Principal’s Letter

Dear Colleague:

When 401(k)s were originally introduced by the IRS in 1981, a loan feature was included with the idea that the ability to access funds when needed, would help participants become more comfortable with contributing regularly to a 401(k). In this issue we look at how 401(k) loans can actually be detrimental to a participant’s retirement readiness.

ERISA 3(38), 3(21), 3(16) and the differences between them can be confusing for many plan sponsors. We explore the distinctions between them and their bearing on a plan sponsor’s fiduciary responsibility.

The new Section 199A business income deduction now allows taxpayers, other than corporations, a deduction of 20% of qualified business income earned in a qualified trade or business, subject to certain limitations. In this issue we look at what this means for business owners and how retirement plans can play a part in maximizing this deduction.

Lastly, we update you on the latest ABG news and review important compliance deadlines. We hope you find this issue informative. As always,

Dennis Davis, SPHR, CEBS, CPC, AIF®

Principal, ABG Southwest