Employer resource articles
Read articles of interest for district administrators, payroll coordinators, and other district administrative staff.
Articles are available from the past year and are sorted by quarter based on the Benefits NewsBrief email for Wisconsin public school district employers. If you would like to be alerted to timely articles, please sign up at the Benefits NewsBrief subscription page.
|>>SECURE Act changes and opportunities||>>Hardship amendment deadline update|
|>>Important 403(b) restatement information||>>Are you complying with “once in, always in?”|
The SECURE Act, enacted on December 20, 2019, amended required minimum distribution (RMD) rules. As of January 1, 2020, retired plan participants are required to start taking RMDs at age 72 or in the year that they retire. Plan participants that turned age 70 ½ prior to January 1, 2020, follow previous RMD rules.
Moreover, the new bill includes a provision that requires certain beneficiaries who inherit an account after January 1, 2020, to distribute the account over a ten-year period. This change would accelerate the depletion of inherited accounts for many large IRAs and retirement plans.
The bill generally exempts Eligible Designated Beneficiaries (EDBs). EDBs include surviving spouses and minor children up to majority—but not grandchildren. Also included are disabled and chronically ill individuals (as defined by the IRS) and individuals not more than ten years younger than the account owner (generally siblings around the same age).
If you are interested in adding automatic enrollment feature to your district’s 403(b) plan, contact your Member Benefits Worksite Benefit Consultant to discuss your options.
The hardship amendment requirement deadline has been extended to December 31, 2021. If you restated your 403(b) plan documents with WEA TSA Trust and your plan allows hardship distributions, the hardship amendment was emailed to you on November 29, 2019. For those plans that are in the restatement process, the hardship amendment is included in the plan document.
If you do not use WEA TSA Trust as your 403(b) document provider, please contact your plan document provider to inquire about the hardship amendment. If you’re interested in restating your 403(b) plan document with WEA TSA Trust, please contact Plan Administration at 1-800-279-4030, Extension 8579.
If you haven’t restated your plan documents yet, your current 403(b) plan has an IRS deadline for restatement by March 31, 2020. When the IRS required plan sponsors to adopt a written 403(b) plan document by December 31, 2009, there was little guidance about what those 403(b) plan documents should say or include. In April 2013, the IRS issued Revenue Procedure 2013-22, establishing a pre-approved plan program for 403(b)s and a remedial amendment period that ends March 31, 2020, to restate 403(b) plan documents to adopt one of the prototype or volume submitter plan documents that has been pre-approved by the IRS.
Plan sponsors who use the new pre-approved documents can be confident that the 403(b) documents meet all of the requirements under the Internal Revenue Code and regulations. Your plan document should include the following amendments created since 2009:
- Pension Protection Act (PPA).
- Heroes Earnings Assistance and Relief Tax Act (HEART).
- Worker, Retiree, and Employer Recovery Act (WRERA).
- The hardship amendment as part of the Bi-Partisan Budget Act of 2018.
We can help you with your plan document restatement to IRS pre-approved documents at no cost to the school district. If your Board needs to approve it, we will need plenty of lead time to prepare the documents for their approval. To discuss restating your plan documents, please call Chris Holtzman, Plan Administration Specialist, at 1 800-279-4030, Extension 8579. If you have already restated your 403(b) plan documents, please provide us with a copy. You can email your documents to email@example.com.
Are you aware of the “once in, always in” 403(b) plan exclusion condition? “Once in, always in” refers to the IRS position that once an employee has become eligible to make elective deferrals into the plan by reaching the 1000-hour benchmark in one year, that employee will remain eligible to make elective deferrals in future years—even in years when that employee does not complete 1000 hours of service. That employee can only lose that ability to defer if they join one of the limited categories of employees which can be excluded (such as certain students).
According to the IRS, “…for a 403(b) plan that excludes part-time employees from making elective deferrals, once an employee is eligible to make elective deferrals, the employee may not be excluded from making elective deferrals in any later exclusion year on the basis that the employee is a part-time employee.”
|>>Member Benefits staff at your service||>>Addressing the Gen X financial squeeze|
|>>Eight ways to encourage employee participation in district retirement plans||>>Disaster Relief Interim Amendment|
Meet your Worksite Benefits Consultants (WBCs)! WBCs can conduct 403(b) plan reviews and offer financial education to your employees.
