1. Overview Presented by Leah Messenger, CPP
Retirement plans
Overview
Presented by Leah Messenger, CPP

2. Defined Benefit Plan – Pensions employer perspective
Costs:
Annual Funding for participants
Audit
Investments
Administration
Defined Benefit Plan – Pensions employer perspective

3. Defined benefit – Pensions employer perspective
Fiduciary Responsibility
Employer training
Employee Education
Investment Review
Oversight Committee
Review of Plan
Vesting
Compliance
Funding
Defined benefit – Pensions employer perspective

4. Defined Benefit – Pension Employee perspective
Contribution - dependent on the plan
Percentage of gross pay – pre tax
No contribution
Contribution limits are defined by the plan, in alignment with federal standards
Participant Loans – dependent on plan
ERISA and PBGC protected
Annual Statement = Summary Annual Report
Due 10 months after end of year (Calendar – October)
Vesting – average is 5 years
Mandatory participation
Defined Benefit – Pension Employee perspective

5. Contribution plans – 401k or 403b employer perspective
Cost
Share of Cost – dependent on plan
Employer match
Vesting
Percentage
Audit
Investments
Administration
Contribution plans – 401k or 403b employer perspective

6. Contribution Plans – 401k or 403b employer perspective
Fiduciary Responsibility
Employer training
Employee Education
Investment Review
Contribution Plans – 401k or 403b employer perspective

7. Contribution Plans – 401k or 403b employer perspective
Fiduciary Responsibility
Oversight Committee
Plan
Loans
Pre-Tax
Roth – after tax
Vesting
Compliance
Funding
Contribution Plans – 401k or 403b employer perspective

8. Contribution Plans – 401k or 403b Employee perspective
Contributions:
Opt In or Opt Out – dependent on plan
Can have a mandatory flat percentage at date of hire (Automatic enrollment
Pre-Tax
2019 Limit - $19,000
Catch up - $6,000
ERISA and PBGC protected
Loans
Hardship
Plan
Visibility and flexibility – dependent on provider and plan
Contribution Plans – 401k or 403b Employee perspective

9. Contribution Plans – 401k or 403b Employee perspective
Annual Statement – Summary Annual Report
Quarterly statement from provider
Vesting
Administrative cost
Per pay period flat amount from employer
Investment fee’s usually a percentage of assets in plan
Admin fee from provider
Contribution Plans – 401k or 403b Employee perspective

10. Contribution Plan – 457 Employer perspective
Federal and State Employers only
No employer match
No audit, as of yet
Low maintenance
Plan
Loans
Roth – After tax contributions
Pre-tax Contributions
Oversight
Review quarterly
Contribution Plan – 457 Employer perspective

11. Contribution Plan – 457 Employee perspective
Contributions
Opt In or Opt out
Contribution type:
Pre-Tax
Roth
Or Both
Can contribute to a 403b and 457 plan concurrently
Double the savings
Contribution limit in total- $19,000
Catch up in total - $6,000
Contribution Plan – 457 Employee perspective

12. Contribution Plan – 457 Employee perspective
Investments
Administrative costs
Percentage of assets in the plan
Contribution Plan – 457 Employee perspective

13. Traditional IRA Not an employer sponsored plan
No Audit or oversight
No match
All employee contributions
Employees can setup an IRA and have direct deposit amount per pay period
Pre-tax Contribution limit is $6,000
Catch up - $1,000
Employees with employer based retirement plans cannot setup a traditional IRA
Traditional IRA

14. Traditional Roth IRA Not an employer sponsored plan
No Audit or oversight
No match
All employee contributions
Employees can setup an IRA and have direct deposit amount per pay period
After-tax Contribution limit is $6,000
Catch up - $1,000
Employees with employer based retirement plans cannot setup a traditional IRA
Traditional Roth IRA

15. State plans - california
CALSAVERS – JULY 1, 2019
Voluntary Employer registration begins
This plan does not apply to employers that already have retirement savings for their employees
State plans - california

16. State Plans - California
CalSavers:
Employer notifications will be sent to employers with no employee retirement savings:
State Plans - California

17. State plans - California
Employers affected will need to:
Register for CalSavers at
Upload your employee roster to enable enrollment
Designate payroll professional or third party provider to facilitate on your behalf
Transmit payroll contributions to a third party administrator designated by CalSavers
State plans - California

18. State plans - California
Employer Safeguards:
No liability for an employee’s decision to participate in or opt out of program
No liability for investment decisions of participating employees
No fiduciary responsibility
No responsibility for:
Administration
Investment performance
The payment of benefits earned by participating employees
State plans - California

19. State Plans - California
CalSavers – Employee Information:
Contacts the employees directly, not the employer
Auto enrollment:
Use standard savings plan-Roth retirement savings
Auto enrollment default rate 5%
Or choose your rate as low as 1%
Maximum contribution $6,000 per year, set by the federal government.
Catch Up, additional $1,000 per year, if employee is over the age of 50
State Plans - California

20. State Plans - California
Customize your savings options
Employees will choose their own investments
Opt out or Opt in at any time
Portable
State Plans - California

21. State Plans - California
CalSavers Withdrawals:
Non-qualified distribution:
Age 59-1/2 and under
10% Penalty, federal and state
Earnings - taxable
Qualified distribution:
Age 59-1/2 and older
Earnings taxable
State Plans - California

22. State plans State Retirement Savings –
Colorado – proposed, died in legislation
New Jersey and Washington State, setting up a marketplace for retirement savings plans for employers
Connecticut – Retirement Savings Plan – disbanded 2016
Legislator are trying to revive
Illinois – 2018 Illinois Secure Choice, fully phased in 11/2019
Maryland – implemented but not rolled out
Oregon – 2017 Oregon Saves Program fully launched
16 other states are considering State Retirement Savings plans
State plans

23. DOL – 1975 Safe Harbor ERISA Provision exempts employers from fiduciary responsibility is in review – Are in Question????
What does this mean for employers? No fiduciary protection
What does this mean for participants? Basis for suing the employer if the savings are not what expected….legal challenges
What does this mean for state retirement plans? No protection for employer, less likely to register – disband the plan due to lack of participation
State Plans - DOL

24. State Plans Obama Era – Revisions
Likely to pass with current legislation, and Trump will sign?
This causing disbandment of the current state retirement plans.
State Plans

25. Payroll Responsibility
Employee contributions
Due dates
Employer Share
Who to send the contributions to
What type of contributions?
Is there an annual audit?
What documents are need for the audit? Census data?
Does your current system provide census data or will you need to contact the system provider for assistance?
When are the audit documents due?
Are there pre audit documents?