Products April 1, 2010

PEO Provider Pairs with The Hartford for 401(k)

Smart-Tek Automated Services, Inc., has signed an agreement to offer its client employees a 401(k) plan through The Hartford Financial Services Group, Inc.
Reported by

According to a press release, Smart-Tek Automated Services, Inc., a subsidiary of Smart-Tek Solutions, Inc., recently entered the PEO market with a strategy of attracting clients through enhanced employee benefits.      

By allowing each client to select a customized 401(k)-plan structure, Smart-Tek said it is able to provide a necessary level of flexibility. Smart-Tek establishes a separate 401(k) plan document with each client, an approach that it says provides “insulation for each client from defects in plan operation of the other clients.”

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Smart-Tek Automated Services, Inc., said it provides financial services to small and medium-sized businesses, noting that it relieves “our clients from many of the day-to-day tasks that negatively impact their core business operations such as payroll processing, human resources support, workers’ compensation insurance, safety programs, employee benefits, and other administrative and aftermarket services predominantly related to staffing—staff leasing, temporary staffing, and co-employment.”  The firm said it not only provides core services but a wide selection of employee and employer benefits and aftermarket products.

More information is available at www.smart-tekservices.com

Data & Research April 1, 2010

Kravitz Report Cites Surge in Cash Balance Plans

Based on an analysis of government filings, a new report claims that cash balance plan designs have enjoyed a 359% increase in six years.
Reported by

Plan provider Kravitz said it has compiled research on all cash balance plans nationwide as of December 31, 2007, using data from the most recently available IRS Form 5500 filings.  While in 2001 there were only 1,337 cash balance plans nationwide, by 2007 there were 4,797, according to the report.

“The Kravitz National Cash Balance Research Report” said that 80% of cash balance plans are in place at firms with less than 100 employees, and that most—nearly two-thirds (63%), in fact—have fewer than 36 participants.

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The report noted that 79% of cash balance plans are combined with a profit-sharing or 401(k) plan, and that more than half of those plans use new comparability.

The report noted that, as of 2007, medical and dental groups together accounted for a third (34%) of all cash balance plans nationally.  The report said that employers in California and New York account for 26% of all cash balance plans, with Ohio, New Jersey and Illinois “close behind.”

Since the majority of cash balance plans were created within the past five years, about half have plan assets totaling less than $500,000, though Kravitz said that they “anticipate that this statistical profile will change significantly over the next decade, as plan assets grow exponentially through large annual contributions and guaranteed interest credits.”

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