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Category: Retirement News

Find up to date Retirement News from the experts at Ubiquity Retirement & Savings. Get important news that can affect your retirement plans, along with tips and advice from our team of Retirement planning experts. Call Ubiquity today for a Free Consultation at 855.466.5825.

A Small Business Owner’s Guide to CalSavers

Answering your top questions about California’s retirement savings program vs. alternative plans

In an effort to help Californians save for a financially secure future, the state of California is rolling out an initiative requiring all employers with five or more employees offer some type of retirement plan for their workers.

CalSavers—the state-sponsored plan—offers a basic Roth IRA to help employees building their retirement savings. But with low contribution limits, limited investments, and limited tax advantages, is it the best solution for empowering your team’s financial future?

At Ubiquity Retirement + Savings, we’ve been helping small businesses and their employees grow their nest eggs for over two decades with affordable, customized 401(k) solutions. While we believe the state’s program is an important step toward ending the looming retirement crisis in California, a 401(k) might be better alternative for your small business and your employees’ futures.

Why is the state of California offering a retirement plan?

55 million American workers—more than 40% of full-time private-sector employees—don’t have access to a workplace retirement savings plan.

Why is this such problem?

As very few employers offer pensions and Social Security is drying up —with funds expected to be depleted as soon as 2035, it’s more responsibility is for saving falls more on the individual than ever before.

Since 2012, at least 45 states have implemented or considered establishing state-facilitated retirement savings programs–with the states of Oregon, Illinois, and our home state of California leading the charge.

In July 2019, California began rolling out CalSavers, the state-sponsored IRA program for the 7.4 million private-sector workers in the state who do not have access to an employer-sponsored retirement savings plan. As of April 30, 2021,  more than 10,000 employers were registered allowing nearly 140,000 individuals to save for their future.

We are rapidly approaching the next CalSavers deadline on June 30, 2021–employers in California with more than 50 employees will be required to enroll in the state-run Roth IRA or offer a private option.

How does CalSavers work?

CalSavers is an automatic-enrollment, payroll deduction Roth IRA. We know this sounds like a lot of financial jargon–so let’s breakdown what that means.

Automatic Enrollment

This means, if your business opts into the state provided IRA, after a 30-day grace period, eligible employees will be automatically start saving for the future through a 5% contribution from their payroll.

How does this work in practice?

Added employees will a notification from CalSavers and will have 30 days to decide to customize their account, opt out of the program, or be automatically enrolled with the standard savings choices.

Payroll Deduction

This means participating employees contribute a portion of their salary into their IRA automatically from each paycheck.

Roth IRA

A Roth IRA is an individual retirement account where the saver pays taxes on money going into your account, and (if you meet certain IRS criteria) all future withdrawals are tax-free.

Roth IRAs have a couple important rules and restrictions to keep in mind.

  • You can’t contribute to a Roth IRA if you make too much money. The income limit for singles in 2021 is $140,000.
  • The amount you can contribute each year changes, based on inflation. In 2021, the contribution limit is $6,000 a year unless you are age 50 or older—in which case, you can deposit up to $7,000.

Click here to read more about 2021 contribution limits

How much does CalSavers cost my business?

There are no employer fees in the CalSavers program–nor are you allowed to make tax deductible matching contributions, as you could in a 401(k) plan.

Your employees, on the other hand, will pay annual asset-based administration fee of 0.825% to 0.95%, depending on their investment choices. These fees will be pulled directly from their assets in their account.

What happens if an employer does not register for a qualified plan by the deadline?

If your business does not register for CalSavers, or an alternative qualified private retirement plan, you may be charged a a $250 penalty per employee starting 90 days after the deadline. The fine increases to $500 per employee 180 days after the deadline.

What are the benefits of enrolling in the CalSavers?

There are several advantages for companies to choose the California’s IRA product including:

  • No cost to the employer
  • No fiduciary risk
  • No investment management responsibilities.

What are the potential drawbacks of enrolling in California’s state provided option?

The access to workplace retirement savings plans offered by Calsavers is a big step forward in solving the looming retirement crisis. However, there are significant drawbacks when compared to alternative eligible 401(k) plans from a private provider like Ubiquity Retirement + Savings.

  • The contribution limit for a 401(k) is more than three times higher than that of an IRA.

Higher contribution rates allow savers to take advantage of the power of compound interest, meaning the more money that is saved, the more it can grow over time.

  • Missing out on significant tax benefits

Did you know small businesses that sponsor retirement plans for their employees are rewarded by the government? Thanks to the SECURE Act of 2019, small businesses can qualify for up to $16,500 in tax credits over a three-year period by starting a qualified retirement plan, such as a 401(k) plan, with auto-enrollment. Employers choosing the state provided option are not eligible for these benefits.

  • CalSavers charges your employees asset-based fees.

Currently CalSavers does not offer the choice to select a flat-fee program, which provides more transparency and ultimately lower costs as savings accumulate. By charging an asset-based fee, your employees are increasingly penalized based on how much they save.

What are the alternatives to the CalSavers program?

