IPS Advisors March Retirement Report

Are Plan Sponsors and Participants Unprepared for "Low Return" Era?
According to BlackRock's 2017 DC Pulse Survey, more than half (56%) of plan participants believe they are on track to retire with the lifestyle they want and nearly seven in 10 expect to be able to save enough to meet their financial goals in retirement. However, participants' optimism might be based on some flawed assumptions about future investment returns.
New consensus forecasts by Horizon Actuarial - based on a survey of 35 financial industry firms (including BlackRock) - suggest that, for the foreseeable future, stock and bond returns could be half that of recent decades. Yet, 66% of workers believe that over the next decade, returns on their savings will continue to be in line with what they have experienced in the past, while 17% believe they will experience even higher returns.

"Most plan participants simply have not come to terms with the dramatic impact that a low-return environment could have on their retirement savings," said Anne Ackerley, head of BlackRock's U.S. and Canada Defined Contribution group. "The reality is that in order to accumulate the same amount of money that participants built in previous years by contributing 6% of their earnings, workers may need to contribute double or even triple that amount going forward."
Click here to continue reading about the survey findings, including tips to get participants back on track to thrive in a low-return market environment. 
[About the survey: BlackRock surveyed more than 1,000 U.S. participants in defined contribution (DC) retirement plans and more than 200 plan sponsors.]
Best Practices for Retirement Plan Administrators
Earlier this year the IPS Advisors Retirement Plan Consulting team hosted a successful workshop on plan administration basics. Tammy Woodman (QKA, AAMS®), Defined Contribution Consultant at IPS Advisors and featured speaker at the event, explains that utilizing a checklist and fiduciary calendar to outline your responsibilities is a great way to keep organized and not get overwhelmed. 
"I suggest administrators think about their duties in four buckets: annually, quarterly, day-to-day and ongoing," shares Ms. Woodman. "As your dedicated retirement plan consultant, we are here to assist you with the plan administration process and can review your plan's adoption agreement to confirm you are operating in compliance to your document."  
Click below to download our complimentary resources for plan administrators:
Contact your plan consultant if you have questions or need assistance. 
Understanding Required Minimum Distributions
To ensure that qualified plans and IRAs are used for their intended purpose of funding retirement income, and not as estate planning tools, the Code provides that plan participants, IRA holders, and beneficiaries take required minimum distributions ("RMDs") when the participant or IRA holder reaches a certain age or after he or she dies. An individual who fails to take the full amount of any RMD is potentially subject to an extremely stiff penalty. Specifically, in addition to the ordinary taxes that may be owed on the amount distributed, the individual will also be subject to an excise tax of 50% of the amount that should have been distributed but was not. For example, if the RMD required for a year was $100,000, and the participant, IRA holder, or beneficiary only received distributions of $20,000 during the year in which the RMD is due, he or she would be subject to an excise tax of $40,000 (50% of ($100,000 - $20,000)).
To learn more on this subject, click here for a mini-white paper outlining seven things to know about RMDs. (Source: AALU)
Compliance Calendar Reminders
March 15: Deadline for processing corrective distributions for failed average deferral percentage (ADP)/average contribution percentage (ACP) test without 10% excise tax. [Note: A special deadline applies to plans that satisfy the requirements of an Eligible Automatic Contribution Arrangement (EACA)].
March 15: Deadline for filling corporate tax returns and contribution deadline for deductibility (without extension) for companies operating on calendar-year fiscal year. Deadline for requesting automatic extension (to September 15) of corporate tax returns.
March 31: Deadline for electronic filling of Form 1099-R to report distributions made in previous year.
IPS Advisors Team Updates
IPS congratulates the following team members on their firm anniversaries during Q1 2017, spanning our Retirement Plan Consulting, Corporate Benefits, and Life Insurance Planning practice areas:
  • Stacey Shinault, Client Advocate - 19 years
  • Kimberly Klumb, Executive Assistant - 18 years
  • Justin Scott, Principal - 15 years
  • David Wells, Account Manager - 14 years
  • Paige Bublik, Client Service Manager - 12 years
  • Stacey Farrell, Manager of Private Sector Marketing Operations - 11 years
  • Tim Thurston, Manager, Retirement Plan Consulting - 10 years
  • Karen Pringle, Client Advocate - 5 years
  • Carina Munoz, Underwriting Case Manager - 4 years
  • Amanda Bowen, Marketing Assistant - 1 year
This quarter IPS also welcomes the following new employees to our Corporate Benefits Consulting practice area:
  • Mark Guajardo, Director of Corporate Benefits Actuarial Analytics 
  • Monica Blakeley, Senior Employee Benefits Specialist
  • Julian Fontana, Account Executive
  • Sara Collins, Account Manager/Wellness Consultant
  • Brooke Spaniol, Marketing Assistant 
Employee Communication Corner: Beneficiary Considerations 
This month's sample employee memo reminds participants of the importance of keeping your beneficiary information up-to-date. 
Click here to access the memo and share with your employees.  
If you have questions, please contact your dedicated IPS Advisors Employee Benefit Specialist, or contact one of our Retirement Plan Consultants below:
Tim Thurston, AIF®
Manager, Retirement Plan Services
(214) 443-2410
Tammy Woodman, QKA, AAMS®
Defined Contribution Consultant
(214) 292-4123


The information provided is for educational purposes only. This information is from sources we believe to be reliable, but we cannot guarantee or represent that it is accurate or complete. The opinions are those of the writer, and the opinions and information presented are subject to change without notice.

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