The Intelligent 401k Advisor

2010 Compliance Calendar

noreply@blogger.com (Kristofer Gray) — Thu, 20 May 2010 22:21:00 +0000

I recently read a great article at plansponsor.com written by PlanSponsor Staff. Please see below.

JUN 30 / ADP/ACP refunds for EACA plans due to HCEs to avoid 10%-excise tax on employer.

JUL 29 / Summary of Material Modifications due to participants (due no later than 210 days after the end of the plan year in which the plan change is adopted).

AUG 2 / Form 5330 to report excise taxes related to employee benefit plans due to IRS. Note: The deadline is usually July 31, which falls on Saturday in 2010.

AUG 2 / Form 5500 due to IRS for plans with December 31 plan year end (due seven months after year end). Note: The deadline is usually July 31, which falls on Saturday in 2010.

AUG 2 / Form 5558 Application for Extension of Time To File Certain Employee Plan Returns is due (used to apply for extension of time to file Forms 5500 and 5330). Note: The deadline is usually July 31, which falls on Saturday in 2010.

AUG 2 / Annual Benefit Statement for Non-Participant-Directed DC Plans: Good Faith Compliance for non-participant- directed DC plans and ERISA 403(b) plans. Note: The deadline is usually July 31, which falls on Saturday in 2010.JAN 15 / Last required quarterly contribution for defined benefit (DB) plans for 2009, due 15 days after last plan year quarter.

To read the rest of the article, please go to the plansponsor.com link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Financial Literacy - Why It Matters to You and Your Employees

noreply@blogger.com (Kristofer Gray) — Wed, 19 May 2010 21:49:00 +0000

I recently read a great article written by Ellen Lovejoy of Lovejoy Associates via 401khelpcenter.com. Please see below.

It may come as no surprise to you that your employees are anxious about financial issues such as spiraling healthcare costs, the rising price of energy, high-interest credit cards, and the current mortgage and credit crisis. You have good reason to be concerned.

Consider these stunning statistics: 74% of American workers have difficulty affording gasoline, 65% are experiencing problems affording heat and electricity, 50% are unsuccessfully grappling with increased grocery bills, 32% have no retirement plan other than Social Security, and finally 62% of the self-described “working class” portray their incomes as falling behind the cost of living. Pew Research Center 2007 and 2008.

..

To read more, please visit the Lovejoy/401khelpcenter article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

401k Automatic Enrollment -- What You Need to Know

noreply@blogger.com (Kristofer Gray) — Tue, 18 May 2010 21:46:00 +0000

I recently read a great article written by TRI-AD at 401khelpcenter.com. Please read below.

Based on current articles in both the popular and business press, it should come as no surprise that Americans are currently not saving adequately to fund their retirement. Legislators have become increasingly concerned, and with the Pension Protection Act of 2006 (PPA), they took action. Although many employers historically have had automatic enrollment, one of PPA’s provisions encourages employers to enroll their employees automatically in an employer-sponsored 401(k) plan without the employees’ written authorization.

The automatic enrollment feature is growing rapidly in popularity. Employers are adopting it for two main reasons:
• Employers are committed to raising 401(k) participation levels. Research shows that one of the biggest barriers to participation is inertia: employees mean to enroll but just don’t get around to it. Employers help employees overcome this inertia by automatically enrolling them in the plan.

The new legislation also provides an ERISA preemption to state laws that often prohibit employers from taking paycheck deductions without the employee’s written permission, as long as the provisions discussed below are met. The state preemption was previously a barrier to implementing automatic enrollment.

..

To read the rest of the article, please visit the 401khelpcenter article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Leave 401(k) Advice to Fiduciaries: SPARK to DOL

noreply@blogger.com (Kristofer Gray) — Mon, 17 May 2010 20:38:00 +0000

I recently read a great article at mmexecutive.com written by Lee Barney. Please see below.

The SPARK Institute filed a comment letter Thursday on the Employee Benefits Security Administration’s proposed guidance on 401(k) investment advice. SPARK’s concern is Department of Labor’s attempt to define acceptable investment practices and theory, instead of leaving the decision on what type of advice to offer, be it computer- or adviser-based, to plan sponsors and administrators.

In essence, SPARK said, the use of historical performance in computer-based models will weaken fiduciaries’ confidence in avoiding liabilities or lawsuits, and have the unintended consequence of sponsors and fund administrators offering less advice, education and investment tools to workers. Instead, SPARK recommends that the plan fiduciary select what constitutes appropriate advice.

