The last few years have been a period of heightened scrutiny and scandal for the financial services industry. Most recently, the SEC issued a report on pension consultants regarding conflicts of interest and the objectivity of advice given to retirement plan sponsors. It's become vital to the success of insurance and financial advisors that they differentiate themselves with their exemplary ethics, that they operate by a higher moral code and that they communicate that higher standard to their clients.

January 1, 2006, a new opportunity for retirement savings came to town. Known as the post tax ROTH 401k - this is the classier sister to the traditional 401k plan. In one corner is the post tax Roth 401k, with a fuller bodied contribution as taxes are included on the front end. There's also a five year wait to end the relationship and take a tax free withdrawal.

Financial Emergency! It is unpredictable yet it happens to all of us. Whether it's college tuition for your daughter, unexpected medical bills from an accident in the yard, covering the higher than expected closing costs on your new home or avoiding foreclosure or eviction because spending got out of hand; you're going to need money fast.

As one of the requirements for the tax exempt status of your Solo 401k, distributions of funds from your Solo 401k are limited to termination of employment, retirement, disability, death, plan termination or inservice distributions after age 59.

Every year, the IRS comes out with the new annual retirement plan limits. Some of these limits provide in part; the maximum individual contribution to Solo 401k, 401(k), 403(b) or 457 plans; the maximum compensation taken into consideration for retirement plan allocations and deductions; and the social security wage base.

Investment representatives and retirement service providers will be hailing the new limits as an opportunity for employees to save more money in their retirement plans on a tax deferred basis.

More and more workers are leaving their jobs and taking their 401 k retirement plan funds with them. While some are rolling their funds over into IRAs or other qualified plans; many are taking their distributions in cash. Once an employee has left the job, any payments of earned vacation, sick or other leave made after leaving the job were not considered for inclusion in deferrals to Solo 401k, 401(k), or 403(b) plans.

There was a sneak preview of the Dept of Labor's preliminary guidance on setting up 401k default investment options. These situations occur when 401k participants fail to select an investment option for their 401k contributions or a 401k default fund is used in 401k plans with automatic enrollment features.
Currently, 401k plan sponsors are rethinking their default fund decisions because they are concerned about the risk associated with their fiduciary responsibility and about the risk of the earnings performance of the default investments of those participants who failed to choose any.

According to a Minnesota TV station, a Wells Fargo 401(k) plan operations manager has been accused of robbing 401k plan accounts.

The 401k Operations Manager, who oversaw the 401k daily fund operations, allegedly disbursed money from dormant 401k accounts to fictitious names he created. He then had the checks sent to his own office and deposited the funds into his own account,

HOW THE 401K ACCOUNTS WERE ROBBED

Point-by-point, this retirement operations manager eluded what should have been Well’s Fargo’s own financial and procedural controls.

See if you make either of these mistakes when taking money out of your 401k plan

Spousal Consent for a 401k Distribution

A woman who claimed that a plan distribution form indicating her consent to her late husband's distribution election was never properly notarized and therefore invalid has the agreement of a federal judge

The husband had elected a split distribution: one half in a lump sum and one half in an annuity without survivor benefits.

The IRS issued the February 14, 2006 Quality Assurance Bulletin ("QAB") dealing with 401k plan exclusions of part-time, temporary, and seasonal (A.K.A. "part-time") employees. T

This QAB revolutionizes the way IRS document examiners will look at 401k plan eligibility clauses and warns that inadequately drafted provisions dealing with part-time employees may be disqualifying, regardless of any plan determination letter.