Meet your 403(b) plan administration team! These staff members can assist you with 403(b) plan documents, questions, and compliance needs.
Call us at 1-800-279-4030 for questions or to request services.
Gen Xers are in their prime earning years, but they are often struggling with debt. And for many, dealing with debt is taking priority over saving for retirement.
This generation is feeling the pressure. While they are in their prime earning years, they are also closing in on retirement and often taking care of both their children and their parents.
According to an article from PLANSPONSOR, the main cause of financial stress for this generation is saving for retirement. While many feel they are on top of their retirement investments, they are experiencing financial stress when trying to meet their long-term goals.
As an employer, you can help alleviate their stress by offering financial wellness programs to your employees. Many Gen Xers say they would like help in calculating how much they need to save for retirement, determining when they can retire, and learning how to invest.
We also offer a variety of paid financial planning services that can help your employees make their own important financial decisions, no matter where they are in their career. Our services are available in Madison, Brookfield, Eau Claire, Green Bay, and central Wisconsin (Portage).
For more information on any of these options, give us a call at 1-800-279-4030.
Want to pick up some best practices to help your employees participate in your district’s retirement plan? Download our flyer (PDF) for helpful tips and resources.
If you restated your 403(b) plan documents with us prior to August 27, 2019, we will be sending you the Disaster Relief Interim Amendment. This provision will allow you to take advantage of the disaster relief provisions.
If you restated your plan documents after August 27, it is already included in your plan document, and no action needs to be made.
The Disaster Relief Interim Amendment is a good-faith amendment updating base document language to comply with the special disaster distributions and loans that Congress has permitted over the past few years. Because this amendment changes only the base document language, there are no changes to your adoption agreement. Therefore, there is no plan sponsor level signature needed.
- This amendment does not mandate disaster relief assistance. The plan sponsor retains discretion to determine what, if any, disaster relief assistance to provide.
- This amendment does not require all plan sponsors to offer the full extent of special disaster distributions and loans. Its provisions give plan sponsors the discretion to utilize some or all permitted disaster relief. The decision to offer disaster relief assistance, and how much, remains an administrative election for the plan sponsor.
- Additional information about the availability of disaster relief assistance is available on the IRS Web site.
Please be on the lookout for an email from firstname.lastname@example.org soon!
As you may have heard, the final hardship regulations were released earlier this month. We are currently reviewing the final regulations and they appear to be substantially similar to the proposed regulations.
We will contact our plan sponsors once we have the 403(b) hardship amendment ready for signature.
Thank you for trusting WEA Member Benefits to be your plan document provider. If you don’t currently use our plan documents and would like information on how to convert to our pre-approved 403(b) plan documents, please contact our Plan Administration Team at email@example.com or call 1-800-279-4030, Extension 8579.
|>>Notice requirement for 403(b)||>>Mutual fund lineup changes|
|>>Oppenheimer Developing Markets name change||>>Your Member Benefits staff contact|
|>>Have you reviewed your 403(b) approved vendor list recently?|
The IRS now requires that the 415 Notice be provided annually to all participants of the employer’s 403(b) plan.
The notice must explain that if the participant owns more than 50% of a business and that business has a 401(a), 401(k), 403(b), or SEP-defined contributions retirement plan, contributions to that plan must be aggregated with the 403(b) plan for purposes of determining contribution limits.
This notice requirement was introduced along with the remedial pre-approved plan restatement period. Delivery of the notice must begin in the calendar year following the year your organization restates its plan.
Given similarities in the delivery requirements, it is suggested that plan sponsors deliver the 415 Notice at the same time as the Universal Availability Notice.
Have questions? Contact Member Benefits’ Plan Administration Team at 1-800-279-4030, Option 3.
To ensure the quality of our retirement programs, Member Benefits regularly reviews investment options. We review a variety of factors to ensure we continue to offer high quality, low-cost investments. We also look to provide members with access to an appropriate number of investment types.