...

To read the rest of the article, please go to the mmexecutive.com article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Key Republican May Push for Broader Fiduciary Standard

noreply@blogger.com (Kristofer Gray) — Sat, 15 May 2010 00:30:00 +0000

I recently read a great article written by Mark Schoeff at InvestmentNews.com. Please see below.

Collins' amendment to financial reform legislation in Senate could go beyond House provision

As Senate floor debate on financial regulatory reform begins, a key Republican senator could revive the push for a broad fiduciary standard for broker-dealers.

Sen. Susan Collins, R-Maine, plans to offer an amendment on fiduciary standards that could be more sweeping than a controversial proposal in a House bill passed last year.

An aide to Ms. Colllins said that specific language for a specific amendment has not yet been drafted. But at two hearings this week, Ms. Collins indicated that she may favor imposing fiduciary requirements on broker dealers for both retail and institutional investors.

...

To read the rest of the article, please go to the InvestmentNews.com link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Survey Suggests Gaps in Plan Sponsor Goals, Roles

noreply@blogger.com (Kristofer Gray) — Thu, 13 May 2010 23:25:00 +0000

I recently read a great article written by PLANSPONSOR.com. Please see below.

A new survey reveals a potential disconnect between plan sponsors and plan participants.

Employers still view retirement plans mainly as a benefit rather than as the primary means for their employees to support themselves after retirement, according to a new survey by Wells Fargo Institutional Retirement and Trust. Fewer than half (45%) say the “primary” goal of offering a retirement plan to their employees is to “provide employees with the means to achieve a financially sound retirement,” according to the report, while slightly more (51%) say the primary reason they offer a retirement plan is to “provide competitive benefits to attract and retain employees.”

Disconnect “Ed”

Asked why they think employees participate in a company-sponsored 401(k) plan, only about a third (30%) of employers say it is because they think participants want to save enough to retire comfortably. The most common response, cited by 42% of employers surveyed, was that employees participate in order to take advantage of the company’s 401(k) match.

..

To read the rest of the article, please go to the PlanSponsor.com link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

What is the End Game With Target-Date Funds; Retirement or Death?

noreply@blogger.com (Kristofer Gray) — Wed, 12 May 2010 19:01:00 +0000

I recently read a great article written by Jeb Graham at 401khelpcenter.com. Please see below.

An article recently published in a retirement plan industry journal addressed criticisms of the construction of Target-Date Retirement portfolios that are based on a "through" retirement approach. The term "through" retirement implies that the glide-path, the formula by which the portfolio's asset allocation rebalances over time, carries through retirement to death. This strategy is contrasted by the "to" retirement approach, in which the glide-path is designed to end, or become static, at retirement, as opposed to death.

The article responded to charges that most near-term (2010) target-date funds (TDFs) were much too aggressively invested in equities, and the harm caused to TDF investors in 2008 could have been avoided. The author, in his response, used universally accepted financial planning themes to support the conclusion that an individual's asset allocation at normal retirement date of 65 should be in the neighborhood of a 50% stock/50% bond mix, thus justifying a 2010 TDF with such an allocation. Maybe the bigger question is not really what percentage is allocated to equities, but rather, what is the end game, i.e. retirement or death?

....

To read the rest of the article, please go to the 401khelpcenter.com link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Death of the Generalist Broker in Retirement Plans

noreply@blogger.com (Kristofer Gray) — Thu, 29 Apr 2010 21:26:00 +0000

I recently read a great article written by Thomas B. Bastin at 401khelpcenter.com via a Twitter update by '401k_Fiduciary'. Please see below.

Specialization is the future of the financial services industry. The day of the generalist broker is quickly coming to an end. Complex financial products and legislation have made it difficult if not impossible for one-stop shopping in which a single broker can meet all of a client's personal and professional needs. No where will you find this more evident than in the ERISA plans such as 401k and 403(b).

In the past a stockbroker or insurance agent would develop an individual relationship with a company executive assisting them with a personal financial portfolio. The broker would then inquire as to what that executive's company was doing with their qualified retirement plan. The executive would agree to allow the broker to make a pitch for the business. The broker would call Joe Recordkeeper, who took him to lunch the week before, and together they would show up with Joe selling the plan sponsor on why their product was best suited to meet participant needs. There would be no independent analysis of product, services or costs. The product decision by the broker would come down to whether the product was approved by his broker-dealer and which wholesaler with an approved product was there when he needed to sell the client. This was (and in most cases still is) your typical retirement plan sales process: A conflicted recordkeeper pushing their proprietary investments and a glorified appointment setting secretary masquerading as a knowledgeable advisor.

