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Hacked! Is Your Retirement Plan at Risk for a Cyber Attack

Cyber-crime is on the rise worldwide. As a result, growing numbers of organizations are taking critical steps to protect their valuable electronic data from hackers and other cyber criminals — a process known as cybersecurity. It’s serious business, and a trend retirement plan sponsors and committees should pay attention to. In 2015, IBM’s chair, president and CEO Ginni Rometty said, “Cyber-crime is the greatest threat to every company in the world.” Last year, billionaire investor and businessman Warren Buffett echoed that sentiment, claiming that “cyber-attacks are a bigger threat to humanity than nuclear weapons.” In short, cyber-crime is extremely dangerous, and...

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A Guide for Employers Dealing with Missing Participants

Locating missing plan participants can be a headache for any employer, but simply ignoring them is not an effective solution. Regulatory agencies in previous years have published guidance on this topic relating to missing “retired” employees. With the increase in the number of “pre-retired” missing plan participants, governmental bodies are now taking additional measures to provide solid guidance and solutions to help streamline this arduous process for plan sponsors. Plan sponsors must understand why locating missing plan participants is important.  First, ERISA requires that plan fiduciaries (e.g., plan sponsors, employers) have a duty of prudence and loyalty to all plan participants...

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The ABC’s of HR

This comprehensive glossary of human resource (HR) terms defines words and phrases frequently used by HR professionals. - A - Ability: A competence to perform an observable behavior or a behavior that results in an observable product. Action item: Specific activity initiated to achieve an objective. Adaptive device: Any tool that facilitates greater efficiency by an individual with a disability in the performance of duties. Adverse impact: Adverse impact exists where a substantially different rate of selection in hiring, promotions, or other employment decisions works to the disadvantage of members of a protected group. An inference of adverse impact may occur in the absence of...

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Should We Have A Retirement Committee

If you are an employer or employee who has decision-making authority over your company’s retirement plan, there is a strong chance that you are a 401(k) plan fiduciary.  You have a legal obligation to operate the plan solely in the interests of the plan participants (people with retirement account balances) and their beneficiaries (people who may inherit those retirement account balances).  Additionally, two other primary responsibilities are to manage the plan for the exclusive purpose of providing benefits and paying reasonable plan expenses. Many HR representatives, Controllers, CEOs, CFOs, and Presidents are unfamiliar with the significant amount of liability to which...

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DOL Updates Regular Rate of Pay Rules

The U.S. Department of Labor (DOL), announced a new final rule that clarifies how to calculate an employee’s regular wage rate under the Fair Labor Standards Act (FLSA). The final rule became effective on Jan. 15, 2020. Calculating the regular rate is an essential first step when determining an employee’s overtime compensation. Under the FLSA, an employee’s regular rate includes all forms of compensation paid to that employee in a workweek. The final rule clarifies what qualifies as compensation. The DOL’s stated objective with this rule is to provide more certainty for employers that offer additional perks to their employees, but aren’t sure...

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Cadillac Tax and Other Key ACA Taxes Repealed

The federal spending bill signed into law at the end of 2019 repealed three taxes and fees under the Affordable Care Act (ACA): The Cadillac tax The medical devices excise tax The health insurance providers fee The Cadillac Tax The Cadillac tax is a 40% excise tax on high-cost group health coverage. Its effective date was previously delayed several times. This tax is now fully repealed, beginning with the 2020 tax year. The Medical Devices Excise Tax The medical devices tax is a 2.3% excise tax on the sales price of certain medical devices. This tax is fully repealed beginning in 2020. Health Insurance Providers...

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PCORI Fees Extended for 10 Years

The same spending bill that repealed the Cadillac tax, the medical devices excise tax and the health insurance providers fee reinstated the annual Patient-Centered Outcomes Research Institute (PCORI) fees for the 2020-2029 fiscal years. As a result, specified health insurance policies and applicable self-insured health plans must continue to pay these fees through 2029. What Are the PCORI Fees? The PCORI fees were created to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. Fees paid by health insurance issuers and sponsors of self-insured health plans fund the institute’s research, in part. Who Must Pay the PCORI...

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Section 6056 Employer Reporting Guide

Section 6056 reporting is the required reporting to the IRS of information relating to offers of health insurance coverage by employers that sponsor group health plans. A statement disclosing information about the offer of coverage must also be furnished to full-time employees. This guide is intended to provide information for employers on the Internal Revenue Code (Code) Section 6056 reporting requirements. Topics covered in this guide include: Applicable large employers (ALEs) that are responsible for reporting under Section 6056 The forms that are used to accomplish the Section 6056 reporting The information an ALE must provide to its full-time employees and...

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Background Information Regarding Section 6056

The Affordable Care Act (ACA) created reporting requirements under Code Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) or provide to their employees. Each reporting entity must annually file all of the following with the IRS: A separate statement (Form 1095-B or Form 1095-C) for each individual who is provided with minimum essential coverage (for providers reporting under Section 6055), or for each full-time employee (for ALEs reporting under Section 6056); and A transmittal form (Form 1094-B or Form 1094-C) for all...

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