The Intelligent 401k Advisor

2010 Compliance Calendar

2010-05-20T15:21:00.000-07:00

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

2010-05-19T14:49:00.000-07:00

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.

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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

2010-05-18T14:46:00.000-07:00

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.

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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

2010-05-17T13:38:00.000-07:00

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

2010-05-14T17:30:00.001-07:00

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

2010-05-13T16:25:00.000-07:00

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.

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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?

2010-05-12T12:01:00.000-07:00

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

2010-04-29T14:26:00.000-07:00

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

2010-03-29T15:28:00.000-07:00

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

2010-03-25T15:08:00.000-07:00

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

2010-03-24T16:57:00.000-07:00

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

2010-03-22T15:47:00.000-07:00

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

2010-03-19T14:11:00.000-07:00

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

2010-03-18T15:13:00.000-07:00

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?

2010-03-18T09:40:00.000-07:00

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…

2010-03-16T16:11:00.000-07:00

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

2010-03-15T15:43:00.000-07:00

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

2010-03-11T16:09:00.000-08:00

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

2010-03-02T16:34:00.000-08:00

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

2010-03-01T15:25:00.000-08:00

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

2010-02-24T11:13:00.000-08:00

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

2010-02-23T16:00:00.000-08:00

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

2010-02-22T15:13:00.000-08:00

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

2010-02-18T14:31:00.000-08:00

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

2010-02-17T16:31:00.000-08:00

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

Hardship Distributions: Lost Retirement Savings or Safety Valve for Employees?

2010-02-16T15:26:00.000-08:00

Below is a great article written by Jerry Kalish:

Hardship distribution provisions in 401(k) plans used to be one of those matters on which plan sponsors didn't spend a whole lot of time. But because of the economy, that's not the case anymore. As a result, two points of view about hardship distributions have evolved.

One one hand, there is the view that hardship distributions act as "leakage" from 401(k) accounts, the result of which is lost retirement savings. It's a view that recently gained traction from the release of a report by the Government Accountability Office, "401(k) Plans: Policy Changes Could Reduce the Long-term Effects of Leakage on Workers' Retirement Savings."

The GAO report suggests that:
* Congress should consider changing the requirement for the six-month contribution suspension following a hardship withdrawal to help participants recover more fully from a hardship situation.
* The Secretary of Labor should consider promoting greater participant education on the importance of preserving retirement savings.
* The Secretary of the Treasury should consider clarifying and enhancing loan exhaustion provisions to ensure that participants do not initiate unnecessary leakage through hardship withdrawals.

Both the Labor Department and the Treasury Department agreed to take actions to follow the GAO's suggestions.

The other view is that hardship distributions act as a "safety valve." While hardship provisions, like loans, are allowed by law, employers are not required to provide for them in a 401(k) plan. Many do offer hardship distributions, however, because they provide a sense of security to participants as they balance their retirement savings and current financial needs. The hardship distribution acts as a safety valve in case they ever need the money.

Both views have currency (pardon the pun.) And until the economy improves, hardship distributions will continue to be a fact of life for many 401(k) plan sponsors. With that in mind, here's a brief rundown on the rules and how to avoid compliance problems:

* The hardship withdrawal must be for an "immediate and heavy financial need."
* The participant has no other way to meet the need.
* The withdrawal cannot exceed the amount needed.
* The participant must have first obtained all distribution or nontaxable loans available under the 401(k) plan.
* The participant cannot contribute to the 401(k) plan for six months following the withdrawal.

Under the provisions of the Pension Protection Act of 2006, an employee's needs may include the need of the employee's nonspouse, nondependent beneficiary. Hardship withdrawals are subject to income tax and the 10% withdrawal penalty if the participant is younger than 59-and-a-half years old.

The IRS, which regulates the tax aspects of retirement plans, was concerned enough about hardship distributions not being done properly that it discussed the matter in its summer 2009 edition of "Retirement News for Employers."

To properly handle hardship distributions, consider these basic, yet very practical, seven steps:
1. Review the terms of your plan.
2. Ensure that the employee complies with the plan's procedural requirements.
3. Verify that the employee's specific reason for hardship qualifies for a distribution using the plan's definition of what constitutes a hardship.
4. If the plan, or any of your other plans in which the employee is a participant, offers loans, document that the employee has exhausted them prior to receiving a hardship distribution.
5. Check that the amount of the hardship distribution does not exceed the amount necessary to satisfy the employee's financial need.
6. Make sure that the amount of the hardship distribution does not exceed any limits under the plan and is made only from the amounts eligible for a hardship distribution.
7. If the plan has a provision that the employee taking a hardship distribution is suspended from contributing to the plan for at least six months, make sure to enforce that provision.

Until the economy improves, don't expect the leakage to slow down.

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: 401khelpcenter.com & ebn.benefitnews.com

What Does W-2 Compensation Really Mean?

2010-02-11T16:11:00.000-08:00

The most popular base definition of compensation for retirement plans is the “W-2" definition. However, we have been receiving a number of phone calls recently asking exactly what that definition covers, and which box of Form W-2 it reflects.

The short answer is that the W-2 definition reflects Box 1 of Form W-2, “Wages, tips, and other comp." This is the number a taxpayer uses to complete Form 1040. However, for 415 purposes (and for purposes of the various Code sections which are based on the 415 definition of compensation, such as the top-heavy rules), the plan must add back in elective deferrals.

For this purpose, elective deferrals include deferrals to:

Qualified plans

403(b) plans

457(b) plans

Salary reduction SEPs

SIMPLE IRAs

Cafeteria plans

Qualified transportation fringe benefit arrangements

Complicating this calculation is the fact that Roth deferrals are already included in income under Box 1. So, when adding back qualified plan deferrals, one is actually adding back only traditional, pre-tax deferrals.

Rather than use Box 1 and add back the deferrals, some practitioners have used Box 5, “Medicare wages and tips." This is unfortunate because there are a number of differences between Box 1 and Box 5. A difference which is currently receiving attention relates to health insurance premiums for S Corporation 2% or more shareholder-employees. Those premiums are always included in Box 1, but may be subject to an exclusion under Box 5. But there are other possible differences as well. As a result, Box 5 is not an appropriate source of compensation for retirement plans and never has been.

There are two exceptions, besides elective deferrals, to the rule that Box 1 compensation equals W-2 compensation for plan purposes:

A plan must disregard any rules that limit the remuneration included in wages based on the nature or location of the employment or the services performed. So, even if a foreign subsidiary pays an individual for work outside the United States and is not required to give the individual Form W-2, a plan must count the compensation which would have been reportable on a W-2.
A plan has the option to exclude amounts the employer pays or reimburses for an employee’s moving expenses if, at the time of the payment, it is reasonable to believe that the employee can deduct these amounts under Code §217. Such an exclusion would need to appear in the plan document itself.

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:401khelpcenter.com & relius.net

The Impact of Automatic Enrollment on 401(k) Match Rates: A Methodological Note

2010-02-10T13:21:00.000-08:00

Here is a great article written by Barbara A. Butrica and Mauricio Soto:

Automatic enrollment in employer retirement savings plans has received considerable attention recently since behavioral studies show that workers are more likely to participate in their employer’s plan if automatically enrolled. And increased participation means more workers likely will retire with some pension savings. However, our recent study “Will Automatic Enrollment Reduce Employer Contributions to 401(k) Plans?” raised the question of how employers will pay for these additional compensation costs.

Our paper offers three hypotheses: (1) firms leave pension and other compensation arrangements unchanged, thereby increasing total compensation paid to workers; (2) firms reduce nonpension compensation to keep total compensation at the same level before autoenrollment was introduced (for example, by reducing wages or other benefits); or (3) firms reduce the match offered to workers to offset the increase in costs. Using data from 2007 Form 5500 filings, we find some evidence to support the third hypothesis. Controlling for size, industry, and other characteristics, we find that employers with autoenrollment seem to have lower match rates than those without autoenrollment. While this result is intuitive to us and describes a seemingly rational response by profit-maximizing firms, we also explore other explanations. We do not, however, have information on how nonpension compensation might be changing, so for us to comment on the generosity of plan sponsors is impossible.

More recently, an advance summary of a forthcoming brief from the Employee Benefit Research Institute (EBRI) reports that 225 large plans implementing automatic enrollment between 2005 and 2009 had higher match rates in 2009 than in 2005, suggesting that employers may have increased pension contributions over the period. While EBRI’s results seem to conflict with ours, it is not clear that they do. The two studies measure different concepts—ours measures the ratio of employer to employee contributions for a sample of 826 large 401(k) plans and the EBRI study measures the change in the potential match rate for a sample that includes switches from defined benefit to 401(k) plans. The studies also use different time frames.

Further research is needed to better understand the decisionmaking of plan sponsors. Ideally, researchers would have a large sample of 401(k) plans reporting match rates before and after automatic enrollment to understand employer responses. The question of how employers respond to automatic pension enrollment is an important element of the debate over how to increase retirement income savings for all Americans.

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: Barbara A. Butrica and Mauricio Soto, 401khelpcenter.com, and (EBRI) urban.org

Some Considerations When Reinstating Your 401k Match

2010-02-09T16:03:00.000-08:00

Here is an article written by Rick Meigs - President of 401khelpcenter.com

Charles Schwab notes that as our economy begins to show signs of improvement, one of the most difficult decisions many companies will struggle with is whether or not the time is right to reinstate the 401k match. While there is no question that matching contributions were a serious casualty of the recession, Schwab has found that anywhere from one-third to one-half of firms that stopped or reduced their contributions are thinking about reinstating them during 2010.

As companies begin to evaluate their programs to reinstate the match, below are several key areas that employers should pay particular attention to:

Benchmarking Around Peers and Goals
Employers should compare its plan match formula and overall structure to others in their industry, including similar sized companies and those in their geographical region to see if their retirement plan is still competitive and properly designed to attract the candidates it considers desirable.

Breaking Down Demographics
By breaking down plan participants by their salary level, years of service, position and age, employers can observe participation and savings rates for each category. This will allow firms to better identify any weak spots that need shoring up.

The Plan's Match Ceiling
Schwab's research shows that employees will most often set their deferral rate at the plan's "match ceiling"- the amount of salary they must defer to receive the maximum employer matching contribution. Employers should reset to a higher match ceiling to encourage employees to save more.

Investment Education
The reinstatement of the match is also a great time to rethink other key aspects of a 401k plan. Employers should take the opportunity to remind employees about other strong features of its plan including free advice sessions and workshops, target date fund options that make diversifying and rebalancing easier, or a Roth 401k plan option. Schwab has found that on average, employees who receive consultations more than double their savings rates because they feel more confident about investing and are happier with their plan.

Automatic Savings Rate Increases
While auto-enrollment is increasing in popularity, far fewer companies take an important next step: automatically raising participants' deferral levels each year. For employers this can be a particularly smart move as auto-enrollment plans usually start participants off at a relatively low deferral level and an annual bump-up can help put employees on a stronger path to a more secure retirement.

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: 401khelpcenter.com/Rick Meigs

Brand Name Consultant vs. Independent Advisor

2010-02-08T15:24:00.000-08:00

Check out this insightful article written by Thomas B. Bastin:

There is a legitimate question in the minds of many as to whom they should be working with to assist in the management of their retirement program. The easy way out is to go with a large brand name consultant or financial institution. After all if they are large and branded they must be competent, right? That is an assumption rather than a careful consideration of what service is actually being offered. In order to answer the real question titled above you must first understand your responsibility/options, and then understand the industry.
ERISA dictates that any person responsible for making decisions impacting ERISA plans are labeled plan fiduciaries.

