ANNOUNCEMENTS

September, 2013

401kTest.com partners with NH Hicks to provide more comprehensive Tech Support:

October, 2012

2013 Plan Limits have been released!

Our "Upload Employee Data" feature is up and running properly:
We got it fixed within 24 hours after discovering the problem.

June, 2011

401kTest.com 3.0 is a Success!

March, 2011

The release of 401kTest.com 3.0 is eminent!

January, 2011

401kTest.com added an HCE Refund Calculator to our ADP/ACP testing site.

Our HCE Refund Calculator will launch this Friday, Jan. 7th.

December, 2010

We are developing an HCE Refund Calculator:

September, 2010

The Search is Still on:

August, 2010

401ktest.com is Looking for a Low-Cost 401k Option for our Clients:

June, 2010

401kTest.com now provides administration tools that can be added to your web-site

• Loan Payment Calculators and loan schedules for monthly, weekly, and bi-weekly payment options!
• HCE Limit Calculator.
• Roth v. Traditional Retirement Plan Comparison Tool.
• EBAR Calculation Spreadsheet - Using the Annual Method.

January, 2010

The 2010 table has been added for ADP / ACP testing

November, 2009

401ktest.com just lowered our annual subscription cost by 68%!

October, 2009

We added a table showing limits for S.I.M.PL.E plans:

TPAs don't make money with a SIMPLE, but we find ourselves recommending them for several reasons including the following:
• No annual 5500 filing requirement.
• The Prototype document is very easy, so there's little to no document administration costs.
• The withholding limits have risen to the point that they are a good option in many cases! Some clients weren't taking advantage of the higher limits allowed by the 401k, so there wasn't a good reason to continue paying for a relatively expensive retirement plan.
• The safe harbor match (and the Profit-sharing contribution) is lower than with a 401k.
• Companies have some flexibility regarding who can enter the plan. You can restrict access into a SIMPLE for almost 3 years if you like.

IRS announced 2010 limits for retirement plans:

August, 2009

April, 2009

• Provides great service for your clients
• Doesn't provide investment services (or TPA services), and doesn't plan to.
• Has the technical ability to create a report that will directly upload to 401ktest.com, as well as Employee Census reports needed by TPAs at year-end.
• Is able and willing to expand - Not everyone meets this criteria, though they think they might.

• Exclusive listing on our site as an 'Advisor Friendly' firm.
• Certification (that can be displayed on your site), as an 'Advisor Friendly' firm.
• A discount for our interim testing service - IE: Your clients will have exclusive access to a service that is 10 times better than the interim testing provided National Firms!
• We will refer local IAs and TPAs to your company.
• A protected (and highly marketable) territory!

March, 2009

• Allow users to upload files directly from Excel (.xls). right now uploads are done two ways:
  1. (.txt) files - These files are very easy to create in Excel, but it would be 30 seconds faster if clients could pull data directly from a .xls file. Some clients test their data 50 times a year, so we know every second counts!
  2. Direct upload from your Payroll Processing Company. Some Payroll Processors create a file specifically for 401ktest.com. If your processor doesn't; please have them contact us and we'll work with them to make it happen!
• Eliminate the Margins on the free online tools. There's a small margin that shows up when you bring a tool up online. This margin isn't there when you purchase the product, but it's there on the online version. It's a small thing, but we'd still like to take care of it.

February, 2009.

Why are we using Project Wonderful?
• We can target ads to thousands of customers (We're advertising on their site as well as allowing ad space on our sites).
• The ads are based on a daily auction, rather than pay-per-click. If someone really wants to advertize on a certain site (on a certain day), they only have to out-bid the competition.
• There is a large network of companies affiliated with them.
• There's no initiation fee or large deposit requirement to advertize with them. That make is easy on the budget!

January, 2009

• Distributions are taxable in the year made. Distributions are now on the cash-basis like more taxpayers, which makes things simpler.
• If the plan fails and a company makes the correction prior to March 15th, there?s no penalty on the distribution! Plan failures are expensive enough due to the extra administrative work required to address them. The penalty has always been salt in the wound.
  Point of fact: The excess distribution penalty is paid by the company, not the employees. Premature distribution penalties are paid by employees.
• If your company has automatic enrollment / automatic contribution provisions, you have till June 30th to make the distributions without threat of a 10% penalty. This gives you additional time to re-test the plan! I?m not a big fan of Auto-enrollment plans, this new provision notwithstanding. Hopefully, this later deadline will apply to all 401k plans in the future.

