Compliance October 13, 2020

Social Security Benefits, Taxable Wages Will Increase in 2021

Social Security recipients will see a 1.3% cost-of-living adjustment, and the maximum amount of earnings subject to the Social Security tax will increase by $5,100.

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Social Security and Supplemental Security Income (SSI) benefits will increase 1.3% in 2021, the Social Security Administration announced today.

The cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index (CPI) as determined by the Department of Labor (DOL)’s Bureau of Labor Statistics.

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In addition, based on the increase in average wages, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $142,800 from $137,700. The IRS uses the Social Security Administration’s taxable maximum to determine the taxable wage base for permitted disparity in defined contribution (DC) plan contributions. Permitted disparity allows for larger contributions or benefits with respect to compensation exceeding the Social Security wage base.

For Social Security beneficiaries receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2021 are announced.

According to the Social Security Administration’s website, Social Security will typically replace about 40% of an employee’s pre-retirement income after retirement. It explains that this will be lower for people in the upper income brackets and higher for people in the lower income brackets.

Products October 12, 2020

LT Trust Offers Data Visualization Technology

The aim of PartnerLens is to help advisers serve clients more effectively.

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LT Trust has released PartnerLens, a new technology that uses data visualization to help advisers serve clients more effectively.

PartnerLens provides a snapshot of an adviser’s book of business with LT Trust. It distinguishes those plans that are maximizing the benefit for their participants from those that may need focused attention from the adviser to increase participation, contribution rates, retirement income replacement ratios or investment diversification.

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Some key features of PartnerLens include a multidimensional plan health bubble chart of participation percentage, retirement income replacement ratios and plan assets; a participation equity allocation glide path chart with variances calculated against age-based benchmarks; an extensive library of participant behavior reports with easily exportable data that can be used to increase assets under management; and real-time status updates of annual compliance testing, 5500 filings and participant distributions.

“We created PartnerLens in collaboration with our advisers not only to provide a transparent view of key retirement plan metrics that assist them in easily analyzing participant behavior, but also to visually expose potential revenue opportunities,” says Burke Johnson, executive vice president and chief operating officer (COO) of LT Trust. “Our goal is to provide one of the industry’s most intuitive self-service platforms, virtually eliminating the need of our advisers to contact us with report requests.”

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