There are four duties imposed on qualified retirement plan fiduciaries under ERISA Section 404(a)(1):

- First is the duty of loyalty identified as operating in the sole interest and for the exclusive purpose of the plan and participants (ERISA Section 404(a)(1)(A)).
- Second, the duty of prudence (ERISA Section 404(a)(1)(B)).
- Third, the duty of diversification (ERISA Section 404(a)(1)(C) and (4).
- Fourth, the duty to adhere to plan documents (ERISA Section 404(a)(1)(D)).

Let us begin by focusing on the second duty of prudence. You often hear people state that in managing a retirement plan one should act as a "prudent man" would. Prudence is code for process. A proper process involves parties that possess the required expertise and accept liability for their actions. The Department of Labor on their website has stated that LACKING investment expertise, a fiduciary WILL WANT TO HIRE someone with the professional knowledge necessary to carry out the investment & other functions. ERISA has even included a safe harbor definition of a "prudent expert" to be either:

(1) A Registered Investment Advisor
(2) A Bank
(3) An Insurance Company

These three "entities" qualify as prudent experts provided the "entity" accepts liability in writing for the advice of their staff. Thus, consulting firms and individual brokers fall outside of the prudent expert safe harbor and as a result the plan sponsor must document their expertise to justify the service provided. The key fact to recognize here is the government expects a prudent expert to accept fiduciary liability in writing for their advice (a safe harbor requirement). Hiring a consultant who refuses to accept liability runs contrary to the government definition of a prudent expert. The first question to ask a consultant is if they do not qualify as a prudent expert how can you possibly have implemented a prudent process that relies upon their service (remember they provide no advice)?

In the hiring of a prudent expert plan sponsors can reduce their liability for the management of plan assets in two ways:

(1) Appoint a co-fiduciary who accepts liability in writing to assist the plan investment committee in creating an investment policy statement, establishing proper criteria for fund selection, retention and removal, and making written recommendations for the committee to consider when making investment decisions. This will aid the committee in reducing liability by establishing and documenting that a prudent process was followed with the assistance of a prudent expert. The plan sponsor retains ultimate authority over the investment options offered to participants.

Potential Result: In a litigious situation, members of the investment committee retain personal liability for their actions with respect to the investment decisions made.
Potential Result: In a litigious situation, members of the investment committee will be called to testify regarding their investment expertise and decisions made along with the Advisor.

(2) Appoint a Registered Investment Advisor will to accept status as an ERISA Section 3(38) Investment Manager via a written agreement to take over the selection, monitoring and replacement of investment options offered to participants. This option provides the most protection to plan sponsors as their duty shifts from participating in investment decisions to monitoring that the Advisor has followed their stated process for making investment decisions. Ultimate authority for investment decisions lies with the Advisor.

Potential Result: In a litigious situation, members of the investment committee will be called to testify regarding their actions in monitoring that the Advisor followed their stated process. No investment expertise is required to monitor that someone else follows their own stated process. One simply has to review the work product.

Potential Result: In a litigious situation, the Advisor will be called to testify regarding their investment expertise and decisions made. Who do you want on the stand answering these difficult questions an investment expert or a committee member? Who would you want on the stand dealing with prudent process questions an ERISA expert or a committee member?

There is a third option which is to hire a brand name consultant that fails to accept liability for the services provided. Not only would your committee members have to defend their investment decisions for which they lack expertise, but they would also have to defend the decision of using the services of a person who is not considered prudent under the Government's Safe Harbor Definition. The question that really needs to be asked, which surely the plaintiff's lawyer will ask the jury, is why didn't you hire a prudent expert? What will your answer be? I find it unlikely the jury will be as impressed with the brand name credential as you are. Especially when that brand name consultant takes the stand and disavows any and all responsibility for the service they have provided. In fact, a former partner for a large brand name consultant recently disclosed that they were forbidden from ever entering into a services contract of any kind with clients for fear they would actually have to identify the service being provided. I have to think that wouldn't look good to a jury when you testify the brand name assisted with your prudent process yet you failed to even enter into a services agreement with them. Add this to your good friend the consultant looking like an Olympic gymnast jumping from your side of the table to the other safe side where non-fiduciaries congregate and you have some real issues to overcome.

Why not just serve as a fiduciary and prevent guys like me from making this an issue? Brand Name Consulting Firms with big dollar budgets can just as easily buy E&O insurance to cover the liability as I have done. For that answer we need to go back to the first duty which is loyalty. As a plan fiduciary every decision made has to be for the sole purpose and in the exclusive interest of the plan and participants. No conflicts of interest can exist. As you might suspect the reason for refusing to become a plan fiduciary has nothing to do with the liability and everything to do with their refusal to avoid conflicts of interest. Think about the players in this industry and the conflicts they might deal with.

• Brand Name Consultants - In the past we have seen consultants recommending vendors which they had direct financial interest in, or indirect via other consulting, soft dollar or pay to play arrangements. Some Consultants are so large, and the conflicts so numerous, they could never operate solely and for the exclusive purpose of the plan and participants.
• Banks & Mutual Fund Companies - It would be a little tough to have any other banking business with a client and also serve as a plan fiduciary. In addition, it would be impossible to stuff the retirement plan with proprietary funds and still serve as a plan fiduciary. Finally, it would be forbidden to retain revenue sharing without disclosing to the client and still serve as a fiduciary.
• Brokerage Houses - Quite impossible to negotiate undisclosed kickbacks from retirement plan vendors in return for offering their products to the brokers and also serve as a fiduciary. Also forbidden to offer high payouts to brokers who place proprietary funds inside retirement products and still serve as a fiduciary.

Discovery can be a powerful weapon in the hands of the plaintiff's bar. They can find conflicts you would never be privy to. The prudent process you thought was implemented can just as easily be turned around to demonstrate your lack of prudence in hiring vendors. Once you lose the jury via a vendor's conflict you have probably lost the case.

As I tell all potential clients you must implement a prudent process that will stand up in court. However, the decision on whether to hire a consultant or independent advisor is really quite easy. You should identify those services desired then seek the appropriate vendor. For instance will they provide the following?

• Serve as a Section 3(38) investment manager accepting liability in writing,
• Provide an investment policy statement with stated criteria for selecting, monitoring and replacing investment options,
• Identify appropriate asset classes to offer participants,
• Provide Quarterly Investment Reviews, document issues for investments on the watch list and replace funds that fail to meet stated criteria,
• Document annually you adherence to stated fiduciary practices,
• Support stated fiduciary practices with case and regulatory law,
• Provide full fee disclosure and transparency with annual reporting,
• Serve as your Section 404(c) fiduciary and provide an annual 404(c) checklist documenting your adherence to this code section thereby shifting liability for participant investment decisions away from the plan sponsor and to participants,
• Provide an annual vendor stability report so you can be comfortable you assets are safe (have you ever looked into the stability of your vendors),
• Provide ERISA consulting and M&A services as desired,
• Serve as the quarterback to your plan answering all plan related questions.

You can have all of this OR you can hire a consultant with the brand name and do it yourself. Just as it would be easy for the large brand name firm to buy E&O insurance and provide these services it would be just as easy for myself to join the brand name. Unfortunately for those reasons listed above neither will happen. They are unwilling to forgo the conflicts and I am unwilling to provide substandard service with no advice.

I can understand why someone would find comfort in a brand name. My problem has always been the focus is on the wrong brand. Rather than the name of entity your Advisor works for you should be investigating the brand behind the E&O policy which backs up their advice. That is the "only" brand name offering you protection!!! Honestly, what value does a brand offer if they refuse to stand behind their service? To answer the titled question what is the difference between a brand name consultant vs. an independent registered investment advisor: "The Advisor works as your Head Coach calling plays and accepting responsibility while the consultant sits in the stands chirping and second guessing without ever becoming a member of your team".

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: 401khelpcenter.com

Participating in a Retirement Plan: Gender Differences

2010-02-04T15:53:00.000-08:00

How does gender affect the likelihood of participating in a retirement plan?

Below is a great article written by John MacDonald:

The November 2009 EBRI Issue Brief, published by the nonpartisan Employee Benefit Research Institute (EBRI), provides answers to these and other questions. Here are some of the key findings concerning race/ethnicity differences in employment-based retirement plan participation in 2008:

Overall, female wage and salary workers ages 21-64 participate in a retirement plan at a lower level than males did.
However, among full-time, full-year workers of these same ages, females had a higher level of participating in a plan than men: 56.2 percent for women, compared with 53.7 percent for men.
Across all of the worker status categories, females were more likely to participate in a retirement plan than males. This result had persisted since 2001, when the full-time, full-year females' participating level was slightly higher than the males' level, at 58.5 percent to 58.1 percent. This difference subsequently grew to 3 percentage points in 2007 before declining slightly to 2.5 percentage points in 2008.
Concerning earnings level, the proportion of females participating in retirement plan was higher than it was for males at each earnings level. Consequently, it appears the female workers' lower probability of participating in the aggregate was a result of their overall lower earnings and lower rates of full-time work in comparison with males.

Percentage of Wage and Salary Workers Ages 21-64 Who Participated in an Employment-Based Retirement by, Work States and Gender, 2008
Source: Employee Benefit Research Estimates from the 2009 Current Population Survey.

The complete November 2009 EBRI Issue Brief is available at www.ebri.org

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: John MacDonald & ebri.org

Obama Administration Unveils Retirement Security Initiatives

2010-02-01T15:18:00.001-08:00

A year ago, President Obama appointed a Task Force on the Middle Class. On January 25, 2010, after a year of meetings held all over the country, the Task Force gave a preview of elements of their recommendations (the full report will be released in February).

In the section on retirement security, they laid out several proposals:

Establishing Automatic IRAs

Currently, 78 million working Americans—roughly half the work force—lack employer-based retirement plans. Fewer than 60 percent of working heads of families were eligible to participate in any type of job-related pension or retirement plan in 2007. The Obama-Biden Administration will promote the establishment of a system of automatic IRAs in the workplace by requiring employers who do not currently offer a retirement plan to enroll their employees in a direct-deposit IRA unless the employee opts out. The contributions will be voluntary and matched by the Savers Tax Credit for eligible families. The Administration is also streamlining the process for employers to automatically enroll workers in 401k plans, which has been shown to boost participation, especially for low- and middle-income workers. New tax credits would help pay employer administrative costs and the smallest firms would be exempt.

Simplifying and Expanding the Saver’s Credit

The struggle to save enough to ensure a secure retirement became particularly pronounced in the wake of the recent financial crisis, which delivered a major hit to the savings on which workers rely for their retirement security. The Administration proposes to help working families save for retirement by expanding and simplifying the Saver’s Credit to match 50 percent of the first $1,000 of contributions by families earning up to $65,000 and providing a partial credit to families earning up to $85,000. The Administration will also make this tax credit refundable to ensure that millions of additional middle-income families can take advantage of it even though they have no income tax liability.

Updating 401k Regulations to Improve Transparency and Reliability

A majority of American workers rely on 401k-style plans to finance their retirements, making it critical that the 401k system be safe, transparent, and well-regulated. Even workers who save significant amounts may see their returns eaten away by fees and expenses. We need to do more to give families better choices to reach a secure retirement. The Administration is:

Improving the transparency of 401k fees to help workers and plan sponsors make sure they are getting investment, record-keeping, and other services at a fair price.

Encouraging plan sponsors to make unbiased investment advice available to workers, helping workers avoid common errors that undermine retirement security, while providing strong protections against conflicts of interest.

Promoting the availability of annuities and other forms of guaranteed lifetime income, which transform savings into guaranteed future income, reducing the risks that retirees will outlive their savings or that their retirees’ living standards will be eroded by investment losses or inflation.

