Article Side

Online Article Directory!

Hello Guest! Login or Register to submit articles!

Lowering the Cost of Retirement Plans

By Inspirafs Subscribe to RSS | March 21st 2012 | Views:

When an employee leaves a job, they often leave their 401k behind. This leaves retirement plan sponsors, advisors and administrators in an awkward situation. Plan sponsors continue to pay advisors and third party administrators to handle these accounts, despite the fact that the employee no longer works for the company sponsoring the plan.

In 2005, the IRS instituted rules to govern Automatic Rollovers. The rules state that accounts belonging to a former employee with a vested balance of $5,000 or less can be automatically rolled over to an IRA. These Automatic Rollover IRAs allow plan sponsors to keep retirement plan costs reasonable, and allows advisors and TPAs to do the right thing by their clients.

An Automatic Rollover IRA works to the former employee’s advantage. A 401k Rollover gives the accountholder greater access to their money as well as more investment options.

Rollover IRAs can also be performed for former employees with vested balances of more than $5,000. However, in this instance the accountholder must voluntarily perform the 401k Rollover.

For plan sponsors, the obvious benefit is saving money. There are other reasons:

• Save time and resources that are normally be spent locating and dealing with former employees

• Reduce your fiduciary liability to lawsuits from former employees

For advisors and TPAs, the driving force behind performing 401k Rollovers is to do what’s best for the client. By taking advantage of Automatic Rollover IRAs, an advisor or TPA can solidify their relationships with clients by saving them from the hassles of former employees.

Removing former employees from a retirement plan also represents extra work for plan sponsors, advisors and TPAs. Some companies, like InspiraFS, specialize in performing these services for retirement plan professionals. InspiraFS will handle all of the required notifications and outreach for these.

Another way for sponsors to save money on their retirement plan is to switch to a Payroll Deduction IRA from a 401k. Payroll Deduction IRA plans cost nothing to start for a business and feature many of the same benefits to employees as a traditional retirement plan.

InspiraFS administers Payroll Deduction IRA plans for companies of any size, as well as other IRA-based retirement plans.

Inspirafs - About Author:
Inspira provides comprehensive IRA rollover and plan termination solutions to plan sponsors, financial advisors and third party administrators. Inspira also provides payroll deduction IRA programs for individual businesses, payroll companies, trade groups and professional associations.

Share on Facebook Tweet It Stumbleupon this post This post is delicious !

Article Source:

Related Investing Articles Subscribe to RSS

Get uniform tax deduction if you have an office uniform
Published by Robert William on January 12th 2012 | Investing
If you have a uniform for office, you might be eligible for getting a uniform tax deduction for the ...
Keep your taxes updated with payroll tax filing services
Published by Payroll1 on June 25th 2012 | Investing
If you own a business, there ought to be employees working in your enterprise. Adding to this you mu...
Opt for Currency Options with the Help of Forex Trading Signals
Published by Kelly Wagenheim on August 24th 2012 | Investing
Currency options give the right to contract holder, to buy (that is call option) or to sell (also kn...
Know how to stay updated with natural gas news on a regular basis
Published by Kevinpieter on August 22nd 2012 | Investing
Before taking investment decision, it is very important to know about the specific company profile. ...
Natural gas investments offer unique opportunity to earn lucrative returns over a period
Published by Mano Matthew on August 22nd 2012 | Investing
Natural gas prices have gone through quite a topsy-turvy phase. Since hitting the peak phase during ...
Singapore Company Registration: a Part of Starting New Business
Published by Andrews Thomas on August 22nd 2012 | Investing
Though Singapore company registration is one of the things, which a business entrepreneur needs to d...
Getting Idea of Fixed Income Products
Published by Fixedincome on August 20th 2012 | Investing
People get perplexed about the investment policies available in the market. They must have idea of t...
A great Agency for that Consolidation Associated with Debt That's Non Revenue
Published by Shyam Singh on August 18th 2012 | Investing
When you obtain a debt administration program via DMCC you'll be assigned an avowed Credit Counselor...