Starting September 3, 2019, at 8:00 a.m. and finishing around September 6, 2019, we will be changing the following mutual fund.
Current Mutual Fund
PGIM QMA Small-Cap Value (TASVX)
New Mutual Fund beginning September 6, 2019
MFS New Discovery Value R6 (NDVVX)
Participants utilizing these funds have been notified directly of this change. They may call Member Benefits to request a prospectus and fact sheet be mailed to them, or they can download the documents at weabenefits.com/investments. We are advising participants to read the prospectus carefully and consider the fund’s investment objectives, risk, and charges and expenses before investing. The prospectus contains this and other information about the investment company.
Please note that on August 30, 2019, at 3:00 p.m. CT, payroll processing will be unavailable and may not be restored until the end of the business day on September 6, 2019.
Contact a Member Service Representative at 1-800-279-4030, Extension 8567 if you have any questions regarding payroll processing.
Invesco announced in May 2019 that it was renaming the Oppenheimer Developing Markets Fund Class I fund to the Invesco Oppenheimer Developing Markets Fund Class R6. The ticker symbol remains the same. Employees participating in WEA Member Benefits’ retirement savings programs will see the change reflected on their second quarter 2019 statement.
If any of your employees come to you with questions about the recent changes by Oppenheimer investment management, and more specifically, the Invesco Oppenheimer Developing Markets fund, please have them call us at the number listed below.
Before investing in any mutual fund, visit weabenefits.com/investments or call Member Benefits at 1-800-279-4030 to request a prospectus. We advise you to read it carefully and consider the fund’s investment objective, risks, charges, and expenses carefully before investing. The prospectus contains this and other information about the investment company.
Until recently, members of the Worksite Benefit team as well as the Plan Administration team made visits to school districts regarding their 403(b) program. However, Member Benefits recently made a change to the staff person your district will be working with. This change has been made to streamline our service to you and to clear possible confusion of who your district contact is at Member Benefits.
- A Worksite Benefit Consultant (WBC) is your main contact. They can discuss 403(b) plan administration, trends, compliance issues, and potential legislation with you.
- The Plan Administration team is an internal team. They will assist Wisconsin public school districts and the Worksite Benefit team on:
- Advanced compliance issues/questions.
- Special 403(b)-related projects.
- Efficient 403(b) plan administration structure.
We appreciate the opportunity to continue serving you. Please call us at 1-800-279-4030 if you have any questions about the change or want to contact the WBC for your district.
If not, now is the time! Compliance of your 403(b) program ultimately falls on you as the plan sponsor, not on your vendors. If no one is utilizing a vendor in your list, now is a good time to deselect that vendor. Fewer vendors makes your 403(b) easier to administer as there is less oversight on your part.
To deselect a vendor, you must follow a formal process which includes the following:
- You must have your plan document updated by your plan document creator.
- You are not allowed to simply remove a vendor from the approved vendor list you hand out to employees.
- When any amendment is completed, you must notify all your vendors so they can administer your plan per your plan document and approved vendor list.
- A deselection notice must be sent to a deselected vendor.
Member Benefits offers a plan document service at no cost to your district. We specialize in 403(b) plans and can help you make sure your plan document is compliant.
Please contact a member of our Plan Administration Team at 1-800-279-4030, Option 3, for more information and assistance.
One of the concerns younger employees have about saving for retirement is the ability to access those savings for other things that come up in their life. Many of these employees may not be aware of the options and flexibility that may be available in a Roth IRA. And, if your plan offers a contribution match, how much money they may be leaving on the table. Here is some information to share with your employees to help allay their concerns and encourage them start saving for retirement.
Saving with a 403(b)
If you offer a match in your 403(b) program, make sure your employees know to take advantage of that “free” money by contributing as much as needed to secure the matching contribution. Your plan may offer hardship or loan features that may calm an employee’s nerves about their inability to access their retirement savings. It is important to educate your employees about saving for their retirement, about the benefits of not touching their retirement savings until retirement, and the impact of taking a loan and/or hardship from their retirement savings—but we don’t want fear of the unknown to stop them from contributing.
