal from Your Retirement Account?

As a retirement plan participant, you might find yourself considering early withdrawals from your retirement account to pay off debt. Before making such a decision, it's essential to understand both advantages and the potential drawbacks, including the taxation and penalties involved.

Advantages of Early Withdrawals:

1. Immediate Debt Relief: Using retirement funds to pay off high-interest debt can provide immediate financial relief, potentially reducing stress and improving your financial situation.

2. Interest Savings: Paying of debt early can save you money in interest payments over time, especially if you have high-interest loans or credit card debt.

3. Improved Credit Score: Reducing or eliminating debt can positively impact your credit score, making it easier to access favorable loan terms in the future.

Disadvantages of Early Withdrawals:

1. Taxation: Early withdrawals from retirement accounts are typically subject to income tax. The amount withdrawn is added to your taxable income for the year, which could push you into a higher tax bracket.

2. Early Withdrawal Penalty: If you withdraw funds before reaching age 59 1/2, you may incur a 10% early withdrawal penalty on top of the regualr income tax, further reducing the amount you receive.

3. Loss of Future Growth: Withdrawing funds early means losing out on potential investment growth, which can significantly impact your retirement savings over time.

4. Reduced Retirement Savings: Using retirement funds to pay off debt reduces the amount available for your future retirement needs, potentially compromising your long-term financial security.

Considerations Before Making a Decision

• Tax Implications: Consult with a tax advisor to understand the full tax impact on an early withdrawal and explore strategies to minimize the tax burden.

• Alternative Solutions: Consider other options to manage debt, such as debt consolidation, negotiating with creditors, or exploring financial assistance programs.

• Long-Term Impact: Evaluate the long-term impact on your retirement savings and consider whether the immediate relief is worth the potential sacrifice to your future financial security.

Conclusion

Taking a loan or early withdrawal from your retirement account can provide short-term financial relief but comes with significant long-term implications and potential tax implications and penalties. It's crucial to weigh the pros and cons carefully and explore alternative solutions before making a decision.

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

Financial Advisor

ERISA Bond vs. Fiduciary Liability Insurance: What Plan Sponsors Need to Know

Plan sponsors play a critical role in managing retirement plans, and with this responsibility comes risk. Two essential tools to protect both the plan and the fiduciaries are ERIS bonds and fiduciary liability insurance. Here's what they are, why they're needed, and why plan sponsors should consider them.

What Is an ERISA Bond?

An ERISA bond is a legal requirement under the Employee Retirement Income Security Act (ERISA). It safeguards the retirement plan from losses caused by theft, fraud, or dishonesty by individuals handling plan assets.

• Why is it needed? To comply with federal law and protect plan participants' assets.

• Who must have it? Any person handling plan funds, including fiduciaries.

• Coverage amount: At least 10% of plan assets, with a $500,000 cap (or $1,000,00 for plans with employer securities).

What is Fiduciary Liability Insurance?

Fiduciary liability insurance is optional but vital. It protects plan sponsors and fiduciaries from personal liability if they are accused of breaching their fiduciary duties, such as poor investment decisions or failure to monitor service providers.

• Why is it needed? Fiduciaries can be held personally liable for plan losses due to mismanagement.

• Who benefits? Plan sponsors, fiduciaries, and organizations overseeing the plan.

• Coverage amount: Tailored based on the plan's size and complexity.

Why Would a Plan Sponsor Want Both?

While an ERISA bond protects the plan against fraud or theft, fiduciary liability insurance protects fiduciaries personally from lawsuits related to breaches of duty. Without both, plan sponsors risk non-compliance, financial loss, and personal exposure to legal claims.

In short, the ERISA bond ensures compliance and asset protection, while fiduciary liability insurance offers financial clarity and financial security for those managing the plan.

By securing both, plan sponsors demonstrate a commitment to protecting participants and fulfilling their fiduciary responsibilities effectively.

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

Financial Advisor

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.

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

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!

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 greater¹ ². 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 2024³ ⁴. 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

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

It is officially Summer! Favorite summer past times of grilling burgers, hotdogs, swimming, boating, gardening, camping and just spending time outside is here. A staple in many American refrigerators in the summertime, and throughout the year, is Ketchup. Ketchup has a way of giving those grilling favorites that much needed edge to just simply make it better. Just like ketchup gives our grilling favorites the edge needed, catch-up contributions in a 401k can serve the same purpose.

If you or someone you love is still working and is or going to turn 50 this year, while the normal contribution limit to a 401k/403b plan is $23,000 for 2024, those 50 and older can make catch-up contributions of an additional $7,500, totaling $30,500. The extra amount contributed can really give an investor’s portfolio the extra boost needed to stay on track or get back on track for retirement goals.

On December 29, 2022, Congress passed the SECURE 2.0 Act, which stands for Setting Every Community Up for Retirement Enhancement. Several of the provisions outlined in the act have delayed start dates. Beginning in 2025, Section 109 of the SECURE 2.0 Act allows employees who are 60-63 years old to contribute at a “super” catch-up rate! The super catch-up allows for investors to make an additional 50% increase to the $7,500, which would result in $11,250 in additional catch-up contributions in 2025. This catch-up contribution is planned to index to inflation and could mean possibly more contributions in future years.

If you have questions or want to learn more, please reach out and let's chat.

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. File # 6718069.1

Jeremy Heavey

AIF ® | FINANCIAL ADVISOR

Jeremy is passionate about partnering with individuals and families to identify what is important in their lives and creating a comprehensive financial strategy to help them reach their life goals. This holistic approach allows Jeremy and the wealth management team to ensure the specific needs of the client are front and center as they make investment recommendations and collaboratively design custom-tailored financial plans.

Jeremy has a professional track record starting, leading, and managing for-profit and non-profit organizations. He is a graduate of Taylor University and has completed business programs at both Hong Kong Baptist University & Harvard Business School. Jeremy is also formally trained and certified in behavioral assessment, conflict management and life coaching. Jeremy, his wife Kim and their 4 kids reside in Kalamazoo. They love spending time exploring the outdoors, fixing up their farmhouse, and living life with friends and extended family.

Fun fact: Jeremy has been playing drums since he was 13 years old and made callbacks for the Blue Man Group.

Interested in more?

Let's Talk

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:

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.

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.

Stay Informed: Keep yourself updated on changes to IRS and DOL regulations that may impact compliance testing and Form 5500 filing requirements.

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

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