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Speaking of One Percent

                            Since the contribution limits were recently raised by 10% 401(k), 403(b) and most 457 plans (to $22,500), we thought now might be a good time to share creative ways to communicate to your participants the benefits of increasing contributions to their retirement plan. These new, higher limits could strengthen their retirement goal, but participants might not be too keen on squirreling away too much right…

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IPS Can Still Add Value for Plans Despite Goldman Sachs Dismissal

Investment policy statements (IPSs) are commonplace among retirement plans — with around 83% providing one. And that number tends to be even higher among bigger plans. Financial powerhouse Goldman Sachs is one of the larger employers that doesn’t utilize an IPS. In fact, this was the subject of a recently dismissed lawsuit by a former Goldman employee, whose attorney alleged that the company violated ERISA by, among other things, failing to adopt an IPS. The federal judge in the…

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Workers Are Turning to Employers for Inflation Help

With inflation at its highest levels in more than four decades, it’s not surprising that nearly three in four American workers report they’re experiencing increased stress concerning their personal finances. According to a 2022 survey of more than 1,000 employees conducted by Voya, almost 90% of respondents say that inflation — including the rising cost of food, gas and housing — was their greatest concern. As a result, many employees (70%), according to the research, are looking to optimize…

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Four Things to Know About Plan Limit Hikes

In October, the Internal Revenue Service significantly raised the contribution limits for 401(k)s and other plans effective in 2023. As plan sponsors begin to think about how to communicate these changes to employees, it’s perfect opportunity to educate, demystify, and encourage participation in these plans. What to Know Retirement. 401(k), 403(b) and most 457 plans got a 10% increase on the contribution limit, so it’s now $22,500. At first glance, employees might say that it’s already too hard to…

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Provider Consolidation in the Retirement Plan Market: Impacts for Sponsors

Following in the footsteps of many banks and big accounting firms, there’s been a growing trend toward consolidation among retirement plan service providers. But for the most part, less competition hasn’t translated into higher fees for plan sponsors — at least not yet. If anything, the costs for recordkeeping and administrative functions have tended to trend downward. Moreover, there’s the potential for additional value for sponsors as a result of M&A activity among larger industry players, with the possibility…

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How to End the Year on Bright Note

December brings with it an expectation of cheer, hope, and festivities. What your employees do not expect (and, frankly, don’t want) are grumpy nudges about enrollment. With the anxiety of the pandemic and lockdowns close behind us, and with the imminent worry over inflation and downturned markets here upon us, participants could use an upbeat message from leadership on how to make the best of imperfect situations. That means it’s time to rethink the language we use to encourage…

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DOL Updates Guidance on Auditor Independence for Retirement Plan Engagements

In September, the U.S. Department of Labor (DOL) released an Interpretive Bulletin that updates guidance on audits of benefit plans under the Employee Retirement Income Security Act. The updated guidelines are intended to help determine when a qualified public accountant is independent for the purpose of auditing and rendering an opinion on the Form 5500. With the new guidance, DOL removes what it describes as certain “outdated and unnecessarily restrictive provisions” and reorganizes other provisions for clarity. While offering…

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Does Your Retirement Plan Stand out From the Crowd?

With more than two-thirds of American workers having access to a retirement plan, employees and job seekers have come to expect one as part of their benefits package. That means it’s more important than ever to make sure your offering differentiates your organization from the competition. Whether you’re looking to deepen your bench by attracting top talent or retain the valued employees you have, evaluate if your retirement benefit is enough to move the needle. Workers Want Financial Wellness…

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Revenue Sharing Decisions

As a result of the significant rise in revenue sharing litigation it behooves plan fiduciaries to confirm and document the prudence and appropriateness of any revenue sharing arrangement. Revenue sharing is the sharing of fees from one service provider (e.g., an investment fund manager) to another service provider (e.g., your record keeper). Revenue sharing may be built into a fund’s asset-based expense ratio if a plan utilizes a higher cost share class. The revenue sharing is often used to…

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Helping Employees Pay Down Student Debt

The ever-growing burden of student loan debt looms menacingly over many Americans, crippling their ability to save for retirement and other financial goals. According to Bankrate, around 60% of Americans who have student debt have delayed saving for major milestones because of it. While young people bear the most debt, they’re not the only ones affected by far as roughly 25% of baby boomers are still paying down student loans. Some employers are taking a more proactive approach to…

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