Businesses can offer a qualified retirement plan from a private provider, which could allow for more savings while providing tax incentives and greater customization.

Let’s see how the state mandate IRA stacks up against Ubiquity’s most popular small business savings vehicle.

CalSavers IRA

Ubiquity 401(k)

Maximum employee annual contribution amount



Additional annual employer contribution limit

Not offered

Yes, up to an additional $38,500¹

Flat fees that don’t increase with your account balance

No, asset-based fees

Yes, flat fees

$500 credit to offset setup costs2



Flexible auto-enrollment and vesting schedules



Investment guidance based on individual risk tolerance



Employee enrollment meetings and education



Auto-enrollment and escalation

Required at mandated levels

Optional and flexible

Customizable investment lineups



  1. This limit is subject to cost-of-living increases for later years (for prior years, refer to this cost-of–living adjustment table.)

  2. Available to eligible employers who have less than 100 employees who received at least $5,000 in compensation in the previous year, had at least one participant who was a non-highly compensated employee, and in the last 3-years did not contribute to a benefit plan for your employees through a plan sponsored by you or a member of a controlled group that includes you.


Choose the better path to savings

If you’re looking for the maximum savings potential and tax benefit, Ubiquity provides customizable 401(k) plans that act as a CalSavers alternative. For over two decades we have pioneered flat-fee retirement plans, designed for small businesses, all delivered online to you and your employees. That means no hidden fees or AUM charges in the fine print. We have helped hundreds of thousands of employees save towards their future.

The content of this blog is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances. Be sure to consult a qualified financial adviser or tax professional for official guidance.   

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was the first major update to retirement plans in more than a decade.

Certain provisions already debuted, but one of the most significant changes — expansion of eligibility to participate in 401(k) plans – went into effect on January 1, 2021. Wondering what these changes are and what they mean for your small business this year? As a leading small business 401(k) administrator, Ubiquity is here to clarify matters.

Who Is Eligible to Participate in 401(k) Plans, Under the SECURE Act?

The 401(k) retirement savings vehicle is no longer just for long-term, full-time employees working more than 1,000 hours. Under Section 112 of the SECURE Act, eligibility expands to workers who:

  • Are at least 21 years old by the last day of the 401(k) plan year
  • Work part-time for at least 500 hours per year, over the past three consecutive years.

When calculating whether or not an employee has worked “at least 500 hours,” plan sponsors are not required to count before January 1, 2021. So, while you have to start tallying up the hours your part-time workers are putting in starting this year, you may not have to formally enroll these workers into your 401(k) until the 2024 plan year.

The SECURE Act Eligibility Update’s Impact on Nondiscrimination and Top-Heavy Testing

The SECURE Act change will add a layer of administrative complexity, as plan sponsors develop new systems for tracking and reviewing hours for part-time employees over the one to three-year tracking periods.

Sponsors will need to consider whether part-time employees will also be eligible for employer contributions and whether to set a vesting schedule. If a long-term, part-time employee becomes eligible for employer contributions, each of the years they were employed and worked 500 hours (even before January 1, 2021) must count for vesting.

For employers who are subject to nondiscrimination and top-heavy testing, adding long-term, part-time employees can skew the results. The SECURE Act allows a testing exclusion for employees working 500 hours a year, but employees working 1,000 or more hours in one year must be included. If, when you start your plan, it contains more than 100 participants, you will require an independent qualified auditors report to accompany your annual Form 5500. If you’re a growing business that has been considered a small plan in the previous year, you will not be audited until you hit 120 participants.

If you are worried about your ability to pass these annual tests, you may want to consider contacting Ubiquity about adding a Safe Harbor provision to your plan for hassle-free administration.

Eligibility Questions to Consider

Plan sponsors may want to consider this short list of questions to ensure they are prepared for the change:

  • Is the hours of service tracking system updated as of January 1 to stay compliant?
  • Have you updated your plan administration documents to note the new eligibility criteria?
  • Do you wish to expand eligibility for matching or non-elective contributions to these employees?
  • Do you need to update new-hire and recruiting materials to ensure plan participation?

What’s Next?

The House Ways and Means Committee introduced SECURE Act 2.0, otherwise known as the Securing a Strong Retirement Act bill, on October 27, 2020. If passed, this bipartisan bill would, among other things, reduce the 12-month measurement period for long-term, part-time employees from three years to two years. Simply put, don’t plan on making the changes in 2024; prepare your business to increase plan enrollment today.

If you think now is the right time to start your 401(k) retirement savings plan, or have questions about switching providers, call Ubiquity, a leader in setting up and administering low-cost 401(k) plans for small businesses and solopreneurs.

Curious how much you can invest toward your retirement in 2021?

Download the Ubiquity Retirement + Savings 2021 Contribution Guide

The IRS has announced the 2021 contribution limits for retirement and health savings accounts. This includes contribution limits for 401(k) and 403(b) plans, income limits for IRA contribution deductibility, and the salary threshold to classify “key” and “highly compensated employees”

While contribution limits won’t increase from 2020 to 2021, there is still some good news for retirement savers. The maximum income levels allowed to make deductible contributions to traditional IRAs and to contribute to Roth IRAs, have both increased for 2021.