To read the rest of the article, please go to the 401khelpcenter.com link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Typical Information Requested in a 401(k) Plan Audit

noreply@blogger.com (Kristofer Gray) — Mon, 29 Mar 2010 22:28:00 +0000

I recently read a great article at Hollandandhart.com concerning what one should expect in case their 401k is audited. Please see below.

Listed below are the items typically requested in an initial letter sent by the Internal Revenue Service or the Department of Labor in connection with a 401(k) plan audit. These items should be maintained and be readily accessible by the plan administrator at all times the plan is in operation.

By Both IRS and DOL:
• Plan document (including adoption agreement and prototype document), trust agreement, and all amendments.
• Copy of the most recent determination letter, other determination letters that apply to the years under examination.
• Copies of Forms 5500 and 5500-C, Annual Return/Report of Employee Benefit Plan, for the plan and any other pension plans sponsored during each year under examination; copies of all schedules, including Schedules A, B and SSA, if applicable; all applicable attachments, including the accountant's opinion, management letters, financial statements, and notes to the financial statements.
• Current fidelity bonds and riders/endorsements...

To read the rest of this article, please go to: Hollandandhart.com article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Saving Money in Hard Times

noreply@blogger.com (Kristofer Gray) — Thu, 25 Mar 2010 22:08:00 +0000

I recently read a great article at Reish.com written by Fred Reish concerning saving money in hard times when it comes to your 401(k). Please see below.

With the bad economy, and its negative impact on the cash flow, we are being asked about ways to reduce costs for 401(k) plans. While the largest cost is usually the matching contributions, the expenses of operating a plan are next. We are working with a number of plan sponsors to transfer the payment of those costs to their plans. However, there are traps for the unwary. Not every expense can be paid from plan assets. Some must be paid by the plan sponsor. This article discusses which can and which cannot.

For our purposes, expenses are divided into two categories: settlor expenses and administrative or fiduciary expenses. The former, settlor expenses, must be paid by the plan sponsor (which is, in legal language, the settlor of the plan).The second category—administrative or fiduciary—are obligations of the plan and may be paid with plan assets....

To read the rest of this article, please go to: Reish.com article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Pension Plan Limits For The Tax Years 2004-2010

noreply@blogger.com (Kristofer Gray) — Wed, 24 Mar 2010 23:57:00 +0000

I recently read a great article at 401khelpcenter.com. Please see below.

The Internal Revenue Service announced on October 15, 2009, the cost-of-living adjustments applicable to dollar limitations for pension plans and other items for Tax Year 2010.

Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. Section 415(d) requires that the Commissioner annually adjust these limits for cost-of-living increases. Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415. Under Section 415(d), the adjustments are to be made pursuant to adjustment procedures which are similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.

The limitations that are adjusted by reference to Section 415(d) will remain unchanged for 2010. This is because the cost-of-living index for the quarter ended September 30, 2009, is less than the cost-of-living index for the quarter ended September 30, 2008, and, following the procedures under the Social Security Act for adjusting benefit amounts, any decline in the applicable index cannot result in a reduced limitation…

To read the rest of this article, please go to: 401khelpcenter article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

8 Factors that Determine Your Final 401(k) Balance

noreply@blogger.com (Kristofer Gray) — Mon, 22 Mar 2010 22:47:00 +0000

I recently read a great article at usnews.com written by Emily Brandon. Please see below.

Your 401(k) balance on the eve of retirement obviously depends on how much you save over your working life and on the performance of your investments. But there are other factors that influence the size of your next egg, including how early you start saving and when you leave the workforce. Fees, expenses, and early 401(k) withdrawals can affect your investment returns as well. Here are eight factors that determine the final balance of your 401(k).

When you begin saving. Workers who start saving for retirement in their 20s and follow through often have the most impressive 401(k) balances. "The biggest influential factor is definitely when you start saving," says Josh McWhorter, president of Black Oak Asset Management in Cartersville, Ga. Money you save in your 20s and 30s has decades of compounding ahead of it. For example, a worker who saves $5,000 each year between ages 25 and 65 and earns 5 percent interest would have $634,199 in retirement. An employee who saved the same amount annually but didn't start until age 35 would have just $348,804.....

