Update For Qualified Retirement Plans

Special appreciation to Keith Mayfield with Plan It Financial for providing us with information on three significant items for qualified retirement plans:

1. FOR NEW PLANS–Significant Tax Credits to set up a 401k, 403b or SIMPLE. The government currently offers significant tax credits to offset some costs of setting up an organization retirement plan and offset costs of making employer contributions to the plan. See this link at the Planit401k.com blog for an example of a 50-person group who received $16,500 in tax credits to offset the cost of a plan AND $175,000 in tax credits to offset the cost of making $250,000 in employer contributions.

2. FOR CURRENT PLANS–Review current 401k plan. Common improvements are to:
a. Change to a 3(38) Investment Manager— ERISA puts financial and fiduciary liability on plan sponsors for ongoing investment selection and monitoring and requires them to do so at the level of a prudent investment specialist. ERISA allows this responsibility and liability to be shifted off the sponsor when they have their plan advisor accept the liability and responsibility as a section 3(38) Investment Manager. In Planit’s opinion, most plan sponsors will adopt this change to meaningfully limit their work and financial liability.
b. Employer Benefit: Organizations put time, effort and perhaps up to 6% of their entire corporate payroll as an employer contribution into the retirement plans. Yet many plans do not have a focus on making this investment a true Employer Benefit that assists with Recruit, Reward, Retain. Keep the following question top of mind when evaluating each decision with your retirement plan… “How can we improve this benefit to positively impact the perception of our company/organization to current and prospective employees”. The more that question is asked, the better your plan serves your participants and the better your plan returns value to your company/organization.
c. Review Plan Fees: Anything that reduces plan growth is equivalent to a plan fee. Sponsors are used to basic fees such as investment/advisor/TPA cost reducing plan growth, but items such as lower than optimal participant rates, contribution rates and investment usage reduce plan growth much more than normally measured “fees”.

3. FOR SIMPLE CONVERSIONS–Convert SIMPLE plans to more beneficial 401k plans. Following find three main reasons for the change:
Employer Benefit-–The purpose of an employee benefits is to improve a company’s ability to recruit, reward and retain. The features of a 401k provide a meaningful improvement in how employees and prospective employees perceive working at their employer over a SIMPLE plan. Items such as higher contribution limits, better investment guidance, and the employee engagement with retirement planning education provided by an advisor are highly ranked by employees when evaluating retirement plan value.
Contribution Limits–Increased employee contribution limits especially for owners/highly compensated employees. While a SIMPLE plan contribution maximum of $15,500/$19,000 is often enough for rank-and-file employees, this limits owners/high saving employees’ ability to fund enough to meet their goals. The 401k limits of $22,500/$30,000 allows owners/high saving individuals a 50% increase in retirement planning limits.
• The ability to have Roth contribution in a 401k (not allowed in SIMPLE plans) further increases owners/highly compensated individuals’ deferral power by approximately another 30%.
Employer Contributions and Vesting Schedules— SIMPLE plans require employer contributions, while employer contributions are optional with 401k plans. When making employer contributions, only the 401k allows vesting schedules which makes employees earn the right to keep those contributions over up to 6 years of tenure using a vesting schedule. This is both an employee retention tool as well as a tool to reclaim employer matching contributions from those shorter-term employees who do not really impact the business. Reclaiming “unvested” contributions typically results in a 10%-25% lower annual expense of employer contributions (which are normally 3% to 6% of total company payroll).
• Notice: Notice to close a SIMPLE must be given by November 2. To close a SIMPLE, notice has to be given by November 2. Though rules in 2024 allow mid-year changes from a SIMPLE to a 401k, mid-year changes have restrictive rules that limit some important normal 401k options available in a calendar year switch.
If you would like to learn more and ask questions Keith will be joining HR Answers on December 6th for HR Lunch Bunch and a discussion on 401k’s. Visit our website for more information.
For additional questions please feel free to reach out to Keith Mayfield at keith@planitfinancial.com or at www.planitfinancial.com or 888-654-4015 ext. 1.

Maintaining Holiday Balance And Avoiding ‘Holidaze’ Stress

The holiday season is upon us, and for HR professionals and business owners, it often brings a unique set of challenges. Balancing work demands, employee well-being, and the desire to celebrate this festive time can sometimes lead to stress and burnout. It’s crucial to find ways to maintain that delicate equilibrium and avoid succumbing to the ‘holidaze.’ Here are some strategies to consider:
1. Do it Your Way:
The holidays should be a time of joy, not stress. Don’t let the commercialized frenzy dictate how you celebrate. Choose what resonates with you and your team, not what the retail calendar dictates. The holidays are about your values and traditions, not the number of shopping days left.
2. Keep it Simple:
Tradition is important, but it doesn’t have to be overwhelming. Simplify your holiday plans, reduce the pressure, and focus on what truly matters. You don’t have to attend every event or buy extravagant gifts. Sometimes, the most cherished moments come from simple acts of togetherness.
3. Be an Angel to Yourself:
Don’t forget to put yourself first. Self-care is not selfish; it’s necessary. If you’re not at your best, it’s challenging to support your team effectively. Prioritize self-care and value your time. Learn to say no when needed to avoid family conflicts.
4. Sustain Your Exercise Regimen:
Amid the hustle and bustle, don’t neglect your physical health. Maintain your exercise routine, even if it’s a short walk or a quick meditation. These moments of self-care can alleviate stress and help you better enjoy the holidays.
5. Find Intentional Moments:
Create spaces of tranquility amid the chaos. Reflect on the deeper meaning of the season in a quiet corner adorned with holiday decor. Meditate, play soothing music, or simply flip through old greeting cards and photos for a moment of self-reflection.
6. Give Yourself “Holiday Cushions”:
Plan your days with extra time in between tasks to reduce stress. Learn to say no to overwhelming requests and take breaks when needed. The holidays are about enjoying, not rushing.
7. Get Ahead of Job Stress and Burnout:
Know your limits and don’t push yourself to the brink. Avoid unrealistic deadlines and spread your work tasks over manageable timeframes. Start your day with a few peaceful moments and set boundaries to safeguard your personal time.
8. Balance Activity and Rest:
Remember that self-care is essential during the holidays. Combine physical activity with moments of restorative rest to maintain your well-being. A brisk walk followed by a short meditation can help manage stress and keep you in balance.