Let’s take a look at the updated limits below:

2021 401(k) and 403(b) individual contribution limits (IRS 402(g) Limit)

Age 49 and under


Age 50 and older

Additional $6,500

The IRS has also set limits for the total amount that may be contributed to your retirement savings 401(k) account from all sources combined (IRS section 415 limit). This includes any employer matching or profit-sharing contributions, and any employee after-tax contributions. For 2021, this limit has increased from $57,000 to a new maximum of $58,000.

Every plan is different, so it’s important to refer to your Plan Document for any compensation or other applicable limits.

Cut through the complexity of choosing and customizing the right 401(k) for your small business. Get an instant quote.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

2021 Highly Compensated and Key Employee definitions and limits

Key Employee Officer Compensation


Highly Compensated Employee


Annual Compensation Limit


2021 Roth and Traditional IRA contribution limits

Age 49 and under

Up to $6,000 (must have earned income)

Age 50 and older

Additional $1,000

2021 Traditional IRA modified adjusted gross income limit for partial deductibility



Married – Filing joint returns


Married – Filing separately


Non-active participant spouse


2021 Roth IRA modified adjusted gross income phase-out ranges



Married – Filing joint returns


Married – Filing separately


2021 Simple IRA contribution limits

Age 49 and under


Age 50 and older


2021 Health Savings Accounts (HSA) contribution limits

Individual (employer + employee)


Family (employer + employee)


Age 55 or older**

Additional $1,000

**Catch-up contributions can be made at any time during the year in which the HSA participant turns 55.

If you need more detailed guidance, see IRS Notice 2020-79.

As of 5/26/2020

Previously we discussed how the recent stimulus package, “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act) helped small businesses owners struggling during the ongoing COVID-19 crisis.

Today, we’ll take answer some of our most frequently asked questions when it comes to CARES and your retirement plan.

Who is qualified for Retirement Plan relief?

The most significant retirement plan changes in the CARES Act are intended to help retirement plan participants effected in some way by COVID-19. The CARES Act introduces coronavirus-related distributions and expands participant loans for qualified individuals.

A qualified individual is someone who:

  • has been diagnosed with COVID-19;
  • has a spouse or dependent(s) diagnosed with COVID-19; or
  • experiences adverse financial consequences due to the virus resulting from:
  • being quarantined, furloughed, or laid off
  • having their work hours reduced
  • being unable to work due to lack of child care; or
  • closing or reducing hours of a business the individual owns or operates.

Coronavirus-Related Distributions

What are the rules around withdrawing money from my retirement plan?

The CARES Act permits distributions from January 1, 2020 to December 30, 2020 to qualified individuals> (see above) of up to$100,000. In addition, the10% early withdrawal penalty for such distributions is waived and the20% federal income tax withholding can be ignored. The distribution can berepaid to the plan within 3 years to gain tax-free rollover treatment. Taxable amounts required to be included in gross income can be spread over a 3-year period.

Is there an age requirement to take the CARES Act Distribution?

No. As long if you are considered a qualified individual, you may take advantage of CARES Act relief, regardless of age.

How do I pay back a CARES Act distribution?

Repayments of CARES Act distributions will be treated as related rollover contributions to the plan. They will not apply against any annual contribution limits. The process to “repay” the distribution is the same as the process to rollover funds into the plan.

If you lose your job during this time, you can still pay back your CARES Act distribution back to a plan or IRA, into which they you are eligible to make rollover contributions.

COVID-19 401(k) Loans

Can I still borrow from my 401(k) or other workplace retirement plan?

Yes–and you can take longer to pay them off. If you’re a qualifying individual, repayments are extended by one year for loan payments due March 27, 2020 through December 31, 2020. This means, that while you can stillchoose> to pay your loan on time, you> will not be penalized if you’re up to one year late for each payment due during this period.Keep in mind that even though you don’t have to make payments during this time, interest will continue to accrue.

Depending on your plan and 401(k) provider, The CARES Act also gives an opportunity for savers to borrow more money than usual. An optional provision allows qualified savers to March 27, 2020- September 22 2020, to borrow:

(a) 100% of their vested account balance

(b) $100,000.

Whichever is less. This temporarily increases the usual 401(k) loan limit, which is typically half your balance. Learn more about 401(k) loan rules here.

Required Minimum Distributions (RMDs)

In regular circumstances, starting at age 72, you must withdraw a minimum amount from your account each year and pay income taxes on it–this is called a Required Minimum Distribution.

As a part of the CARES Act, for the calendar year 2020, no one will have to take an RMD from any individual retirement accounts (IRAs) or workplace retirement savings plans, like your 401(k).

If you don’t have need the money to pay immediate bills, letting the investments sit may help regain any losses due to recent market volatility. While we don’t yet know the long-term effect of the pandemic on the economy, if we look back over history, major events like this tend to have greater short-term impacts rather than long-term ones.