Reviewing and requiring clear disclosure regarding target-date funds, which automatically shift assets among a mix of stocks, bonds, and other investments over the course of an individual's lifetime. Due to their rapidly growing popularity, these funds should be closely reviewed to help ensure that employers that offer them as part of 401k plans can better evaluate their suitability for their work force and that workers have access to good choices in saving for retirement and receive clear disclosures about the risk of loss.

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: 401khelpcenter.com

BrightScope Ratings on 401k Plans

2010-01-22T12:53:00.000-08:00

BrightScope quantitatively rates 401k plans and gives participants, plan sponsors, and advisors tools to make their plans better.

What is a BrightScope rating?
The BrightScope RatingTM is a quantitative 401k plan rating developed by BrightScope with the help of leading independent fiduciaries, finance professors and 401k experts. The BrightScope rating algorithm takes in 200+ unique data inputs per plan and calculates a single numerical score for every 401k plan in the country. The algorithm runs thousands of simulations for each plan in order to determine how quickly each 401k plan will get the average 401k participant to retirement. BrightScope believes that this rigorous approach is necessary to ensure that every factor that affects retirement outcomes - company contributions, fees, investment menu quality, vesting schedules, eligibility periods etc. - is accurately reflected in a company's rating.

The BrightScope RatingTM is designed to assist industry participants in determining the relative quality of a company's 401k plan when compared to a unique peer group of companies with employees of a similar demographic makeup. We believe that industry adoption of the BrightScope RatingTM will ultimately lead to more cost-effective plans, increased participation rates, higher employee satisfaction, and better outcomes for employees who depend on their 401k plan for retirement.

Media Coverage of BrightScope:
- The Wall Street Journal
- Business Week
- CNN Money
- USA Today
- Forbes
- CNBC

BrightScope rating of other companies’ 401k plans:
The BrightScope Rating measures the ability of your plan to get the average 401k participant to retirement and is calculated by running thousands of simulations on the plan. The "Plan Component Ratings" provide an easy-to-understand analysis of the health and performance of a 401k plan independent of its BrightScope Rating. What is your company’s BrightScope rating? Go to www.brightscope.com to find out.

Some sample ratings of local companies include:
Nordstrom 56
Amazon.com 59
Starbucks 45

BrightScope rating of our flagship 401k client:

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. The AWB 401k Plan is a defined contribution plan with a profit-sharing component and 401k feature. This plan has a BrightScope Rating of 76, placing it in the top 15% of all plans in its peer group. We are delighted to provide references for the quality of our service model. As a boutique consulting practice, we distinguish ourselves by tailoring solutions to the unique needs of our clients. Integrity Financial Corporation welcomes the opportunity to serve you. To learn more go to www.ifclegacy.com

Are You a 401k Participant? Look up your company in the search bar to see how it compares.
Are You a Plan Sponsor? Benchmark your plan against your competitors'.

Integrity Financial Corporation helps business owners and executives evaluate and make smart financial planning decisions on behalf of their business. Our firm specializes in 401k plans for local mid-size companies. Our flagship 401k client is the Association of Washington Business (AWB) in Olympia. Our state-of-the-art processes will provide greater employee satisfaction and participation, while reducing plan anxiety by the sponsors. As a boutique consulting practice, we distinguish ourselves by tailoring solutions to the unique needs of our clients. Integrity Financial Corporation welcomes the opportunity to serve you. To learn more go to www.ifclegacy.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: brightscope.com

Comparison of Roth 401k, Roth IRA, and Traditional 401k Retirement Plans

2010-01-21T16:25:00.000-08:00

Since January 1, 2006, employers have had a new retirement savings plan to offer their employees--the Roth 401k plan, which combines features of Roth IRAs and traditional 401k plans.

The plan, commonly referred to as a "Roth 401k," is a hybrid that combines features of Roth IRA and traditional 401k plans but differs in important aspects. Some of the differences and similarities are outlined below.

Employees who already have a regular 401k plan can participate in a Roth 401k if the employer offers it. However, as of April, 2009, the combined total contributions cannot exceed the Internal Revenue Service limit set for individual plans--that is, $16,500 (or $22,000 for employees aged 50 or over). An employee who participates in both plans can designate the amount to be applied to each plan. Once a decision is made, the participant cannot switch money among the plans. (Roth 401k participants who change employers can roll over the proceeds into a Roth IRA.)

If an employer provides a matching contribution to a Roth 401k, two accounts are set up for each participant. The first contains the employee’s after-tax contributions that will be distributed tax free. The second account contains the employer’s before-tax contributions and any investment growth; these funds are taxable when distributed.

The National Compensation Survey (NCS) publication "Employer Costs for Employee Compensation" presents employer costs data for various employee benefits. Currently, information is available for defined contribution retirement plans that includes data for traditional 401k plans. When the NCS encounters the new Roth 401k plans, they will be included as defined contribution plans in the NCS benefits incidence and provisions estimates.

Roth 401k plan
- Employee contributions are made with after-tax dollars.

- Investment growth accumulates without any tax consequences.

- No income limitation to participate.

- Contribution limited to $16,500 in 2009 ($22,000 for employees 50 or over).

- Withdrawals of contributions and investment growth are not taxed provided recipient is at least age 59½ and the account is held for at least five years.

- Distributions must begin no later than age 70½. (This may change.)

Roth IRA

- Employee Contributions: Same as Roth 401k plan.

- Investment Growth: Same as Roth 401k plan.

- Income limits: married couples, $176,000, singles, $120,000 adjusted gross income.

- Contribution limited to $5,000 in 2009 ($6,000 for employees 50 or over).

- Withdrawals of contributions and investment: Same as Roth 401k plan.

- Distribution: No requirement to start taking distributions.

Traditional 401k

- Employee contributions are made with before-tax dollars.

- Investment growth is not subject to Federal and most State income taxes until funds are withdrawn.

- Same as Roth 401k plan. No income limitation to participate.

- Contribution Limit: Same as Roth 401k plan.

- Withdrawals of contributions and investment growth are subject to Federal and most State income taxes.

- Distributions: Same as Roth 401k plan.

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: John E. Buckley and 401khelpcenter.com

Ten Fiduciary Duties

2010-01-15T16:08:00.000-08:00

At the 2005 ASPPA 401k Summit, Marilyn Colister, National Director of Regulatory Policy for Great-West Retirement Services, spoke on the topic "Fiduciary Responsibility in the Spotlight." Ms Colister made the point that few plan sponsors really understand their fiduciary duties and responsibilities, but because of a number of factor including the recent corporate and mutual fund scandals, class action lawsuits and a new focus by the Department of Labor and Internal Revenue Service on a number of issues including fees, plan sponsors need to be more vigilant. They also should take proactive steps to ensure that all plan fiduciaries have a good understanding of their obligations in overseeing the companies retirement plans.

Here is a general overview of fiduciary duties and responsibilities. It is not intended to be a detailed or comprehensive list, but it will give you a starting point in understanding the issues.

A fiduciary must act solely in the best interests and for the exclusive benefit of plan participants and beneficiaries.
Must defray plan expenses in a reasonable manner. This implies that a fiduciary knows what all the plan expenses and costs are.
Must comply with all plan documents and all applicable federal and state laws and regulations. This implies that fiduciaries will become familiar with them.
Where a fiduciary is unsure of their expertise, they have a duty to seek the advice of experts and carefully evaluate the advice given.
A fiduciary may not engage in certain transactions with parties providing services to the plan such as the sale or leasing of property, lending of money, furnishing goods, services or facilities, or the transfer or use of plan assets.
Self-dealing is prohibited and therefore a fiduciary cannot use their position for personal gain.
A fiduciary may not act on behalf of any party whose interests are adverse to the interests of the plan or the plan participants.
A fiduciary must act with the care, skill and diligence that would be exercised by a reasonably prudent person who is familiar with such matters.
Fiduciaries have an affirmative duty to diversify plan investment options.
A fiduciary has an obligation to prudently select investment options for the plan, as well as an obligation to periodically evaluate the performance of such vehicles to determine, based on that evaluation, whether the vehicles should continue to be available as participant investment options.

Employee Education and Participation

2009-12-15T10:00:00.000-08:00

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.

Remember the unsettling 1968 horror movie, “Night of the Living Dead”? Despite the grainy black and white low-budget production, the film was then and continues to be, desolately disturbing because it taps into the uncertainty and anxiety that we all feel when faced with unaccountable terrors. Recent research confirms that today’s workers are experiencing plenty of terrors, not those of George Romero’s classic film perhaps, but the ghouls of financial stress which keep them awake at night and distracted during the day.

What’s the impact on you - the Plan Sponsor, and what can you do about it?

If many of your workers are struggling to concentrate on the job at hand and functioning at less than optimum capacity, the damage to personal lives and business productivity is a serious one. But you as Plan Sponsor are in the unique position of being able to address these issues for your employees. Consider offering a series of Financial Literacy workshops in which employees are given the tools to budget and plan in a more disciplined manner, figure out their credit scores, understand the principle of compounding and how interest rates work.

Financial Literacy means being educated in matters of money, and American workers are proving to be seriously financially illiterate. Workers are not taught how to budget by their families or their high schools or colleges, leaving most (with the exception of those few with the resources and determination to teach themselves) absolutely ‘at sea’ when it comes to even the most basic economic concepts. And these concepts have the power to shape and determine the quality of the rest of their lives. Moreover, studies show that financial illiteracy is tied to economic behavior; in other words, individuals who do not have a handle on money matters will be less inclined to participate in their company’s 401(K) or 403(b) plan. Lusardi, Annamarie and Olivia Mitchell (2008) “How Much Do People Know About Economics and Finance?”.

Financial Literacy

Here are ten components which comprise a Financial Literacy series of workshops:

How to Create a Budget/Strategies of Saving
Debt Consolidation
How to Read, Monitor, and Improve Your Credit Report
Understanding Your Company’s Retirement Plan
College Planning
The Role of Insurance in Financial Planning
Types of Mortgages/How to Qualify
Tax Issues – Homeowners, Retirement Savings, Estate Planning
Financial Issues of Divorce
Pre-Retirement Issues/When Can I Afford to Retire?

Think these are only Boomer issues? Think again. According to Thrivent Financial Survey, 66% of Generation-Xers (those born between 1960 and 1984) admit to thinking about their finances on a daily basis and nearly half, 46%, also worry about the finances of their parents and siblings. All employees, regardless of age, can benefit from one or more of these topics.

Face-to-face education

Seminars offered by professional educators have been proven most effective as long as the educator is well-versed in the details and able to de-mystify and simplify the topic. Employees deserve the opportunity to ask questions, receive answers in “English”, and engage in hands-on exercises, quizzes, tips, and step by step guides that give them the tools to planning their financial lives more effectively.

What’s the benefit to you?

Happier employees, greater company loyalty, increased productivity, perhaps even an increase in revenues. As the Plan Sponsor, you also have the opportunity to assist your employees in defeating their personal financial terrors and in doing so, contributing real lasting value to the quality of their lives.

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

Sources: 401khelpcenter.com and lovejoyassociates.com

Implementing an Automatic Enrollment Arrangement

2009-12-11T16:03:00.000-08:00

Implementing a 401(k) Automatic Enrollment Arrangement

Under most 401(k) plans, an eligible employee who does not make an affirmative election to defer salary under the plan has no contributions deducted from his or her paycheck - i.e., the employee is deemed to have elected to make no contributions to the plan. ERISA permits another option, whereby an employee who does not make an affirmative election either to contribute or opt out is deemed to have elected to make a positive contribution of X % of compensation, with the default percentage established under the terms of the plan.

