ADMIN PARTNERS

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FINANCIAL PLANNING

Meet the Team: Greg Verna

We are continuing our Meet the Team Q&A series with our National Sales and Client Engagement Manager, Greg Verna. This week’s Q&A even includes photos of Greg’s new puppy, Arlo and his gorgeous family! Each week we will be giving the spotlight to an ADMIN team member allowing our community to get to know them better.

Click below to see the profiles for Greg and the rest of our team! Please keep tuned for spotlight blog posts on our entire team!

Stay connected with us for more ADMIN partners and industry information! Follow us @adminpartners on all social media platforms. Tune in tomorrow to see one of Greg’s favorite quotes on our Instagram and Twitter pages @adminpartners

Self Corrections

This week in our (b)informed series we are tackling the subject of self-correction. Making sure your plan documents are up-to date and compliant is extremely important. If the plans are not, self-correction can be a vital tool to remedy that for plan sponsors. The deadline to do so, is nearing this December 2022.

ADMIN Partners believes there are literally thousands of 403(b) Plan Sponsors who have not adopted a pre-approved 403(b) plan document (not to mention those that never adopted a written plan). So, the question is – what can these Plan Sponsors do to get the advantages of using a pre-approved plan document? If you are interested in learning more about IRS audits and the benefits of a pre approved plan document, join us September 28 at 2:00pm (EST) for an informative webinar on the topic. Register below!

What is Self Correction?
As per the IRS, “The IRS Employee Plans Compliance Resolution System (EPCRS) permits any size business or organization that sponsors a retirement plan (including SEP and SIMPLE IRA plans) to identify and correct many failures they find.” In 2019, the IRS issued Revenue Procedure 2019-19 (Rev. Proc. 2019-19). This Revenue Procedure sets out provisions of the IRS’s Employee Plans Compliance Resolution System (EPCRS) and permits 403(b) plans to be “self-corrected” (that is, amending a plan document without obtaining formal IRS approval of the amendments).

To continue, under the Revenue Procedure guidance, the ability to self-correct 403(b) plans to a pre-approved version is available through December 31, 2022. Even though the ARA has asked the IRS to “put it in writing,” and explicitly say that Rev. Proc. 2019-19 can be used for this purpose. To date, the IRS has not responded to this request. Nonetheless, ADMIN Partners has decided not to wait on the IRS. After consulting with legal counsel, we believe the risk is negligible to utilize the Rev. Proc. to “self-correct” 403(b) plan documents. The facts are:

If you are not sure if your plan documents are up to date, reach out to our team! Please feel free to contact a member of our team at (877) 484-4400 Option 2 or contact@youradminpartners.com and on all social media platforms @adminpartners.

Meet the Team: Maria Speeney-Johnson

We are continuing our Meet the Team Q&A series with our VP of Operations & Client Services, Maria Speeney-Johnson. Each week we will be giving the spotlight to an ADMIN team member allowing our community to get to know them better.

Click below to see the profiles for Maria and the rest of our team! Please keep tuned for spotlight posts on our entire team!

Stay connected with us for more admin partners and industry information! Follow us @adminpartners on all social media platforms. Tune in Monday to see one of Maria’s favorite quotes on our Instagram and Twitter pages @adminpartners.

Automation in Retirement Plans

Retirement financial planning has always been extremely important, but with the increasing inflation it is even more important to increase your savings for retirement. Preparing for retirement can be really overwhelming, but both auto-enrollment and auto-escalation are potential solutions to help participants save more for retirement. Auto-enrollment and auto-escalation in retirement plans is a popular topic of conversation and many states and organizations have implemented some variation of either or both. In fact, the proposed Secure Act 2.0 has a provision that would apply to new 401(k) and 403(b) plans which would include both auto enrollment and auto escalation.

What is Automatic Enrollment?

Auto-enrollment will automatically enroll qualifying employees into their offered employer retirement program. There is an option for a participant to elect out of the plan if they wish to do so. Under Secure Act 2.0 there will be exceptions to the provision, like small businesses with 10 or less employees.

What is Automatic Escalation?

A solution to increase your retirement deduction year by year is automatic escalation. As the name suggests it is the automatic increase in deduction percentage, typically on a yearly basis. This will allow your savings to increase without having to remember each year to reach out to your payroll personnel to increase your deduction. Under the proposed Secure Act 2.0, the initial starting contribution at a pre-tax level would be 3% of the participant’s pay. It would then increase annually by 1% percentage point with a 15% cap.

Both auto-enrollment and auto-escalation are meant to encourage people to actively save more for retirement. Follow us for more education on different retirement plan topics in our (b)informed series! If you have any questions or comments please reach out to us via our email contact@youradminpartners.com or our social media accounts @youradminpartners.

