Who 401k Squared Works With for Qualified Retirement Plans
Whether you're just beginning to offer a
401k retirement plan to your employees
or you have $50 million in plan assets…
We can help you choose and maintain the
right qualified retirement plan for you
and your employees.
Our client base ranges from small business owners
who want to offer a basic 401k retirement
plan to their employees to large corporations that employ
1500 people in 25 different offices around
the country who now know how to use their
retirement package to attract and retain
employees.
While most advisors offer retirement planning
as just another item in a long list of
services, we are specialists that focus
specifically on the qualified plan arena. Given
the fact that there are so many nuances
involved in offering and maintaining
a plan, it makes sense to have experts,
rather than a generalist, managing your
company’s
retirement future.
We
offer our clients a wide range of qualified
retirement plans. If your need is a SIMPLE,
a SEP, a 403b plan, a 457 Deferred Compensation
Plan, or a Cash Balance Plan, we can
help.
Our clients value service first
and foremost:
They want to know what we are
going to provide them after we have sold
them the 401k plan. Unlike
many “recreational brokers” who
just disappear after the sale, we provide
our clients with ongoing service. We
continuously monitor the plan for our
clients to ensure everything is running
as it should. Our clients can be confident
in knowing there is an expert who is
managing the plan for which they are
paying.
Do these scenarios sound familiar?
Scenario
1: You haven’t
seen your broker since the sale was made
All too often, brokers come in, sell a plan, have an enrollment
meeting, and then move on to their next prospect. Maybe
they contact the plan sponsor once a year, maybe not at all. Retirement
plans, however, require constant servicing and monitoring by their
advisors to be successful.
Whether you see the actual fees or not, you are paying
something to someone to service your
plan. If you are
paying these fees to your broker but
not receiving regular communication
and hands-on service, you
are essentially paying an employee
that never shows up for work.
You probably would not allow this to
happen in your company, so why would
you allow it in your 401k plan?
401k Squared outlines a sponsor communication plan as well as
a customized education program that addresses
the plan’s specific
objectives, the employee demographics,
and the unique provisions of the plan. Generally, we have
education
workshops once
every six months or even once a quarter,
depending on your needs and availability.
401k Squared also provides other services such as individual
meetings with participants, participant Gap
Analysis and TRAK
reports, plan
sponsor aggregate reports,
satisfaction
surveys,
and a fiduciary notebook.
Advisors with 401k Squared are available
to answer calls and emails from participants
with questions – you
are not forced to talk to someone on
the other end of a 1-800 number who
knows nothing about the specifics of
your plan.
Scenario 2: Participants
are receiving refunds of their deferrals
When the 401k plan was created, Congress devised
non-discrimination tests to prevent
the plans from becoming a tax-dodge for top employees. These
tests are known as the ACP/ADP tests.
If your plan has ever failed its ACP/ADP
tests and employees received refunds of their 401(k) contributions,
you probably knew no one was happy when that check arrived.
Refunds tend to be unpopular for many reasons. First,
the money is viewed as taxable income
by the IRS, so it can increase your adjusted
gross income. Further, you can lose the ability to invest
the money tax-deferred. Plus,
you might only get the refund after you
file your tax return, since refunds can be made up until the
tax filing date, so you may have to file an amended return.
In the last few years, Congress has passed legislation creating
simple solutions that make it easier
for employers to pass non-discrimination
tests or eliminate them all together.
Unfortunately, if your broker was not
aware of these changes when your plan
was set up or your plan has not been
updated with one of these remedies, you
are still being faced with having to
pass the ACP/ADP tests. Given
these new laws, plans should never be
challenged with having to refund money
to their employees. 401k
Squared can help you amend your plan
and install these simple solutions to
do away with discrimination testing every
year.
Scenario 3: Employees do not know what to do
It is common for employees to have 20 funds put in
front of them as options for investing,
but they have no idea what to do. As a result,
they either do not enroll at all or
they never make a choice of where they
want their money to go. In turn, their
money defaults into a money market fund that does not earn
them anything.
Employees may turn to you for help, but you cannot or do not want
to help because you know you could be held personally liable for
their account if you do.
Education is
key. If
your employees know what to do, they
are going to be able to act. If there is no one to educate
them on what to do, they are not going to do anything.
Scenario 4: You have excess profits at
year-end that you have to take as income and therefore pay taxes
on
Do you wish you could take excess profits and invest
them on a pre-tax basis? An employer can offer
a combination of qualified retirement
plans in order to produce a larger
contribution amount. Just as a Profit
Sharing feature can be added to a 401k plan, an employer
can add a Cash Balance plan as well. In
fact, a 401k plan in combination
with a Cash Balance plan can be the
ideal plan-design for many companies
and partnerships.
A Cash Balance plan is a type of retirement plan that belongs
to the same general class of plans known
as "Qualified
Plans." A
401k is a qualified plan. These plans "qualify" for
tax deferral and creditor protection
under ERISA.
In a Cash Balance plan each participant has an account. The
account grows annually in two ways: First, a contribution and second,
an interest credit, which is guaranteed rather than being dependent
on the plan's investment performance.
Many owners and partners are looking for larger tax deductions
and accelerated retirement savings. Cash Balance plans may be the
perfect solution for you. 2006 legislation is encouraging
more and more professionals and successful business owners to adopt
this type of plan.
Scenario 5: You want to protect yourself from liability
It is common for those who are responsible for their company’s
retirement plan to be familiar with the
term fiduciary liability but they do not know what it means or
for what they can be liable.
You may believe you are protected from
a fiduciary standpoint since you have elected
Section 404c of ERISA. But, did you know
there are actually over 20 steps of action
that must be taken to ensure compliance before the protection
applies? If you are found deficient in just one of those areas,
the Department of Labor can find you liable for a plan’s
shortcomings.
Implementing a successful qualified retirement plan
for your employees will require effort
on your part, and there are two keys to
your ultimate success.
Key #1: You sincerely care about providing a top-notch
qualified retirement plan for your employees.
If you want to succeed, you must really care about providing
a great retirement plan for your employees.
-
You do not want to just offer it because
you feel obligated to offer a retirement
plan.
You really want to know what options
are available to you and what the
best plan is for your employees.
-
You should also be concerned with whether
you are offering the best plan
that is available.
-
You must take advantage of all of the
services that are available to
you and to your employees.
If you really value service and are not focused on finding
the cheapest product available, you will be successful.
-
You do not just want to get quotes
and pick the cheapest option.
-
You
want value, and you are willing
to pay for it. 401k Squared can help.
Key #2: You value and are willing to pay for superior
service from a trusted 401k advisor
You will be successful if you are willing to pay us
to work with you as an advisor rather than going direct with
a company. If you are not comfortable with paying
for an advisor or if that is not what you are looking for,
we are not going to work well together.
If you are looking for top-notch service from experienced advisors
and you care about your employees’ from a retirement
standpoint, we will work together well to ensure your success.
One of our goals is to educate you, in particular about
the service plan you have chosen, but that comes at a price.
If you are not willing to pay for it,
we are not going to work well together. It is important for clients
to understand that we are not a discount broker.
Set up your initial qualified retirement plan consultation with
401k Squared today by calling 303-797-1401.
