ERISA PLAN stands for Employee Retirement Income Security Act. This law sets the guidelines and standards for qualified plans, pensions, and welfare plans to protect employees and their beneficiaries. These are retirement plans that are established by the employer for the benefit of the employee, guided by rules that are in the best interest of the employee.
A fiduciary is the one who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. This can be an individual, company, or trust.
Regarding ERISA plans, there are three different classification of Fiduciary and level of liability taken on.
Rules and Regulations are constantly changing. We highly recommend going with a 3(38) Fiduciary to mitigate the risk and liability to the plan sponsor (company providing the plan to their employees) and to allow the company to focus on the business.
Working with Ruggiero Group Benefits, LLC to establish or manage your company ERISA plan will save you time and money. By bringing on a Third Party Administrator (TPA), you are mitigating risk as a company. The TPA assumes the risk and liability, mitigating the company exposure.
What is the role of a Third Party Administrator?
A Third Party Administrator is an organization that is hired by the plan sponsor (your company) to run the day-to-day operations of your retirement plan.
These tasks include:
The most important investment that you can make into your company is the employees that work for the organization. They are not only creating or selling your product, they are an advocate for the brand, and a representative of the core values the company carries in the public eye.
There are many different options for an employer to take care of their employees. One of those ways is to establish a Qualified Retirement Plan that will allow the employee to establish a plan earmarked and focused on the future financial growth. Pensions that use to give employees a sense of security by providing a guaranteed income in retirement years have been phased out over the years, leaving very few establishments that still offer that security. It is now up to the individual to plan for income in his or her later years. This is where ERISA comes into place and a Fiduciary that keeps up to date with the rules and regulations that are always changing.
Providing an employer-sponsored plan for your employees allows them to put away for retirement Pre-Tax before receiving that money in their paycheck. There is a better chance the individual will contribute to their retirement prior to receiving the funds in their paycheck than after they receive the funds. This is because they factor in the deduction from their paycheck as money they never received and cannot spend.
There are different types of Qualified Plans that can be established. Your type of business registration, employees, and other factors will dictate the type of plan that you should establish.
Below is some information to give you a brief description on the options available to businesses and corporations. In order to determine the plan best-suited for your business, please contact an advisor to assist you.
A 401(k) plan is a tax-advantaged retirement account offered by many employers to their employees. Workers can make contributions to their 401(k) accounts through payroll withholding, and their employers can match contributions. Contributions are invested towards a retirement.
A 403(b) plan is a retirement plan for specific employees of public schools, tax-exempt organizations, and certain ministers. Workers can make contributions to their 403(b) accounts through payroll withholding, and their employers can match contributions. Contributions are invested towards a retirement.
A Simplified Employee Pension IRA, or SEP IRA, is a traditional IRA that lets self-employed individuals and small-business owners contribute up to $57,000 toward retirement. Contribution rules mean these plans tend to be best for companies with few or no employees. Contributions are invested towards a retirement.
Savings Incentive Match for Employees. A SIMPLE IRA is an employer-sponsored retirement plan available to small businesses that have less than 100 employees. Small businesses are favorable towards SIMPLE IRAs because they are a less expensive and less complicated alternative to a 401(k) plan.
A defined contribution plan is a retirement plan in which the employer or employee, or both, make contributions into the plan on a regular basis. Individual accounts are established for participants. Benefits are based on the amounts credited to these accounts, along with any investment earnings on the funds
in the account.
A defined benefit pension plan is a plan where an employer/sponsor promises a specified pension payment, a lump-sum, or the combination thereof on retirement that is predetermined by using a formula based on the participant's earnings, tenure of service, and age instead of depending directly on investment returns. Most governmental and public entities provide defined benefit plans as a means of compensating workers.
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