Saving with a Roth IRA
Another good option, in addition to a 403(b) plan, is a Roth IRA. An individual can withdraw his or her annual contributions tax-free and penalty-free before retirement if he or she chooses to do so. A Roth IRA from Member Benefits offers low fees, 24/7 account access, convenient automatic contributions through electronic transfer of funds (ETF) or payroll deduction (where available), as well as personal consultations to help individuals develop a plan that is right for them. Share our online brochure, “To Roth or Not to Roth in Your IRA”, or give us a call at 1-800-279-4030 for more information.
Another great resource for your employees is this infographic: Are you Jack or Jill? Learn the value of saving for retirement sooner than later
Source: Retirement Plans for Young People: Know Your Choices, Morningstar
There are a number of things you can do to prevent errors in your 403(b) plan. Here are some tips to keep it running efficiently:
1. Watch for law changes. Keep your plan up-to-date with the law. WEA Member Benefits offers free services that can help you make important decisions regarding your plan. Call us at 1-800-279-4030, Extension 8579, for more information.
2. Review your plan. Avoid letting plan errors grow into costly headaches by fixing them when they are small. Consider scheduling regular checkups and self-audits. Contact us to schedule a Compliance Plan Review. We have been able to uncover several potential compliance issues through these meetings with school districts.
3. Watch for common mistakes. Some of the most common include:
- Neglecting to follow the terms of the plan document. Be sure you’re aware of what is allowed and not allowed in your plan document.
- Not including the proper employees. Check your plan document to see if any employees are excluded.
- Forgetting to give employees required information. Make sure you are distributing a Universal Availability Notice to all eligible employees each year. Request a sample plan document packet.
- Failing to deposit employee deferrals and/or employer contributions in a timely manner.
- Failing to limit employee deferrals and employer to the proper limits.
4. Monitor third-party administrators and vendors who work with your plan. Remember, you are ultimately responsible for what happens with your plan.
- Make sure the correct data is getting to those who operate your plan, especially with employment and compensation records.
- Monitor the plan investments (this can be done in conjunction with the plan’s vendors).
- Make sure any fees charged by vendors and/or third party administrators are appropriate.
- Ensure plan contributions and distributions are made properly and in a timely manner.
According to the 2018 PLANSPONSOR Defined Contribution Survey, two-thirds of 403(b) sponsors agreed with this statement: “Our organization has a responsibility to improve the ‘financial wellness’ of our employees.” Chances are, you agree. Member Benefits can help your district by offering your staff free financial information and education. We do it because retirement security is more than just a savings plan—access to financial education is also key. We offer, at no cost to your district:
- Financial wellness plans to evaluate your current benefit offerings, explore ideas to better engage your staff, and provide financial education.
- 30-minute financial consultations for your staff with a Member Benefits Consultant.
- Financial seminars.
Share our free resources with your employees such as:
- List of free eBooks, including Educators’ Guide: 20 WRS FAQs and 10 Money-Saving Tips New Teachers Want to Know.
- Budget worksheet.
- Free financial calculators.
If you would like to learn more about what Member Benefits can offer your district, give us a call at 1-800-279-4030 and ask for a Worksite Benefit Consultant.
If we receive a payroll roster created on our website through yourPLAN ACCESS with a future date on it, we cannot apply the contributions to the employees’ accounts until that day—even if we have the funds.
For example, during June, the payroll rosters are created for June 15, June 30, July 15, July 31, August 15, and August 31. A check or ACH is then sent to our bank for the total of all those payrolls and dated August 31. Our system will not be able to apply those funds until the date listed on the submitted payroll, which is August 31.
If you would like to create multiple payrolls that do not cross calendar years, and submit them all at once so the funds are applied immediately to the accounts, simply use the current date for those payrolls when you enter the information in our system. This ensures that we can put all the contributions into the accounts as soon as the funds arrive.
Have you explored the Employer Resources section of our website? Find payroll coordinator resources, order enrollment booklets, access employee status templates, or sign up for the Benefits NewsBrief quarterly email.
Member Benefits needs to know if any of your staff have retired so we can determine if they can take distributions from their 403(b). This is especially helpful if the member contacts us to start taking withdrawals.