Recent changes in the law under the Pension Protection Act of 2006 and regulations issued thereunder have made this type of "automatic enrollment arrangement" easier to implement and more palatable to both employers and employees. Most importantly, the law and regulations provide safe harbor investment vehicles in which the plan can deposit automatic contributions with reduced risk of a fiduciary breach lawsuit under ERISA. The law and regulations also give employees the right to a minimum 30-day decision period during which an employee can opt-out of automatic contributions before they begin; plus, in most cases, a 90-day "second-chance" opt-out opportunity whereby an employee can cancel participation and get an immediate refund of any automatic contributions made through the effective date of the cancellation.

The primary decision points for adoption and implementation of such an arrangement are the following:

1. Which employees will be subject to automatic enrollment: Any employee who does not have an affirmative election on file, or only new employees hired after the arrangement is first adopted?
2. What is the appropriate default contribution rate(s)?
3. Where should default contributions be invested until the employee exercises investment control?
4. What are the initial set-up and ongoing administrative costs?

Which Employees to Cover

An employer can specify in the plan document which employees are subject to automatic enrollment. For example, the plan could cover all eligible employees or limit automatic enrollment to non-union employees, employees in particular divisions, or employees hired after a specified date, to give a few examples.

While the regulations provide this flexibility, in our experience the decision typically boils down to a choice between the following three coverage alternatives:

Option 1: Include any employee who has not yet made an affirmative election to contribute a positive amount or zero.

* This option is feasible only if the plan can distinguish between employees who never submitted a deferral election (and thus have a zero contribution rate by default) and employees who affirmatively elected zero.
* The option has the benefit of not forcing non-contributing employees, who already signaled their decision not to contribute by submitting a deferral election of zero, to affirmatively opt out of the automatic enrollment program.
* A potential down side is that in the first year, current employees whose failure to submit a deferral election may reflect a conscious decision not to make contributions will be forced to affirmatively opt-out of automatic enrollment if they do not wish to participate.
* Another down side is that leaving current zero-electing employees out of the program will limit initial participation in automatic enrollment.

Option 2: In the first year following adoption of automatic enrollment, include all eligible employees who are not making positive contributions; thereafter, include only new hires and employees who as of each January 1 have not yet made an affirmative election either to contribute or opt-out.

* This option has the benefit that it initially extends eligibility for the automatic contribution arrangement to all employees who have not made an affirmative election to contribute a positive amount, even employees who previously elected to contribute zero. (Any employee can still opt-out.)
* Then in future years, only employees who do not have an affirmative election on file (either to contribute a positive amount or zero) are bothered with the notice and opt-out requirements. Employees who have previously expressed their wishes are left alone - just as under option 1.
* The down side of this alternative is that in the first year, current employees who may have made a conscious decision not to make contributions - either by not making a deferral election or affirmatively electing zero - will be forced to affirmatively opt-out of automatic enrollment if they do not wish to participate.

Option 3: Include only employees hired after adoption of the automatic enrollment option. Extend eligibility for automatic contributions upon hire and in each subsequent year in which the employee has not yet made an affirmative election to contribute a positive amount or zero.

* This option has the benefit of not forcing non-contributing current employees to affirmatively opt out of the automatic enrollment program.
* The down side is that leaving current employees out of the program will severely limit initial participation in automatic enrollment.

Notice and Other Requirements

The regulations require that employees covered by an automatic contribution arrangement generally be given notice at least 30 days (and no more than 90 days) before the arrangement is first implemented, and then again at least 30 days before the beginning of each plan year. For new employees, the notice must be provided as soon as practicable (which can be after the employee has commenced employment, but before any automatic paycheck withholding would go into effect).

The notice need only be provided to employees who will be deemed to have made a contribution election if they do not make an affirmative election to participate or opt-out. After the first year, this generally would include any new employees and employees who did not have an affirmative deferral election on file with the plan.

Once notice is provided, an employee must be given a reasonable amount of time to make an affirmative election to select his or her preferred deferral rate or to opt out. Automatic paycheck withholding (for employees who fail to make an affirmative election) generally should not begin until about 30 days have passed from the notice date.

Default Contribution Rate

The default contribution rate for employees who do not opt-out generally must be a uniform percentage of pay for all employees subject to automatic enrollment - e.g., 3% of pay for all covered employees. However, plans are permitted to have different default rates for union vs. non-union employees, for different unions, and for different "qualified separate lines of business."

It is also permissible to have graduated rates - e.g., 1% in the first year, 2% in the second year, 3% in the third year, etc., maxing out at 10% in the tenth year. Other variations are permitted as well, though certain "uniformity" standards apply.

Default Investment

An employee who neglects to affirmatively elect to make 401(k) contributions or opt out will likely not provide instructions as to how his automatic contributions will be invested within a plan. Accordingly, plans need to designate a default investment or investments. The regulations provide three "safe harbors" which, if utilized, generally shield plan fiduciaries from claims of fiduciary breach related to the performance of the investments.

Two of the safe harbors are not available under most plans and may be costly and/or controversial to implement. Safe harbor one is a so-called "life-cycle" or "target-date" fund. Another safe harbor is to offer professional management of each employee's account, the manager aiming for an optimal allocation for each participant's investments among the plan's various investment offerings based on factors such as age or target retirement.

The remaining safe harbor is a "balanced" fund. Many plans have a fund that may qualify for this safe harbor, though it requires close examination to be sure. One of the requirements for a safe harbor balanced fund is that the selected fund reflect "a target level of risk appropriate for participants of the plan as a whole," taking into account the demographics of the participant population, at a minimum. A plan's existing balanced fund offering would have to be analyzed to determine if it satisfies this standard.

Following the recent stock market collapse, some investment advisors and policy-makers have been critical of the three regulatory safe harbors. As a result, some plans have been considering default investment options that do not meet one of the safe harbors, such as money market or stable value funds. Although these options do not automatically shield plan fiduciaries from fiduciary risk, the potential exposure is likely quite low. A compromise position might be to use the plan's money market fund for the first 120 days of a participant's initial contribution under the automatic contribution arrangement, with assets shifting to the balanced fund thereafter. Indeed, the regulations provide a safe harbor for this structure.

Optional Design Features

More complex designs are permitted under the regulations, and some come with "rewards" in the form of relief from specific rules with which a 401(k) plan must comply. For example, if the default contribution rates meet the standards for a "qualified" automatic contribution arrangement, the plan is excused from annual ADP/ACP nondiscrimination testing (comparing average deferral rates for highly-paid and non-highly-paid employees). To qualify for this testing exclusion, the minimum automatic deferral percentage is 3% for the first full plan year and increases by 1% for each of the three succeeding plan years, up to 6%. Furthermore, the employer would be required to provide either matching or nondiscretionary contributions to all non-highly compensated employees. The minimum match is 100% of the first 1% deferred and 50% of the next 5% deferred, for a total contribution of 3.5% for participants who defer at least 6%. The minimum employer contribution (the alternative to the matching contributions described above) is 3%, regardless of the deferral amount. Matching or company contributions must be 100% vested after two years of service. This structure is more generous than currently provided under many plans.

Another available design option is to apply the automatic contribution feature to each employee every year - so that employees would have to either make a new affirmative deferral election each year or be subject to the applicable default contribution rate. The regulations would reward this design by giving the plan an extra 3 ½ months to refund any discriminatory deferrals made by highly-compensated employees during the year. Unless the plan frequently fails the ADP/ACP test, requiring refunds or other correction strategies, this hardly seems worth the inconvenience of requiring every employee to renew his or her contribution election each year or be defaulted into the plan at the automatic contribution rate.

Plan Amendment and Qualification

Ideally, an automatic contribution arrangement should be implemented as of the first day of a plan year - e.g., January 1, 2010. To encourage employers to adopt automatic contributions in 2010, the Treasury Department on September 5, 2009 released sample amendments to streamline the adoption and implementation process. If an employer uses the sample amendments, modified to the extent necessary to reflect plan-specific design choices, the amendment will be deemed to have received IRS approval even in the absence of a determination letter specifically addressing the amendment. See IRS Notice 2009-65.

If it is not feasible to implement automatic contributions by January 1, 2010, the regulations provide a roadmap for a mid-year implementation. The Treasury sample amendment can be used for mid-year implementations to the same extent as January 1 adoptions.

Administrative Costs

Initial set-up and ongoing administrative costs can be determined in consultation with the plan's administrators. Many 401(k) third-party administrators have already programmed their systems to accommodate automatic enrollment, which should reduce implementation costs significantly.

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

Source: 401khelpcenter.com/www.ipbtax.com

The Tax Benefits of Equity-Indexed Universal Life Insurance

2009-12-04T16:55:00.000-08:00

The Tax Benefits of Equity-Indexed Universal Life Insurance

The main emphasis of having life insurance for individuals and their families is to help replace income that is lost, provide death benefits, and an overall protection of family members from the losses possibly resulting from the death of the insured individual. Equity-indexed life insurance offers many additional benefits by way of tax advantages, unique to that of life insurance.

When it comes to speaking about life insurance, there are two typical categories to be discussed. The first is term insurance. Term insurance provides what is known as "pure" insurance protection. This type pays beneficiaries a death benefit if the insured individual is to die during the policies term. On the contrary, if the insured individual lives, the policy will expire without any value at the end of the given term. In many cases, the individual can choose to renew the policy for an addition term. Usually, this decision will carry a higher premium.

The second category and type of life insurance policy is typically known as "permanent" or "cash value" life insurance. Included in these policies are whole life and universal life as well as others. A policy such as this is typically designed to provide the insured with long-term life insurance coverage, usually for the insured's entire life.

This option also features a flexible premium as well as the opportunity to accumulate cash value. This is available to the owner of the policy through policy loans and alternative options. These options reduce the death benefit.

The Advantages

Among financial products, life insurance holds a unique status. The tax benefits of life insurance are:

No current income tax on interest or other earnings credited to cash value. While the cash value accumulates, it is not subject to current taxation.

No income tax penalty if you choose to borrow cash value from the policy through loans. Typically, loans are seen and treated as debts, not as taxable distributions. With this option, it can give you practically unlimited access to cash value on the basis of tax advantage. In addition, the loans do not need to be rapid. Over time, after a sizable amount of cash value has accumulated, it can systematically be borrowed against to help supplement retirement income. In many cases, you may never pay even one cent of income tax on the gain.

*There are several cautions regarding policy loans: First, loans are charged interest and policy loans can reduce the overall value of the policy. Second, the cash value can be potentially subject to income taxes if/when there is a withdrawal from or surrender of the policy. The same situations applies if a certain ratio of death benefit to cash value is not maintained. Third, if the policy is a modified endowment contract, the loan may be taxable.

The policy holder's heirs pay no income tax on the proceeds. Beneficiaries will receive death benefits completely free of income taxation.

You can avoid potential estate taxes and probate costs on policy proceeds, as long as the beneficiary designations and policy ownership are arranged in accordance with current law. For instance, if you own your policy at the time of your death or make your estate the beneficiary, the policy proceeds will generally be included in your estate at death. This can increase the value of your estate, triggering estate taxes. This situation may be avoided, however, by placing ownership and naming beneficiaries outside your estate. If the policy is structured properly, proceeds will not be included in your estate. However, to avoid estate inclusion for existing policies, the policy must be transferred more than three years before your death. Consult your tax and legal advisors regarding your particular circumstances.

Equity-indexed universal life insurance is unique among typical financial products. It provides protection of death benefits as well as potential for attractive tax advantages. For more information these benefits listed as well as other benefits of cash value life insurance and details about the best way to arrange your policy beneficiary and ownership designations, consult your attorney and your advisor at Integrity Financial Corporation.

