Pentegra

Pentegra is a leading provider of financial retirement planning, fiduciary outsourcing and financial planning services to clients nationwide. At Pentegra Partner with us to get on the Smart Path to retirement, design a retirement plan or executive benefit plan to attract, reward and retain employees, or reduce risk and burdens with our fiduciary and institutional investment management solutions.

The Roth 401K may offer advantages to those who are currently in a low tax bracket but expect to be in a higher tax bracket after retiring. Another benefit: the Roth 401(k)’s tax-free withdrawals can help highly paid workers manage their tax situation in retirement. For most people, the main reason to contribute to a Roth 401(k) is to let the money grow tax-free.

With a Defined Contribution plan, it’s the employees who make many of the contributions and take on the investment risk. Their retirement benefit is their accumulated balance. With a Defined Benefit plan, the employer makes the contributions and assumes the risk. Employees receive a promised benefit at retirement, typically in the form of monthly income.

Today there is a great deal of talk about helping employers with fiduciary responsibility, yet the talk often falls short of what most employers actually desire and need someone to simply handle it for them.

We serve in all three principal roles in a retirement plan as a full scope ERISA 402(a) Named Fiduciary, a 3(16) Plan Administrator, and as Trustee, whether as a fully discretionary trustee with sole authority over plan assets or as a directed trustee under 402(a)(1).

Today there is a great deal of talk about helping employers with fiduciary responsibility, yet the talk often falls short of what most employers actually desire and need someone to simply handle it for them. Pentegra’s fiduciary services are designed to complement the unique value proposition and service delivery model that each advisor brings to the table. We tailor our solutions to meet your preferences.

403(b) plans are commonly used by tax-exempt organizations to provide retirement benefits for their employees. Generally, plans that are established or maintained by private tax-exempt organizations are subject to ERISA (governmental and non-electing church plans are always exempt).

The banking industry has seen its fair share of consolidation over the past few years. It has certainly been an unprecedented era of mergers and acquisitions, not only for banks, but also for the vendors that serve the community banking marketplace. This is particularly significant when a bank’s non-qualified benefit and bank-owned life insurance (BOLI) administrator and/or service provider changes.

A Multiple Employer Plan, or “MEP”, is a retirement plan that is maintained by two or more unrelated employers that are not members of the same controlled group. Employers are characterized as “Adopting Employers” when they elect to participate in the MEP.

Bank-owned life insurance (BOLI) can be a valuable asset for banks of all sizes, including community banks. Offered by most major insurance carriers, BOLI is a single premium insurance policy in which the bank is the beneficiary and owner. While banks often utilize BOLI as a tax shelter, given BOLI’s status as a tax-free asset, it is also utilized to help offset the ever-increasing costs of employee benefit programs.

An automatic contribution arrangement (also known as automatic enrollment) is a feature in a retirement plan that allows an employer to “enroll” an eligible employee in the employer’s plan unless the employee affirmatively elects otherwise. “Enroll” in this context means that part of the employee’s wages are contributed to the retirement plan on the employee’s behalf. Most commonly, this feature is in 401K plans.

The Pentegra Benefits Financing Advantage is a benefit financing tool that uses BOLI to enhance earnings, restore existing retirement program shortfalls, and offset the costs of qualified retirement programs along with healthBOLI Insurance and welfare and group life benefits.

For more than 75 years, we’ve delivered a different approach to every client solution. It begins with a strategic understanding of your needs, and putting those needs first. At Pentegra, integrity is more than just implied in our name.

Here is some not-so-breaking news when it comes to how and why things often go wrong when administering 401(k) plans: It’s very often the client’s fault. What sometimes gets missed is that a company’s 401(k) plan administrator is, in addition to administering the plan, busy with the day-to-day demands of his or her actual job.

We have long touted the benefits of multiple employer plans, or MEPs, which can provide a cost-effective way of managing a retirement plan. As its name indicates, MEP adopters are a number of employers who are involved in “commonality,” or the same line of business. Combining into a MEP can make it simpler for a given company or business owner to run a retirement plan while providing an appealing level of efficiency and governance.

n Part 2 of our series on 401K administration errors, I will discuss some other problems we commonly see when working with clients particularly new clients and how we address them.

403(b) plans are commonly used by tax-exempt organizations to provide retirement benefits for their employees. Generally, plans that are established or maintained by private tax-exempt organizations are subject to ERISA (governmental and non-electing church plans are always exempt).

As some of my Pentegra colleagues have pointed out in some of our recent blogs, there are many pitfalls and problems that can arise when it comes to the ins and outs of creating, administering and managing your company’s retirement plan. Here are some of my own experiences, which I hope can help others avoid some of the difficulties that can come with the territory.

Both 401K and 403B plans are retirement plans that are sponsored by an employer. Both must meet IRS requirements to allow tax-free contributions. However, 401K plans are offered by for-profit companies whereas 403b plans are offered by not-for-profit organizations that are tax exempt under IRS Code 501(c)3, such as educational institutions, school districts, governmental organizations, religious organizations and hospitals.

Small to mid-size plan sponsors have for years been simplifying their 401k plan oversight by merging their plan into a Multiple Employer Plan (MEP), a retirement plan that covers unrelated employers while transferring many of the responsibilities and liabilities associated with being a named fiduciary to the MEP. Non-profits looking to reap the benefits of a 401(k) MEP can do so via a 403b MEP.

Pentegra offers a highly consultative approach to retirement investment options and the benefit of over 75 years of industry knowledge and insights in designing retirement plan services for advisors and clients nationwide.

The historically low interest rates, which caused Defined Benefit plan liabilities and plan contribution levels to increase every time they dropped, are headed in the other direction.

Despite a high level of concern in many quarters over speculation that the Republicans’ “Tax Cuts and Jobs Act” would include revamping how the 401K is structured capping the amount that people could put into a traditional, tax-deferred retirement account like a 401K was reportedly being given serious consideration it turned out that the proposal leaves the 401K untouched.

Better manage defined benefit plan costs, ensure compliance and reduce fiduciary risk. Take a more creative approach to the changing defined benefit landscape.

With more than 70 years of experience and insights gained managing one of the largest defined benefit plans in the nation and structuring competitive retirement programs for clients nationwide, we help clients navigate the changing defined benefit landscape, and better manage plan complexity and risk. We’ve developed a suite of tools and support services designed to simplify plan management, reduce Administrative burdens and make defined benefit decisions with confidence.

If a 401(k) plan offers a Roth option, it may be a good idea for participants to invest in it, or at least consider investing a portion of one’s 401(k) contributions in the Roth.

For the most part, the news about Defined Benefit plans lately has not been particularly good. Whether a big company could no longer fund its plan or how it was bankrupting their business, headlines have discouraged many businesses from seriously considering a DB plan.