To read the rest of this article, please go to: usnews.com article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Paychex Opens 401k Services to Fee-based Advisors

noreply@blogger.com (Kristofer Gray) — Fri, 19 Mar 2010 21:11:00 +0000

I recently read a great article at 401khelpcenter.com about Paychex 401k Services. Please see below.

ROCHESTER, NY, March 15, 2010 -- Independent, fee-based retirement advisors can now work with their clients through Paychex Retirement Services for a range of advantages, including direct automated payments, consolidated reporting, and tracking. For clients, the Paychex service offers the ultimate convenience of integrated payroll through Paychex payroll processing, but is also available as a stand-alone service.
Paychex officials today briefed fee-based advisors on the service at the American Society of Pension Professionals & Actuaries 401k Summit at the Orlando World Center Marriott Resort and Convention Center.

"Through payroll integration, critical transactions such as deposits and payments are streamlined for advisors and their clients who use Paychex for payroll and retirement services administration," said Janice Nearen-Bell, vice president of Human Resource Services Sales for Paychex. "Other advantages to working with Paychex include access to diverse fund options and opportunities for new business."

....

To read the rest of this article, please go to: Paychex article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Kristofer Gray Cited in Workforce.com Article

noreply@blogger.com (Kristofer Gray) — Thu, 18 Mar 2010 22:13:00 +0000

Integrity Financial was mentioned in the Workforce.com article "BrightScope Shines a Light on 401(k) Plans" by Michelle V. Rafter! Please read below.

Retirement plan advisors are cheerleaders
All of that activity encourages BrightScope supporters, who maintain that when it comes to 401(k) plans, companies are typically slow to change. Expect to see more employers making adjustments to their retirement plans because of BrightScope, “simply because they’re stirring the pot,” says Kristofer Gray, a retirement-plan manager for small and midsize businesses. “In the next year it’ll become a kind of litmus test as to how astute someone is on their 401(k) plan,” says Gray, owner of Integrity Financial Corp. in Bellevue, Washington.

Find the rest of the Workforce.com article here.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Back to Basics: What is a 401k plan?

noreply@blogger.com (Kristofer Gray) — Thu, 18 Mar 2010 16:40:00 +0000

I recently read a great article at 401khelpcenter.com. Please see below.

Employer-sponsored retirement plans are generally grouped into two major categories: defined benefit (DB) and defined contribution (DC). In a DB plan, the employer promises to pay a defined amount to retirees who meet certain eligibility criteria. In other words, the plan defines the benefit to be received. In its most typical form, a DB plan pays a lifetime monthly benefit to retirees who fulfill specific age and service requirements. Benefits are usually linked to the amount of service and based on final average salary. Employees can reasonably rely on a known and expected benefit level; although protection against post-separation inflation is usually limited and/or uncertain. The plan sponsor may also provide an alternative lump-sum "cash-out" of the benefit entitlement. Until relatively recent times, the DB was the dominant form of employer-sponsored retirement program.

In DC plans, the plan defines the contributions that an employer can make, not the benefit that will be received at retirement. The terminating employee receives the proceeds in a current or deferred lump sum or annuity…

To read the rest of this article, please go to: 401khelpcenter article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Senate Passes Bill to Expand 401(k) Roth Access, But…

noreply@blogger.com (Kristofer Gray) — Tue, 16 Mar 2010 23:11:00 +0000

I recently read a great article at PlanAdviser.com written by Nevin E. Adams. Please see below.

A legislative amendment could make it easier for participants to do a Roth conversion within a 401(k) plan – but not for as many as you might have thought.

Last week the U.S. Senate approved a bill that would permit 401(k) plan participants to convert pre-tax contributions to a Roth account within their 401(k) plan (see Senate Bill Would Permit Roth Conversion Within 401(k)s). However, the language in the bill limits such conversions to “distributable events” – that is, only applicable to monies that would be eligible for a distribution. Moreover, the bill would seem to suggest that the participant must first request a distribution, receive it, and then redeposit it to the 401(k) in Roth status….

To read the rest of this article, please go to: PlanAdviser article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Unscrambling Fiduciary Confusion

noreply@blogger.com (Kristofer Gray) — Mon, 15 Mar 2010 22:43:00 +0000

I recently read a great article at 401khelpcenter.com written by Matthew D. Hutcheson. Please see below.

Every now and then "industry experts" write and distribute confusing or misguided information that unintentionally helps professional fiduciaries. Upset and confused plan sponsors turn to professional fiduciaries to "unscramble industry messages."

