TLB 8.6.18

White Papers by Madison Pension Services, Inc.

  • Inflation & Retirement - At a 3% Rate of Inflation, Will I be ok or is my nest egg being eroded?

    For those at or near retirement, the topic of inflation is certainly a cause for concern. A study several years ago by the Society of Actuaries revealed that 71% of folks approaching retirement were “very or somewhat concerned about inflation risk.” Many baby boomers are now or will shortly...
  • BABY BOOMERS IN STUDENT DEBT?

    Seniors with student debt? Surely that is some sort of a mistake. No, it’s not. A recent article in the Wall Street Journal (WSJ) shined a light on a little known and growing problem. Seniors that have taken on student debt. Some took out loans to help pay for their children’s college tuition...
  • The Notorious ESG

    Environmental, social and governance investing – better known as ESG to those in the know (by the way, I was one of those not in the know) is a hotly debated topic in the 401(k) world. Research from Cerulli Associates, which specializes in worldwide asset management and distribution analytics,...
  • AMERICANS STILL HAVE HIGH HOPES OF RETIRING EARLY & RETIREES UNDERSTANDING OF TAXES IN RETIREMENT

    Findings from MassMutual’s 2018 “State of the American Family” illustrates that on average, respondents expect to retire at age 62, as opposed to age 64 when the study was last conducted five years ago in 2013. Surprisingly, 40% of the respondents from the study intend to retire before age 60,...
  • The Timing of Safe Harbor Provisions

    Is It Too Late to Establish a 401(k) Safe Harbor Plan for 2018? The answer of course is – it depends. If you currently sponsor a retirement plan that includes a 401(k) feature, to use either of the standard 401(k) safe harbor provisions, (the mandatory employer matching contributions or the...
  • SAVING FOR YOUR KIDS' COLLEGE vs. SAVING FOR RETIREMENT - IF YOU LAG BEHIND, CAN YOU CATCH UP?

    When it comes to growing your retirement nest egg, conventional wisdom calls for us to start early and then to save 10% - 15% of your income. That’s great but for many of us, totally unrealistic. The day to day expenses of the child rearing years, coupled with the need to save for college can...
  • A SEP-IRA or a Solo 401(k) Plan - Which is Better?

    Fortune Magazine recently ran an article touting the benefits of a Solo 401(k) over a SEP-IRA for sole proprietors or single member LLCs with no employees. And for those of you who are sole proprietors or single member LLCs who are looking to maximize your contribution (and thus your tax...
  • Has It Really Been Forty Years?

    Madison Pension Services first opened its doors on July 1, 1978. Being an actuary, it is not hard to figure out that July 1, 2018 will represent our fortieth year in business. Forty years is a long time and it has gone by in the blink of an eye. For you millennials and Gen Xers, let’s take a...
  • What People Fear the Most

    When I looked at various top ten lists of what people fear the most, public speaking was invariably number one. Also making the top ten list was a fear of heights, flying, snakes, spiders, zombies and clowns. But I noticed that a new fear had emerged. And as baby boomers age out of the work...
  • What are the three most common errors that CPAs find when they conduct plan audits?

    CPAs are tasked with auditing plans that (generally) have more than 100 participants. So they get to see just about everything – the good, the bad and the ugly. Auditors test a sample of the Plan Sponsor’s employee population when auditing a plan. Once they discover an error, they must determine...
  • The (Potential) Dark Side to 401(k) Auto Enrollment - The Participants Seem to Take on More Debt

    Auto-enrollment has resulted in millions of people who were not previously putting savings into their company’s 401(k) plan, now actively participating in it. That is a good thing. However according to a recent article in the Wall Street Journal, many of these workers seem to be offsetting those...
  • WHAT TOOK SO LONG? – IT WAS BOUND TO HAPPEN SOONER OR LATER

    A scheme using what appears to be stolen identity information has resulted in a lawsuit by the U.S. Attorney’s office in Colorado. Their goal is to recover $2 million in losses from participants’ 401(k) accounts.
  • FOR GOVERNMENTAL OVERSIGHT OF RETIREMENT PLANS, YOU NEED TO WORRY ABOUT THE AGENCY WITH THE THREE IN

    Governmental oversight and compliance of retirement plans has largely shifted away from the IRS over to the Department of Labor (the DOL). At the American Society Of Pension Professionals and Actuaries (ASPPA) national conference in Washington, two speakers, J.K. Nowiejski and Heather Agribo...
  • PARTICIPANTS ARE RESPONSIBLE TO VERIFY PLAN LOAN REPAYMENTS – SO SAYS THE TAX COURT

    A recent tax court ruling, Louelia Salomon Frias v. Commissioner illustrates the importance of verifying that loan repayments are actually being made. Moreover, it is the participant’s responsibility to do so.
  • TIBBLE v. EDISON – THE GIFT THAT KEEPS ON GIVING

    A lawsuit that began in 2011 is finally approaching its conclusion. The plaintiffs claimed that the 17 investment options selected by the plan back in March of 1999 were retail funds instead of lower cost institutional shares. The funds remained in the plan beyond August 16, 2001. That date is...
  • WHAT TRAITS IN THEIR PLAN'S ADVISOR DO PLAN SPONSORS VALUE? WHICH ONES SHOULD THEY VALUE?

    Which Qualities Plan Sponsors Do Value… A recent poll of plan sponsors wanted to know which services plan sponsors most value from their advisors. Asked to name their top three, two stood out: • Monitoring investments (81%) • Acting as a co-fiduciary (81%) Coming in a distant third...
  • Every company offers a 401(k) plan, don't they? & What do 401(k) participants want?

    401(k) plans are so ubiquitous that we assume that every employer offers a retirement plan to their employees. But that perception is just that; a perception. There are a fair number of small to mid-size firms that do not sponsor a 401(k) retirement program for their employees. The question is...
  • Tastes Great vs. Less Filling

    When I was younger (much, much younger) Bud Lite ran a series of commercials where quasi- celebrities (most of them were retired athletes) argued back and forth about whether they drank Bud Lite because it “tasted great” or because it had less calories and thus was “less filling” (they had not...
  • Six Things You Proabably Did Not Know About 401(k) Catch-up Contributions

    The catch-up contribution got its name because it was designed to help older workers “catch up” on contributions they may not have made when they were younger. Simply stated, it is an opportunity to make up for lost time. Anyone who turns age 50 at any point during a calendar year can make an...