When it comes to operating your retirement plan, determining the compensation that should be used for each participant can be really confusing. It seems like it should be simple, but the reality is quite different. In fact, the rules can be so confusing that using an incorrect definition of compensation is on the top ten list of mistakes the IRS sees in voluntary correction filings.

Nearly five years in the making, the Department of Labor (DOL) has published its long-awaited plan sponsor fee disclosure regulations under ERISA section 408(b)(2). With these new regulations taking effect on July 1, 2012, plan sponsors and service providers alike will be scrambling to prepare.

Many employers establish retirement plans without being fully aware of their fiduciary responsibilities. It is imperative to know whether you are a fiduciary and, if so, what your responsibilities are because there are risks for the unwary. A fiduciary that breaches any obligation or duty can be held personally liable to make good any losses incurred by the plan resulting from the breach, even if the breach was made unknowingly. Pleading ignorance or inexperience will not be adequate defense.

Let’s face it. Finding out that the IRS wants to poke around is not going to be the highlight of anyone’s day. Voluntarily admitting a mistake to the IRS and asking for forgiveness is probably even lower on the wish list! So hearing about new voluntary corrections from our friends at the Service might seem like a waste of time.

Not so fast! Believe it or not, the division of the IRS responsible for qualified retirement plans actually does not want to find problems and hand out sanctions. Their goal is to help preserve tax-favored retirement benefits that exist within retirement plans. Of course, if someone doesn’t play by the rules, they shouldn’t then be able to claim the same benefits as someone who does satisfy the various requirements.

That is where the various voluntary correction programs come into play.

Although not a new design, there has been renewed interest in the “combo plan” as a way for higher income business owners to turbocharge their retirement savings. The term “combo plan” generally refers to the combination of a defined contribution plan (usually a 401(k) profit sharing plan) and a defined benefit plan (usually a cash balance plan). The combined benefits in both plans are tested together to allow certain owners or key individuals to receive significantly larger amounts without breaking the bank in contributions to the employees.

Sounds great, right? Sure, but there are several factors that are important to consider in determining whether the combo plan arrangement is right for you. Some of the concepts can be a little tricky, so we will take a look at them using an example.

Excuse me, can you tell me what kind of car is best for me? It is impossible to answer that question without getting more information…how will the car be used? What is the budget? For fuel efficiency and driving in a crowded downtown area, maybe a Smart Car is best. Hauling heavy loads of construction materials? Perhaps a truck makes sense. Have kids that need to be shuttled from one activity to another? Maybe the less-stylish but ever-so-practical minivan is the perfect solution.

The same is true when selecting a retirement plan. Although there aren’t as many makes and models, there are some significant variables, and the most appropriate option depends on some of the same factors. How will you use the plan and what is your budget?

McDonald’s may have been the automatic enrollment pioneer 30 years ago, but it wasn’t until 2008 when the new Pension Protection Act rules kicked in that it really started to gain serious momentum.

Since that time, articles have regularly extolled the virtues and almost every new retirement-related bill introduced in Congress has included some provision designed to encourage more widespread adoption of automatic enrollment. Unfortunately, with that much attention comes a certain amount of hype. In this article, we will attempt to separate hyperbole from helpful.

For years now, we have been hearing from the Department of Labor (DOL) about the importance of depositing employee 401(k) deferrals and loan payments as quickly as possible. While that continues to be the case, it seems that there is not nearly as much commentary about when to deposit company matching or profit sharing contributions. That is about to change with this article.

The end of the calendar year is fast approaching which means the plan year end for many qualified plans. It will be time for plan sponsors to collect complete employee data to enable their service providers to perform the numerous compliance tests required to retain the plans tax qualified status.

This article provides a brief description of the required defined contribution plan compliance tests as well as an overview of the census data collection process.

It’s four o’clock on Friday afternoon and there’s a knock on the door of the Human Resource Manager’s office. It’s Zachary, a fairly new employee who entered the company’s 401(k) plan last month. He’s been deferring $40 a week into the plan, which means he has accumulated $160 by now. But last night his cable TV was shut off because he couldn’t afford to pay the bill and from his 23-year-old point of view, retirement seems like a long way off.