, next to perhaps the home. Regardless of the value in these retirement plans, 401k plans and pension plans, many couples mishandle these accounts in divorces. The result can be a substantial financial loss for one spouse, sometimes even for both. Today’s post will detail some of the most common ways people in Texas divorces mishandle …
You worked for decades at an employer, retired and began receiving your defined benefit pension from your employer. You have planned your finances around your pension payments, social security and other sources of retirement savings. Then a letter shows up from the pension administrator. No, it isn’t your monthly check. It isn’t a spare check, …
Pension overpayments / pension recovery: Dallas pension lawyers Read More »
In my 2010 article about KSOPs, I discussed how KSOPs risk employees over-leveraging their employment into excessive financial risk. KSOPs blend 401k and ESOP plans in which the employer uses an ESOP with the employer’s stock as an investment as an investment option within the 401k to let employees use their retirement savings to invest in …
Blackberry layoffs show why KSOPs are bad for employees Read More »
In a highly important move, the Department of Labor released guidance on how ERISA-governed employee benefit plans will treat same-sex marriages following the Supreme Court’s overruling of DOMA’s definition of marriage as limited to one man and one woman. ERISA-governed benefit plans include private employer benefit plans like 401k plans, defined benefit pensions and health …
DOL releases official guidance on ERISA and same sex marriage Read More »
Earlier this week I wrote about Flexible Spending Accounts (FSA) and the “use it or lose it” rule. Today’s post discusses Health Savings Accounts (HSAs), which are a very different kind of account. FSAs and HSAs both give employees tax-advantaged opportunities to finance health care costs in a consumer-driven health insurance plan; but HSAs are far …
Flexible Spending Accounts, or FSAs, allow employees to make tax-advantaged contributions towards their health care costs for the year. The FSA is distinct from the employer’s ERISA-governed health insurance plan; but the two operate closely. The employer’s insurer may even administer the FSA. The employee, and possibly the employer as well, contributes each year which …
Generally yes. Employers are not required to offer retirement benefits; nor are they required to make matching contributions, profit sharing, or any other contribution. (With the exception of certain safe harbor plan designs that require safe harbor contributions.) If your employer has a 401k, ESOP, or other defined contribution plan and makes contributions for you, …
In an article I authored back in 2010 published in the National Law Review I discussed the risks involved for both companies and employees in allowing employees to invest in company stock within their 401k plans. The company stock becomes available through an ESOP (Employee Stock Ownership Plan) within the 401k known as a KSOP. Companies can …
Generally no. ERISA requires 401k plans to strictly follow plan rules and treat employees fairly. The intended effect is for the plan to treat employees equally. To violate plan rules can result in as little as fines or as much as forfeiting the entire plan. Changing distribution rules requires amending the plan for all participants …
It depends. Each option gives you a different benefit and the respective benefits will have a maximum positive impact depending on your current financial situation, retirement needs/goals and your expectations for future tax rates. Pretax 401k contributions Pre-tax contributions provide an immediate tax benefit because you do not pay taxes on income contributed to your …
Should I contribute Roth, after-tax, or pre-tax in my 401k? Read More »
Generally, no. The federal regulations that govern 401k plans require that 401k plans do not discriminate against employees. Plans must have uniform rules and the rules must apply in a uniform manner. For example, if your plan permits hardship withdrawals it must establish specific rules for those distributions. Plans can establish some variances in rules across …
Can my employer change the 401k plan or make an exception for me? Read More »
401k fees have come into focus as one of many ways the financial services industry leeches money from the investors. That focus turned into litigation by participants against their plans (and plan service providers). Eventually the Department of Labor instituted fee disclosure rules that require plan service providers to break down fees charged to the …
401k loans allow you to borrow against your 401k account tax-free (as long as you pay it all back). The loan payments typically occur by payroll deductions. If considering a 401k loan you should carefully consider he loan terms and the ramifications. Your employer does not have to offer 401k loans and can severely limit …
Employment Attorney explains: When can I take a 401k loan? Read More »
By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure these retirement plans provide plan participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) …
Generally, both plan formats defer compensation because the employee has elected to defer taking cash in hand to obtain some additional benefit, such as deferring taxes on the money or investing on a tax deferred basis. Under more specific legal definitions, there is a distinction between how these different plans work. Today’s post will discuss …
What is the difference between a 401k plan and a deferred compensation plan? Read More »
By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure retirement plans provide participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that …
When employees leave employment, the common response is to want to sever ties and move on, especially if the employee left involuntarily or on bad terms. However, withdrawing or rolling over your 401k may not be the best decision in every case. There are important financial and legal considerations. Before making decisions about your 401k …
Benefits of staying in your 401k after you leave an employer Read More »
KSOP is jargon used within the financial and employee benefit industries as shorthand to explain the arrangement where a 401k plan houses an ESOP of the employer’s stock as an investment option. An ESOP is an Employee Stock Ownership Plan that allows employees to purchase company stock through a retirement plan. It is an ERISA …
Defined benefit pension benefits are calculated in a variety of ways, depending on what formula your plan has adopted. ERISA requires defined benefit pension benefits expressed in the normal form of payment at the plan’s normal retirement age. (Often referred to as the accrued benefit.) This is normally a monthly annuity benefit paid out over the …
Spouses in Fort Worth and Dallas are entitled to part of your retirement accounts in Texas because the federal law surrounding retirement plans allows for spouses to earn an interest in your retirement accounts during the marriage. State law allows for family courts to divide these assets based upon a domestic relations order. (That usually becomes …
Why does my spouse get part of my 401k or pension in a divorce? Read More »