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

Why You Should Consider Making Changes to Your Company's Qualified Retirement Plan for 2010

2009-12-01T16:00:00.000-08:00

With the holidays approaching and the New Year around the corner, now is an ideal time to consider making necessary changes to your company’s qualified retirement plan for 2010. As a boutique 401(k) advisory firm, we are quite familiar with the different strategies small business owners might implement at this time. There was some sweeping legislation and pension reforms passed in 2006 that impacts qualified plans, and would necessitate a more in-depth review if that has not happened in the last couple of years.

When you couple the current monetary and fiscal policy decisions with the volatility of the stock market in the last two years, only a fraction of the retirement plans that I come in contact with are maximizing the tax benefits that are available under the Internal Revenue Code, and have sound investment strategies that include hedges against a weakening dollar.

Here are a few thoughts from my desk to yours:

1. Make sure that your current retirement plan has investment options that include inflation hedges (like TIPS or Commodities) and a wide array of USD hedges (like global funds).

2. Take advantage of after-tax investments (as a tax hedge) such as Roth 401k, as it is fairly predictable that future taxes will likely be higher than they are now.

3. If you have a SIMPLE IRA consider adopting a 401k plan on January 1. You cannot change in the middle of the plan year, so if you don’t make the change now, it will be another year before you can. A SIMPLE IRA or a SEP IRA do not have a Roth component.

4. If you need access to your retirement account money for a short-term fix, set-up a 401k and roll your IRAs into the plan and take a loan from your account with no penalties or tax (just remember that you will need to pay the loan back in at least 5 years).

5. If you have an IRA, consider converting part of it next year to a Roth IRA, as the income limitations are removed for 2010…particularly if we see a downward slide in the markets between now and then.

The national debt just crossed $12,000,000,000,000, and our deficit spending is looking to nearly double that over the coming decade. The unfunded obligations of Social Security, Medicare, and Medicaid are staggering. There is more to comment on here, but I would say that today’s small business owner must use prudence in their tax, investment, and legal planning to ensure a legacy for their families and friends. Integrity Financial Corporation helps business owners evaluate and make smart financial planning decisions on behalf of their business. Visit our website at www.ifclegacy.com.

Source: 401khelpcenter.com

Business Financial Planning | Strategies: 401(k)

2009-11-17T15:04:00.001-08:00

Ensuring the profitability of your business requires substantial time and hard work. Integrity Financial Corporation helps business owners and executives evaluate and make smart financial planning decisions on behalf of their business. Our firm specializes in 401k plans for small to mid-size companies. Our flagship 401k client is the Association of Washington Business (AWB) in Olympia.

The IFC Retirement Plan Solution
Integrity Financial provides a unique and comprehensive 6-Step retirement plan solution for your company:

• Step 1: The Retirement Plan Evaluator: Our easy-to-use tool provides you with an evaluation of your company’s retirement plan objectives and concerns and an analysis of other plan solutions. We’ll also discuss and review funding strategies for fee administration.
• Step 2: The Retirement Plan Optimizer: We conduct a feasibility study to help maximize the tax benefits of your retirement program for both your company and your employees.
• Step 3: The Fiduciary Shield: Meeting your fiduciary responsibilities can be a complex process. We help control risk by developing a formal investment policy statement and establishing clear criteria for selecting and monitoring investment managers.
• Step 4: The RFP Manager: We’re on your team. We’ll sit on your side of the negotiating table to walk you through the RFP (request-for-proposal) process, manage the flow of information, analyze and review proposal and guide you in making an informed and knowledgeable decision.
• Step 5: The Educational Experience: We manage every step of the transition form your current retirement program to your new program. We enroll your employees and educate them on the benefits of their new program. We’ll ensure their satisfaction through quarterly, semi-annual and annual education and financial planning seminars.
• Step 6: The Wealthcare Monitor: We’ll manage the health and welfare of your retirement program over its lifetime, advising you on regulatory changes, program enhancements and investment due diligence on a quarterly or semi-annual basis.

The IFC Retirement Plan Solution Value
Engaging an independent 401(k) advisor to help you navigate through the complexities of the qualified retirement plan landscape has proven invaluable to our clients. Our value is best articulated as follows:

• Boutique Firm that provides Objective and Unbiased 401(k) Consulting
• On-site Financial Planning and Advice for Participants
• Fiduciary Best Practice Solutions
• Proficient Selection of Investments to include in your Plan
• Customized and Sophisticated Plan Design
• Personalized Support for HR Manager
• 56 Point Annual Plan Inspection
• Retirement Plan Benchmarking related to your Industry
• On-site Enrollment and Educational Services
• Partnership in Creating an Investment Policy Statement

Our state-of-the-art processes will provide greater employee satisfaction and participation, while reducing plan anxiety by the sponsors. As a boutique consulting practice, we distinguish ourselves by tailoring solutions to the unique needs of our clients. Integrity Financial Corporation welcomes the opportunity to serve you, and we look forward to a long and rewarding relationship with you.

Retirement Security: Importance of an Independent Investment Adviser

2009-11-13T16:27:00.000-08:00

Comments to the U.S. House of Representatives
Committee on Education and Labor
Subcommittee on Health, Employment, Labor and Pensions

Retirement Security: The Importance of an Independent Investment Adviser

Now more than ever, American need access to independent and professional investment advice as they manage their 401(k) plans. As demonstrated during the past year, the consequences of concentrated investments, made without regard to risk tolerance or investment horizeon, can be dire for participants and beneficiaries who often lack access to professional, prudent investment guidance.

Department of Labor Investment Advice Regulations

ERISA and the Internal Revenue Code generally prohibit plan fiduciaries from rendering any investment advice to plan participants and beneficiaries that would result in the payment of additional fees to the fiduciaries or their affiliates. The Pension Protection Act of 2006 (PPA) provided a statutory prohibited transaction exemption to the rule (codified at ERISA 408(b)(14) and 408(g) and IRA 4975(d)(17) and 4975(f)(8)] for certain transactions that may occur in connection with the provision of "eligible investment advice" by a "fiduciary adviser," subject to specific requirements. In particular, the final PPA investment advice provision allowed two speific permissible investment advice exceptions: (1) certain "fee-leveling" arrangements; or (2) certified computer model arrangements.

Independent Investment Advice Legislation

With the growth of participant-directed individual account plans, the importance of investment advice to participants and beneficiaries of retirement plans has become increasingly clear. The majority of Americans are not experts on how to appropriately invest their retirement savings. However, due to the shift from defined benefit to defined contribution plans, many Americans are required to do just that.

ASPPA, CIKR and NAIRPA believe that working Americans should not have their retirement assets exposed to conflicted investment advice where the adviser has a financial interest in what investment choices to recommend. Instead, American workers should have access to independent investment advice provided by qualified advisers.

We comment Chairman Andrews for his past leadership in support of independent investment advice for plan sponsors and participants. Legislation providing a safe harbor for plan sponsors with respect to independent investment advice provided to plan participants would be a significant step towards encouraging plan sponsors to make available independent advice.

One of the challenges is encouraging independent advice is to define what constitutes an independent advisor. NAIRPA has developed a criteria for membership that we believe could serve as a model for providing independent advice. Specifically, a member firm:

Does not receive compensation for retirement plan advisory services that varies with the investments selected by the plan sponsor or participants

Agrees in its engagement letters to serve as a plan fiduciary with respect to all plans for which it serves as a retirement plan advisor;

Agrees to clearly disclose all fees expected to be received in connection with retirement plan advisory services in advance of any engagement and all such fees actually received at least annually thereafter;

Is either a federally or state regulated registered investment advisor; and

Is not directly or indirectly part of a controlled group that includes a financial services firm (i.e., an investment manufacturer).

Encouraging plan sponsors to base plan investment offerings on independent advice, and making independent advice available to plan participants, would be a major step forward in securing America's retirement.

Summary
During these difficult economic times, Americans need access more than ever to independent and professional investment advice. ASPPA, CIKR and NAIRPA comment the Chairman for holding this timely hearing. Furthermore, to ensure adequate protection to participants and beneficiaries, ASPPA, CIKR and NAIRPA recommend that the DOL withdraw the Class Exemption portion of the final, DOL investment advice regulation. We also encourage Congress to consider legislation that encourages the provision of independent investment advice to retirement plans and participants.

Source: edlabor.house.gov

The Roth 401(k) plan

2009-07-21T14:31:00.000-07:00

The Roth 401(k) combines some of the most advantageous aspects of both the 401(k) and the Roth IRA. Under the Roth 401(k), employees can decide to contribute funds on a post-tax elective deferral basis, in addition to, or instead of, pre-tax elective deferrals under their traditional 401(k) plans. An employee's combined elective deferrals-- whether to a traditional 401(k), a Roth 401(k), or to both-- cannot exceed $16,500 for tax year 2009 if a participant is under 50; if they are over 50, they may contribute an additional $5,500. Employer's matching funds are not included in the $16,500 elective deferral cap, but are considered for the maximum section 415 limit, which is $49,000 for 2009. Employers are permitted to match contributions to a designated Roth account, but the matching funds must be made on a pre-tax basis, not be made into the designated Roth account, and cannot receive the Roth tax treatment. (Pub 4530)

In general, the difference between a Roth 401(k) and a traditional 401(k) is that the Roth version is funded with after-tax dollars while the traditional 401(k) is funded with pre-tax dollars. After-tax dollars represent money for which taxes are paid in the current year, and pre tax dollars are those which do not represent federal taxable income in the current year. Typically, the earnings on Roth contributions will be tax free as long as the distribution is made at least 5 years after the first Roth contribution and the attainment of age 59 and one half, unless an exception applies.

A Roth 401(k) plan will probably be most advantageous to those who might otherwise choose a Roth IRA, for example, younger workers who are currently taxed in a lower tax bracket, but expect to be taxed in a higher bracket upon reaching retirement age. The Roth 401(k) offers the advantage of tax free distribution, but is not constrained by the same income limitations. For example, normal Roth IRA contributions are limited to $5,000 ($6000 if age 50 or order); whereas, up to $16,500 could be contributed to a Roth 401(k) account, provided no other elective deferrals were taken for the tax year (no traditional 401(k) deferrals taken).

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

Best social network?

2009-06-18T10:57:00.001-07:00

What social network have you found to work best? Take our poll here - http://tinyurl.com/ml99nm

Integrity Financial Corporation helps business owners evaluate and make smart financial planning decisions on behalf of their business. Please visit our website at www.ifclegacy.com and take advantage of a free intial 401k consultation.

2009 is the Year of the Advisor - a recent article by Fred Barstein

2009-06-12T10:20:00.000-07:00

2009 is the Year of the Advisor
by Fred Barstein

With the popularity of Target Date funds and the Auto Plan as a result of the 2006 Pension Protection Act (PPA), some observers had opined that advisors would become less important in helping companies with their corporate retirement plans. If participants were automatically enrolled and fund selection is controlled by the target date providers, what would be the advisors’ role? So why are more and more plan sponsors abandoning the direct sold model and hiring advisors at an incredibly growing rate?

As shown in the chart below based on almost 20,000 surveys in 2009 and close to 3,500 in May, over 80% of DC plans with less than $100 million in plan assets indicated that they were using an independent financial advisor. Compared to last May, there’s a stunning increase trending even higher. Retirement advisors roles have changed over the years from:

Selecting the right products and vendors, to
Creating the right process with a focus on fiduciary concerns, to
Managing to the right outcome for participants and sponsors

More plan sponsors than ever realize that not only do they need an advisor to protect them from liability (process), manage costs and limit work for diminishing HR and finance staffs, participants need someone to speak to or be available to answer thorny questions, especially after the recent market meltdown, like, “What happened to my account balance?” or, “How will I ever be able to retire?”