Looking for more information on CARES Act and COVID-19?

Here at Ubiquity Retirement + Savings, our heart goes out to our fellow members of the small business community as we all deal with the impacts of the ongoing global health challenge and market volatility. As we navigate this challenging time together, we’re committed to providing you with information, resources, and support along the way.

On March 27th 2020, the U.S. government passed the “Coronavirus Aid, Relief, and Economic Security Act” (the CARES Act) to help businesses, families, and individuals make ends meet during the COVID-19 crisis.

The $2 trillion package is the largest financial assistance bill ever and sets aside $350 billion specifically to help small businesses affected by the pandemic.

We broke down the provisions that most impact small business owners, like you.

Paycheck Protection Program

One of the most emotionally and financially difficult challenges facing small business owners right now is retaining their employees. The Paycheck Protection Program (PPP) created by CARES was created to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.

How does the Paycheck Protection Program (PPP) work?

Currently, the Small Business Association (SBA) guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The Paycheck Protection Program creates a special kind of emergency loan that can be forgiven when used to maintain payroll through June. This program also expands the lending network beyond just the SBA so that more banks, credit unions, and lenders can issue those loans.

If your business continues paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.

Ultimately, the goal of the PPP is to help more workers remain employed, affected small businesses stay afloat, and our economy snap-back quickly after the crisis.

This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.

What types of businesses are eligible?

The Paycheck Protection Program offers loans for:

  • Small businesses with fewer than 500 employees, including self-employed, sole proprietors, and freelance and gig economy workers
  • 501(c)(3) non-profits with fewer than 500 workers
  • Veteran organizations
  • Small businesses (and other eligible entities) will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020.

How much money can I borrow?

PPP loans can be up to 2.5 times monthly payroll expense for full-time employees with a salary cap of $10 million. Salaries capped at $100,000 per employee in the calculation.

Want to determine for your organization’s loan cap? Calculate your average total monthly payroll expense for full time employees over the last 12 months. Exclude individual salary amounts above the $100,000 cap, payroll and income taxes, and salaries of employees outside the U.S., and contractors. Your business or nonprofit is eligible for 2.5 times this amount, up to $10 million.

Will they check my credit score?

All loan terms will be the same for everyone. No personal guarantee or collateral is required for PPP loans. The lenders are expected to defer fees, principal and interest for no less than six months, and no more than one year.

What can I use a PPP loan for?

You should use the proceeds from these loans on your:

  • Payroll costs, including benefits;
  • Interest on mortgage obligations, incurred before February 15, 2020;
  • Rent, under lease agreements in force before February 15, 2020; and
  • Utilities, for which service began before February 15, 2020.

How can I apply?

  • Contact your bank today to find out if they are an approved SBA lender. If they’re not, the SBA Lender Match tool will help you find one in your area.
  • Applications for borrowers can be found here
  • Starting April 3, 2020 small businesses can begin applying for PPP loans through existing SBA lenders.
  • Starting April 10, 2020 independent contractors and self-employed individuals can begin applying for PPP loans through existing SBA lenders.

Economic Injury Disaster Loans and Emergency Economic Injury Grants

The Small Business Association’s Economic Injury Disaster Loan program provides small businesses with financial aid after major, detrimental events. The program provides low-interest loans of up to $2 million dollars to help businesses overcome temporary loss of revenue and get back on their feet.

CARES expanded this existing program to more types of small businesses, made it easier to apply and ensured that EIDLs smaller than $200,000 can be approved without a personal guarantee.

The expanded EIDL loan program also offers up to a $10,000 emergency cash advance that may not need to be paid back. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.

Who is eligible?

  • Small businesses with fewer than 500 employees, including self-employed, sole proprietors, and freelance and gig economy workers
  • Non-profits, including 501(c)(6)s with fewer than 500 workers
  • Tribal businesses, cooperatives, and Employee Stock Ownership Plans (ESOPs) with fewer than 500 employees.

How can I get an SBA disaster loan for COVID-19 related aid?

You can apply online directly with the SBA by clicking here.

Be prepared with some financial information and supporting documentation related to your business including: tax returns, last year’s financial statements, a year-to-date financial statement, property leases, and a working knowledge of your business and personal credit score. You can find the full list of supporting documentation at the bottom of your application form.

Can my business get an EIDL and a Paycheck Protection Program loan?

Yes, small businesses can get both an EIDL and a Paycheck Protection Program loan as long as they don’t pay for the same expenses. If you have questions about your specific situation or eligibility, be sure to check with your financial advisor or lender to address any questions you may have.

Small Business Tax Provisions

The CARES Act makes select changes to taxes and tax policies in order to ease the burden on businesses impacted by COVID-19.

Key changes tax changes effecting small business owners include:

Delayed Tax Date

Taxpayers now have an extra three months to both file and pay their taxes! The typical April 15th tax deadline, for both businesses and individuals, has been extended 90 days to July 15, 2020.

