Ongoing monitoring, maintenance and government compliance are paramount to the success of your retirement plan, and each should be an essential piece of your plan’s administration. The IRS and DOL each have various regulations with which your plan must comply, and failing to do so can have unintended consequences, including a loss of tax-favored status, costly fines and penalties or even personal liability. Therefore, it is imperative for the employer/plan sponsor to partner with a retirement plan specialist who can monitor the ever-changing regulatory landscape and do the heavy lifting:

• Designing a retirement plan that meets your business or organization objectives
• Performing required nondiscrimination testing
• Preparing required government forms, such as IRS Form 5500 annual return/report
• Keeping your plan up to date with changing rules and regulations
• And much more!

• We are neither financial advisors nor do we provide financial advice
• We are not CPAs
• We are not ERISA attorneys
• However, we do work closely and collaboratively with your financial advisor, CPA, or ERISA attorney to make the most of your plan

401(k) and 403(b) are a highly technical space. For example, plans are required to complete nondiscrimination testing, meet fiduciary responsibilities, and file annual government forms, among others — aspects that we specialize in. Having a Retirement Plan Expert manage these tasks can not only ensure your plan is fully compliant but it can also be cost-effective than doing the same work in-house. In short, choosing NESA means more free time to do what matters most to you.

We are students of the profession. Our staff have either earned multiple credentials from the IRS and American Society of Pension Professionals (ASPPA) or are currently working toward earning their credentials. We are one of the only few in the country to have the ERPA designation from the IRS which allows us to talk to or represent our clients in front of the IRS and DOL. Current credentials include:

• Enrolled Retirement Plan Agent (ERPA): Provided by the IRS, allows us to represent our clients in front IRS or DOL.
• Qualified Pension Administrator (QPA): Provided by ASPPA, shows general expertise with retirement plans.
• Qualified 401(k) Administrator (QKA): Provided by ASPPA, shows expertise with 401(k) plans.
• Tax-Exempt & Governmental Plan Consultant (TGPC): Provided by ASPPA, shows expertise in nonprofit space, such as 403(b) and 457(b) plans.

You bet! We prepare your signature-ready Form 5500. Additionally, NESA Plan Consultants will submit/file the forms with the DOL on your behalf. We also prepare the Summary Annual Report for each client. This service is included in our annual fee.

Contribution limits are subject to cost-of-living adjustments, meaning the limits may (usually does) change year to year. Current limits can be found here: https://www.irs.gov/retirement-plans/cola-increases-for-dollar-limitations-on-benefits-and-contributions

Currently, employers with less than 100 employees may be eligible for a three-year start-up tax credit of up to 50 percent of administrative costs, with an annual limit of $5,000. SECURE 2.0 increases this credit to 100 percent of qualified start-up costs for employers with up to 50 employees. An additional credit of up to $1,000 per employee for eligible employer contributions may apply to employers with up to 50 employees, but phases out from 51 to 100 employees.

For more information, click here.

No, businesses and organizations are not obligated to provide matching contributions although more and more are beginning to. Matching can be a powerful incentive for employees and there are major tax incentives for employers that offer a match.

Aside from tax deductions, the employer match is a powerful recruiting tool to attract and retain your most valuable asset — your employees. Safe harbor matches, a special type of employer contributions, can ensure employers are complying with IRS rules and regulations and more likely to pass non-discrimination testing.

In 2016, employers made contributions 79 percent of 401(k) plans, according to Investment Company Institute.

It is a type of 401(k) and 403(b) plan that ensures all staff at an organization have some set of minimum contributions made to plan-eligible employees, regardless of their title, compensation, or length of service. This contribution must be 100% vested.

There are three different types of safe harbor 401(k) and 403(b) plans, and two of them also have employer match programs. For more information, click here.

Offering a retirement plan can be a win-win for both business and organizations and their employees. Research shows that when employees feel they are on track for a meaningful financial future, they have greater job satisfaction and loyalty to their organization. And for employers offering a 401(k) is shown to help attract and retain talent.  Businesses starting a new plan are eligible for tax credits and those providing matching contributions are also eligible for tax deductions. Win-win for everyone involved, wouldn’t you agree?

If you make decisions that impact your business or organization retirement plan, you’re likely a fiduciary as defined by the Employee Retirement Income Security Act of 1974 (ERISA).

ERISA governs workplace retirement plans and protects retirement plan assets by setting standards for people like the plan’s trustees, administrators, and members of its investment committee.

Many of the actions involved in operating a plan make the person or entity performing them a fiduciary. Using discretion and in administering and managing a plan or controlling the plan’s assets makes that person a fiduciary to the extent of that discretionary control. Providing investment advice for a fee also makes someone a fiduciary. Therefore, fiduciary status is based on the functions performed for the plan, not just a person’s title.

A plan must have at least one fiduciary named within the plan document. The named fiduciary can be identified by office or by name. For some plans, it may be an administrative committee or a company’s board of directors.

