WHAT DO YOU MEAN BY PLAN DESIGN? ALL PROVIDERS CLAIM THEY PROVIDE CUSTOM OPTIONS. WHAT IS DIFFERENT ABOUT NESTEGGS?
For NestEggs, “plan design” doesn’t mean giving you a few options for a company match. We design company retirement plans to achieve tax efficiency through our vast understanding of IRS and DOL rules. We check in with you prior to the end of the year to get the pulse of your business and make sure your plan is still on track with agreed upon objectives instead of coming to you in January and telling you it is too late to make a change. Proactive support is key to our consultative approach.
WHAT ARE COMBO PLANS? AS AN OWNER, CAN I REALLY CONTRIBUTE MORE THAN $100,000 TAX-FREE INTO A RETIREMENT PLAN? HOW WILL THAT IMPACT MY BOTTOM LINE?
Combo plans refer to the process of operating a 401(k) plan (with profit sharing) and a form of defined benefit pension plan simultaneously. Yes, under that plan arrangement, there is significant contribution potential – possibly greater than $100,000 per owner or executive per year.
CAN I REDUCE ANY OF MY FIDUCIARY LIABILITY AS A PLAN SPONSOR?
You can by working with providers that explicitly accept and provide ERISA §3(38), §3(21) & §3(16) Fiduciary Services. NestEggs serves as a Fiduciary to the Plans we manage. Ask your current provider if they explicitly accept Fiduciary Responsibility over your account and if it is in writing.
WHEN DOES MY PLAN REQUIRE A FORM 5500 LARGE PLAN AUDIT?
Generally, if your plan had 100 participants or more at the beginning of the plan year, you’re required to file the long Form 5500 version along with an annual Large Plan Auditor’s Report. There is an exception to this rule, referred to as the 80-120 participant rule, where if the number of participants to be reported on line 5 of the Form 5500 was between 80 and 120 at the beginning of the year, and you previously filed as a small plan in the prior Plan Year, you can still file as a Small Plan. NestEggs proactively assists clients with managing headcounts by advising which terminated plan participants may be eligible for forcing out of their Company Retirement Plan. One of the many ways we go the extra mile for our clients and is not industry standard.
WHO IS GETTING PAID ON MY COMPANY’S RETIREMENT PLAN? WHO IS DOING WHAT?
In the small-mid segment market, it is not uncommon to see 3 separate service providers attached to the operation and support of a qualified retirement plan. This may include a Third-Party Administrator (TPA) handling compliance and testing, a record keeper responsible for daily operations and data, and an investment advisor responsible for investments and education. In some cases, you’ll find a fourth party, typically a broker or insurance agent who sold you the plan. NestEggs is a RK, TPA and Investment Adviser which eliminates the need for inefficient, multi-party arrangements.
HOW IS YOUR SERVICE MODEL DIFFERENT?
We do everything under one roof which is extremely rare in the small to mid-size market while offering all the bells and whistles you should demand as a plan sponsor. The result is efficiency in service, pricing and our unbeatable offering.
DO YOU PARTICIPATE IN REVENUE SHARING, RECEIVE COMMISSIONS OR 12-B1 FEES?
No. This practice creates inherent conflicts of interest and makes it nearly impossible to objectively select and monitor the funds offered in the plan.
HOW DO I REVIEW MY CURRENT PLAN?
This is overwhelmingly difficult (on purpose) for those that are not retirement plan experts. Ask us for a cheat sheet that you can send your current provider detailing what documents you need to do a thorough review. You’ll likely receive back documentation with hundreds of pages and we’d be happy to review them for you for free. When we are done, file our report away in your fiduciary file as evidence of your proactive review.
HOW OFTEN SHOULD I BENCHMARK MY PLAN AS A FIDUCIARY?
It is an industry “best practice” that a plan sponsor should Benchmark their 401(k) plan once every three years. This should be in a printed report and saved in your compliance file.