Employee Retention Credit

Eligible businesses can receive a refundable 50% tax credit on wages up to $10,000 per employee.

The credit can be obtained on wages paid from March 13, 2020 through December 31, 2020.
Businesses are eligible for an employee retention tax credit if:

  1.  Your business operations were fully or partially suspended due to a COVID-19 shut-down order or
  2. Your gross receipts declined by more than 50% compared to the same quarter in the prior year

The credit can be obtained on wages paid or incurred from March 13, 2020 through December 31, 2020.

Delayed Payroll Tax Payments

Businesses and self-employed individuals can delay their payroll tax payments. These payments, the employer share of Social Security tax owed for 2020, can instead be deferred and paid over the next two years. Fifty percent must be paid by the end of 2021 and 50% must be paid by the end of 2022.

(Note: The ability to defer these taxes does not apply to a business that has a Paycheck Protection loan forgiven.)

Where can I learn more?

As we continue to navigate these challenging times, Ubiquity is committed to helping you stay invested in a brighter future. We believe in the power of our small business community and we’re confident in our ability to be here for our clients, partners, and savers, every step of the way.

Relief Calculator


Estimated Payment: $3,900

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please note that the IRS determines the official amount, for more information please visit the IRS FAQs page.

The SECURE Act, which stands for the Setting Every Community Up for Retirement Enhancement Act, is the biggest piece of retirement legislation in over a decade. Provisions from the bill, which originally passed through the House in May 2019, were wrapped into a larger government spending package and signed into law on December 20, 2019.

This piece of important retirement legislation includes policy changes to retirement plans, annuities, pension plans, and 529 college savings accounts.

Key changes from The SECURE Act include:

  • Increasing tax credits for small business owners to set up and run retirement plans
  • Introducing incentives for new plans with auto-enrollment
  • Raising the required minimum distribution (RMD) age for retirement accounts to 72 (up from 70½)
  • Allowing long-term, part-time workers to participate in 401(k) plans
  • Expanding options for multiple, unrelated businesses to partner under a single retirement plan (MEPs)
  • Permitting parents to withdraw up to $5,000 from retirement accounts penalty-free within a year of birth or adoption
  • Allowing withdrawals from 529 plans to repay student loans

Most SECURE Act provisions went into effect on January 1, 2020. Let’s dive deeper into some of the biggest changes ahead for retirement savers and small business owners:

Small business owners can receive a tax credit for starting a retirement plan, up to $16,500

  • Small business owners who haven’t established a retirement plan are in luck! The new law provides a start-up retirement plan credit for smaller employers of $250 per non-highly compensated employee eligible to participate in a workplace retirement plan at work. The minimum credit is $500 and the maximum credit is $5,000.
  • This credit would apply to small businesses with up to 100 employees over a 3-year period beginning after December 31, 2019 and applies to 401(k), SIMPLE, SEP, and profit-sharing plans.
  • If your retirement plan includes automatic enrollment to encourage participation, you may also receive an additional credit of up to $500 for the first three years of the plan. This new credit is also available to employers that convert an existing 401(k) plan to an automatic enrollment design.

Cut through the complexity of choosing and customizing the right 401(k) for your small business. Get an instant quote.

How many employees do you have?
Just me and/or my business partner/spouse

Required minimum distributions (RMDs) now begin at age 72

  • Americans are living and working longer than ever before, and this change reflects that shift. Savers will no longer be required to withdraw assets from IRAs and 401(k)s at age 70½.
  • RMDs now begin at age 72 for individuals who turn 70½ in 2020.
  • If you turned age 70½ in 2019 and have already begun taking your RMDs, we recommend speaking to your financial advisor regarding any 2020 distributions.

You can make IRA contributions beyond age 70½

  • As with the new RMD rule, the SECURE Act addresses the increasing number of Americans working past traditional retirement age.
  • As of the 2020 tax year, you can continue to contribute to your traditional IRA past age 70½, as long as you are still working.
  • Savers can make their 2020 tax year contributions until April 15, 2021.

Small business owners will find it easier to pool together to offer retirement plans

  • According to a 2018 study by the U.S. Bureau of Labor Statistics, nearly 40 million private-sector employees do not have access to a retirement plan through their workplace.
  • In an attempt to increase retirement access, the new law allows unrelated businesses to join together under an open multiple employer program called a MEP.
  • The new law, which goes into effect in 2021, eliminates the IRS’s “one bad apple” rule. This removes the risk of being penalized if one employer in your group fails to satisfy the tax qualification rules for the MEP.

Inherited IRA distributions must be taken within 10 years

  • Previously, if you inherited an IRA or 401(k), you could “stretch” your distributions and tax payments out over your life expectancy. This allowed beneficiaries to use stretch IRAs as reliable income sources as they benefited from the tax-advantaged gains.
  • Rules have changed for IRAs inherited from original owners who have passed away on or after January 1, 2020. Beneficiaries, generally, must withdraw all plan assets from an inherited retirement plan within 10 years following the death of the account holder.
  • The 10-year rule does not apply to: a surviving spouse or a minor child; a disabled or chronically ill beneficiary; and beneficiaries who are less than 10 years younger than the original IRA owner or 401(k) participant.
  • If you have an IRA that you planned to leave to beneficiaries, we recommend working with your estate planning attorney or financial advisor to address how might this change your strategy.
  • If you’re a beneficiary who has inherited an IRA or 401(k) and the original owner passed away prior to January 1, 2020, you don’t need to make any changes.

