The Retirement Plans tab is where information about the employers' retirement plans are configured. The Secondary Retirement Plan and Employer Sponsored Retirement Plan are only available when Advanced is selected as the Editor Mode.
TRAK allows for up to 3 different retirement plans. They are:
1.The primary retirement plan is the plan an agent is illustrating to a client. This is the account that the advisor typically works with (e.g. 401(k), TSA or 457).
2.The secondary retirement plan is an alternative retirement plan an agent is illustrating to a client. For example, if the primary plan is a 403(b) plan, the client may have an option to make additional contributions to a 457 plan.
3.The third retirement plan would be an employer sponsored retirement plan (such as a state defined benefit retirement plan) that the agent is not involved in.
| Hint: | Configuring the Visible Fields tab first may simplify the input by reducing the number of inputs that must be configured. For example, in the image above the Secondary retirement plan prompts are disabled because on the Visible Fields tab the Secondary Qualified Plan was not checked. |
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The input data is discussed below:
Primary and Secondary Plans
There are two employer plans an advisor may work with that may be configured, the second one being optional (configured in the Visible Fields tab). Each prompt is discussed below:
Qualified Plan Type
Select the type of qualified plan. To choose a custom retirement plan (which allows for more complex defined contributions plans), select Custom Plan from the drop down list. Then select the plan from the next prompt. (See the Custom Retirement Plan prompt for more information on custom plans).
Custom Retirement Plans are configured in Setup/Custom Retirement Plans, and may be preferred for several reasons:
1.They allow for more complex employer contributions (tiered, conditional contributions, profit sharing, Roth matching, etc.) than the employer file editor provides.
2.They are selectable in the Quick Gap and Gap-Analysis calculators.
3.They only need to be configured once when used with different employer or client files.
The Custom Retirement Plan editor is enabled when Custom is selected in the Qualified Plan Type selection prompt. The Custom Retirement Plan editor can be accessed by clicking on the editor button on the right side of the Custom Retirement Plan selection box
or pressing Ctrl-Enter when the editor is focused.
Employee Pre-Tax Contribution Method
Enter the default method by which the employee's contributions are made: Percent of Paycheck or Dollar Value. This will control the method for how the contribution is entered in the Paycheck calculator.
| Note: | Normally, 401(k) plans would use the Percent of Paycheck method and 403(b)/TSA plans would use Dollar Value. |
| The selected method can be overridden in the Paycheck calculator. |
| Notes: | The following prompts are enabled if Custom Plan was not selected as the Qualified Plan Type. |
| The employer matching contribution only match the the pretax contribution. It does not match any Roth contributions. If the employer matching contributions include matching the employee's Roth contribution, a custom retirement plan must be used |
Matching (%)
Enter the percent that the employer matches of the employee's pretax contribution.
Maximum Percent Match
Enter the maximum percent of the employee's contribution that the employer's matching is calculated.
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Maximum Dollar per Paycheck
Enter the maximum dollar per paycheck that the employer will contribute.
Employer Contributions (regardless of employee's contributions)
Dollar Contribution
Enter the per paycheck dollar contribution made by the employer.
Percent Contribution
Enter the percent of the employee contribution that the employer contributes to the retirement plan.
Roth Contributions
Employee Roth Contributions Method
This is the default contribution method for Roth contributions (either Dollar Value or Percent of Paycheck).
| Note: | This prompt will be enabled if the Roth account option is checked in the Visible Fields tab. |
Employer Sponsored (Pre-defined) Retirement Plan
This qualified plan would be an employer sponsored retirement plan of which the advisor is not an active participant by making recommendations to the client (for example, an employer sponsored defined benefit plan).
| Note: | If the employer does not have an employer sponsored retirement plan, uncheck the Employer Sponsored (Pre-defined) Retirement Plan checkbox on the Visible Fields tab. |
Contributions Based On
Select the method that the employee contributions are based on. The options are:
•% of Paycheck
•Specific Dollar
•$ then Percent
•Retirement Plan
•None
Retirement Plan
If Retirement Plan is selected in the prior prompt, select the retirement plan to use for the contributions. If the plan makes contributions as a percent of pay, the value will be displayed here and in the Paycheck Calculator; but it will not be available to edit.
| Notes: | If the employer has different pension plans that they work with, or different tiers of the same pension plan, with different contribution levels for the employee, select % of Paycheck. Then for the Prompt enter the name of the plan. (You may want to abbreviate the name. For example, rather than California STRS, enter CalSTRS). |
| Trust Builders, Inc. works hard at keeping the pre-defined retirement plans included with TRAK up to date. Invariably, however, there is a lag between the occasional changes made in a plan and TRAK being updated. In this rare instance, if the employee makes contributions as a percent of their paycheck, you may want to select % of Paycheck in place of using the retirement plan. |
| If the retirement plan you are working with is not listed, and you would like it added, contact Trust Builders, Inc. at Support@AskTRAK.com. |
Dollar Contribution
If the employee's contributions are a specific dollar value, enter the value here. It will be used as a default, but may be edited in the Paycheck Calculator.
Percent Contribution
If the employee's contributions are a percent of pay, enter the percent value here. It will be used as a default, but may be edited in the Paycheck Calculator.
Prompt for Value in Main Paycheck Data Entry
If the contributions are based on a percent of paycheck or specific dollar value, by default a prompt will display in the Paycheck Calculator. If the value does not need to be modified for each paycheck (e.g. California STRS is 8% of pay), uncheck this box and no prompt will be displayed.