December, 2008

November 21, 2008.

November, 2008

We'll feature a sponsor from our links page each month.
We make an effort to endorse sponsors with a good reputation in the business community. Please let us know if you have a bad experience with any sponsors. We will investigate your concerns and consider revoking our endorsement.

October, 2008

We plan to feature one of our sponsors on a monthly (or semi-monthly) basis from now on. We will only feature sponsors with a good reputation in the business community.
Please let us know if you have a bad experience with any of our sponsors. We will investigate your concerns and work to resolve them. This is one of many efforts taken to ensure the integrity of our sponsors.

September 18th, 2008.
Central Ohio was hit by a massive wind-storm last Sunday, which knocked out our servers and our electricity. I don't expect our service to be up and running properly for some time. My electricity and ISP is up, but many ISPs (like Time Warner) are still having trouble. We apologize for the loss of service. I know everyone is working as hard as they can to get things back to normal.

August 2008

• SBCs work harder (and hopefully smarter) than anyone else.
• (Working hard) expresses optimism and hope for the future in my opinion. SBCs are working to create a better life for themselves, and often for their families as well.
• SBCs usually wear a lot of hats, so they are often up late at night (once or twice a week) catching up with office work (boring work!).
• What are you doing in the office after 10PM! Are you kidding me! Go home and get some sleep!

We plan to feature one of our sponsors on a monthly (or semi-monthly) basis from now on. We will only feature sponsors with a good reputation in the business community.
Please let us know if you have a bad experience with any of our sponsors. We will investigate your concerns and work to resolve them. This is one of many efforts taken to ensure the integrity of our sponsors.

Projected Financial Statements.com has a very sophisticated spreadsheet template that creates a 3 year business plan. Simply enter historical financial data (then assumptions) into the yellow shaded cells, and the financial projection (and cash-flow projection) is created instantly. The following reports are generated:
• Binder Cover and Spine insert
• Balance Sheet, Income Statment, and Direct Method Cash-Flow Statement
  Monthly Projections for the 1st 12 months, and annual statements for the subsequent 2 years
• Detailed assumptions including Headcount projections, sales, and a projected Depreciation Schedule.

The company founder took a projection tool (that's been used by CPA firms and CFOs for almost 20 years) and developed it into a very user-friendly program. I think you'll like it.
Take a look at their products and tell them that 401ktest.com sent you!

We're going to host a series of online meetings to demonstrate 401ktest's functionality and ease of use. Please contact us ASAP if you would like to attend. We are limiting the size of each class so everyone will have a chance to ask questions and provide feedback. If you can't join us this Wednesday, don't worry. Future dates will be announced very soon.

These demonstrations are being conducted to help our online customers understand the value of this service. Many people see the subscription price and assume they are going to get what they pay for - very little! Let us show you that nothing could be further from the truth. We are keeping the price low so everyone in our target market can afford it.

Our highly respected collegues have suggested that we raise our price to $250 per year or higher. We have no intention of doing this. If such a price increase every happens, you'll know that we were bought out by Fidelity, Raymond James, Paychex, Datair, or another large player in the 401k industry. Till then, we'll keep delivering an excellent product at an excellent price!

July 2008

Featured Link:

We plan to feature one of our sponsors on a monthly (or semi-monthly) basis from now on. We will only feature sponsors with a good reputation in the business community.
By the way: Please let us know if you have a bad experience with any of our sponsors. We will investigate your concerns and work to resolve them. This is one of the efforts we make to ensure the integrity of our sponsors.

EM Trend Advisors provides trend analysis for serious investors.
I chose to feature EM Trend first after reading that Southwest Airlines made a profit last quarter. While other Airlines lost tons of money because of fuel prices, Southwest "cleaned up".

Southwest understands that they are not only an Airline Company, they are also a commodities investor. They (and all other airlines) have a major stake in the crude oil market. Many airlines don't seem to understand how the crude oil market impacts their livelyhood, or they just don't invest enough time and money to take advantage of this fact.