You can withdraw money from your retirement account penalty-free upon the birth or adoption of a child

  • Bringing a new member into the family can be expensive. The SECURE Act allows savers to take a “birth or adoption distribution” of up to $5,000 from a qualified retirement plan, such as a 401(k) or an IRA, without incurring an early withdrawal penalty.
  • This distribution must be taken within one year of the date of birth or adoption finalization.
  • If the parents have separate retirement accounts, they can each withdraw $5,000 to help defray the cost of a new child.

529 funds can now be used to pay down student loan debt

  • Sometimes families have funds remaining in their college savings plans after their student graduates. Under the new law, you can now use a 529 savings account to pay up to $10,000 in student debt over the course of the student’s lifetime.
  • To expand the benefit of tax-advantaged college plans to those who take vocational training, a 529 savings plan may now also be used to pay for qualified apprenticeship programs.

Increased penalty for failure to file federal returns

  • Failed to file your tax returns? You may now face a steeper punishment. The Secure Act increases the penalty for failure to file affected federal tax returns to the lesser of: (1) $400 or (2) 100% of the amount of tax due.
  • There are also increased penalties for failure to file retirement plan returns, including a higher IRS Form 5500 non-filer penalty.

How else could The SECURE Act impact your retirement?

  • Raising the cap on auto enrollment contributions from 10% to 15% in employer-sponsored retirement plans

If you were automatically enrolled in your retirement plan at work, your plan also may have an automatic escalation feature that increases your retirement contributions each year. Under the new law, the amount withheld for your retirement account could go up every year until you are contributing 15% of your income to your retirement savings plan.

The bottom line on the SECURE Act

Changes in life, the tax code, and your own financial circumstances are common–and are a good reminder to update your retirement and estate planning strategies every few years. As the SECURE Act brings changes to retirement, take some time (and work with your financial advisor, if you have one) to help set personal and financial goals.

And if you’re a small business owner not opening a retirement plan, there’s never been a better time to take advantage of the tax benefits of a 401(k). Connect to one of our retirement experts today to learn more.

Ubiquity Retirement + Savings: Stay Up-To-Date.

Download our 2020 Contribution Guide

Curious how much you can invest toward your retirement in 2020? The IRS has announced the 2020 contribution limits for retirement and health savings accounts. Changes include increased contribution limits for 401(k) and 403(b) plans, as well as income limits for IRA contribution deductibility. Additionally, the salary threshold to classify “key” and “highly compensated employees” has been announced. Review our quick guide of the updated limits below.

2020 401(k) and 403(b) individual contribution limits (IRS 402(g) Limit)

Age 49 and under


Age 50 and older

Additional $6,500

The IRS has also set limits for the total amount that may be contributed to your retirement savings 401(k) account from all sources combined (IRS section 415 limit). This includes any employer matching or profit-sharing contributions, and any employee after-tax contributions. For 2020, the maximum is $57,000.

Every plan is different, so it’s important to refer to your Plan Document for any compensation or other applicable limits.

Cut through the complexity of choosing and customizing the right 401(k) for your small business. Get an instant quote.

How many employees do you have?
I am a sole proprietor
(just me/or my business partner/spouse)

2020 Highly Compensated and Key Employee definitions and limits

Key Employee Officer Compensation


Highly Compensated Employee


Annual Compensation Limit


2020 Roth and Traditional IRA contribution limits

Age 49 and under

Up to $6,000 (must have earned income)

Age 50 and older

Additional $1,000

2020 Traditional IRA modified adjusted gross income limit for partial deductibility


$65,000 – $75,000

Married – Filing joint returns

$104,000 – $124,000

Married – Filing separately

$0 – $10,000

Non-active participant spouse

$196,000 – $206,000

2020 Roth IRA modified adjusted gross income phase-out ranges


$124,000 – $139,000

Married – Filing joint returns

$196,000 – $206,000

Married – Filing separately

$0 – $10,000

2020 Simple IRA contribution limits

Age 49 and under


Age 50 and older


2020 Health Savings Accounts (HSA) contribution limits

Individual (employer + employee)


Family (employer + employee)


Age 55 or older**

Additional $1,000

**Catch-up contributions can be made at any time during the year in which the HSA participant turns 55.

If you need more detailed guidance, see IRS Notice 2019-59.

Ubiquity Media Roundup Graphic

From new Department of Labor regulations to state-mandated retirement plans, there is no shortage of activity in the retirement space today. Industry publications regularly turn to our team members for their expert opinions on the latest announcements, programs and research impacting retirement savers like you.

