What or Who is a 401k Plan Sponsor?

09 May 2023 Fiduciary-Shield-by-BidMoni 401(k) Administration, 401(k) Advisors

Plan Sponsor

A 401k plan sponsor is an employer or organization that establishes and maintains a 401k retirement plan for the benefit of its employees or members. The plan sponsor is responsible for selecting the investment options available in the plan, determining the plan's administrative and operational features, and ensuring that the plan complies with applicable laws and regulations.

The plan sponsor may also hire third-party service providers, such as recordkeepers and investment advisors, to assist with the administration and management of the plan. However, the plan sponsor retains ultimate responsibility for the plan's operation and fiduciary duties.

Plan sponsors have a legal obligation to act in the best interests of plan participants and beneficiaries and to fulfill their fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). This includes ensuring that fees and expenses associated with the plan are reasonable and disclosing all relevant information to plan participants.

Can I Make Roth Contributions in a 401k Plan?

28 April 2023 Fiduciary-Shield-by-BidMoni 401(k) Administration, 401(k) Advisors, 401(k) Participants, 401(k) Rules and Regulations

Can I Make Roth Contributions in a 401k Plan?

Yes, some 401k plans offer a Roth option that allows you to make after-tax contributions. These contributions are then invested and grow tax-free, and you won't have to pay taxes on the money when you withdraw it during retirement.

However, not all 401k plans offer a Roth option, so you should check with your plan administrator to see if it's available. Also, there are limits to how much you can contribute to a Roth 401k each year, just like with traditional 401k contributions. In 2023, the annual contribution limit for both traditional and Roth 401k contributions is $22,500, with an additional catch-up contribution of $7,500 for those age 50 and older.

What is a Safe Harbor Plan?

20 April 2023 Fiduciary-Shield-by-BidMoni 401(k) Administration, 401(k) Advisors, 401(k) Rules and Regulations

 

Safe Harbor Plan

A safe harbor plan is a type of retirement plan designed to help employers comply with certain non-discrimination requirements set by the IRS. These requirements prohibit highly compensated employees (HCEs) from receiving disproportionate benefits or contributions compared to non-highly compensated employees (NHCEs) in a 401k or other qualified retirement plan.

By adopting a safe harbor plan, an employer can automatically satisfy certain non-discrimination testing requirements and avoid costly penalties that can arise from failing to meet these requirements. Safe harbor plans offer several benefits, including:

  1. Enhanced contribution limits for HCEs: In a safe harbor plan, HCEs can make larger contributions to their retirement accounts without worrying about violating non-discrimination rules.

  2. Reduced administrative burden: Safe harbor plans typically have fewer administrative requirements than traditional 401k plans, which can save employers time and money.

  3. Greater employee satisfaction: Safe harbor plans can be designed to provide generous matching contributions, which can help attract and retain talented employees.

Overall, safe harbor plans can be an effective way for employers to offer a valuable retirement benefit to their employees while minimizing their own administrative burden and legal risk.

State Retirement Plan Mandates: What States Have Them and When Do They Take Effect?

13 January 2022 Fiduciary-Shield-by-BidMoni 401(k) Administration, 401(k) Advisors, 401(k) Participants, 401(k) Rules and Regulations

State Retirement Plan Mandates: What States Have Them and When Do They Take Effect?

 
CONTRIBUTOR
Vestwell
 
PUBLISHED
 

Currently, there are 14 states with retirement plan mandates to help individuals save for retirement. In this article, explore program mandates, structure, and roll-out plans for each of the 14 states to understand how (and if) this applies to you and your small business.

California

Name: CalSavers

Mandate: Companies with 5+ employees must offer a plan or face a fine of $250 per eligible employee after 90 days of noncompliance and an additional fee of $500 per eligible employee after 180 days of noncompliance.

Timing: As of September 30, 2020, anyone with 100+ employees must have complied; as of June 30, 2021, those with 50+ employees must have complied, and by June 30, 2022, those with 5+ employees must comply.

Colorado

Name: Colorado Secure Savings Programs

Mandate: Companies that have been in business for 2+ years with 5+ employees must offer a plan or face a fine up to $100 per eligible employee per year (up to max of $5,000 annually).

Timing: The pilot program begins in October 2022, enrollment begins in 2023.

Connecticut

Name: MyCTSavings

Mandate: Companies with 5+ employees paid more than $5K each in the calendar year (unless the business already offers a qualified, employer-sponsored retirement plan). Non-compliance may result in an investigation and penalties.

Timing: Pilot launched in November 2021, with full launch slated for early 2022.

 

Click here to view additional states.

 

Webinar Replay: BidMoni Small Market Solution

22 July 2021 Fiduciary-Shield-by-BidMoni 401(k) Administration, 401(k) Advisors

BidMoni Small Market Solution Webinar Replay

 

BidMoni has partnered with five national Recordkeeping firms and one national TPA firm to create the first ever fully digital 401K marketplace.  We have worked with advisors across the country to remove the friction points in selling smaller plans, including:

  • Identifying opportunities
  • Generating proposals
  • Running plan comparisons
  • Plan onboarding