Put Your Advisor to the Test Ask these critical questions to test the knowledge of future plan advisors. A knowledgeable plan advisor is an important component in the successful operation of your qualified plan. However, selecting the right candidate requires more than simply reviewing typical Request for Proposal (RFP) responses. RFPs are an important part of the process, but boilerplate questions may draw generalized, high-level responses that reveal few details about a potential advisors’ knowledge. You should make sure the potential advisor possesses broad industry experience and expertise that applies to your unique situation. It only takes a few questions to put them to the test. So, as you consider prospective plan advisors, here are some non-boilerplate questions that you can ask to assess their knowledge. Under what scenario would my plan need a BRF test? Sometimes, plan designs create different benefits for different classes of participants. The BRF (Benefits,…

With student loan debt reaching astronomical numbers, employers are increasingly looking for ways to add student loan assistance programs to their benefits packages. While current student loan repayment programs can relieve financial stress, they do not offer tax benefits to employees. However, a recent IRS Private Letter Ruling allowing a major pharmaceutical company to add loan repayment benefits to its 401(k) plan has sparked interest in this approach. See how you may be able to design a solution that aligns with the IRS ruling here. Adding student loan repayment to a qualified plan is not the right solution for everyone. If you are considering this enhancement, contact Innovative to discuss your specific situation and objectives.

For plan sponsors, running a 401(k) plan can be complex and time consuming. Some plan sponsors hire outside advisors to help the plan stay compliant with IRS and ERISA laws. It is crucial to understand the difference between hiring a broker versus hiring a fiduciary. Each has a unique set of regulatory standards governing their behavior which can affect the range and quality of services offered to the plan. Below are a few key differences between brokers and fiduciaries: Standard of Care: Brokers: Are held to a suitability standard. Under this standard, brokers can only recommend investments that they reasonably believe are appropriate for the given situation. Fiduciary advisors: Are held to stricter rules, known as the fiduciary standard of care. This standard legally requires the investment representative to act in the best interest of the investor. The fiduciary duty is the highest standard of care under American law1. Commissions…

As the calendar year draws to a close, older plan participants may have to consider taking a required minimum distribution (RMD) from their qualified retirement plan. A required minimum distribution is a withdrawal from a qualified retirement plan for participants who have reached the age of 70½. While many qualified plans have services to notify participants that they have to take an RMD, it is important for plan sponsors to understand the mechanics and rules governing required minimum distributions. How is an RMD Calculated? An individual’s RMD is normally calculated using the “Uniform Lifetime Table,” which is an IRS chart that assigns a “Life Expectancy Factor” to each age. The previous 12/31 balance is divided by the “Life Expectancy Factor” to calculate the required minimum distribution. Other tables are used if either: The spouse is the sole beneficiary and they are more than 10 years younger than the participant. OR…

An existing client had experienced problems with their 401(k) plan audit for several consecutive years due to internal operational issues. The client requested our help in determining whether they should spend the money for a 3(16) service to help improve efficiencies and eliminate some of the operational errors they were experiencing. See how Innovative helped the client determine if it was the right strategy, move to the 3(16) and reduce their costs and audit error rate. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.

Our firm was founded on the principles of integrity, professionalism and exceptional client service. We are also deeply committed to continuous improvement. Our dedication to doing what is best for you, our clients, prompted us to engage CEFEX, the Centre for Fiduciary Excellence, LLC to audit our processes. In June of 2019, we contacted the CEFEX organization and requested an independent analyst provide us with a comprehensive independent review.  The process was rigorous and their assessment took months to complete. Now, after going through the audit and carefully evaluating our procedures, we are proud to share with you that Innovative Benefit Planning is a CEFEX certified Investment Advisor. This certification signifies our commitment to uphold the highest level of fiduciary care and that has a direct impact on you, your plan and your employees. As a plan sponsor, the Department of Labor (DOL) identifies the following as your fiduciary responsibilities:…

A new client engaged Innovative after they decided to transfer their current plan to a new service provider. After our initial investment review, we noticed there was an existing Stable Value Fund, which was subject to a market value adjustment (MVA). When an MVA is being applied, a complete fund liquidation may result in a loss to the plan and participants. See how Innovative helped our client in moving their assets with no loss to the participants. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.

Does your organization’s retirement plan frequently refund money to highly compensated employees (HCE)? Do you want to provide a great incentive to your employees to save for retirement and perhaps allow them to retire earlier? Would the owners and highly compensated employees like to save more of their own money? Do your key employees own a significant portion of plan assets? These are among the common reasons a company might implement a Safe Harbor contribution feature for their retirement plan. If a company agrees to make a Safe Harbor contribution to their retirement plan, then the plan is exempt from nondiscrimination testing for the plan year. These include: Average Deferral Percentage tests, Average Contribution Percentage tests, and Top Heavy tests. Depending on your company, it might be wise, for several reasons, to avoid these tests and the actions required from failing them. There are several contribution calculation methods that qualify…

As an organization offering a retirement plan to their employees, plan sponsors are faced with decisions that can affect the entire organization.  The plan design, investment line-up, and who the recordkeeper will be are typical for all plans. Beyond these standard decisions, there is the issue of knowing and understanding the ERISA laws that govern retirement plans. Depending on the complexity of your organization and business, not every advisor has the background to help. Plan decision makers usually have other job responsibilities that can divert their attention, yet since they are considered fiduciaries of the plan, decision makers must act in the best interest of the plan participants and their beneficiaries.  How can they if they don’t know what the standards are?  The same is true of advisors.  Not all are well versed in ERISA law, which is complex and sometimes difficult to interpret. Hiring the right plan advisor can…

A new client engaged Innovative to transfer their current plan to a new service provider. During the course of our detailed review, we discovered that certain employees had annuity contracts with death benefits that exceeded the value of their plan investments. If the client executed the transfer, these participants would have lost those benefits, which is a violation of ERISA laws. See how Innovative helped our client navigate their retirement plan transition to a new service provider and avoided a potential ERISA violation. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.

See how Innovative helped our client from running afoul of the Affiliated Service group rules and saved the client from potential serious regulation issues. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.