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Posts from the ‘Tax Exempt’ Category

Clean Up the Clutter Legacy Assets Leave Behind

We all have to deal with clutter that piles up in our lives – whether it’s mail piling up on the kitchen counter, emails overtaking our inboxes or cell phone charger cords that tangle up our car consoles.

These days 403(b) plan sponsors face the task of cleaning up the clutter of “legacy assets” that threaten to clog up their plan administration efforts. Legacy assets are essentially the plan assets left at prior providers which plan sponsors still have to account for.

Finding the most efficient way to deal with these plan assets seems to be a recurring question lately. Employee Benefit Adviser recently asked me to offer some guidance on this confusing and concerning topic. Check out my answer in the video posted to their website. Read more

6 Insights into Higher Education Retirement Plan Opportunities

With two daughters in college, I’ve come to appreciate that the three “R’s” continue into higher education. The traditional readin’, ‘rightin’, and ‘rithmatic, carry forward, but I’ve realized lately that a fourth “R” applies. Both my girls are in private colleges, and we’re starting to see an evolution with private higher ed in “R”etirement planning.

What is this evolution, and what do financial professionals need to know? Read more

High Maintenance – or Huge Opportunity?

I have food allergies. Since I’ve gotten used to not having certain things in my diet, it’s more of an inconvenience than a problem. I can eat out, but I always have to give explicit instructions to the server. I used to work with a guy (who probably reads this blog) who called me “high maintenance.”

I was reminded of this during our recent national distribution conference. At dinner, I had the pleasure of sitting at the table of one of our field offices, with several people I had never met. After I had given instructions to the server, the woman sitting next to me brought up that “high maintenance” term again. Well, maybe I am.

This also calls to mind another area sometimes considered “high maintenance.” It’s a reason we hear occasionally from financial professionals as to why they don’t want to branch into the 403(b) plan space. Read more

Helping Your 403(b) Plan Stay Healthy

I can tell the flu season is still raging, judging by all the empty desks in our office. We all know one of the best ways to stay healthy is good old-fashioned hand washing with soap and water.

A similar type of thorough clean-up work has been going on with 403(b) plans to keep them healthy. First, we saw significant activity around plan design review and changes when the final 403(b) regulations came out in 2007. By the time the regulations were effective in 2009, a significant number of 403(b) plans had reviewed their ERISA status, changed plan design features, reviewed – and in many cases eliminated – various investment choices and service provider choices and modified administrative procedures to take into account the requirements of the regulations. Read more

The PSCA Survey Soaks Up Valuable Retirement Plan Data

Maybe it’s just me, but people always seems to be clamoring for my opinion. For example, my receipt from the automotive repair place tempts me with a $5 coupon toward my next oil change if I call and complete a survey. Or I get calls on my home phone (so 2008, I know) pelting me with questions about my political views, or even more intrusive, my choice in paper products. It’s enough to drive me off the questionnaire cliff.

So you might think it’s strange that I want to talk to you about surveys, or even encourage you to complete one. But I have a good reason why. When you take the 403(b) plan survey from the Plan Sponsor Council of America (PSCA), you’ll get much more out of it than a discounted oil change. Read more

Tax the Rich – and Limit Retirement Contributions? It Doesn’t Add Up.

Tax the rich!  Raise their rates! Limit their deductions! That seems to be the populist mantra. It’s perpetuated in the press, and there’s some indication that the general public seems to support the idea. Now middle class workers with higher than average incomes seem to be caught up in discussions defining those that are “rich.”

As this applies to tax-exempt organizations, we’re talking about hospital administrators, educators, executive directors of local community and other charitable organizations – people who generally earn a better than average income, yet by no stretch of the imagination do their incomes compare to Warren Buffett’s. And when it comes to the impact on their employers’ retirement plans, shouldn’t the tax structure support retirement readiness for those who have dedicated their careers to giving back to their communities? Read more

What you really need to know about the latest IRS procedure for fixing retirement plan mistakes asked me to write about the new IRS Revenue Procedure. If you didn’t see it there, we are reposting it here on The Principal® blog. Article originally posted on

To err is human. To fix complex errors is, well, complex.

I’ve received several phone calls over the past couple of days about the recent revenue procedure issued by the Internal Revenue Service (IRS) that impacts the system for correcting retirement plan compliance mistakes, the Employee Plans Compliance Resolution System (EPCRS).

Mostly, the calls are coming from people who have read that the procedure—known as Internal Revenue Procedure 2013-12 or Rev. Proc. for short—somehow affects 403(b) plans. But the callers are struggling to understand how. They have found the Rev. Proc., and the summaries about the procedure, are overwhelming and highly technical. The fact is that the Rev. Proc. is highly technical because it covers a highly technical issue. Even the shortcut terminology—Rev. Proc., EPCRS—tends to make eyes glaze over.

So what exactly should a financial professional know about the compliance resolution system and the updated procedure? Read more