Retirement Plan FOCUS Bulletin - First Quarter
What's new at Fulton Financial Advisors?
Payroll Integration with JetPay
FFA Retirement Services is happy to announce that we are now able to provide 360 degree Payroll Integration with JetPay. This integration allows Fulton and JetPay to exchange critical plan data regarding your retirement plan and essential payroll data. This integration eliminates the need for the plan sponsor to act as an intermediary between payroll and provider.
In a completely automated fashion, JetPay remits payroll files directly to Fulton which we will use to update participant accounts, transfer contributions, and update participant data on your behalf. In addition, Fulton will also remit to JetPay any payroll changes that are essential and relevant to them as payroll provider. This includes changes to contribution rates, new enrollments, and providing information regarding new loans such as payment amount and number of payments.
JetPay is a national payroll provider that has its headquarters in the Lehigh Valley area. In addition, their Outsourced Human Resources team offers HR expertise to small and medium sized businesses - working as an extension of their clients’ organizations to design HR Strategies and tailor solutions.
Maintaining a Better Plan
Helping Participants in Volatile Markets
Up and down markets are hard enough to contend with from a personal perspective, but it’s even more difficult when you have anxious participants approaching you about their 401(k) balance and are looking for answers. Although none of us have any idea what the markets will do in the future, we can look to some historical facts to give us perspective. A few thoughts that you can share with participants are:
There are a few things that we can all do to help prevent fraudulent distributions:
- Prior to 2018, the S &P had 9 straight years of positive gains and has had positive gains 14 out of the last 16 years (including 2018) (source: BTN Research)
- The S&P 500 Index has been up an average of 9.8% annually for the last 50 years (source: BTN Research)
- The return of the S&P 500 Index has been up an average of 13.1% over the last ten years. However, if you were not in the market during the 10 best days in the market over that 10 year period – your annual return would have dropped to 7.9% (source: BTN Research)
- The taxable bond market was just barely positive in 2018 – with an overall yield of 0.1% in 2018 and was negative until the last day of the year (Source: Bloomberg Barclays)
- Bond returns have been an average of 5.1% per year for the last 25 years source: BTN Research)
- At one point in the fourth quarter, the S&P 500 has declined almost 20% from it’s all time high. The last 10 times such a decline has happened, the S&P 500 took an average of 24 months to return to its all-time high again. However, as of mid-February, the market has recovered about two thirds of that decline (source: BTN Research)
- Earnings per share of companies in the S&P 500 are projected to increase 8% in 2019. Actual earnings per share increased 20.5% in 2018 (source: FactSet)
Historically speaking, the markets have provided consistent returns. Having a long-term strategy, sticking to it through the volatile times and consistent re-balancing are the essential tools to a long term investment strategy.
If you would like further information to you share with your participants, we can provide an article written by a member of our Investment team that speaks to the markets in greater detail. Please reach out to your Relationship Manager if you would like to have a copy of this article.
Industry & Legislative Changes
2019 Contribution Limits
There were a number of changes to the 2019 contribution limits for retirement plans. Highlights include:
- Contribution limits for employee contributions has been increased by $500 – raising the contribution limit from $18,500 to $19,000
- Limits on catch-up contributions remain unchanged at $6000
- The total contribution limit per individual (including employer contributions) has been raised from $55,000 to $56,000 for 2019
- The threshold for determining if an employee is a highly compensated employees (for discrimination testing purposes) has been increased from $120,000 to $125,000. This is the first time in five years that this threshold has been increased
Don't take our word for it
Why Employers Should Care about Employee Financial Stress
The following article helps to illustrate the effect that financial stress affects employees. It also highlights how employees prefer to receive assistance. We are always ready to engage with your employees to help improve their retirement outcomes and happy to work with them in a variety of ways. Please click here to explore the article.