Coming Soon: Online SRA Submission

We are very happy to announce that the ability to submit an online Salary Reduction Agreement (SRA) will soon be available via our website! We are currently in testing with a select group of clients and will be progressively rolling out to our entire client list. Soon plan participants will be able to submit an SRA directly to the Admin Partners team and their employer on the go.

Participants will be able to access our site and submit a Salary Reduction Agreement to: initiate into a plan, discontinue, change an amount, change source type, or investment company by filing out all required fields. Once completed you will see the following landing page.

After the participant receives a confirmation email, our team receives a copy of the submission for our processing and the appropriate employer contact will also receive a copy for the correct deduction to be made on their end. We are so excited for this addition and hope you are too!
Please be on the lookout for an Admin Partners notification on any changes or updates. Please reach out to us at contact@youradminpartners.com or our social media with feedback! If you have any suggestions or comments, we want to hear from you!

IRS Penalties & How Admin Partners Can Assist

Employers have enough on their plates when it comes to daily operations. Administering retirement plans should not be one of them. With retirement policy changes over the last few years, it makes it even more difficult ensure these plans are operating in a compliant manner with the IRS and DOL. Additionally over the last few years, the IRS penalties have dramatically increased for plan sponsors making it even more vital for plans to be compliant.

Plan sponsors should be aware that these penalties have been increased dramatically in recent years! For example, a late 5500 filing will result in a penalty of $250 per day. A few years ago, in 2019 that same penalty was $25 per day. Not meeting IRS deadlines and regulations will be an even more costly mistake going forward.

A great solution is hiring a Third-Party Administrator (TPA) to alleviate the administrative burdens that come along with retirement plan administration.

What to consider when hiring a TPA? Not all TPA’s offer the same levels of service. Here at ADMIN Partners, you can guarantee a level of service that will give you a peace of mind knowing your plan is established and maintained in a compliant manner.

ADMIN Partners is a full service TPA. We offer step by step guidance from the beginning of implementation, walking our clients through all the provisions that are available to their plan. We are here to answer day to day questions and concerns that may arise after implementation. Our services can also include comprehensive compliance sign offs which ensure any compliance request a participant makes is compliant within the provisions of the established plan. Common remittance of contributions is also available to our plans. Our in house plan administrators handle all year end services for our plans that are subject to ERISA.  The available services include: form 5500 filing, filing of SSA-8955, nondiscrimination testing, and additional schedules if applicable. We offer a variety of services to better suit your plan and needs. If you would like to learn more about us, click the link below!

The increased penalties have the potential to have a huge impact on plan sponsors making it even more important to have a complaint plan and follow IRS guidelines and regulations. ADMIN Partners can help you with that. If you feel your retirement plan is out of compliance, please feel free to contact us for a free plan consultation. Please reach out to us at contact@youradminpartners.com for more information on how we can help your plan.

ADMIN’S 2022 WEBINAR LINEUP

While the past two years have definitely changed the way we all work, ADMIN is using the 2022 year to reconnect with Financial Advisors as they support their clients both remotely and in person. This year ADMIN will be hosting quarterly webinars on various retirement plan topics including IRS audits and retirement plan options for charter schools. Our objective with these webinars is to ensure advisors have up-to-date education on retirement plan administration so they can best service their plan sponsor clients.

HERE’S WHAT TO EXPECT

In depth webinars hosted by ADMIN’s National Sales Manager, Greg Verna, on retirement plan compliance and administration. ADMIN’s focus on tax-exempt and government retirement plans allows us to share our expertise to Financial Advisors working in this unique market.

Here is a sneak peek at our current webinar lineup for 2022:

IRS AUDITS: PROTECTING YOUR PLANS

In this webinar, we will take a look at IRS Audits and how they impact retirement plans. Who is subject to an IRS audit? What are some of the top violations? How can advisors and TPA support plan sponsors in an audit? We cover all this and more!
WANT TO REGISTER? Click on the link below

CLICK HERE to register for the webinar on June 22, 2022 @ 11am EST

CLICK HERE to register for the webinar on September 28, 2022 @ 2pm EST

CHARTER SCHOOLS: WHAT TO KNOW

In this webinar, we will explore retirement planning for charter schools. How are charter schools defined? What plan options do they have? Are charters schools subject to ERISA? We cover all this and more! 

WANT TO REGISTER? Click on the link below

CLICK HERE to register for the webinar on June 29, 2022 @ 2pm EST

CLICK HERE to register for the webinar on September 21, 2022 @ 11am EST

Questions? Feel free to contact our Sales Manager, Greg Verna, to learn more about our webinars and how you can work with ADMIN Partners! You can reach Greg via email at GVerna@youradminpartners.com or by phone at 856-382-3501.