Many of the most popular target date providers have failed their 2010 clients either out of greed, ignorance or neglect. Fewer plan sponsors are instituting automatic enrollment because they have to match up to 2.5% to qualify for the PPA’s safe harbor provisions. Bob Reynolds, CEO at Putnam Investments and architect of Fidelity’s DC business, wisely suggested at the recent 401kWire Thought Leader’s Summit in DC that all participants should be automatically enrolled and sponsors that match should be rewarded with a tax credit. But until then and perhaps even after, the notion that sponsors and participants can be guided from above without expert, human advice is ridiculous. There will always be some challenge facing sponsors and participants that only an experienced retirement advisor can answer. Clearly, more sponsors are coming to that realization and, of those selecting an advisor, more are becoming discerning buyers. Fewer sponsors are hiring family members, college roommates, golfing buddies or personal financial consultants who do not have the necessary experience realizing that these kinds of “favors” can result in disaster, especially for participants in need of answers to very difficult questions.

Integrity Financial Corporation helps business owners evaluate and make smart financial planning decisions on behalf of their business. Please visit our website at www.ifclegacy.com and take advantage of a free intial 401k consultation.

BrightScope 401k Ratings

2009-06-06T16:19:00.000-07:00

Some colleagues recently directed me to a new website that independently analyzes 401k plans from public data sources. It is most useful for plans that are above the audit point. An interesting discovery is to analyze the results for companies like: Nordstrom (52), Microsoft (80), Costco (62), Boeing (79), and Paccar (76). According to BrightScope, Nordstrom and Costco could use some improvement. The website has gained some prominence among independent fiduciary 401k advisors accross the country. www.brightscope.com How does your company's 401k plan rate?

About BrightScope
BrightScopeTM, Inc. is an independent provider of 401k ratings and financial intelligence to plan sponsors, advisors, and participants in all 50 states. Our mission is to increase the retirement security of America's workforce by bringing transparency and efficiency to the 401k plan market. We maintain a comprehensive database of information on the 401k plan market and add additional value and insight by quantitatively rating each 401k plan across critical metrics. BrightScopeTM empowers plan sponsors to quickly and accurately determine the optimal structure for their 401k plan and choose the providers that provide the most value for the fees they charge. BrightScope is the only 401k analytics firm that is truly independent and does not accept compensation in the form of revenue sharing from mutual fund companies or plan providers. BrightScope is aligned with plan sponsors and seeks to avoid conflicts that will jeopardize its ability to give its clients unbiased advice. BrightScope is not a fiduciary under ERISA.

The BrightScope Rating
The BrightScope RatingTM is an industry standard quantitative 401k plan rating developed by BrightScopeTM, Inc. with the help of leading academics and independent 401k fiduciaries. The BrightScope rating algorithm calculates a single numerical score for each 401k plan in the country after considering over 200+ individual data points in broad categories such as total plan cost, company generosity and investment menu quality. The BrightScope RatingTM is designed to assist industry participants in determining the relative quality of a company's 401k plan when compared to a unique peer group with similar demographic characteristics. We believe that industry adoption of the BrightScope RatingTM will ultimately lead to more cost-effective plans, increased participation rates, higher employee satisfaction, and better outcomes for employees who depend on their 401k plan for retirement.

The BrightScope Database
BrightScopeTM obtains some of its data from public sources such as the Department of Labor, the Securities and Exchange Commission, the U.S. Census Bureau, the Equal Employment Opportunity Commission, and the Bureau of Labor Statistics. Mutual fund and investment data are obtained from mutual fund prospectuses, statements of additional information, Form NSAR and the Center for Research on Securities Prices (CRSP). Data on 401k fees comes directly from plan sponsors who work with us to improve their plan. While all company-specific data is protected and confidential, we aggregate fee data across comparable companies to construct relevant benchmarks on fees. BrightScopeTM believes it possesses the most comprehensive private database of 401k information in the country. The company will leverage this database to provide our clients with accurate and high quality data that places them on a level playing field with their providers.

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

ASPPA's Recent Comments regarding 401k Advisors

2009-05-15T18:38:00.000-07:00

Comments to the U.S. House of Representatives
Committee on Education and Labor
Subcommittee on Health, Employment,
Labor and Pensions

Retirement Security: The Importance of an
Independent Investment Adviser
March 24, 2009

Independent Investment Advice Legislation With the growth of participant-directed individual account plans, the importance of investment advice to participants and beneficiaries of retirement plans has become increasingly clear. The majority of Americans are not experts on how to appropriately invest their retirement savings. However, due to the shift from defined benefit to defined contribution plans, many Americans are required to do just that. ASPPA, CIKR and NAIRPA believe that working Americans should not have their retirement assets exposed to conflicted investment advice where the adviser has a financial interest in what investment choices to recommend. Instead, American workers should have access to independent investment advice provided by qualified advisers. We commend Chairman Andrews for his past leadership in support of independent investment advice for plan sponsors and participants. Legislation providing a safe harbor for plan sponsors with respect to independent investment advice provided to plan participants would be a significant step toward encouraging plan sponsors to make available independent advice. One of the challenges in encouraging independent advice is to define what constitutes an independent advisor. NAIRPA has developed criteria for membership that we believe could serve as a model for providing independent advice. Specifically, a member firm:

Does not receive compensation for retirement plan advisory services that varies with the investments selected by the plan sponsor or participants.

Agrees in its engagement letters to serve as a plan fiduciary with respect to all plans for which it serves as a retirement plan advisor;

Agrees to clearly disclose all fees expected to be received in connection with retirement plan advisory services in advance of any engagement and all such fees actually received at least annually thereafter;

Is either a federally or state regulated registered investment advisor;

Is not directly or indirectly part of a controlled group that includes a financial services firm (i.e., an investment manufacturer).

Encouraging plan sponsors to base plan investment offerings on independent advice, and making independent advice available to plan participants, would be a major step forward in securing America's retirement.

Summary
During these difficult economic times, Americans need access more than ever to independent and professional investment advice. ASPPA, CIKR and NAIRPA commend the Chairman for holding this timely hearing. Furthermore, to ensure adequate protection to participants and beneficiaries, ASPPA, CIKR and NAIRPA recommend that the DOL withdraw the Class Exemption portion of the final, DOL investment advice regulation. We also encourage Congress to consider legislation that encourages the provision of independent investment advice to retirement plans and participants.

Cash Balance Pension Plans

2008-02-07T10:08:00.000-08:00

Cash Balance just might be the most exciting plan design to ever come along. It has been around for a few years but was made feasible for a small business by the Pension Protection Act of 2006. The PPA legislation actually describes it as a "Hybrid" plan. Cash balance earns this description because it has both defined benefit and defined contribution features.

Defined Benefit Characteristics:

Benefits must be definitely determinable and stated in the plan document
Contributions are required annually at the stated level
The plan sponsor assumes the investment risk (no participant direction)
Defined Benefit 415 limits apply

Defined Contribution Characteristics:

Participants have an account balance
Contributions and interest are added to the account annually
Contributions can be skewed by class to favor owners and key employees

There are a number of features related to cash balance plans that make them both easier and harder to understand. The contribution and the interest that will be credited to participants' accounts must be guaranteed by the plan. Unlike a 401(k) plan, participants do not get to direct investments in their accounts. Since the plan sponsor must guarantee the interest credit to the accounts, if the plan's investments earn less than the promised rate the employer must make up the difference. Conversely, if the plan earns greater than the promised rate the excess amount would reduce the employer's future required contributions. This is exactly the opposite of what we have become accustomed to with defined contribution plans, where the actual rate of return is exactly what is credited to the participants' accounts.

The exciting features of a cash balance plan include the fact that the defined benefit contribution limit can be used for the owner rather than the $46,000 defined contribution limit and the fact that contributions can be skewed in favor of the owner by creating classes of employees as we have become familiar with in new comparability plans. This allows us to create an "efficient" plan design by providing the maximum contribution for the owner while making lower contributions for the other employees. From a contribution standpoint, a cash balance plan can be looked at as a new comparability profit sharing plan without the $46,000 contribution limit for the owner class.

Another unique feature of a cash balance design is that a business is allowed to make the exact same contribution amount for all of the members of the "owner" class of employees. This means if we have different age owners they can still receive the same contribution amount. That is often not possible in most other plan designs, but is most often what the small business owner is looking for.

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. Or visit our website at www.ifc401k.com

2008 IRS Limits on Benefits and Compensation

2008-02-07T09:59:00.000-08:00

This is a summary of the various limitation adjustments that affect
qualified plans for Plan Year 2008:

Qualified Plan Compensation Limit $230,000

401(k) Plan
Maximum elective deferral limit $15,500
Catch-up limit (age 50 and over) $5,000

Defined Contribution
Section 415 annual addition limit $46,000

Defined Benefit
Section 415 annual benefit limit $185,000
Section 415 monthly benefit limit $15,417

Highly Compensated Definition
Compensation test $105,000

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. Or visit our website at www.ifc401k.com

What is a Defined Benefit Plan?

2008-01-28T12:56:00.000-08:00

A defined benefit plan is a pension plan. It is a "promise" of future benefits. The plan sets a specific benefit at retirement. For example, the plan may establish a benefit of "50% of salary at age 65". The salary defined may be the average of the final five years of salary before retirement. Thus, the plan is specifically targeting a set benefit and promises to supply this benefit for the life of the participant. The type of annuity benefit is also defined in the plan. It may be defined as a joint and survivor annuity with 100% of the benefit being paid to both spouses as long as they both live. It may be a "10 years certain" annuity with the benefits payable to the participant for life with 10 years of payments guaranteed even if the participant would die within the first 10 years. Various options are available including a cash payment at age 65 in lieu of an annuity payout.

The main consideration is the plan must make sure it has enough funds at any point in time to pay the benefits of all participants. To verify the plan is properly funded, an actuary must calculate the funding necessary to assure the plan benefits can be paid. The maximum benefit limit that may be promised is 100% of salary at the normal retirement age. Whatever funding is necessary to assure this benefit is allowed as a deduction for that year. There is no limit on the contribution, only a limit on the benefit funded. For the year 2006, the maximum benefit limit is 100% of salary to a dollar maximum of $175,000 annually.

A business providing a defined benefit plan must feel secure in its ability to continue funding the plan at the proper levels to assure the benefit payments to all participants. Regardless of financial circumstances, the business must fund the plan. Each year, the plan actuary verifies the plan is properly funded and this is communicated to the government in required annual reports.

A 412(i) fully insured defined benefit plan is a variation of the defined benefit plan. This type of defined benefit plan is subject to different funding requirements, which may mean a higher required contribution, level for the same benefit as a traditional defined benefit plan. The plan funding is required to be in insurance company life and annuity products that ultimately guarantee the plan benefit.

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. Or visit our website at www.ifc401k.com

The IFC Retirement Plan Solution

2007-12-31T11:56:00.000-08:00

Our firm can help navigate the complexities of the RFP process in the 401k arena. Our flagship client is the Association of Washington Business (AWB) in Olympia, of which Crane is a member. Our firm provides a unique 6 step process to providing a retirement plan solution for your company.

Stage 1: The Retirement Plan Evaluator: Our easy-to-use tool provides you with an evaluation of your company’s retirement plan objectives and concerns and an analysis of other plan solutions. We’ll also discuss and review funding strategies for fee administration.

Stage 2: The Retirement Plan Optimizer: We conduct a feasibility study to help maximize the tax benefits of your retirement program for both your company and your employees.

Stage 3: The Fiduciary Shield: Meeting your fiduciary responsibilities can be a complex process. We help control risk by developing a formal investment policy statement and establishing clear criteria for selecting and monitoring investment managers.

Stage 4: The RFP Manager: We’re on your team. We’ll sit on your side of the negotiating table to walk you through the RFP process, manage the flow of information, analyze and review proposal and guide you in making an informed and knowledgeable decision.

