In my 2010 article about KSOPs, I discussed how KSOPs risk employees over-leveraging their employment into excessive financial risk. KSOPs blend 401k and ESOP plans in which the employer uses an ESOP with the employer’s stock as an investment as an investment option within the 401k to let employees use their retirement savings to invest in […]
Blackberry layoffs show why KSOPs are bad for employees Read More »
In a highly important move, the Department of Labor released guidance on how ERISA-governed employee benefit plans will treat same-sex marriages following the Supreme Court’s overruling of DOMA’s definition of marriage as limited to one man and one woman. ERISA-governed benefit plans include private employer benefit plans like 401k plans, defined benefit pensions and health
DOL releases official guidance on ERISA and same sex marriage Read More »
Earlier this week I wrote about Flexible Spending Accounts (FSA) and the “use it or lose it” rule. Today’s post discusses Health Savings Accounts (HSAs), which are a very different kind of account. FSAs and HSAs both give employees tax-advantaged opportunities to finance health care costs in a consumer-driven health insurance plan; but HSAs are far
Health Savings Accounts: when you can have one Read More »
Flexible Spending Accounts, or FSAs, allow employees to make tax-advantaged contributions towards their health care costs for the year. The FSA is distinct from the employer’s ERISA-governed health insurance plan; but the two operate closely. The employer’s insurer may even administer the FSA. The employee, and possibly the employer as well, contributes each year which
Flexible Spending Accounts: Use It or Lose It Read More »
As an employee, contributing to a 401k plan can be an essential aspect of your retirement planning. However, if your employer contributes to your 401k plan, you may wonder whether they can stop contributing to it. In this article, we will discuss what a 401k plan is, how employer contributions work, and whether your employer
Can my employer stop contributing to my 401k? Read More »
Employees must understand the importance of making informed investment decisions when it comes to your 401(k). One common question that arises is whether investing in company stock within your 401(k) plan is a wise choice. In this comprehensive article, we delve into the factors you should consider when deciding whether or not to invest in
Should I invest in company stock in my 401k? Read More »
401k fees have come into focus as one of many ways the financial services industry leeches money from the investors. That focus turned into litigation by participants against their plans (and plan service providers). Eventually the Department of Labor instituted fee disclosure rules that require plan service providers to break down fees charged to the
Should I be concerned about 401k fees? Read More »
401k loans allow you to borrow against your 401k account tax-free (as long as you pay it all back). The loan payments typically occur by payroll deductions. If considering a 401k loan you should carefully consider he loan terms and the ramifications. Your employer does not have to offer 401k loans and can severely limit
Employment Attorney explains: When can I take a 401k loan? Read More »
By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure these retirement plans provide plan participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees)
Retirement Plan Participant Disclosures Read More »
Generally, both plan formats defer compensation because the employee has elected to defer taking cash in hand to obtain some additional benefit, such as deferring taxes on the money or investing on a tax deferred basis. Under more specific legal definitions, there is a distinction between how these different plans work. Today’s post will discuss
What is the difference between a 401k plan and a deferred compensation plan? Read More »
By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure retirement plans provide participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that
ERISA Retirement Plan Participant Disclosures Read More »
When employees leave employment, the common response is to want to sever ties and move on, especially if the employee left involuntarily or on bad terms. However, withdrawing or rolling over your 401k may not be the best decision in every case. There are important financial and legal considerations. Before making decisions about your 401k
Benefits of staying in your 401k after you leave an employer Read More »
KSOP is jargon used within the financial and employee benefit industries as shorthand to explain the arrangement where a 401k plan houses an ESOP of the employer’s stock as an investment option. An ESOP is an Employee Stock Ownership Plan that allows employees to purchase company stock through a retirement plan. It is an ERISA
Pensions are a type of retirement benefit offered by employers or the government that provide a regular income to individuals after they retire. However, the calculation of pension benefits is not always straightforward. In this article, we will explore how pensions are calculated, including the various factors that can impact the final amount. Unlike an
How are pensions calculated? Understanding the process Read More »
Spouses in Fort Worth and Dallas are entitled to part of your retirement accounts in Texas because the federal law surrounding retirement plans allows for spouses to earn an interest in your retirement accounts during the marriage. State law allows for family courts to divide these assets based upon a domestic relations order. (That usually becomes
Why does my spouse get part of my 401k or pension in a divorce? Read More »
Are you aware of the Summary Plan Description (SPD)? If you are an employee or a plan participant in a retirement or health plan, you should be familiar with this document. An SPD provides important information about the benefits, rules, and procedures of a retirement or health plan. In this article, we will discuss what
What is an Summary Plan Description? Read More »
FMLA is the Family and Medical Leave Act, a federal law that provides certain employees leave protections. FMLA provides twelve weeks of leave in a twelve month period. The twelve month period can be a fixed twelve month period, such as the calendar year, or a rolling twelve month period so the beginning of an
Texas employment attorney explains what is FMLA Read More »
An article published early this year discussed a survey by State Street Global Advisors (SSgA) proudly boasted that 74% of participants in 401k plans want to better understand how their savings will pay off in retirement. This should come as no surprise. Most workers have little or no formal or informal education in investing. Thanks
401k Participants Want Employer Help Saving for Retirement. No Kidding? Read More »
Under the Affordable Care Act (ACA) employers with fifty or more full time employees must provide health insurance to 95% of full time employees or pay a penalty. This “play or pay” provision has a lot of employers in a tizzy. Among the reasons is the ACA defines a full time employee at thirty hours per
New federal bills seeks to redefine what it means to be a full time employee Read More »
An ESOP is an Employee Stock Ownership Plan. It is an ERISA-governed employee benefit plan that allows the employee to purchase shares of the employer’s stock on a tax deferred-basis. (You don’t pay taxes today but you will pay taxes when you take your money out of the plan.) ESOPs were common before the rise
How does an ESOP work? How does it work with a 401k plan? Read More »