Category

Blogs

Tweens & Teens

By | Blogs, Financial Education

Tweens & Teens

It’s never too early to learn smart financial habits. Whether saving a portion of a weekly allowance or understanding the deductions on the pay stub from a first job, good money management skills instilled at an early age can last a life time.

Financial Topics for Tweens & Teens

Investments

By | Blogs, Plan Sponsors

Investments

As part of our ongoing commitment to help plan sponsors more effectively manage their employer-sponsored retirement plans, PSCA will create a library of investment and financial wellness topics. Our goals for this information library are to share best practices, introduce new strategies and trends, revisit core assumptions, and to create a library of though leadership. We hope that PSCA members will contribute their ideas and feedback on these new pages. If you would like to add information about an investment or financial wellness topic to our website, send an e-mail to Kara Clark.

Investment Topics

Reexaminging Asset Allocation
Introducing Adaptive Asset Allocation

PSCA does not advocate any one approach, investment strategy or product over any other. Our role is merely to provide a platform for plan sponsors to explore new trends and developments. We welcome input, articles, case studies and all opinions on adaptive asset allocation that you wish to share with the plan sponsor community.

Homeowners

By | Blogs, Financial Education

Homeowners

For many, the American dream still means owning a home. Whether you’re buying for the first time, refinancing or beginning home improvements, you need to understand the complex issues involved.

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Financial Topics for Home Owners

Parents & Children

By | Blogs, Financial Education

Parents & Children

For some parents, talking to a child about money is almost as hard as broaching some of those other difficult subjects. But understanding what money is and how to manage it is a crucial life skill parents must pass on to their children. It’s never too early to start giving your child a solid foundation for making a lifetime of financial decisions.

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Financial Topics for Parents & Children

Employed

By | Blogs, Financial Education

Employed

Money management should never get in the way of career advancement. Learn what you need to know to take advantage of a wide range of employer benefits, prepare for unexpected career changes and chart a clear path to job success.

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Financial Topics for Employed

Starting a Retirement Plan

By | Blogs, Plan Sponsors

Starting a Retirement Plan

Starting a plan will help your company stay competitive in today’s tight labor market.

401(k) plans help you:

  • Attract and retain the best employees
  • Help your employees plan for retirement
  • Take control of your own financial future
  • 401(k) plans help your employees
  • Defer federal and, in most cases, state income taxes
  • Contribute through automatic payroll deductions
  • Simplify investment decisions
  • Receive immediate investment return when a company match is available

Today, 401(k) plans are more available, easier to administer and more affordable than ever before, whether you have 50 or 5,000 employees. In fact, approximately 400,000 companies are already benefiting from 401(k) plans, and 42 million employees are saving for retirement through company-sponsored plans. Americans have more than $1.9 trillion invested in 401(k) plans.

Choosing a Plan

There are several types of plans to choose from. Your decision will be based upon both your own personal goals and your goals for your company. The following questions will help you identify plans that may best suit your company. Plan service providers will be able to discuss your needs in detail and help you decide what type of plan is right for you.

  • Do you have fewer than 100 employees and want to make a company contribution of up to 3% of pay? Consider the SIMPLE plan.
  • Do you want to include employees who work less than 1000 hours a year? Consider a SEP Plan.
  • Do you want contributions to vary according to company profits and be paid to employees immediately? Consider a cash profit sharing plan.
  • Do you want contributions to vary according to company profits and be payable upon retirement? Consider a deferred profit sharing plan.
  • Do you want to make contributions with the goal of participants achieving a specific “target” amount of money at retirement independent of company profits? Consider a target-benefit plan or a defined-benefit plan.
  • Do you want your employees to be able to defer some of their current income so they can save in a tax-deferred account? Consider a 401(k) plan.
  • Do you want to match your employees’ contribution more than 3%? Consider a 401(k) plan.
  • Do you want to make contributions independent of company profits? Consider a money purchase plan.

Types of Plans

Profit Sharing Plan
A plan established and maintained by an employer to provide for the participation in its profits by its employees or their beneficiaries. Company contributions may be determined either by fixed formula or at the discretion of the board of directors.

Cash Profit Sharing Plan
Profit sharing plan in which profits are paid directly to employees in cash, check or stock as soon as profits are determined. (This type of profit sharing plan is not a qualified retirement plan.)

Deferred Profit Sharing Plan
Profit sharing plan designed to provide benefits upon retirement. Benefits at retirement are based strictly upon the sum total of the contributions made and the investment results therein. The plan must provide a definite predetermined formula for allocating contributions made to the plan participants.

401(k) Plan
A defined contribution plan that enables employees to choose between receiving current compensation and making pre-tax contributions to an account through a salary-reduction agreement. Employers may also make contributions to employees’ accounts.

Money-Purchase Plan
A type of defined contribution plan in which the employer’s contributions are determined by a specific formula, usually as a percentage of pay. Contributions are not dependent on company profits.

Target-Benefit Plan
Contributions are based on an actuarial valuation designed to provide a target benefit to each participant upon retirement. The plan does not guarantee that such benefit will be paid; its only obligation is to pay whatever benefit can be provided by the amount in the participant’s account. It is a hybrid of a money-purchase plan and a defined-benefit plan.

Simplified Employee Pension Plan (SEP)
This is essentially an individual retirement account (IRA) to which an employee and his or her employer may contribute. Any employer contributions are excluded from an employee’s income.

SIMPLE Plan (Savings Incentive Match Plan for Employees)
A type of pension plan that may be implemented by employers with 100 or fewer employees in which the employer matches 100% of employee deferrals up to 3% of compensation or provides nonelective contributions up to 2% of compensation. These contributions are immediately and 100% vested, and they are the only employer contribution to the plan. SIMPLE plans may be structured as individual retirement accounts (IRAs) or as 401(k) plans.

Defined Benefit Plan
A type of retirement plan that provides each participant with a fixed income at retirement.

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