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Automatic Features to Help Boost Participation and Savings Rates

The use of auto features in 401(k) plans has continued to climb in popularity over the past decade. In fact, auto features such as automatic enrollment and auto escalation are considered best practices in 401(k) plan design as ways to help boost participation and employee savings rates.1 Many large 401(k) retirement plans offer auto features. However, small business plan sponsors have been slower to adopt them as part of their 401(k) plan design. If your company’s 401(k) plan design doesn’t currently include auto features, and/or if you’re thinking about implementing them, then keep reading. Small Plans Playing Catch-up The majority of retirement plans...

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Are we headed toward recession?

Last week the yield on 2-year Treasurys eclipsed the yield on 10-year Treasurys for the first time since 2007. This ‘inversion’ of the yield curve is widely-followed because it has preceded every recession post-WWII. That’s not to say that it causes recessions, but it is considered a harbinger of slower growth. (recessions are shaded in gray) Lots of ink was spilled last week debating whether a yield curve inversion is as relevant today as it once was in light of the Federal Reserve’s policy over the last decade. That debate is not important. What’s important is to remember that everything is cyclical, including the...

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Retirement Plans: The Employee Perspective

Qualified employer-sponsored retirement plans can provide a number of tax and nontax benefits to employees. The employee perspective on these plans should certainly consider the obvious tax deferral and retirement savings benefits. Additionally, however, employees should consider various strategies to optimize their benefits. For example, employees will approach their retirement plans most effectively when they take full advantage of employer-matched savings and by remaining with a particular company at least until vesting has occurred. In some cases, moreover, the advantages and disadvantages of borrowing from employer-sponsored plans should be evaluated. How are employer-sponsored retirement plans categorized? Employer-sponsored retirement plans may be categorized...

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CBO Report Looks at Effect of Raising the Federal Minimum Wage

The federal minimum wage (FMW), currently $7.25 per hour, hasn't increased since 2009—the longest stretch with no federal increases since 1938, when the minimum wage was created. Several presidential candidates as well as proposed House Bill H.R. 582, Raise the Wage Act, would raise the FMW. What effect would a wage increase have on wage earners, families, employers, and the economy? The Congressional Budget Office (CBO) released a new report that examined the impact of raising the federal minimum wage to $10, $12, or $15 per hour by 2025 and how this would affect employment and family income. According to the CBO,...

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2018 Tax Filing Data Shows Need to Review Withholding

The IRS continues to encourage taxpayers to review the amount of tax they have withheld to avoid an unexpected tax surprise when they file their 2019 tax returns next year. Preliminary 2018 tax filing data seems to show the need for taxpayers to review their withholding in order to make sure the appropriate amount of tax is being withheld from their paychecks to reflect recent tax law changes. Tax Cuts and Jobs Act The Tax Cuts and Jobs Act made significant changes to the tax code, and 2018 was the first time that taxpayers filed with the new rules. Among other changes,...

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August 1 IRS webinar to help employers, tax pros understand payroll taxes

IR-2019-133, July 29, 2019 WASHINGTON — The Internal Revenue Service will conduct a webinar August 1 for employers and tax professionals focusing on employment and payroll taxes. Federal law requires most employers to withhold federal income taxes from their employees' wages. These taxes must be deposited, along with the employer and employee portion of Social Security and Medicare taxes, and reported to the IRS. Last year, the IRS processed over 30 million employment tax returns and collected over $1 trillion in employment taxes. The free 60-minute webinar is open to tax professionals, employers and anyone else interested in the topic. Tax pros can...

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Five Ways to Prevent Workplace Harassment

Every employer should make preventing workplace harassment a top priority Harassment is a form of employment discrimination that may violate federal laws such Title VII of the Civil Rights Act; the Age Discrimination in Employment Act; and the Americans with Disabilities Act. The Equal Employment Opportunity Commission (EEOC) has issued a list of best practices for employers to use to prevent harassment in their workplaces. [embed]http://hr360.wistia.com/medias/4gsb9jchzx?wvideo=4gsb9jchzx&wemail[/embed]...

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ACA Affordability Contribution Rate Set at 9.78% for 2020

New Figure Marks Decrease from 2019 Under the employer shared responsibility ("pay or play") provisions of the Affordable Care Act, applicable large employers—generally those who have 50 or more full-time employees (including full-time equivalent employees)—may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependents. For plan years beginning in 2020, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee's required contribution for the lowest-cost self-only health plan offered is 9.78% or less of his or her household income for the taxable...

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3rd Quarter Market Memo from Ashley Vice, Portfolio Manager

Time to read: 8 minutes At the end of this month, the current economic expansion will become the longest in our country’s history. Ten years ago people feared that the economy might never improve. Now the prevailing worry is that the music might stop. So far, 2019 has been great for stocks and bonds; both hit all-time highs this week. And it’s justified. Interest rates are low, business optimism is high, inflation is benign, corporations are more profitable than ever, and the general feeling among consumers is positive. Moreover, market fundamentals are not stretched. The fastest-growing companies are trading at high multiples...

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