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Thursday, February 20, 2020

FMLA Administration Outsourcing

The Family and Medical Leave Act (FMLA) is a federal law that allows eligible employees to take unpaid leave for a variety of personal circumstances. Due to the numerous regulations and complexities of the FMLA, administering FMLA leave can be a daunting task for many HR departments. In an effort to make FMLA administration more accurate and efficient, many employers have opted to outsource their leave programs to outside vendors.

Why Do Companies Outsource FMLA Administration? 

Many small companies struggle to find the time and resources required to properly train staff on FMLA administration, and employers who deny eligible employees leave or violate FMLA requirements could face hefty fines and legal repercussions.

As a result, HR representatives will sometimes grant too much leave to employees out of fear that an eligible employee’s leave request might accidentally be denied. While this practice might spare companies from finding themselves in serious legal trouble, it can also lead to staffing issues and decreased productivity.

How Does FMLA Outsourcing Work? 

When leave programs are outsourced, the process of handling all of a company’s FMLA-related workload is transferred to an outside FMLA administration vendor. FMLA administration vendors stay current on evolving regulations and changes to the federal law as well as individual state laws which may affect an employee’s eligibility and leave rights. This greatly increases the likelihood that leave will be administered properly and in compliance with all applicable rules and regulations. In addition, lifting the responsibility off of in-house HR departments can significantly reduce workloads, giving staff more time to devote to other necessary projects and tasks.

What Are the Disadvantages? 

While FMLA outsourcing can make FMLA administration more accurate and efficient, there are a few drawbacks to consider. HR departments may need an initial adjustment period while they reshuffle their workload and delegate new tasks.

Employees might be displeased with needing to contact an outside resource rather than their company’s HR department to make leave requests. In addition, decisions regarding leave requests may not happen as quickly as they do when employees are able to speak directly to an HR representative, even if the vendor is complying with FMLA deadlines. Any additional delay can cause frustration as employees attempt to plan for their personal circumstances.

Is FMLA Outsourcing Right for Your Company? 

It is important to consider several factors in order to determine which FMLA administration option is best for your organization. Examine how efficiently your company’s HR department currently handles FMLA administration. Brought to you by the insurance professionals at HANYS Benefit Services

Are they able to keep track of FMLA regulations and stay up to date on changes to FMLA requirements? Are leave requests being over-granted due to a lack of understanding of FMLA regulations and employee eligibility requirements?

In addition, assess your HR department’s current workload to determine whether FMLA administration is making it difficult to delegate or complete other tasks.

For more information on whether FMLA administration outsourcing is right for your company or to begin talking to an employee benefits consultant, please get in touch by email or by calling (855) 882-9177.

Tuesday, February 11, 2020

The case for an operational review of your 403(b) plan

Why now?

The plan sponsor community has been woefully unprepared to meet the increased scrutiny of 403(b) plan operations by the IRS, Department of Labor and private auditors. There has been a material spike in plan correction applications, investigations and regulatory penalties, not to mention the associated professional service fees necessary to tackle these problems.

But don’t just take our word for it. Let your fellow plan sponsors’ experiences tell the tale.

Join us on March 26 at 1 p.m. for a complimentary webinar featuring real life stories about sponsors just like you. Each of them had a “What, me worry?” attitude where their plan was concerned, confident that they had everything well in hand—until everything changed.

By attending this webinar, you will learn:
  • the pros and cons of conducting a plan operational review;
  • when you should do it; and
  • how much you can expect to spend.

FEATURED SPEAKERS:


Carol Idone
Vice President, Consulting
Strategic Benefit Services
Eric Paley
Partner
Nixon Peabody
Claire Rowland
Associate
Nixon Peabody

Wednesday, January 29, 2020

Q4 Market Recap: Roaring into the 20s

U.S. equities continued to roar leading into 2020. The Federal Reserve reversed course on monetary policy in 2019, stimulating both the economy and securities markets.

Read the Q4 Market Recap for a brief review of the 2019 stock market performance and outlook for 2020. Also included is an update on important provisions in the Setting Every Community Up for Retirement Enhancement (SECURE) Act.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

Thursday, January 16, 2020

Fiduciary safe harbor for selection of lifetime income provider

The Setting Every Community Up for Retirement Enhancement (SECURE) Act provides a safe harbor for plan fiduciaries who select a guaranteed retirement income contract, which is defined as an annuity contract for a fixed term or providing for systematic payments guaranteed by the provider to be made over the life, life expectancy or joint lives or life expectancies of a participant and beneficiary.

