The Rosenbaum Law Firm P.C. Blog

I was against Automatic Enrollment before I was for it. When it finally became part of the Internal Revenue Code, plan sponsors got liability protection through using the QDIA. While I like that plan sponsors under SECURE 2.0 will have to offer it, if they have a new plan, it will lead to a lot of errors.

The errors will deal with forgetting to automatically participants who fail to opt-out. Add the addition of long-time, part-time, employees, and you will find a lot of plans with errors. Hopefully, we can have some easy fixes for plan sponsors in these situations that won’t require the opening of the employer’s checkbook.

Wealth Enhancement Group, a wealth management firm with more than $94.7 billion in client assets, acquired FinTrust Capital Advisors LLC, which has more than $2.39 billion in client assets.

FinTrust Capital Advisors is registered investment advisory headquartered in Greenville, South Carolina, with additional office locations in Anderson, South Carolina, and Athens, Georgia.

Wealth Enhancement Group’s acquisitions in 2024 include Gavin Financial Group in June, Peak Financial Management and Levy Wealth Management.

A research paper from the Wharton Pension Research Council states that 401(k) contributions are “remarkably stable” after loans and hardship withdrawals. Quite honestly, I always saw loans as a non-issue since it would be a participant-directed investment and the issue with hardship distributions is that they’re leakage.

It seems that thanks to auto enrollment and auto escalation Being so prevalent, loans and hardship distributions don’t negatively impact savings behavior.

A long-time advisor-client called with a chuckle that both he and I were right and a partner at a law firm admitted that we were.

I said it’s better to be right than wrong, but too many providers out there will make excuses, claim the earth is flat, blame the client, or do anything, but other than apologize. To many, like my parents, they would rather die than apologize.

Good providers make a few mistakes and when they do, they apologize.

Company A wants to buy Company B and everyone wants to terminate Company B’s 401(k) Plan. In an ideal world, this should be done before the closing date of the deal. If A has a plan and wants to terminate B’s plan, that successor plan rule could be a problem since if you terminate B’s plan and distribute assets, barring a very minor exception, A can’t have a plan for a year.

That’s why with any stock purchase with existing 401(k) plans, an ERISA attorney needs to be contacted.

For those aged 55-64 the average 401(k) account balance is $244,750. The median account balance is $87,571. No matter the occupation, that amount of money isn’t enough for retirement. It shows that no matter, we still have a retirement crisis in this country where people don’t have enough money to last retirement.

Sure, there is Social Security, but it’s clearly an amount that isn’t enough for retirees, even if they retired in their 70s these days.

Nvidia Corp. has reached a proposed settlement with former participants of the company’s 401(k) plan over claims that they were forced to pay exorbitant administrative fees

The participants had claimed that the size of Nvidia’s 401(k) plan should have entitled participants to significantly lower fees. They alleged that plan participants paid between $53 and $63 to for recordkeeping, but should have paid about half that amount.

Walgreens announced the launch of its Student Loan 401(k) Match Program, a benefit for student loan borrowers who are 401(k) participants that were made available by the SECURE 2.0 Act of 2022.

The benefit will be available to plan partcipants in January 2025 and will allow participants to qualify for company 401(k) match contributions as they pay down their student loans.

The plan had more than $11 billion in assets as of plan year 2022.

According to Walgreens, roughly 30% of their employees are facing financial debt from education—including more than half of its pharmacy team members. Pharmacists have an average student loan debt of $170,000.

Walgreens will match eligible student loan payments up to 4% of eligible pay. Employees are generally eligible for employer matching contributions after one year of work and 1,000 hours of service.

It’s all friendly between the plan sponsor and the Third-Party Administrator (TPA) until the plan sponsor wants to make a change. Then it could get nasty when the TPA wants to be compensated for doing work for the reconversion process.

I’ve been on both sides of the coin, as an ERISA attorney for the TPA and for the past 17 years, on the side of the plan sponsor. In a world of fee transparency, the termination of the TPA is when things are still murky. This is an area where the Department of Labor (DOL) could add some transparency for once and all. It is my opinion that if a TPA doesn’t mention termination/deconversion fees in their contract, they shouldn’t be. Entitled to them. That’s my two cents and I imagine that continued abuses by certain TPAs will eventually lead to DOL action.

We have a Pooled Employer Plan (PEP) for so many things, so a Pot PEP seems OK.

The North American Companies Council (NACC), a 501(c)(6) not-for-profit in the cannabis industry started offering a 401(k) Pooled Employer Plan (PEP) to its members. The PEP serves “cannabis-related entities across the country.”

CuraFin Advisors, is the PEP’s 3(38) investment manager. Group Plan Systems (GPS), will be the Pooled Plan Provider (PPP) for the PEP. AmericanTCS’s American Trust Retirement will provide recordkeeping and third-party administration. AmericanTCS’s American Trust Custody will serve as sub-custodian, and Bankwell will serve as custodian.