Plan sponsors want and need to rely on someone who is legally accountable to plan participants. It is confusing and frustrating to plan sponsors to discover the person they hired to help with its 401k plan has no real fiduciary responsibility and hence has no real accountability; accountability that plan sponsors and participants always believe existed!

In seeking clarity about the "type" of 401k professional it has retained, plan sponsors often find the answers they are given to be incoherent with a slant in favor of the 401k industry instead of plan participants. The residual fuzziness plan sponsors are left feeling about this topic is a source of significant irritation to them. Eventually a professional fiduciary will be sought to clarify the confusion, and by so doing, will establish an authentic relationship of trust with the plan sponsor…

To read the rest of this article, please go to: 401khelpcenter.com article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Washington, D.C. Update: The Feds Have A Full Agenda

noreply@blogger.com (Kristofer Gray) — Fri, 12 Mar 2010 00:09:00 +0000

I recently read a great article at Reish & Reicher written by Fred Reish and Bruce Ashton. Please see below.

In recent months, we have spent a considerable amount of time talking with government officials at the Departments of Treasury and Labor, as well as congressional staff members, concerning regulatory and legislative developments in Washington, D.C. The purpose of this bulletin is to bring you up to date on those subjects.

Department of Labor: Plan-level disclosure. The Obama-appointed leadership of the DOL’s Employee Benefits Security Administration (EBSA) has “re-started” the project to develop a regulation under ERISA section 408(b)(2), which requires that all arrangements with ERISA-governed retirement plans be reasonable. As you may recall, the prior administration had drafted a regulation which would require most service providers to disclose their fees, describe their services, and explain material conflicts of interest. The most important of the “covered” service providers were: brokerdealers; RIA firms; recordkeepers and bundled providers; and third party administrators. However, the Bush Office of Management and Budget (OMB) refused to approve that regulation…apparently because they felt it imposed too great a burden on businesses.

To read the rest of this article, please go to: Reish & Reicher article link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Survey Reveals Most Companies Planning to Restore 401k Match in 2010

noreply@blogger.com (Kristofer Gray) — Wed, 03 Mar 2010 00:34:00 +0000

I recently read a great article at 401khelpcenter.com written by Hewitt Associates. Please see below.

LINCOLNSHIRE, IL, February 8, 2010 -- Many U.S. employers are increasingly losing confidence in their workers' ability to save for retirement and, as a result, plan to step up their efforts this year to help workers maximize their 401k savings, according to a new survey by Hewitt Associates, a global human resources consulting and outsourcing services company. High on employers' priority lists in 2010: restoring company 401k matches that were suspended or reduced during the market downfall and adding automated tools and investment features that take the guesswork out of saving and investing.

Hewitt's study of 162 mid- to large-sized U.S. companies representing 5.7 million employees reveals employers today (54 percent) are less confident about their workers' ability to retire with sufficient assets than they were in 2009 (66 percent). In addition, less than one in five (18 percent) say they are very confident about their employees' ability to have enough retirement income to last throughout their retirement years.

To read the rest of this article, please go to this link at 401khelpcenter.com.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

401(k) Fiduciary Risk Management

noreply@blogger.com (Kristofer Gray) — Mon, 01 Mar 2010 23:25:00 +0000

The illusions of hope are apt to close one's eyes to the painful truth.
—Harry F. Banks

ERISA, and the regulations under it, are often lamentably obscure—to describe them as a tangled web does not do them justice. —Mark R. Kravitz

That...is what makes ERISA cases fun for litigators like me - nothing is ever simple, even the issues that one would think should be. This [results]... from a complicated statute that leaves much to further development by the courts...to the frequent disagreement among circuits (and even among district court judges within the same circuit in some instances) on a variety of issues under the statute. —Stephen D. Rosenberg

Certitude is not the test of certainty. We have been cocksure of many things that were not so. —Oliver Wendell Holmes, Jr.

The foundation of effective 401(k) risk management is the recognition that 401(k) fiduciary responsibility is a “black box”. Neither ERISA nor the regulations define the duties of loyalty, prudence, and disclosure. To make matters worse, a reading of the legal literature leads one to conclude that the appropriate fiduciary conduct is a matter of the unique facts and circumstances of each case.