Retirement plan fiduciaries will be deemed to have acted prudently and will be eligible for the new safe harbor protection if they engage in and document the following process:
  • objective, thorough and analytical search for an annuity provider;
  • consideration of all costs, benefit features and terms of the contract;
  • obtain written assurances from the provider of compliance with all federal and state laws and regulations governing lifetime income solutions, including state insurance laws;
  • as a result of the analysis, the plan fiduciaries should be able to conclude that the provider has the financial strength to fulfill all its obligations under the contract; and
  • the cost of the contract is reasonable (the SECURE Act does not require that fiduciaries select the lowest cost provider).
Annuities may not be appropriate for all plans, but interested plan fiduciaries now have a safe harbor if they wish to consider including them.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or email us at sbs@hanys.org.

Tuesday, January 14, 2020

Don’t Get Caught in the Act:

The Setting Every Community Up for Retirement Enhancement (SECURE) Act

After spending most of 2019 on hold in Congress, the SECURE Act was passed and signed into law on December 20. This is the largest retirement reform act since the Pension Protection Act in 2006 and has a broad focus on improving both the reach and quality of retirement plans, as well as updating several individual tax rules.

While most changes require no immediate action, it’s important for plan sponsors to be aware of changes that may soon impact them. Here is a chart with the most significant changes:

Tuesday, November 12, 2019

Q3 Market Recap: The Federal Reserve Past and Present

The longest bull market in history continues to run through Q3. 

Investors remain focused on three key areas: trade conflict, slowing global economic growth and the Federal Reserve monetary policy. Under the successive leadership of three chairs, the Fed has fostered the longest economic expansion in U.S. history.

Read the Q3 Market Recap to learn more about the recent history of bull markets, as well as the Q3 market drivers. Also included is an overview of key year-end notices plan sponsors may need to provide to employees according to IRS and DOL regulations.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

Tuesday, November 5, 2019

You’ve Been Put on Notice

As we enter the fourth quarter of 2019, it’s important for sponsors of calendar year retirement plans to be mindful of certain required participant notices. Sponsors of qualified retirement plans, such as 401(k) or 403(b) plans, may need to provide several of these notices per various Internal Revenue Service and Department of Labor regulations.

Notice
Purpose
Audience
General Deadline
Deadline for Calendar Year Plans
Qualified Default Investment Alternative
Informs of the plan’s default investment in the event the participant does not make an investment election.  Helps maintain 404(c) protection.
Active eligibles and terminated participants
At least 30 days ahead of plan year
Dec. 2
Automatic Contribution Arrangement
Informs of the plan's feature to automatically enroll participants to a default savings rate in the plan and the potential “refundability” of deferrals.
Active eligibles
30 to 90 days ahead of plan year
Dec. 2
Safe Harbor
Informs of the plan's intent to provide a safe harbor contribution, alongside other key plan provision details.
Active eligibles
30 to 90 days ahead of plan year
Dec. 2
Universal Availability
Informs 403(b) participants about the opportunity to establish or change their salary deferrals in the plan.
Active eligibles
Annually
Dec. 31
Plan and Investment Fee Disclosure
Summarizes fees that may be paid from participant accounts or withheld by investment companies.
Active eligibles and terminated participants
Every 14 months
Depends on timing of prior mailing
Summary Annual Report
Summarizes the plan's key financial and administrator information with respect to the prior year's Form 5500 filing.
Active and terminated participants
60 days following the plan’s regular or extended Form 5500 filing deadline
Sept. 30 or Dec. 16

Sponsors with calendar year plans that extended their Form 5500 deadline to Oct. 15 may be able to align the delivery of any applicable notices into a single mailing event.

In addition to the above notices, plans must provide a Summary of Material Modifications to participants no later than 210 days following the plan year in which an amendment was effective. Alternatively, providing an updated Summary Plan Description satisfies this requirement. Updated SPDs are required to be provided every five years if material changes are made or every 10 years if no material changes have been made. If you recently amended or restated your plan document, this upcoming annual notice mailing may provide an opportunity to satisfy the SMM/SPD requirement as part of the same mailing.

While the DOL and IRS each have rules for distributing these notices electronically, abiding by the rules can be challenging. Newly proposed DOL e-delivery regulations are a welcome development, but until they can be fully unpacked, mailing paper notices is the safest bet for those delivered in 2019. Electronic delivery of such notices is permitted where a participant has affirmatively consented to such delivery.

It’s important to note that in addition to the annual requirements, these notices should be provided to employees in your plan enrollment materials before or coincident with each participant’s eligibility for the plan.

Finally, there may be other participant notices that apply for defined benefit plans, other benefit plans or for situations such as plan terminations, blackout periods and disclosure of electronic statement delivery. Be sure to work with your service providers and make sure all applicable notices are mailed out as required by the IRS and DOL.

If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by calling (855) 882-9177 or e-mail us at sbs@hanys.org.

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