IRS ANNOUNCES 2022 CONTRIBUTION LIMITS

One of the most important aspects of retirement planning is saving your money for your future. Of the various ways to do this, investing in a retirement plan is one of the best. So, how much can you save in a retirement plan in 2022? Here’s the breakdown:

The IRS has just released the contribution and benefit limits on pension plans and other retirement items for the 2022 tax year. These changes, published in Notice 2021-61, have increased contribution limits for 401(k), 403(b) and most 457 retirement plans options giving individuals more opportunity to save for their future.

Limits to contributions into a 401(k), 403(b), and most 457 Plans have been increased to $20,500.

Catch-up contributions for 401(k), 403(b), and most 457 Plans remains unchanged at $6,500 annually.

The limits for those contributing to an Individual Retirement Account (IRA) have remained the same at $6,000.

To see the updated limits and terms on all retirement plan types, review the IRS Notice 2021-61 here.

If you have any additional questions regarding the 2022 contribution limits, please contact ADMIN Partners at contact@youradminpartners.com or at 877-484-4400.

UPDATES TO FINANCIAL HARDSHIPS

Our TPA clients may recall that back in late 2018, we announced changes to the financial hardship distribution option for 403(b), 401(k), and Governmental 401(a) Plans. These changes, a result of the Bipartsian Budget Act of 2018, will only impact plans that currently permit hardship distributions as part of their plan provisions. It is important to note that the Budget Act of 2018 specifically cites 401(k) plans, therefore, rule changes with respect to employers sponsoring 403(b) plans are a bit more confusing.

With 403(b) plans not being cited in the Budget Act; consequently, certain rule changes do not technically apply to 403(b) plans. This legislative deficiency relates to making other contribution sources (besides employee deferral contributions) available for hardship distributions. ADMIN has consulted with legal counsel on the issue, and as a result, we are recommending that clients sponsoring 403(b) plans do not permit other contribution sources to be used for hardship distributions until the Congress enacts a technical correction to fix the issue. 

There are other rule changes that will impact how ADMIN administers both 403(b) and 401(k) plans that permit hardship distributions. These changes took effect January 1, 2019. Here is a summary of those changes:

ADMIN has been in communication with our investment provider and record keeping partners. Many of them have previously announced changes to their systems to implement new hardship rules that were passed as part of the Budget Act.

These changes do require updates to the documents of those impacted plans. ADMIN Partners will be reaching out to our existing clients in the next few weeks with the necessary documents to facilitate these updates for your plans. In the meantime, if you have questions or need additional information, please feel free to contact us at (877) 484-4400. 

3 QUESTION THURSDAY: WES IFAN

As part of our commitment to providing continuous retirement planning education, ADMIN Partners is adding a new series to our blog: 3 Questions Thursday! This series will be an opportunity for ADMIN to introduce you to leading Financial Advisors working in the retirement space. Each month a new Advisor will join us in answering 3 questions that can help Plan Sponsors and Participants better understand how to benefit from their retirement plan(s).

Today we are showcasing Wes Ifan with Kobo Wealth Strategies. ADMIN’s sales team was introduced to Wes a few years back and have since built a great rapport with the emerging advisor. He is the CEO and Senior Financial Advisor of Kobo Wealth Strategies and has over 15 years of experience in financial planning. We were especially excited to feature Wes due to his expertise in the church/religious organization retirement planning space. As you may recall from our ADMIN Education series (here), the unique plan design for churches and religious organizations requires a proficiency that supports Plan Sponsors and their Participants. In today’s 3 Questions Thursday, Wes shares what brought him to this sector of retirement planning and advise on saving for your future during these uncertain times.

As we enter a new year, 2021 is filled with such uncertainty.  In your opinion, what are some ways that financial advisors can stay relevant during such times? 

“The best ways financial advisors can stay relevant are to remain active in social media by posting content that connects with their followers both written, graphic, and video.  Also, education is a great way to engage the public in your areas of expertise and position yourself as an expert in the marketplace.”

ADMIN Partners has had the pleasure in doing business with you over the past few years, particularly in Church retirement plans.  What would you say drives this passion? 

“As someone who grew up in church my whole life, I understand the difficulties that churches and particularly pastors have with finances.  I wanted to make sure that part of my practice focused on helping pastors and church staff to have access to the advice they need and the resources to be successful financially.  The partnership with Admin Partners helps me do it in a professional and cost-effective way.”

How would you advise plan sponsors to encourage employees to save for retirement during such financially challenging times?

“The key is not to stop saving.  Even if you have to reduce your contributions, the key is to keep saving.  I know that can be challenging during these times.  Plan sponsors should work with the advisors to promote education and financial literacy.  Especially now with everyone used to Zoom and other video platforms, you can provide 30 minute quarterly education for the employees which I think helps.”

To learn more about Wes and his work in financial planning, visit the Kobo Wealth Strategies website. You can also connect with Wes online via his Instagram and LinkedIn.

Kobo Wealth Strategies is a branch office of Securities America. Securities offered through Securities America, Inc Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Kobo Wealth Strategies and Securities America are separate entities. 

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