Here's my point. We are not just employees: Most of us are also investors. As our investment portfolios get larger, we should recognize that our role as an investor is becomming more and more important, and we should take this role seriously. Consider this: If you have $500,000 in the market (thru 401k, savings, Insurance surrender values, etc.), your role as an investor could be more important than your role as an employee.

Every serious investor should have a good trend analyst on their team. Visit EM Trend Advisors' web-site. Take a look at their blogs and their track record. If you decide to work with them, tell them we sent you!

May / June 2008

• You will be prompted to save changes upon exiting a page.
  If you forget to save changes to an edit field, we?ll give you a friendly reminder.
• You will be able to renew your license online.
  You no longer need to call with your credit card information (or mail a check) in order to renew your current UserID.
• The Administrator?s license will become more powerful.
  Under the new configuration, an Administrator will have control over a group of Single User Licenses.
  • You buy an admin license, and then purchase as many single-users licenses as you need.
  • When you issue a single-user license to a client, your client can upload payroll information for you, then you can access it instantly. You and your client will have secure access to the client?s file.
  • Each Single User license (under an administrators control) has a separate password and userid.
• 401k courses will be made available.
  Earn CPE credit for the material covered on our Terminology page. Most of the information provided on our Terminology page is being developed into a series of courses that are approved for Continuing Professional Education in most states.
• An alternative method for calculating ADP and ACP %?s is being added to the testing process.
  If the IRS comes up with a 3rd method for calculating an average, we?ll consider adding that also.
• More content is being added to the Terminology section.
  We are also making more content available to non-members.

One year subscription ? Unlimited usage:
• Single-company license - $79.00
• Administrator?s license - Based on volume: Please contact us for details.

Continuing education courses ? Earn up to 3 hours of CPE per course while learning valuable information about 401k and 403b administration and testing.
• $59 per course.
• Members receive a $20 discount, bringing the price to $39 per course.

April 2008

• Mutual fund fees:
  This issue will not go away, nor will it be fixed by anyone in Washington (in my opinion). However we currently have a situation (created by Washington) that puts a great deal of pressure on Plan Sponsors. Plan Sponsors are now required to provide full disclosure of plan costs to participants. But there?s a problem; Brokers and Advisors are not required to provide full disclosure to plan sponsors. Do you see a problem here? Me to. In my opinion, the full disclosure mandate can not be taken seriously under these circumstances.
  
  Let's assume we get to the point some day where all information is available: Will participants really want to see it? I believe participants would not be interested in this minutia, and I?m pretty sure they are more concerned with the performance of their investment. Speaking of which.
  
  
• Investment Performance.
  Lawsuits are on the rise. The most troubling lawsuits are those that 2nd guess a plan?s fee structure. For one thing, it?s very hard to get this information. I have spent hours of research and coercion, and I?m not confident I have found all the ways that fees are passed from Mutual funds to brokers. In addition, I think some brokers don?t take advantage of all the revenue-share options made available by mutual funds ? IE: Many brokers are leaving money on the table, which ultimately adds to the participant?s cost. Is this frustrating? Yes! Very! Should anyone get sued over this? No!
  Mistakes happen. It's human nature. Hindsight is 20/20. Pick your favorite cliche.
  
  I found a couple other issues of particular concern. These issues will not affect investment performance (In fact they will probably improved investment performance overall), but I still find them troubling:
  • Many large companies no longer offer mutual funds.
    In response to the full-disclosure issue, many companies no longer offer mutual funds. Instead, they are offering actively managed lifestyle funds. That?s one way to take care of the full-disclosure mandate!
  • Many other investment options are being away.
    Technology is making it possible for 401k?s to provide more choices to their participants; and many large companies took advantage of this by allowing employees to direct their own investments. However, research is showing that most employees? investment performance is extremely poor.
    In response to this, many sponsors are taking more control of the investment decisions of their plans. More precisely, they are hiring professional investors to actively manage plan assets. One the one hand, this is a great service that is usually only available to the wealthiest among us. On the other hand, I am sorry to see participants lose the freedom to choose their own investments.

