Required Minimum Distributions

Category: Retirement Plans

Required Minimum Distributions

Posted On: November 20, 2019 | Categorized as: Retirement Plans

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…


Innovative Myth Series #11-As a plan sponsor, I shouldn’t consider adding a 3(16) service to my plan.

Posted On: November 14, 2019 | Categorized as: Retirement Plans

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.


Innovative Benefit Planning Earns Specialized Advisor Recognition

Posted On: November 12, 2019 | Categorized as: Retirement Plans

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:…


Innovative Myth Series #10: When Transferring Service Providers, There are no Pitfalls, Part 2 – Market Value Adjustments and Fixed Accounts

Posted On: October 24, 2019 | Categorized as: Retirement Plans

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.


Should you Consider a Safe Harbor Contribution Feature?

Posted On: October 23, 2019 | Categorized as: Retirement Plans

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…


5 Reasons To Hire the Right Financial Advisor For Your Retirement Plan

Posted On: September 18, 2019 | Categorized as: Retirement Plans

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…


Innovative Myth Series #9: When Transferring Service Providers, There Are No Pitfalls. Part 1-Protected Benefits

Posted On: September 13, 2019 | Categorized as: Retirement Plans

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.




Innovative Myth Series #6: Funding a Profit Sharing Plan for a Company with More Than 100 Employees Will Only Benefit My Employees

Posted On: July 17, 2019 | Categorized as: Retirement Plans

See how Innovative helped one client generate significant tax savings for their company. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.                               Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.


The Importance of a Roth Option in Retirement Plans

Posted On: June 18, 2019 | Categorized as: Retirement Plans

Roth contributions can provide significant benefits to retirement plans for both participants and plan sponsors alike. But what does Roth mean? Unlike pre-tax, Roth refers to post-tax dollars, meaning the money has already been taxed when it goes into a participant’s account. They are beneficial to participants because qualified Roth distributions are taken tax free. Plan sponsors benefit from the after tax feature because it offers flexibility in how participants can save which improves employee retention, particularly with younger employees. 63% of 401(k) plans in the United States offer a Roth feature for participants within the plan3 . Plan sponsors that offer a Roth option allow their participants to perform tax diversification. Simply put, participants can be more flexible with how they save for retirement. Tax diversification refers to the allocation of an individual’s investments into different account types based on their tax characteristics1. This flexibility in saving will help…


Andrew May Earns Accredited Investment Fiduciary Designation

Posted On: June 18, 2019 | Categorized as: Company News, Retirement Plans

Innovative is proud to announce that Andrew May has been awarded the Accredited Investment Fiduciary designation from the Center for Fiduciary Studies, the standards-setting body for fi360. Andrew is a Financial Services Associate working in the retirement services department. He is responsible for servicing the firm’s qualified plan clients in the areas of plan consulting, compliance, financial wellness, and participant education. The AIF designation signifies specialized knowledge of fiduciary responsibility and the ability to implement policies and procedures that meet a defined standard of care. The designation is the culmination of a rigorous training program, which includes a comprehensive, closed-book final examination under the supervision of a proctor, and agreement to abide by the Code of Ethics and Conduct Standards. On an ongoing basis, completion of continuing education and adherence to the Code of Ethics and Conduct Standards are required to maintain the AIF designation.   About Innovative Innovative Benefit…


Benefits to Offering a 401(k) plan

Posted On: June 18, 2019 | Categorized as: Retirement Plans

According to the recent Jobvite’s Recruiter Nation Survey, after Healthcare, 401(k)s are considered the most valuable benefit to recruit and retain employees. Providing retirement benefits to your employees, such as 401(k) plans, is an important step in recruiting, retaining and promoting employee wellness.   Recruitment and retention: Recent trends demonstrate that recruiting for new employees is becoming more competitive. According to the 2018 Recruiter Nation Survey, 74% of recruiters believe hiring will become more competitive over the next year1. As employee recruitment becomes more competitive, it is up to the hiring organizations to set themselves apart from the pack to attract the best talent. Offering a 401(k) plan demonstrates that an organization is invested in the long-term outlook of its employees and of the organization.   Morale Boost: Providing a 401(k) to employees improves employee morale by reducing financial stress. A Study Conducted by the Social Market Foundation revealed that…


Innovative Myth Series #5: Plans With No Financial Consultant Receive The Best Fees And Fiduciary Protection From Their Qualified Plan Provider

Posted On: June 18, 2019 | Categorized as: Retirement Plans

See how Innovative's experience with reviewing "Retirement Plan Relationships" helped one client in negotiating lower administrative fees, increased services for the plan sponsor and streamlined administrative functions. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here.


Are Target Date Funds Right for Your Participants?

Posted On: June 18, 2019 | Categorized as: Retirement Plans

In recent years, plan sponsors have increased the inclusion of Target Date Retirement funds in their investment fund lineup. In fact, J.P. Morgan estimates that 88% of new retirement plan contributions are expected to flow into Target Date Funds by end of this year1.  Here are some of the reasons these types of investments have become so popular: Many investors are unsure about where to start investing when it comes to selecting their allocation. They are faced with questions like “What mix of stocks and bonds should I be invested in?” Target Date funds help participants reduce the stress of having to make choices when creating this mix within their retirement plan lineup. Of course, even one’s decision to use Target Date funds should be re-evaluated regularly to ensure the investment accommodates an individual’s changing needs. The answer is not always simple as to whether you should invest your contributions…



Innovative Myth Series #3: Mergers and Acquisitions are Simple

Posted On: March 22, 2019 | Categorized as: Retirement Plans

Innovative's merger and divestiture of plans consulting expertise enabled us to provide complete end -to-end service. See how we helped our client ease their administrative burden and reduce client fees by over 40%. Download full case study here. Let Innovative perform a complimentary review of your plan, contact our retirement planning team here. 




Innovative Benefit Planning Celebrates 30 Years of Business

Posted On: January 10, 2019 | Categorized as: Company News, Employee Benefits, Events, HR Consulting, Retirement Plans, Workplace Wellness

As we enter 2019, Innovative Benefit Planning celebrates 30 years of success as a national, employee benefit, and financial services company.  Founded in 1989 by Terriann Procida and Mark Sulpizio in Mt. Laurel, NJ, the firm’s vision was to provide unique employee benefit consulting and financial planning services to businesses and their executives in the Philadelphia/Southern New Jersey region.  Terriann and Mark started the company with one simple objective, to always put people first, and it’s this exact mission that has led the company to triple in size, expand practice areas and grow from a regional service area to a national company with an admirable reputation for work ethic, integrity, credibility and experience. Over the course of 30 years, Innovative’s history of outstanding service, pioneering turn-key, cost-saving plans, and technical expertise in the areas of employee benefits, financial planning, population health management and HR consulting have resulted in substantial growth…


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