Stage 5: The Edu-tainment Experience: We manage every step of the transition form your current retirement program to your new program. We enroll your employees and educate them on the benefits of their new program. We’ll ensure their satisfaction through quarterly, semi-annual and annual education and financial planning seminars.

Stage 6: The Wealthcare Monitor: We’ll manage the health and welfare of your retirement program over its lifetime, advising you on regulatory changes, program enhancements and investment due diligence on a quarterly or semi-annual basis.

Our state-of-the-art processes will provide greater employee satisfaction and participation, while reducing plan anxiety by the sponsors. We are an independent advisory firm that provides business solutions in an unbiased manner. We look forward to assisting you in the RFP process for your 401k plan.

Glossary of 401(k) and Related terms

2007-09-12T14:07:00.000-07:00

The Intelligent 401k Advisor thought it would be appropriate to post a glossary of 401k and related terms...a starting point for beginners and a refresher for the experts.

401(k) Plan A defined contribution plan that permits employees to have a portion of their salary deducted from their paycheck and contributed to an account. Federal (and sometimes state) taxes on the employee contributions and investment earnings are deferred until the participant receives a distribution from the plan (typically at retirement). Employers may also make contributions to a participant's account.

403(b) Plan See Tax Sheltered Annuity (TSA).

Actual Deferral Percentage (ADP) An anti-discrimination test that compares the amount deferred by highly compensated employees to the deferrals of non-highly compensated employees.

Allocation The employer's contribution to a defined contribution plan.

Alternate Payee A person other than a plan participant (such as a spouse, former spouse, child, etc.) who, under a domestic relations order, has a right to receive all or some of a participant's pension benefits.

Annual Audit An independent audit required by federal law for all plans with more than 100 participants. It is also common to refer to a DOL or IRS examination of a plan as a plan audit.

Annual Report A document filed annually (Form 5500) with the IRS that reports pension plan information for a particular year, including such items as participation, funding, and administration.

Annuity A contract providing retirement income at regular intervals. See also Qualified Joint and Survivor Annuity

Automatic Deferral Default Percentage The percentage of pay that is deferred when an employee is enrolled in a plan through its automatic enrollment feature. The typical automatic deferral default percentage is 3% of pay. Participants can generally choose to defer an amount other than the default percentage.

Automatic Enrollment The practice of enrolling all eligible employees in a plan and beginning participant deferrals without requiring the employees to submit a request to participate. Plan design specifies how these automatic deferrals will be invested. Employees who do not want to make contributions to the plan must actively file a request to be excluded from the plan. Participants can generally change the amount of pay that is deferred and how it is invested.

Beneficiary A person, persons or trust designated to receive the plan benefits of a party participant in the event of the participant's death.

Cafeteria Plan A benefit plan offering a choice from a "menu" of cash or two or more benefits.

Cash-Out The distribution of assets from a qualified plan to a participant prior to retirement, or age 59 1/2 typically occurring when a participant has a balance under $1,000 and leaves a company without requesting to have their assets rolled over into an IRA or into a new employer's plan. Cash-outs are subject to federal withholding tax, and are subject to the 10% early withdrawal penalty if not rolled over.

Cash or Deferred Arrangement (CODA) A type of profit sharing or stock bonus plan in which employees may defer current compensation on a pre-tax basis.

Cash or Deferred Election A participant request to defer compensation, on a pre-tax basis to a CODA plan.

Cash Profit Sharing Plan A type of profit sharing plan in which the company makes the contributions directly to employees in cash or stock. (This type of profit sharing plan is taxable and is not considered a qualified retirement plan.)

Common Control Business are under common control when one entity owns at least 80% of the stock, profit, or capital interest in other organization, or when the same five or fewer people own a controlling interest in each entity.

Conversion The process of changing from one service provider to another.

Deferred Profit Sharing Plan A type of qualified retirement plan in which the company makes contributions to individual participant accounts.

Defined Benefit Plan A retirement plan in which the sponsoring company provides a certain benefit to participants based on a pre-determined formula.

Defined Contribution Plan An employer-sponsored plan in which contributions are made to individual participant accounts, and the final benefit consists solely of assets (including investment returns) that have accumulated in these individual accounts. Depending on the type of defined contribution plan, contributions may be made either by the company, the participant, or both.

Department of Labor (DOL) The U.S. Department of Labor (DOL) deals with issues related to the American workforce--including topics concerning pension and benefit plans. Through its branch agency the EBSA, the DOL is responsible for administering the provisions of Title I of ERISA.

Determination Letter Document issued by the IRS formally recognizing that the plan meets the qualifications for tax-advantaged treatment.

Discrimination Testing Numerical measurements used to determine if tax qualified retirement plans are in compliance with several regulations. Typically, the process of determining whether the plan is in compliance is collectively called discrimination testing.

Disclosure Certain types of information plan sponsors must provide plan participants to access certain types of information, including the summary plan descriptions, summary of material modifications, and summary annual reports.

Distribution Any payout made from a retirement plan. See also Lump Sum Distribution and Annuity.

Early Withdrawal Penalty A 10% penalty tax for withdrawal of assets from a qualified retirement plan prior to age 59 1/2, death, disability, or retirement. This 10% penalty tax is in addition to regular federal and (if applicable) state tax.

Eligibility Conditions that must be met in order to participate in a plan, such as age or service requirements.

Eligible Employees Employees who meet the requirements for participation in an employer-sponsored plan.

Employee Benefits Security Administration (EBSA) An agency of the Department of Labor responsible for protecting the integrity of retirement plans, health plans and other employee benefits.

ERISA A federal law that requires plan sponsors to design and administer their plans in accordance with the Employee Retirement Income Security Act of 1974 (ERISA). Among its statutes, ERISA calls for proper plan reporting and disclosure to participants.

ERISA Rights Statement A statement required by ERISA that explains participant and beneficiary rights and must be included within a summary plan description (SDP).

ESOP (employee stock ownership plan) A qualified defined contribution plan in which plan assets are invested primarily or exclusively in the securities of the sponsoring employer.

Excess Aggregate Contributions After-tax participant contributions or matching employer contributions that cause a plan to fail the 401(m) actual contribution percentage (ACP) non-discrimination test.

Excess Benefit Plan A plan, or part of a plan, maintained to provide benefits that exceed IRS Code 415 limits on contributions and benefits.

Excess Contributions Pre-tax participant contributions that cause a plan to fail the 401(k) actual deferral percentage (ADP) non-discrimination test.

Expense Ratio The percentage of a fund's assets that are used to pay its annual expenses.

Facts and Circumstances Test The test determining whether financial need exists for a 401(k) hardship withdrawal.

Fidelity Bond A bond that protects participants in the event a fiduciary or other responsible person steals or mishandles plan assets.

Fiduciary A person with the authority to make decisions regarding a plan's assets or important administrative matters. Fiduciaries are required under ERISA to make decisions based solely on the best interests of plan participants.

Fiduciary Insurance Insurance that protects plan fiduciaries in the event that they are found liable for a breach of fiduciary responsibility.

Forfeiture Plan assets surrendered by participants upon termination of employment before being fully vested in the plan. Forfeitures may be distributed to the other participants in the plan or sued to offset employer contribution.

Form 1099R A form sent to the recipient of a plan distribution and filed with the IRS listing the amount of the distribution.

Form 5500 A form which all qualified retirement plans (excluding SEPs and SIMPLE IRAs) must file annually with the IRS.

Guaranteed Investment Contracts (GICs) Accounts with an insurance company at a fixed rate of interest.

Hardship or In-Service Distribution A participant's withdrawal of their plan contributions prior to retirement. Eligibility may be conditioned on the presence of financial hardship. These distributions are taxable as early distributions and are subject to a 10% penalty tax if the participant is under age 59 1/2.

Highly Compensated Employees (HCEs) An HCE, according to the Small Business Job Protection Act of 1996, is an employee who received more than $100,000 in compensation (indexed annually) during the last plan year OR is a 5% owner in the company.

Individual Retirement Account (IRA) Personal retirement vehicles that allows a person to make annual tax deductible or non-deductible contributions. These accounts must meet IRS Code 408 requirements, but are created and funded at the discretion of the individual. They are not employer sponsored plans.

Internal Revenue Service (IRS) The branch of the U.S. Treasury Department is responsible for administering the requirements of qualified pension plans and other retirement vehicles. The IRS also worked with the DOL and the PWBC to develop Form 5500, and is responsible for monitoring the data submitted annually on Form 5500 reports.

Keogh Plan A qualified defined contribution plan permitting self-employed individuals to contribute a portion of their earnings pre-tax to an individual account.

KSOP A plan arrangement that includes both 401(k) contributions and an ESOP.

Leased Employee An individual contracted to a leasing organization that provides services for the company.

Lump-Sum Distribution The distribution at retirement of a participant’s entire account balance within one calendar year due to retirement, death or disability.

Matching Contribution A contribution made by the company to the account of the participant in ratio to contributions made by the participant.

Material Modification A change in the terms of the plan that may affect plan participants, or other significant changes in a summary plan document (SDP).

Median Market Cap An indicator of the size of companies in which a fund invests.

Money Market Fund A mutual fund seeking to generate income for participants through investments in short-term securities.

Money-Purchase Plan A type of defined contribution plan in which the employer's contributions are determined by a specific formula, usually as a percentage of pay. Contributions are not dependent on company profits.

Multiemployer Plan A pension plan receiving contributions from more than one employer contributes, and which usually is maintained according to collective bargaining agreements.

Mutual Fund A single account designed to create a diverse portfolio that may help to reduce the risk of owning individual investments.

Named Fiduciary One or more named individuals who have authority to control and manage the operations of the plan.

Nonelective Contribution An employer contribution that cannot be withdrawn or paid to the employee in cash. This contribution is neither a matching contribution or an elective contribution.

Non-Highly Compensated Employees (NHCEs) Employees who are not highly compensated. See highly compensated employees.

Non-Qualified Deferred Compensation Plan A plan subject to tax, in which the assets of certain employees (usually Highly Compensated Employees) are deferred. These funds may be reached by an employer's creditors.

Participant Directed Accounts Investment options offered to participants that allow them to choose their own investment mix.

Party-In-Interest Any individual or group having direct interest in the plan including: the employer; the directors, officers, employees or owners of the employer; any employee organization whose members are plan participants; plan fiduciaries; and plan service providers.

Pension Benefit Guaranty Corporation (PBGC) A federal agency established by Title IV of ERISA for the insurance of defined benefit pension plans. The PBGC provides payment of limited pension benefits if a plan terminates and is unable to cover all required benefits.

Plan Administrator The individual, group or corporation named in the plan document as responsible for day to day operations. The plan sponsor is generally the plan administer if no other entity is named.

Plan Loan Loan from a participant's accumulated plan assets, not to exceed 50% of the balance or $50,000, whichever is less. Loans are an optional plan feature.

Plan Sponsor The entity responsible for establishing and maintaining the plan.

Plan Year The calendar, policy or fiscal year for which plan records are maintained.

Portability This occurs when, upon termination of employment, an employee transfers retirement funds from one employer's plan to another without penalty.

Price/Book Ratio The share price of a stock divided by its net worth, or book value, per share.

Price/Earnings Ratio The ratio of a stock's current price to its earnings per share over the past year. The P/E ratio of a fund is the weighted average of the P/E ratios of the stocks it holds.

Prohibited Transaction Activities regarding treatment of plan assets by fiduciaries that are prohibited by ERISA. These include transactions with a party-in-interest, including, sale, exchange, lease, or loan of plan securities or other properties. Any treatment of plan assets by the fiduciary that is not consistent with the best interests of the plan participants is a prohibited transaction

Profit Sharing Plan A company-sponsored plan funded only by company contributions. Company contributions may be determined by a fixed formula related to the employer's profits, or may be at the discretion of the board of directors.