A plan’s fiduciaries will ordinarily include the trustee, investment advisers, all individuals exercising discretion in the administration of the plan, all members of a plan’s administrative committee (if it has such a committee), and those who select committee officials. Attorneys, accountants, and actuaries generally are not fiduciaries when acting solely in their professional capacities. The key to determining whether an individual or an entity is a fiduciary is whether they are exercising discretion or control over the plan.

A number of decisions are not fiduciary actions but rather are business decisions made by the employer. For example, the decisions to establish a plan, to determine the benefit package, to include certain features in a plan, to amend a plan, and to terminate a plan are business decisions not governed by ERISA. When making these decisions, an employer is acting on behalf of its business, not the plan, and, therefore, is not a fiduciary. However, when an employer (or someone hired by the employer) takes steps to implement these decisions, that person is acting on behalf of the plan and, in carrying out these actions, may be a fiduciary.

Source: Department of Labor

Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include:

• Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;
• Carrying out their duties prudently;
• Following the plan documents (unless inconsistent with ERISA);
• Diversifying plan investments; and
• Paying only reasonable expenses. 

The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments. Lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out the investment and other functions. Prudence focuses on the process for making fiduciary decisions. Therefore, it is wise to document decisions and the basis for those decisions. For instance, in hiring any plan service provider, a fiduciary may want to survey a number of potential providers, asking for the same information and providing the same requirements. By doing so, a fiduciary can document the process and make a meaningful comparison and selection.

Following the terms of the plan document is also an important responsibility. The document serves as the foundation for plan operations. Employers will want to be familiar with their plan document, especially when it is drawn up by a third-party service provider, and periodically review the document to make sure it remains current. For example, if a plan official named in the document changes, the plan document must be updated to reflect that change.

Source: Department of Labor

With your fiduciary responsibilities, there is also potential liability. Fiduciaries who do not follow the basic standards of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of the plan’s assets resulting from their actions.

However, fiduciaries can limit their liability in certain situations. One way fiduciaries can demonstrate that they have carried out their responsibilities properly is by documenting the processes used to carry out their fiduciary responsibilities. 

There are other ways to reduce possible liability. Some plans, such as most 401(k) and profit sharing plans, can be set up to give the participants control over the investments in their accounts and limit a fiduciary’s liability for the investment decisions made by the participants. For participants to have control, they must be given the opportunity to choose from a broad range of investment alternatives. Under Labor Department regulations, there must be at least three different investment options so that employees can diversify investments within an investment category, such as through a mutual fund, and diversify among the investment alternatives offered. In addition, participants must be given sufficient information to make informed decisions about the options offered under the plan. Participants also must be allowed to give investment instructions at least once a quarter, and perhaps more often if the investment option is volatile.

Plans that automatically enroll employees can be set up to limit a fiduciary’s liability for any plan losses that are a result of automatically investing participant contributions in certain default investments.  There are four types of investment alternatives for default investments as described in Labor Department regulations and an initial notice and annual notice must be provided to participants. Also, participants must have the opportunity to direct their investments to a broad range of other options, and be provided materials on these options to help them do so. (See Resources for further information.)

However, while a fiduciary may have relief from liability for the specific investment allocations made by participants or automatic investments, the fiduciary retains the responsibility for selecting and monitoring the investment alternatives that are made available under the plan.

A fiduciary can also hire a service provider or providers to handle fiduciary functions, setting up the agreement so that the person or entity then assumes liability for those functions selected. If an employer appoints an investment manager that is a bank, insurance company, or registered investment adviser, the employer is responsible for the selection of the manager, but is not liable for the individual investment decisions of that manager. However, an employer is required to monitor the manager periodically to assure that it is handling the plan’s investments prudently and in accordance with the appointment.

Source: Department of Labor

Our fees are 100% transparent. In fact, our fees are structured in a way so that we grow as your business or organization grows. It’s a win-win.

Plan Design & Installation Fees:

• New Start-Up Plans – $2,000
• Plan Transfers (Existing Plans Only) – $500

Annual Administration Fees:

401(k) Plans

• $2,000 annually
• $40 per participant annual fee

403(b) Plans

• $2,000 annually
• $40 per participant annual fee

How we get paid depends on your unique plan design and services our firm provides. If you’d like a quote, we would be delighted to hear from you.

Absolutely! Any revenue sharing we receive is credited 100% and used toward your invoice.

At NESA, we specialize in both 401(k) and 403(b) plans. The main difference between the two types of plans is what type of entity can offer them.

• 403(b) plans can be offered by not-for-profits such as public schools, churches or 501(c)(3) organizations.
• 401(k)s are typically sponsored by private, for-profit companies.

Generally, both types of plans require government compliance such as filing Form 5500. And they are similar when it comes to contribution limits, deductibility, and loans. 

The first step is to schedule a complimentary 30 minute phone call. We will go over your strategic goals and objectives and design or re-design your plan if necessary. It’s completely free and there’s no obligation.