MARCH 2008

• 401k Basics
• ADP / ACP Testing
• 403b Testing Basics - This course covers 4 tests in detail (The ACP test, Universal Availability, Maximum Deferal and Annual Limitations). It also explains the Coverage test and the Gateway minimum test - The circumstances under which these tests become necessary, and the basic guidelines of these tests.

• CPE courses will be published on 401ktest.com: After we develop an online courseware platform I can be proud of, CPE approved courses will also be offered here at our site. Members will receive a substantial discount of course!
• The site is going to get a make-over: The ADP/ACP testing process works better than we hoped when we envisioned this site, so there won't be any changes to that basic testing process. But there are a few things I'd like to change. I'm not just the President of 401ktest.com, I'm also a client! As I've used the site, I've noticed a few improvements I would like to make:
  • When in an Edit field, I'd like to see the 'Save' button moved to a more visible location. This is a learning curve issue that users get comfortable with after a few minutes on the site, but I still think the 'Save' button should be moved to a more prominent location.
  • We're going to prompt you to save before you leave an edit field. Currently, if you make a change to an employee or a company field, you have to hit save or your changes will be lost with no warning. This has been a great source of frustration for me a few times, so I'm surprised that no one else has complained about it.
  • More license options will be available to purchase online. You can currently buy a single-user license or a multi-user license online. You will soon be able to buy multiple single user licenses online. We also want to provide a way for your to renew your annual subscription online, rather than mailing a check with your client number in the memo line. Who wants to write checks these days? It takes so long! And stamps are so expensive! Gosh!

JANUARY 2008

• Some administrators should be ashamed of themselves, but they are not doing anything immoral or unethical. I wouldn't do business with them, but that's my choice.
• Clients should insist on full disclosure of fees. However, our government's time might be better spent on something else.
• 401k fees are currently knowable. If your administrator doesn't disclose them, you can find them without too much difficulty. Every mutual fund has a prospectus which discloses fees paid for administration. Fees taken (over and above mutual fund fees) have to come from somewhere. If the company is not paying them directly, they have to be taken out of fund assets, so it wouldn't (shouldn't) go un-noticed.
• It's your money. Pay attention to what's going on. If you don't like what's happening, fire your administrator and hire someone more honest and less greedy.

• The only tax-deductible retirement vehicle available, other than a company sponsored plan, is an IRA. The limit on IRAs, though rising, makes them an inadequate retirement planning option. An after-tax retirement plan is good for those who can afford it, but most Americans need the tax savings now, so they can afford to defer enough for later.
• Social Security is also not a valid retirement option, and it was never meant to be a retirement option. Social Security was intended to be a supplement. Nothing more.
• Everyone with an income should be saving something for a time when they are no longer able (or willing) to work. As you make plans for retirement, you should assume that Social Security is not going to be there. If SS is available when you retire, consider it a pleasant surprise.

A retirement plan doesn't have to be a big company expense:
If you can't afford to offer a 401k plan, then consider offering a SIMPLE retirement plan. Here is one way to structure a SIMPLE plan so it minimizes cost and targets your benefit dollars strategically:
• Opt to offer a 3% match. You must choose between a 3% match or a 2% contribution for all eligible employees. If you choose the 3% match, you are only paying money for employees who choose to participate. Also, you have an option to lower the 3% match to 1% for up to 2 years in a row. So if things get really tight for the company, you have this option to pull back company expenses to almost nothing.
• Let the participants pay for the plan administration expenses. SIMPLE plans are very inexpensive to manage because there are very few testing requirements, and no annual 5500 filing requirement.
• Restrict access to the plan if you like. You can make Employees wait up to 2 years to join a SIMPLE plan. You can also let them join immediately.
• Officers can participate in this plan with no fear of anti-discrimination testing. As long you follow the rules, the SIMPLE plan functions like a Safe Harbor plan.
An employee making $50,000 could have deferred as much as $12,000 in 2006 - $10,500 in withholdings and $1,500 in matching funds. If the company is passing administrative costs to the employees, each employee should expect to pay about $75 per year plus 1/2% to 3/4% of total assets to the administrator - Perhaps less. Under this cost structure, an employee with $100,000 in his retirement account would pay about $825 in administration fees. Most 401k participants pay more than this, though many are not aware of it.