Qualified Domestic Relations Order (QDRO) A judgment, decree or order that creates or recognizes an alternate payee's (such as former spouse, child, etc.) right to receive all or a portion of a participant's retirement plan benefits.

Qualified Joint and Survivor Annuity (QJSA) An annuity with payments continuing to the surviving spouse after the participant's death, equal to at least 50% of the participant's benefit.

Qualified Plan Any plan that qualifies for favorable tax treatment by meeting the requirements of section 401(a) of the Internal Revenue Code and by following applicable regulations. Qualified plans include 401(k) and deferred profit sharing plans.

Rollover The action of moving plan assets from one qualified plan to another or to an IRA within sixty days of distributions, while retaining the tax benefits of a qualified plan.

Roth 401(k) A 401(k) feature that allows employees to make elective contributions on an after-tax basis. Qualified distributions from these plans, including both the Roth contributions and their associated earnings, are distributed tax-free.

Safe Harbor Rules Provisions that exempt certain individuals or kinds of companies from one or more regulations.

Savings Incentive Match Plan for Employees See SIMPLE Plan.

Schedule SSA A form that must be filed by all plans subject to ERISA Section 203 minimum vesting requirements. The schedule, which is attached to Form 5500, provides data on participants who separated from service with a vested benefit but were not paid their benefits.

Service Provider A company that provides any type of service to the plan, including managing assets, recordkeeping, providing plan education, and plan administration.

SIMPLE Plan (savings incentive match plan for employees) A type of defined contribution plan for employers with 100 or fewer employees in which the employer matches 100% of employee deferrals up to 3% of compensation or provides nonelective contributions up to 2% of compensation. These contributions are immediately and 100% vested, and they are the only employer contribution to the plan. SIMPLE plans may be structured as individual retirement accounts (IRAs) or as 401(k) plans.

Simplified employee-pension plan (SEP) A defined contribution plan in which employers make contributions to individual employee accounts (similar to IRAs).

Stock Bonus Plan A defined contribution plan in which company contributions are made in the form of company stock.

Summary Annual Report A report that companies must file annually on the financial status of the plan. The summary annual report must be automatically provided to participants every year.

Summary of Material Modifications A document that must be distributed to plan participants summarizing material modifications made to a plan.

Summary Plan Description (SPD) A document describing the features of an employer-sponsored plan. The primary purpose of the SPD is to disclose the features of the plan to current and potential plan participants. ERISA requires that certain information be contained in the SPD, including participant rights under ERISA, claims procedures and funding arrangements.

Target-Benefit Plan A type of defined contribution plan in which company contributions are based on an actuarial valuation designed to provide a target benefit to each participant upon retirement. The plan does not guarantee that such benefit will be paid; its only obligation is to pay whatever benefit can be provided by the amount in the participant's account. It is a hybrid of a money-purchase plan and a defined-benefit plan.

Tax Sheltered Annuity (TSA) Also known as a 403(b) plan, a TSA provides a tax shelter for 501(c)(3) tax exempt employers (which include public schools). Employers qualifying for a TSA may defer taxes on contributions to certain annuity contracts or custodial accounts.

Top Heavy Plan A plan in which 60% of account balances (both vested and non-vested) are held by certain highly compensated employees.

Trustee The individual, group of individuals, bank, or trust company having fiduciary responsibility for holding plan assets.

Turnover Rate (of a mutual fund)A measure of the trading activity in a mutual fund.

Vesting The participants’ ownership right to company contributions.

Vesting Schedule The structure for determining participants' right to company contributions that have accrued in their individual accounts. In a plan with immediate vesting, company contributions are fully vested as soon as they are deposited to a participant's account. Cliff vesting provides that company contributions will be fully vested only after a specific amount of time, and that employees who leave before this happens will not be entitled to any of the company contributions (with certain exceptions for death, disability or retirement). In plans with graduated vesting, vesting occurs in specified increments.

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. Or visit our website at www.ifc401k.com

401k & Executive Compensation Plans

2007-08-01T21:41:00.000-07:00

Due to certain limitations on contributions to qualified retirement plans, many business owners and executives are having a difficult time adequately saving for their retirement. Studies show that the average employee needs at least 80% of their income to maintain their current standard of living in retirement. Highly compensated employees are normally replacing only 30% of their income through qualified plans and social security benefits.

Integrity Financial Corporation designs solutions for your business to attract and retain key employees. Non-qualified executive benefits provide additional retirement income for select key employees by layering non-qualified strategies over an existing qualified retirement plan.

Call us at 425-454-1254 for the Seattle or Bellevue area, or at 1-800-794-401k. Or visit our website at www.ifc401k.com

Profit Sharing & 401k Plan Ideas

2007-08-01T21:31:00.000-07:00

The intelligent 401k advisor recommends a variety of plans depending on the specific needs of the business.

A profit sharing plan is a plan that makes no promises of contributions or benefits. The business can decide each year if it will make a contribution on behalf of the plan participants. Profits are not a requirement to make the contribution. Once a contribution is made, the earnings on the funds will ultimately determine the benefit level at retirement. The maximum deduction to the business in any one-year is 25% of the total salaries of the plan participants plus the amount of salary deferrals made to the plan. The maximum allocation that can be made to any one participant for the year is 100% of salary to a maximum dollar limit of $45,000 (for the year 2007).

A traditional profit sharing plan will allocate the contribution to each participant in proportion to salaries paid. For example, if a participant’s salary is 10% of the sum of the salaries of all participants, that participant will receive 10% of the company’s plan contribution.

An age-weighted profit sharing plan will allocate the contribution according to age. Older employees will receive larger contributions as a percentage of salary. The allocation is determined by calculating the contributions required to fund the same projected hypothetical benefit at retirement for all participants. Then each participant’s percentage allocation determined in this manner is applied to the actual annual contribution of the company. The net result is larger allocations, as a percentage of salary, for older participants.

A new comparability profit sharing plan allows a large amount of flexibility in allocating the contribution among participants. Participants are separated into "reasonable" classes. Each class may receive different allocation percentages. Certain guidelines must be met to assure no discrimination among plan participants. This is the most flexible type of profit sharing plan and can be very appealing to many small business owners and their advisors.

A 401k plan is a profit sharing plan that allows employees to make pre-tax contributions to the plan in addition to any employer’s contribution. These 401k provisions allowing elective deferrals by the employees may be incorporated into any of the types of profit sharing plans described above. These deferrals are held in individual accounts and the earnings on the funds will determine the level of benefits at retirement. The maximum deferral allowed by an employee for the year 2007 is 100% of salary to a maximum dollar amount of $15,500. (If the employee is at least age 50 at any time during the plan year, he/she may defer an additional $5,000 "catch-up contribution".) The contribution allowed by highly compensated employees may be limited depending on the results of required comparison testing of levels of contributions by non-highly compensated employees.

A safe harbor 401k profit sharing plan will assure the maximum contributions made by highly compensated employees will not be limited by the contribution level of non-highly compensated employees. Certain employer contributions must be made on behalf of non-highly compensated for this to be accomplished.

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. Or visit our website at www.ifc401k.com

Roth 401k Opportunity

2007-07-24T10:30:00.000-07:00

Compared to the Roth IRA, the Roth 401k has created a tremendous opportunity for employees and owners alike. The Pension Protection Act of 2006 made permanent the idea of the Roth 401k. Unfortunately, most owners and executives are above the income threshhold for a Roth IRA and are not allowed to participate. However, there is no income restriction for those contributing after-tax dollars to a Roth 401k. Furthermore, the contribution limitations are significantly higher for the Roth 401k ($15,500/yr - $20,500/yr depending on the employees age). Call us today to see how we can integrate a Roth feature into your existing 401k plan. www.ifc401k.com

401k Rollover

2007-07-24T10:24:00.000-07:00

Did you know that the investment advice given by many financial professionals is distorted by commissions and brokerage fees?

Integrity Financial Corporation differs by offering independent and unbiased investment advice on a fee only basis to individuals interested in diversifying their retirement and corporate assets through premium allocation models. Typically, our new clients are seeking personalized service and investment expertise, and they are concerned about conflicts of interest and liquidity of funds. Before working with IFC, many of our clients didn’t know that they could work with a financial professional without paying brokerage fees or commissions.

Integrity Financial Corporation uses fundamental investment principals in advising clients to strategically balance their investments across asset classes, then takes the diversification a step further by using exchange traded funds within the allocation model. The end result is a professionally managed account, with low overall fees, and high liquidity in the event that the client needs access to the funds.

Visit Integrity Financial Corporation's website at www.ifc401k.com

401k History & Background

2007-07-10T09:13:00.000-07:00

The 401(k) plan is a type of employer-sponsored retirement plan named after a section of the U.S. Internal Revenue Code. A 401(k) plan allows a worker to save for retirement while deferring income taxes on the saved money and earnings until withdrawal. The employee elects to have a portion of his or her wage deferred directly into his 401(k) account. In participant-directed plans, the employee can select from a number of investment options, usually an assortment of mutual funds that emphasize stocks, bonds, money market investments. Many companies' 401(k) plans also offer the option to purchase the company's stock. The employee can generally re-allocate money among these investment choices at any time. In the less common trustee-directed 401(k) plans, the employer appoints trustees who decide how the plan's assets will be invested.

All assets in 401(k) plans are tax deferred. Before the January 1, 2006 effective date of the designated Roth account provisions, all 401(k) contributions were on a pre-tax basis, and the contributions and growth on them are not taxed until the money is withdrawn. With the enactment of the Roth provisions, participants in 401(k) plans that have the proper amendments can allocate some or all of their contributions to a separate designated Roth account, commonly known as a Roth 401(k). Qualified distributions from a designated Roth account are tax free, while contributions to them are on an after-tax basis (i.e., income tax is paid or withheld on the income in the year contributed).

In 1978, Congress amended the Internal Revenue Code to add section 401(k). Work on developing the first plans began in 1979. Originally intended for executives, section 401(k) plans proved popular with workers at all levels because it had higher yearly contribution limits than the Individual Retirement Account (IRA); it usually came with a company match, and provided greater flexibility in some ways than the IRA, often providing loans and, if applicable, offered the employer's stock as an investment choice. Several major corporations amended existing defined contribution plans immediately following the publication of IRS proposed regulations in 1981.

A primary reason for the explosion of 401(k) plans is that such plans are cheaper for employers to maintain than a pension for every retired worker. With a 401(k) plan, instead of required pension contributions, the employer only has to pay plan administration and support costs if they elect not to match employee contributions or make profit sharing contributions. In addition, some or all of the plan administration costs can be passed on to plan participants. In years with strong profits employers can make matching or profit sharing contributions.

2007-07-06T15:17:00.000-07:00

Kristofer R. Gray, MPA, CRPS
Chartered Retirement Plan Specialist

Member of the Tax & Fiscal Policy Council of the Association of Washington Business

Member of the Western Pension & Benefits Conference

Master's Degree in Administration from the University of Washington

A longtime resident fo the Pacific Northwest

Association of Washington Business 401k Plan

2007-06-28T15:17:00.000-07:00

Integrity Financial Corporation (www.ifc401k.com) was recently selected to advise and manage the Association of Washington Business' 401k plan. In a recent conversation with Dick Walter, the VP of Operations for the AWB, he told Kristofer that prospective clients of IFC are welcome to call him and hear how IFC has improved their 401k plan over the past year (www.awb.org).

The Association of Washington Business is Washington State's Chamber of Commerce. With a diverse membership consisting of businesses large and small, urban and rural, and from all parts of the state, the Association of Washington Business lobbies in Olympia for public policy that encourages economic growth, boosts productivity and creates jobs.