To read the rest of this article, please go to: 401khelpcenter/Richard Glass link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

10 ERISA Insights for Employers

noreply@blogger.com (Kristofer Gray) — Wed, 24 Feb 2010 19:13:00 +0000

I recently read a great article at Workforce.com written by H. Douglas Hinson. Please see below.

A recent ERISA litigation conference that featured in-house counsel, ERISA litigators and federal judges yielded important insights on how employers can protect themselves in this technical—and potentially costly—area of employment law. Here are the top 10 insights from one of the conference’s organizers.

The American Conference Institute’s ERISA Litigation Conference was held over two days in October in New York and featured more than 25 in-house counsel, more than 20 federal judges from eight circuits and dozens of ERISA litigation practitioners from around the country. The in-house counsel and judges were the stars of the show, providing insights for employers who wish to prepare for ERISA litigation—or better yet, avoid it. Here are my top 10 insights from the conference, along with brief explanations of how they might be of help to your company and your plan’s fiduciaries. Following these practical suggestions will greatly improve your company’s chances of avoiding ERISA litigation, and winning any such litigation that is filed...

To read the rest of this article, please go to this Workforce link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

DB Plans Outperform DC Plans

noreply@blogger.com (Kristofer Gray) — Wed, 24 Feb 2010 00:00:00 +0000

I recently read a great article at ebn.Benefitnews.com written by Kathleen Koster. Please see below.

Defined benefit plans fared slightly better than defined contribution plans as the economy began its decline two years ago, underscoring the importance of rebalancing 401(k) accounts.

According to new analysis by Towers Watson, DB plans outperformed 401(k) plans by roughly 1 percentage point in 2008, even though both types of plans lost value. In addition, some DB plans actually reported small positive returns in 2008, though most DB plans incurred losses.

On the other side of the spectrum, all DC plans in the study had losses of at least 10%, and a few had severe losses greater than 40%, more than any DB plan in the study.

The 2008 results are based on a survey of 79 employers that sponsor one DB plan and one 401(k) plan.

Also noted in the study, DB plans had median investment returns of -25.27% in 2008, while DC plans had median returns of -26.20%. A broader analysis of more than 2,000 plan sponsors shows that DB plans had a median return average of 7.71% while DC plans had a median return of 6.78% in 2007.

To read the rest of the article, please go to this Employee Benefit News link.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Source: Kathleen Koster & ebn.benefitnews.com

2010 Compliance Calendar

noreply@blogger.com (Kristofer Gray) — Mon, 22 Feb 2010 23:13:00 +0000

I recently read a great article at plansponsor.com written by PlanSponsor Staff. Please see below.

JAN 15 / Last required quarterly contribution for defined benefit (DB) plans for 2009, due 15 days after last plan year quarter.

FEB 1 / Many recordkeepers require participant data for average deferral percentage (ADP)/average contribution percentage (ACP), top heavy, and 402(g) compliance testing to be returned by this date.

FEB 1 / Deadline for sending Form 1099-R to participants who received distributions during previous year. Note: The deadline is usually January 31, which falls on a Sunday in 2010.)

FEB 1 / DB Notice of Benefit Restrictions must be provided to participants and beneficiaries of any benefit restrictions that apply due to the plan being less than 80% funded. Note: Usually due January 31, which falls on a Sunday in 2010, or 30 days after valuation date at which the restriction is determined.

FEB 16 / Quarterly Benefit/Disclosure Statement for Participant-Directed DC Plans: Good Faith Compliance due 45 days after the end of the quarter. Note: Usually due February 15, which is a holiday in 2010.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

To read the rest of the article, please go to this plansponsor.com link.

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

6 Ways Employers Will Change 401(k)s in 2010

noreply@blogger.com (Kristofer Gray) — Thu, 18 Feb 2010 22:31:00 +0000

Please read this great article written by Emily Brandon:

Employers plan to get more involved in their 401(k) plans in 2010. The trend of employers automatically signing their workers up for retirement accounts is expected to continue this year. Many companies will also attempt to steer their employees into more appropriate investments, according to a new survey by Hewitt Associates, a human resources consulting firm. “They are restoring their matching contributions and offering features and tools that push workers to save more throughout their working years,” says Pamela Hess, Hewitt’s director of retirement research.

Here are six ways companies plan to update their 401(k) plans in 2010:

Automatic enrollment. Interest in signing workers up for retirement accounts unless they opt out continues to grow. Some 59 percent of employers already automatically enroll their workers in retirement accounts, up from 51 percent in 2009, according to the survey of 162 mid and large companies with 5.7 million employees. More than a quarter (27 percent) of the companies with voluntary 401(k) participation plan to begin automatically enrolling workers in the coming year.