A company (with $300,000 in annual payroll) might pay $6,000 in benefits for a plan like this - probably less. And these benefit dollars are targeted to employees who perceive its value:
• Assume each employee makes $50,000; that 4 of them participate, and the 4 participants contribute $10,500 per year.
  The company would give each participant a match of $1,500 each year (1,500 * 4 = $6,000).
  The match can be funded after the end of the year, or each pay period.
• Employees who are not interested in retirement (and who wouldn't appreciate the benefit) won't cost the company anything under this plan: Company contributions are in the form of a match so, if an employee doesn't invest their own money in the plan, they won't get a benefit. I have seen many poorly structured 401k plans that provide $1,000's in benefits to employees who don't care; just so the Officers can participate in the plan. This SIMPLE plan structure doesn't allow that to happen.
• If $6,000 sounds like a lot of money, keep in mind this represents less than 2% of total payroll costs. Total annual payroll costs for a company this size would be about $330,000 - $300,000 for salaries, and 30,000 for Employer Payroll Taxes (FICA, Medicare, Workers' Comp. Insurance, State unemployment, and Federal Unemployment).
Retirement plans don't have to be expensive. Companies can offer great benefits for very little money, as illustrated in this example.

DECEMBER 2007

OCTOBER 2007

• Average Deferral Percentage (ADP) Test (IRC §401(k))
• Average Contribution Percentage (ACP) Test (IRC §401(m))
• Multiple Use Test
• Coverage Test (IRC §410(b))
• Top Heavy Test (IRC §416)
• Maximum Deferral Limit Test (IRC §402(g))
• Annual Additions Limitations (IRC §415)

SEPTEMBER 2007

• Additional updates to the Terminology page. We want to help people understand the unique language used in the Pension industry, so this page will be updated several times a year.
• Our product offering and pricing has been updated. We are also making more of our products available for purchase online - as a convenience. Please also feel free to purchase our services by contacting us directly at info@401ktest.com.

• Assistance with Cross-tested 401k Contributions Cross-testing will become available to prototype 401k plans in 2008, so we are going to provide assistance with some of the repetitive and time consuming functions related to this test, like Tiered testing and the E-bar calculations.
• Vesting and a test of simple limits: These items are still on our production schedule, but our primary focus is on Cross-testing.

AUGUST 2007

• Single user licenses are now available for bulk purchase. Some TPAs and investment managers have expressed an interest in buying single user licenses for their clients. I hadn't considered this, but it's a good idea. With single-user license, your client can:
  • Perform their own interim tests and intitial year-end test.
  • Transmit their payroll data to you quickly and safely.
  This can be a great value-added service for your clients. Thank you for the suggestion!
• Our 'Terminology & Tables' page has been updated: We provided this page to help employers navigate some of the acronyms, terms and numbers used in the 401k community. We may also provide a course on discrimination testing for those who are interested in learning more about the process.
• We purchased another web-site address - www.403btest.com: A new testing procedure has been put in place for so called 403(b) plans. We plan to create a systematic testing process to help non-profit organizations navigate these new rules. PLease E-mail us if you would like to beta test this process when the time comes.

JULY 2007

• Current Year Method testing: For more aggressive clients who have adopted the Current Year Method without a safe harbor match. NOw you can perform the current year method as often as you like. This can help minimize (if not eliminate) plan failures.
• Improved reporting: The final report provides detailed results to assist with 5500 preparation
• More flexibility: HCE status can be permanently forced for any eligible employee. You have always had the ability to manually move employees from one category to another during testing: But this feature makes the change in the employees' file.

JUNE 2007

• E-Commerce: Credit Card Processing is up and running: We had announced that it would be ready by the end of the summer, but we like to under-promise and over-perform as a general rule.



• We have segregated our remaining production goals into two tiers, in order of expected completion. The following items should be completed in July:
• Manual override for HCE Status:
• Test report upgrade:
• Current Year Method: I prefer the Prior Year Method as a management tool to maximize HCE contributions, but many administrators prefer the Current Year Method ? See details below. The people have spoken, so we moved this upgrade up on our priority list.


