Conference confronts concerns over retirement plans

Expect default enrollment of employees into 401(k) plans, greater scrutiny by regulators.In early 2010, federal lawmakers are likely to pass a requirement to automatically enroll employees in corporate retirement plans, according to John Bigley, director of the corporate retirement division at Amper Financial Services, in Bridgewater.

“The default choice would be enrollment in a plan,” he said. “Employees would have to make a conscious choice to opt out of a plan.”

Bigley and other Amper professionals spoke about retirement plan strategies and trends Thursday morning at a conference held at the Small Business Development Center at The College of New Jersey, in Ewing.

Amper Financial, a division of the CPA firm Amper, Politziner & Mattia LLP, sponsored the event, which drew representatives from small and big businesses alike.

“I’m here because our company wants to see how we can increase employee participation in our retirement plan,” a 401(k), said Irma Voegtlin, a retirement plan specialist with Berlitz International Inc., a Princeton-based global company that provides language instruction and cross-cultural training. “Fortunately, we’ve maintained the company match, so there’s plenty of incentive for them to sign up.”

East Brunswick business consultant Gary Ciner said he came to learn more about retirement plans so he can provide more advice to his clients.

Interest in 401(k) and other retirement plans is still strong despite the down economy, Bigley said.

“Most companies are maintaining their 401(k) match program,” he said. “Some employees have stopped contributing, but that’s likely tied to the high jobless rate.”

The recession is also spurring increased scrutiny by regulators, Bigley said.

“Tax revenues are down, so regulators are taking a closer look at corporate retirement plan compliance,” he said. “It’s a big issue, especially when you consider that since 2007, 70 percent of plan audits have failed, resulting in a total $1.5 billion of fines.”

More companies are considering “nonqualified” retirement plans, which are designed to attract, reward and retain key employees in almost any sized business, said Amper partner Onofrio R. Cirianni.

“A firm generally does not get a current tax deduction for its contributions to a nonqualified plan,” Cirianni said. “But the plans also offer a company more flexibility in determining when to make contributions and how much to contribute — and how long a participant must wait to be vested. Nonqualified plans also give a company the ability to be selective about who can participate in the plan.”

E-mail Martin C. Daks at [email protected]