Automatic escalation and rebalancing. Simply enrolling workers in retirement accounts generally isn’t enough to ensure they will have a secure retirement. Only 18 percent of the companies surveyed say they are confident that their employees will have enough retirement income to last throughout their lifetime. To attempt to get employees to save more, 38 percent of the companies say they are planning to add a feature that will automatically increase employees contribution rates to 401(k) accounts over time. And almost half (46 percent) of the employers say they are likely to add an automatic rebalancing tool to their retirement accounts in 2010 that will regularly shift employee portfolios to target asset allocations.

More investment guidance. Employers plan to become more involved in helping workers choose appropriate investments. Half (51 percent) of firms currently provide online investment guidance to their workers and another 42 percent are likely to do so in 2010. Many companies (68 percent) also plan to better educate their employees about investment and fund fees in their 401(k) plans this year. For employees who don’t wish to choose their own investments, a quarter of companies indicate they plan to begin offering managed accounts in the coming 12 months in addition to the 28 percent who already do. The amount of employers offering target date funds in 2010 will remain the same as last year at 78 percent.

Add a Roth 401(k). Some 25 percent of companies are likely to add a Roth 401(k) option to their retirement plan in 2010 and 29 percent of companies already have both types of retirement accounts. Roth 401(k) contributions are made with after-tax dollars and withdrawals in retirement are tax free. Traditional 401(k) deposits consist of pre-tax dollars, but income tax is due when the account owner withdraws their savings.

Offer annuities. Only 14 percent of the employers surveyed currently offer the option to purchase an annuity upon retirement through their 401(k) plan, up from 8 percent in 2009. But interest in adding an annuity feature that provides a guaranteed stream of retirement income for life is growing. Over a quarter (28 percent) of companies say they are likely to add an annuity option to their retirement plan in 2010.

Resume the 401(k) match. Some companies temporarily suspended their 401(k) match in 2009. But most firms plan to bring matches out of retirement this year. About 80 percent of companies that slimmed their company contributions last year plan to restore them in 2010.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Source: Emily Brandon & usnews.com

401(k)'s for Solo Businesses

noreply@blogger.com (Kristofer Gray) — Thu, 18 Feb 2010 00:31:00 +0000

Below is a great article written by Jane Hodges:

One-person companies can have the same type of retirement plan common at large corporate employers. And Roth 401(k)s are an option, too.

Talk about control. In addition to managing themselves, self-employed workers have their own options for retirement saving, too.

Two of the best options: solo 401(k)s and solo Roth 401(k)s.

Both have been around a few years but are more common now as accountants with entrepreneurial clients have become more fluent with them, says Rick Meigs, president of Portland, Ore.-based 401khelpcenter.com, a 401(k) research firm.

Their biggest benefit is they often allow for higher retirement-savings contributions than other plans. They also have less-complicated contribution rules than a Keogh, which offers high contribution potential but may require the expense of an actuary and extra paperwork.

Salt Away
Solo 401(k)s let you put away more than a Simple IRA, which allows a maximum contribution of $11,500 a year for those under 50 and $14,000 for those older, plus up to 3% of income (after adjusting for self-employment tax). More than Roth IRAs, too, which set a ceiling of $5,000 for those 49 and under, and $6,000 for those older. Unlike a Roth IRA, solo 401(k) plans also place no income limits on who can participate.

Regular solo and Roth solo 401(k)s also can allow for higher contributions than a Simplified Employee Pension (SEP) IRA at the same income level. In a SEP IRA for 2009 and 2010, entrepreneurs may contribute as much as 20% of their net business profit (up to a maximum of $49,000) if they are sole proprietors, or 25% of their salary if their company is a corporation. (Net business profit is defined as the income of the business after expenses, and minus half of the self-employment tax.)

But with a solo 401(k) or solo Roth 401(k), for 2009 and 2010 you can put into the plan 100% of your first $16,500 in income from the business (or $22,000, if 50 or older), plus 20% of net profit, until you max out contributions at $49,000 (or $54,500, if you are 50 or older).

How can an entrepreneur sock away more with a solo 401(k) than with a SEP IRA? Clint Gharib, director of managed products and insurance at J.P. Turner & Co. in Atlanta, uses the example of a 51-year-old sole proprietor whose business income was $100,000. If the proprietor used a SEP IRA, he or she could invest only 20% of $92,936 ($100,000 minus $7,064, half the self-employment tax), or about $18,600.