We recapped some of these happenings below with media articles featuring our team’s insight. To find future insight from the Ubiquity team, follow us on Twitter, Facebook, LinkedIn and YouTube.

Employee Benefit News

When the Department of Labor reduced the limitations governing multiple employer plans (MEPs), Employee Benefit News consulted our Vice President of Compliance and Regulatory Affairs, Nasrin Mazooji. Nasrin weighed in on the likelihood that the industry will move to authorize open MEPs, which would allow employers without a common nexus to join forces and offer a retirement savings plan.

In their current design, MEPs typically reduce the cost, administrative burden and fiduciary liabilities associated with offering small business employees access to a workplace retirement savings plan. However, they aren’t quite as flexible as company-sponsored retirement plans. Nasrin explained why MEPs aren’t a one-size-fits-all solution and how small businesses should approach them under this new legislative action.

401(k) Specialist

Another area of legislation impacting the retirement savings industry is state-mandated retirement plans. More than 30 states have expressed interest in establishing legislation requiring small businesses to offer employees a retirement plan. Our Director of Product Development, Ashvin Prakash, has been keeping a close eye on the implementation and adoption of these programs and recently authored a piece for 401(k) Specialist about how they could affect 401(k) product development.

In an effort to better serve small businesses, more 401(k) providers are opting for simplified plan designs and increased reliance on flat-fee models. To compete with the state’s plan, private providers will likely incorporate 3(38) offerings into their plans to reduce fiduciary risk and develop new API integrations to streamline payroll automation.

With the introduction of these mandates, Ashvin expects demand for savings plans to increase. Our team is continuing to monitor how these state-sponsored retirement plans will affect small businesses and the retirement industry as a whole.


Research indicates that 42 percent of Generation X is prioritizing paying off debt over saving for retirement. PLANSPONSOR, a go-to resource for America’s retirement benefits decisionmakers, turned to our Founder and CEO, Chad Parks, for insight on the unique financial challenges facing this generation and how plan sponsors can help individuals tackle them.

As a Gen Xer himself, Chad shared his experience of juggling financial responsibilities as part of the sandwich generation and how account aggregation solutions can help people in similar situations appropriately allocate their money and prioritize saving for retirement.


With more than 24 years of experience in the retirement industry, Chad has witnessed firsthand the evolution of 401(k) record-keeping technology. In this bylined article, Chad shares his observations from his time as an independent registered investment advisor and CFP. The difficulty he experienced in finding plan providers who offered cost-effective access to multiple fund families for his small business clients led him to establish an online, fully bundled, open architecture 401(k) platform in 1999. Chad’s vision withstood and evolved with the introduction of numerous regulatory changes such as the Single(k)®, fee disclosure rules and the fiduciary rule.

These technological advancements have improved small business access to professional investment management, lowered costs associated with offering a workplace retirement savings plan and automated investment selection. For this reason, Chad underscores how crucial it is for advisors today to embrace technology but never underestimate the value of human connection in client relationships.

This article originally appeared on Marketwatch

The extended U.S. government shutdown that occurred earlier this year shined an unflattering spotlight on our country’s financial preparedness.

It revealed that many people who wouldn’t typically be considered impoverished are still clearly living paycheck to paycheck. This certainly doesn’t bode well for them saving enough money to be financially independent in retirement.

Now, more than ever, retirement is built on personal savings and it’s up to the individual — not the government or employers — to make that dream a reality. The notion of working your entire life while simultaneously stashing away money for your future is something I frequently refer to as, “the great retirement experiment.” Let’s take a look at how we got here.

How our modern retirement system came to be

Before the 20th century, our country’s economy was based almost entirely on agriculture. Americans didn’t have hopes or dreams about retirement in the 1700s, 1800s or even early 1900s. They simply worked until they no longer could, and hoped that their families would take care of them in old age.

The retirement system that we know of today didn’t come into existence until after World War II. Following the war, companies hired people in droves and provided pensions. At the time, this was the best concept available for retirement security and many people from this generation benefited. My grandparents, for example, retired with a full pension and my father retired with a partial pension. As time went on, however, companies realized funding these programs entailed a lot of complexity and decided to freeze pensions or stop offering them altogether.

In the late 1970s, the government recognized these resources wouldn’t sufficiently support people through their retirement years, so it implemented tax-deferred savings accounts and the 401(k) was born shortly thereafter in the early 1980s.

Cut through the complexity of choosing and customizing the right 401(k) for your small business. Get an instant quote.

How many employees do you have?
Just me and/or my business partner/spouse

The broken three-legged stool of retirement

Over many decades, we have come to think of retirement as a three-legged stool consisting of Social Security, a pension and personal savings, all working together to fund your retirement. Today, the three-legged stool looks more like a pogo stick.

Social Security, the first leg, is projected to have a reduction in benefits by 2034, if no changes are made today. This program was introduced in 1935 and originally designed to help those in dire need of financial assistance. It was never intended to be relied on as heavily as it is today as a primary means of retirement income.

