What
were the original words, and how and why did it change?
Answer: The original words
were, “I pledge allegiance to my Flag and the Republic for which it
stands, one nation, indivisible, with liberty and justice for all.”
In
1923 and 1924 the National Flag Conference, under the leadership of the
American Legion and the Daughters of the American Revolution, changed the words,
‘my Flag,’ to ‘the Flag of the United States of America.’
In
1954, Congress added the words, ‘under God,’ to the Pledge. Some accounts say
this followed a campaign by the Knights of Columbus, and some say President
Eisenhower encouraged the change due to the threat of Communism at the time.
So
the Pledge now is, “I pledge allegiance to the flag of the United States
of America, and to the republic for which it stands, one nation under God,
indivisible, with liberty and justice for all.”
A safe harbor plan requires an initial plan year that is at
least three full months, making October 1 the effective deadline for creating a
new plan in 2015.
There probably aren’t many better proxies for measuring
small businesses’ interest in creating retirement plans than the sales figures
for a company like ShareBuilder 401k.
The firm specializes in helping small businesses and
mid-sized employers launch safe harbor and tradition design 401(k) plans.
Stuart Robertson, president of ShareBuilder 401k, tells PLANSPONSOR sales are
up a strong 23% to 24% year over year.
“In our corner of the business, there is a lot of energy and
strength in the marketplace,” Robertson says. “Some of that is our own sales
success, but some of that is also the confidence that small businesses have
right now in the U.S. economy.”
The past couple weeks have seen a market reassessment, but the weakness and
uncertainty ruffling the markets is pegged mainly to Europe and Asia, not
necessarily the economy here in the states.
“It’s the fundamentals that are driving interest in safe
harbor plans and other plan designs,” Robertson says. A survey his firm
completed in 2014 found that 86% of small-business owners who currently offer a
plan are willing to spend more on their plan in return for
increased support for the plan and for their employees. This includes paying
for access to investment advisers (37%) and employee guidance tools and
materials (35%).
“So far, we have not seen a change in the buying behavior
based on increasing market volatility,” Robertson adds.
NEXT: Discounts available on safe harbor startup
Robertson says ShareBuilder 401k is, like last year,
offering small business owners $100 in savings if they establish a new safe
harbor 401(k) plan before September 15.
The big benefit of safe harbor plans is their simplicity, he
notes. Traditional 401(k) plans are subject to annual nondiscrimination testing
to ensure that the average deferral rates and employer match contributions of
the highly compensated employees do not exceed the average deferral rates of
the nonhighly compensated employees by more than (i) 125% or (ii) two
percentage points and two times such deferral rates. If the average deferral
rates of the highly compensated employees exceed the average deferral rates of
the nonhighly compensated employees by more than the legally permitted percentage,
then potentially costly remedial steps must be taken.
Safe harbor 401(k)s are not subject to the Actual Deferral
Percentage (ADP) and Actual Contribution Percentage (ACP) tests. Robertson
points out that this provision allows highly compensated employees to max out
their annual contributions to defined contribution retirement plans, sans
testing problems. In exchange for more relaxed testing requirements, plans of
this type must make certain minimum employer contributions and meet other
requirements related to vesting, withdrawal restrictions, and participant
communications (see “Matching
Contributions Under Safe Harbor Plans”).
A helpful publication from Legacy Retirement Solutions’
President Steve Warner warns safe harbor 401(k) plans “must be adopted before
the beginning of the plan year and maintained throughout a full 12-month plan
year.”
“In the context of the first year that the plan or 401(k)
feature is established, a plan is permitted to have a no shorter than three
month plan year for purposes of the safe harbor 401(k) feature,” he explains.
“Therefore, it is possible to establish a calendar year, safe harbor 401(k)
plan as late as October 1st and still obtain the exemption from the ADP and ACP
tests in relation to the remainder of the year.”
More information about the ShareBuilder 401k promotion is here.