But the same proprietor could put $22,000 in a solo 401(k), plus 20% of $92,936, for a total of about $40,600. Under some accounting rules and business structures (if incorporated, for instance), this same entrepreneur might be able to put as much as 25% of his or her salary in a SEP IRA—but that amount would still be far less than a solo 401(k) allows.

Numerous mutual-fund, brokerage and discount-brokerage firms offer solo 401(k) plans. Among fund families that sell them through financial advisers: Invesco Aim, Pioneer Investments and OppenheimerFunds. Self-directed investors can open such plans at T. Rowe Price Group, Charles Schwab Corp., Fidelity Investments and Vanguard Group. The Roth versions are also available from fund companies and securities firms such as Invesco Aim, Pioneer, T. Rowe Price, Vanguard, ING Direct's ShareBuilder unit and E*Trade Financial Corp.

Fees vary, and can include a setup fee, annual administration fee, and routine mutual-fund fees—in addition to adviser fees. The highest fees are for those solo 401(k)s sold through insurance companies, Mr. Meigs says.

Among adviser-sold plans, Pioneer charges no setup fee but has a $25 annual fee that is waived on accounts over $25,000. Invesco Aim charges no setup fee and offers two administration options: a self-service option with a $10 annual fee or a full-service option, in which advisers choose a third-party administrator that aids with plan compliance. Fees for the latter vary but average less than $100 per year.

OppenheimerFunds charges no setup fee and annual administration fees of $10 for accounts over $50,000, and $15 for accounts under $50,000.

ShareBuilder's solo 401(k) products cost $195 to set up, and are assessed a $15 monthly fee, waived on accounts over $250,000; start-up costs are $125 for Costco members.

Russell Lowry, a certified financial planner with Sagemark Consulting Private Wealth Services in Windsor, Conn., says he has opened plans for clients at Plan Administrators Inc., a third-party administrator in De Pere, Wis., which offers adviser-sold plans featuring funds from companies such as American Funds and OppenheimerFunds. At Plan Administrators, setup costs $50, and annual fees are $150 (for balances below $250,000) or $250 (for balances $250,000 and above). Mr. Lowry also charges a fee on the plans; he says it's about 1.5% of assets annually, or less as balances rise.

Solo 401(k)s do in some cases have higher administration fees than SEP IRAs or other plans. Investors need to weigh whether they save aggressively enough to justify those fees. Another detail: With solo 401(k) plans, once accounts hit $250,000, investors are required to file annual paperwork on them to the Internal Revenue Service.

Richard Reyes, a certified financial planner in Orlando, Fla., says to help his clients decide which plan is right for them, he asks them: "How much money are you going to put away yourself? If he/she tells me less than $10,000 to $15,000, then I will always lean toward the SEP and Simple arena. If the owner says a lot more, then one is almost automatically thrown into the solo 401(k) arena."

Mr. Reyes advises that when an investor can reliably contribute at least $15,000 a year, solo 401(k) plans often make more sense than SEP IRAs.

Other Considerations
Investing benefits aside, the ability to borrow is a plus, too. The decision also involves age considerations and guesswork about future tax rules. Investors or their advisers must figure whether it's wiser to contribute after-tax now—to a Roth IRA or Roth 401(k)—or reduce taxable income now and pay tax on retirement income later—with a SEP IRA or solo 401(k).

Mr. Lowry, the financial planner, says that for entrepreneurs under 40 who want to maximize their retirement investment, he generally recommends a solo Roth 401(k) because of likely future tax increases.

The bottom line? As more workers start businesses, work as contractors or opt for self-employment, higher earners should strongly consider a solo 401(k). Even among adviser-sold plans, it's possible to find reasonably priced options.

Integrity Financial Corporation’s flagship 401k client is the Association of Washington Business (AWB) in Olympia. AWB is Washington state’s premier advocate for the business community and is recognized as The State’s Chamber of Commerce. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. www.brightscope.com

Integrity Financial Corporation helps business owners and individuals build a financial legacy through well designed executive compensation and retirement plans. Our clients can expect to receive personalized service and expertise, built on a foundation of trust. Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k.

Please visit our website at www.ifclegacy.com to have an independent fiduciary 401k advisor at Integrity Financial Corporation analyze and evaluate your company's 401k plan.

Source: Jane Hodges & online.wsj.com