Products July 28, 2003

BPP Rolls Out New Small Entrepreneurs 401(k) Plan

July 28, 2003 (PLANSPONSOR.com) - BSW Benefit Plans Plus, LLC (BPP) has rolled out a new retirement solution tailored for business owners with no employees other than a spouse.
Reported by

The Small Business Owner (SBO) 401k-Plan offers unlimited investment options and a choice between self-directed or professional fund management at the financial institution of the participant’s choosing, according to a news release.

The so-called Individual (k) plan is unique in that it is designed explicitly for owner-only businesses and businesses with part-time or seasonal employees that can be excluded from participation in traditional 401(k) plans in accordance with federal law. The product enables small-business owners to contribute significant amounts of income, in some cases more than twice as much as they are allowed under traditional small-business plan regulations.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 2001 lifted many of the limits on the amount and deductibility of contributions for 401(k) plans. Prior to that, single-owner businesses were better off saving for retirement in other types of plans. However, EGTRRA effectively put 401(k) plans on an equal—and, in some cases, better—footing compared with other tax-deferred savings plans for sole proprietorships—giving life to a “new” product, the “Individual (k)” or “solo (k).”

BPP Particulars

The BPP plan also allows individuals to squirrel away up to $40,000 annually by maximizing salary deferrals and employers contributions for 2003.   Participants age 50 and older can tack on an extra $2,000 to that annual contribution amount.

BPP is also offering a variety of resources at their Web site ( www.bpp401k.com ) to assist participants and financial advisors.   Those include:

  • A free plan analysis
  • Comparison of a SEP verses the SBO-401k-Plan
  • Online application
Deals and People July 25, 2003

Study: More Older Workers Staying Put in Workforce

July 25, 2003 (PLANSPONSOR.com) - Driven by retirement savings accounts hit hard by the slumping markets and the increasing numbers of older people without health insurance, more older Americans are staying in the labor force than ever, according to a new study.
Reported by

The Economic Policy Institute (EPI) said that the share of those between the ages of 55 and 64 (who EPI calls “near elderly”) who were in the labor force by the end of 2002 either working or unemployed rose to 62.9% – it’s peak in the post-war era.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

EPI said the share of the 55 to 64-year-olds still working has grown rapidly in recent years. From the end of 2000 to the end of 2002, the number of near elderly in the workforce has increased 3.1%. In the previous 15 years, the increase in the number of near elderly in the workforce totaled only 5.5%, or 0.4% per year.

The acceleration of the share of the near elderly in the labor force has been attributed to a loss in retirement savings as the stock market crashed in early 2000, decreasing access to health insurance for early retirees, and rising health care costs for the near elderly and the elderly, EPI researchers said.

More of the near elderly are in the labor force because older workers are staying in the labor force longer instead of retiring, not because people who had already been retired are returning to the labor force, EPI said.

«