For all of you ardent followers of this Blog, you might have lost sleep wondering, “Where did the MMG Blog go? Only one post since December? We’re experiencing serious withdrawal symptoms (nausea, dizziness, a sudden craving to read IRS regulations). What’s going on?” Well, we’re pleased to tell you that we’re back. We’ve just completed one of our busiest year ends ever, adding 29 new plans to our caseload within the last two months of 2011. It takes substantial manpower (and womanpower) to get these plans onboarded, and up and running, along with our normal servicing of our existing clients’ plans. Let us explain:
A new plan may be implemented anytime before year end, and made retroactively effective to the beginning of the year. While December 28 may be too late to start a 401(k) program for the year, it is not too late to establish a plan with a year end profit sharing contribution that takes the entire 12 months’ compensation into account. Thus, companies finding themselves with an unanticipated level of profit at year end will naturally look at a qualified retirement plan as an effective way to shelter that profit from taxation. Using our OCPP® design, these plans can put more money into the owners’ pockets than would be left after taxes in the absence of a plan!
Once the company has committed to the new plan (or redesign of an existing plan to achieve better results than in the past), our New Plan Implementation (NPI) team takes over. New documents must be drafted (and executed) before year end; the plan’s investment program must be established in coordination with the plan’s financial advisor; if a new 401(k) program is being set up for the following year, arrangements must be made for enrollment of employees; or if the investment platform is changing, we must supervise the delivery of appropriate notices, transfers of assets and make sure we get all plan documentation and participant records from the prior provider. It’s a busy time.
And what about the MMG personnel who are not involved with sales or NPI? Nothing much to do, EXCEPT preparing projections for clients who need their contributions determined before year end for planning purposes, receiving and scrubbing year end census data that starts coming in as soon as the ball descends in Times Square, and calculating and confirming employer contributions so that our clients’ accountants can complete their business and personal tax returns on a timely basis. Not to mention updating all of our spreadsheets for the new 2012 limits (discussed in our most recent blog post).
So as we hurtle toward our first 2012 deadline (March 15, the unextended due date for calendar year corportate returns), we assure you that we will be back regularly to explain those esoteric concepts and terms, give you our take on important news regarding your plans, and regale you with more tales from the retirement plan battlefield. If you have suggestions for future blogs, we’d love to hear them. Now go and get a good night’s sleep.
Kenneth Marblestone, Esquire
