NAPA Net - Polling Places 011720

Will a (Much) Bigger Start-Up Credit Matter?

Surveys of small business owners have consistently shown cost to be a significant impediment to the adoption of a retirement plan for employees. The SECURE Act includes a massive increase in a tax credit for start-ups – do you think it will matter?

Under SECURE, the amount of the tax credit is now capped at $250 times the number of NHCEs eligible to participate in the plan up to a $5,000 annual maximum (but never less than $500), though, as with prior law, the credit is still limited to 50% of the start-up costs.

Moreover, if the new plan automatically enrolls employees into the plan on a uniform basis (but at no minimum rate), the employer will get an additional annual credit for start-up costs of $500 per year. And all of this is effective Jan. 1, 2020. Yes, effective for new plans beginning now.

Regardless of whether you work with start-up plans or not (but especially if you do), this week we’d like to know what kind of impact you think this huge increase in the tax credit for start-ups will have – and if it might affect your approach to these plans.

Question Title

1. What impact do you think the massive increase in tax credit will have on new plan start-ups?

It will have a huge impact on new plan start-ups!

it will have some impact.

it probably won't have much impact.

it will encourage more firms/advisors to sell in that market, but may not impact the number of new plans.

it won't have any impact.

who can say?

Any comment(s) on the trend(s) - or lack thereof?

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2. Do you currently focus on start-up plans?

yes.

don't focus on those, but do have some in my portfolio.

no.

depends on what you mean by "focus."

Any comments on the trend(s) with this (or lack thereof)?

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3. How many start-up plans have you sold in the past year?

None

1-5

5-10

11-15

More than 15

Any comments?

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4. Any chance the SECURE Act changes might lead you to reconsider your current focus?

No, I'm already focused on start-up plans.

No, not currently interested, and not enough here to change that.

Yes, SECURE is going to make a big difference in my focus.

Not sure yet, but I'm keeping an open mind.

Yes, I was focused on start-ups, but now I'm rethinking that focus.

Any comment(s) on these trend(s) (or lack thereof)?

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5. Realizing that a lot of variables come into play, in your experience, what is the cost (to a plan sponsor) of a start-up plan for 50-75 employees in the first year?

less than $1,000

$5,000 - $7,500

More than $10,000

$1,000 - $3,000

$7,500 - $10,000

$3,000 - $5,000

I've no earthly idea.

Care to explain your response (or assumptions)?

Question Title

6. What's going to top your list of topics for Q1 meetings with plan sponsors/committees (you can check more than one)?

SECURE Act implications

The markets.

Investment review

Litigation trends

Service metrics

Preparations for RPF

Education plan.

Service contract provisions.

Something else?

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7. Other comments about start-up plans, start-up plan tax credits, increases in start-up plan tax credits, trends in start-up plan tax credits, or life in general?

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8. What is your role working with retirement plans?

Advisor

Provider

TPA

Plan sponsor

Recordkeeper

Other (please specify)

Question Title

9. What size plans do you PRIMARILY work with?

Under $10 million in assets

$10-$20 million

$20-$50 million

$50-100 million

$100 million - $250 million

$250 million - $500 million

Above $500 million

Other (please specify)

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10. Suggestions for future survey questions?

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11. All responses are anonymous and confidential, of course - but if you'd like me to know who you are, or allow for a response - or want to be included in the lottery for a free registration to the 2020 NAPA 401(k) Summit, you can leave your email below...

Question Title

* 1. What impact do you think the massive increase in tax credit will have on new plan start-ups?

Question Title

* 2. Do you currently focus on start-up plans?

Question Title

* 3. How many start-up plans have you sold in the past year?

Question Title

* 4. Any chance the SECURE Act changes might lead you to reconsider your current focus?

Question Title

* 5. Realizing that a lot of variables come into play, in your experience, what is the cost (to a plan sponsor) of a start-up plan for 50-75 employees in the first year?

Question Title

* 6. What's going to top your list of topics for Q1 meetings with plan sponsors/committees (you can check more than one)?

Question Title

* 7. Other comments about start-up plans, start-up plan tax credits, increases in start-up plan tax credits, trends in start-up plan tax credits, or life in general?

Question Title

* 8. What is your role working with retirement plans?

Question Title

* 9. What size plans do you PRIMARILY work with?

Question Title

* 10. Suggestions for future survey questions?

Question Title

* 11. All responses are anonymous and confidential, of course - but if you'd like me to know who you are, or allow for a response - or want to be included in the lottery for a free registration to the 2020 NAPA 401(k) Summit, you can leave your email below...

1. What impact do you think the massive increase in tax credit will have on new plan start-ups?

2. Do you currently focus on start-up plans?

3. How many start-up plans have you sold in the past year?

4. Any chance the SECURE Act changes might lead you to reconsider your current focus?

5. Realizing that a lot of variables come into play, in your experience, what is the cost (to a plan sponsor) of a start-up plan for 50-75 employees in the first year?

6. What's going to top your list of topics for Q1 meetings with plan sponsors/committees (you can check more than one)?

7. Other comments about start-up plans, start-up plan tax credits, increases in start-up plan tax credits, trends in start-up plan tax credits, or life in general?

8. What is your role working with retirement plans?

9. What size plans do you PRIMARILY work with?

10. Suggestions for future survey questions?

11. All responses are anonymous and confidential, of course - but if you'd like me to know who you are, or allow for a response - or want to be included in the lottery for a free registration to the 2020 NAPA 401(k) Summit, you can leave your email below...