The ‘holidaze’ doesn’t have to overwhelm you or your team. By reevaluating your approach to the season and embracing a mindful, intentional perspective, you can ensure that the holidays remain a time of joy, connection, and celebration, both in your professional and personal life.

Handling An Employee Compliant

Q: Where I work, we do not have an HR Manager, so I am the “HR Department” (business owner, office manager, etc.). I had a complaint about an employee who works at the company, and I have never investigated a sexual harassment incident before. I have the complainant’s statement, but I have not spoken to the subject of complaint(s). I don’t really know how to handle this and what I need to do next. Any help would be appreciated!!

A: First off, take a deep breath! We know these are tough situations to handle and manage. We understand that conducting internal investigations, especially when you’re not directly responsible for “all things HR” can be challenging. For the purposes of this Q&A, you will be referred to as the “HR Administrator”. Therefore, here is some guidance to help you navigate a complaint of sexual harassment in an effective and timely manner:

The initial step is crucial: Ensure the complainant’s statement is acknowledged by letting them know the allegation will be kept confidential and taken seriously. In your role as an HR Administrator, gather as much information as possible from the complainant by meeting with them to discuss the written or verbal complaint. This includes the details of the incident(s), dates, times, locations, and any potential witnesses. Cover the five (5) W’s and the H which means create questions that cover the: Who, What, Where, When, Why, and How.

Your next step is to inform your immediate supervisor, higher management, or general counsel about the complaint. This is especially important since you are the “de facto HR Administrator”. Transparency and collaboration with management will ensure the process proceeds appropriately. At this time, we would suggest you determine if you are the best person to manage this investigation. Consult with an HR professional or employment attorney, as needed. Ensure that the process will be conducted professionally and free from any preconceived judgments. This underscores the importance of involving a third party. You will want to minimize any perception of a conflict of interest by taking lead in the investigation if there is a bias.

Following the meeting with the complainant and informing those who need to know about the actual complaint, the next step is to meet with the employee who is the subject of the complaints. Again, this meeting should be face to face (in-person or virtual). Be sure to prepare your questions in advance to structure your interview with the subject. Ensure confidentiality, no retaliation, and that your questions are unbiased. It’s essential to conduct a fair and impartial investigation. Structure your questions to allow them to provide their side of the story and gather any relevant evidence they might have to tell you at this time. If there are any witnesses mentioned, follow up with them and capture their details. Document every interaction and piece of evidence meticulously. At all times reminding and assuring people of privacy, confidentiality, and no retaliation.

It is important to remain neutral during the entire process and at the same time be supportive of both parties throughout the process. This is done by maintaining open lines of communication with both the complainant and the subject of complaints. Let them know that their concerns and well-being are a priority. Offer resources such as counseling or support groups as needed. Equally as important is ensuring the safety of each person involved, be sure to review their comfort level to continue working together, if required. This might include talking through options with an experienced HR professional consultant or employment attorney.

After you have gathered all your facts and details, if you are unsure about how to proceed next with the investigation, do not hesitate to seek guidance. If there are any questions or concerns with the facts collected, consult with an employment attorney or an experienced HR professional consultant. Remaining neutral and unbiased is paramount to evaluating the facts and determining the outcome and conclusion.

Once the investigation is finalized, compile a comprehensive report with your findings, evidence, and conclusions. Management can then decide on the appropriate action if any will be required.  However, final determinations may be case-by-case and the result may involve disciplinary measures or other necessary steps. At this juncture, you may decide to seek out an experienced HR professional consultant or employment attorney to review the findings, solutions, and recommendations before concluding. Then you need to communicate to both the complainant and the subject of complaints to reflect the investigation is complete.

In many cases, additional findings may include coaching, updating employee handbooks, and/or training on conducting investigations for yourself or someone else within the organization to ensure better management of situations that arise in the future. HR Answers is offering a session on Tuesday, November 28. Register Here.

Remember that conducting internal investigations is challenging and creates discomfort within the organization, however, equally invaluable to your business is managing them successfully. Seek guidance when unsure, maintain professionalism, and ensure fairness to all parties involved. Your commitment to handling these situations conscientiously is vital in creating a safe and respectful workplace as well as mitigating risk.