• Testing of simple limits on the employee report. We?re going to expand this project to include the percentage vested year-to-date. Vesting schedules are required on a quarterly basis, and we want to be helpful, so we?ll add this feature to the ?simple limits? report. This feature should be available before the end of the 3rd quarter ? September 30th.



• There are a couple items that have fallen off our production schedule due to a lack of interest:
• 403(b) Testing: There have been a few requests for this service, but not enough to justify an investment of time and money. We will consider this for future updates.
• Output reports in a format other than Excel. A Mac user asked if we were planning to produce reports in a MAC friendly format. We will keep this under advisement, but it?s not a priority for our current audience. IE: We had over 20,000 hits on this site in the last month: 3 of them were MAC users. I really like the commercials though!

MAY 2007

• Speed - Demand for the site is picking up steam, as anticipated. Our ISP has invested a great deal of money to ensure efficient navigation: We?ll continue to be proactive in order to keep navigation easy and fast.
• Features and future development plans: We have developed a site that will save you a great deal of time; but we?re not going to stop there. We have an aggressive development schedule planned for the summer:

• Uploads payroll data from a tab delimited text file ? If your payroll program won?t create a file(s) that can be directly uploaded; just download your payroll data to Excel, configure it as needed, then save it as a text file. A prior year test takes two files to perform the test - Prior year data and current year data. Each file takes less than 10 seconds to upload.
• Eligibility criteria can be filtered based on hours worked per year, employee start date, and/or employee age. If your plan has more criteria than this, you can manually move an employee from one category to another by dragging and dropping them. This is done just before the test is performed and it is a temporary status change.
• Catch-up contributions are taken into consideration for HCEs who are 50 or older. This is a very powerful feature, and it can be easily overlooked when you perform a test manually.
• When test results are reported, you have an option to download current year testing information to Excel. Some may want to run pro-forma scenarios this way, though it would be easier to use 401ktest.
• Security: We go to great lengths to make sure your information is kept private. My ISP also handles medical records, so we do everything reasonable to secure our clients data.

• E-Commerce: You will be able to purchase a license securely over the web. This is our first order of business. We hope to have this feature available soon.
• Current Year Method: We?re adding an option for those who have opted to do the ?Current Year? test. I wouldn?t recommend that anyone opt for current year testing. BE WARNED: No testing can guarantee that you will pass when you use the ?Current Year? method. Anyone using this method should test every time they run payroll, especially in the 4th quarter, in order to minimize the impact of failing a test.
• Manual override: We?re adding a feature so an employee can be permanently designated as an HCE. Such an override is not for the faint of heart. While you WILL be able to (deselect the employee as an HCE at any time), it will be very easy to forget that you selected them in the first place. I would recommend that you drag and drop an employee if you need to change their status prior to testing. However; this feature will be useful in some cases.
• Testing of simple limits on the employee report. The employee report is primarily provided to double-check the accuracy of an uploaded file; but were going to add a feature that will test data for simple limits, and give you a warning when something looks out of the ordinary. Most payroll programs do this already, but it won?t hurt to have another program looking at your data with a ?critical eye?.
• Test report upgrade: Prior year information is going to be added to the report created after testing is complete. This information may be useful to TPAs and sophisticated users who want to double-check their results or run additional scenarios in Excel ? rather than in 401ktest.com.
• 403(b) Testing: We have had a few requests for a test routine for Non-profit organizations. If we get more requests for this service, we will consider adding it.

April 2007

We?re scheduled to go live on May 1, 2007. Here are our introductory rates:

• One year subscription ? Unlimited usage:
• $45 for a single company license
• $300 for up to 100 companies
• $260 to upgrade from a single company license to a 100 company license ? The term of the license is 1 year from the date of the upgrade

• Advertising on this site: Please contact us at 614-313-4130 if you would like to help sponsor this site.
• $500 per year. We will link to your web-site for one year. Please provide a couple sentences about your company, your link, and a small banner (approximately 500 x 60 pixels).

• To help small Third Party Administrators streamline their compliance testing procedures; giving them a chance to be more competitive.
• To provide Companies with a tool to help them maximize (401k contributions for their Officers and HCEs) without failing the compliance test.

Sign up with 401ktest.com