Personal pensions, the second leg, have recently seen a staggering, swift disappearance. This chart, provided by CNN Business with data from Pension Benefit Guaranty Corporation, depicts the shrinking population of workers covered by company pensions. Today, the majority of workers don’t expect to see a pension unless they’re unionized or government employees.


With pensions nearly extinct and Social Security looking less and less reliable as a means of income, the onus is now largely on individual citizens to save enough money during their lifetimes for retirement, serving as the vital “pogo stick” leg of the stool. Realistically speaking, can people bear that burden?

This is why we call it the great retirement experiment. Although the outcome is unknown, it must be brought to light.

The challenge is that not everyone takes a diligent and responsible approach to saving for retirement on their own, nor should they be expected to. We have asked everyday people to become both financial and investment experts, which ultimately may set them up for failure. Not to mention, people are now living longer than ever before and working later in life to fund retirement or catch up on lost savings.

How defaulting to Social Security could change it all

So, how can we solve the issue of underfunded retirements? While there is no surefire solution, I believe a significant adjustment to our Social Security system could alleviate much of the burden currently placed on everyday Americans.

Let’s keep Social Security as we know it today, the same. However, let’s augment the required Social Security savings from both the employer and the employee by doubling the amount saved, which would add an additional 12.4% (6.2% employer contribution, 6.2% personal contribution, doubling it would increase it to 24.8%) of income contributed to retirement. This could be credited into an account that is in the individual’s name so they have complete control over the investments, but won’t be able to access to the funds until normal retirement age.

Retirement accounts like 401(k)s and IRAs would still be in play, just not as the main source of income. This also solves the portability issues with retirement accounts. If the Social Security account is already under an individual’s ownership, it doesn’t matter how often you change jobs.

Bottom line, our retirement system is not as good as it gets. Savers must be aware of the flaws in the existing retirement savings experiment as well as the great responsibility of saving for their own future.

March Media Roundup

Dylan Telerski / 18 Mar 2019 / Press, Retirement News

Ubiquity Media Roundup

Ubiquity in the News

As a pioneer in small business retirement savings, we’ve been leading the charge for nearly 20 years on making it as simple and convenient as possible to save for your future. With this mission rooted deep in our company, respected members of the media frequently turn to Ubiquity Retirement + Savings for our insights and expertise on the retirement market, savings strategies, and fintech industry trends.

Check out some recent media placements below, featuring insights from our Founder and CEO, Chad Parks. For more tips on optimizing your firm’s retirement savings plan, follow us on Twitter, Facebook, LinkedIn, and YouTube.


From his early days as a financial advisor to his current role at Ubiquity, Chad has seen a lot of changes and improvements in financial services throughout his career. He drew upon these experiences to craft some ‘predictions’ for the industry, which he recently shared with the readers of WealthManagement.com. In this bylined article, Chad pointed to two key trends that could transform the financial services landscape, including the introduction (and eventual takeover) of artificial intelligence in financial advisory roles and the elimination of the asset-based fee model. Though these changes may seem drastic, Chad underscored that they will ultimately improve the savings experience for businesses and everyday consumers alike.

Zacks Investment Research  

Zacks Investment Research welcomed Chad on its Tech Talk Tuesday podcast to discuss everything from the small business retirement plan marketplace, to financial technology, to potential implications of the looming retirement crisis. Host Ryan McQueeney kicked things off by asking Chad about his early career in financial services, where Chad illustrated what sparked his passion for serving the small business market. From there, Ryan and Chad covered the current small business retirement landscape and how Ubiquity got its start catering to this historically underserved community. Chad then highlighted his involvement in producing the “Broken Eggs Film” documentary, which shines a light on the dangers of an under-funded retirement with powerful stories from real people. Closing out the conversation, Ryan and Chad discussed how the fintech industry will continue to become further integrated to provide a “one-stop-shop” for the best possible user experience. This podcast was even picked up by Yahoo Finance and Nasdaq!



PLANSPONSOR, a leading retirement industry trade publication, turned to Chad for his thoughts on best practices when converting to a new retirement plan recordkeeper. In this piece authored by Editor Lee Barney, Chad discussed how to keep things organized when making the transition to a new recordkeeper, and by extension, how to avoid any mishaps in the process. This means getting your documents, including financial statements, compliance tests and annual reports, organized before you even start the process. Chad also underscored the importance of ensuring everything is fully compliant with the Department of Labor (DOL) and Internal Revenue Service (IRS) prior to the conversion, and double- and triple-checking that participant account balances are correct once the conversion is complete.   

Kiplinger’s Retirement Report  

A successful retirement doesn’t stop at building a nest egg; having a plan to guide your decisions along the way is critical. That’s why Chad spoke with Kiplinger’s Retirement Report Editor Rachel Sheedy to identify key dates those nearing retirement can’t afford to miss out on. Chad reminded savers that all 2018 IRA contributions must be made by the tax-filing deadline of April 15, 2019. For the 2018 calendar year, Chad noted IRA contribution limits are capped at $5,500 for those under age 50 and $6,500 for those over 50. He also provided tips to ensure all your paperwork is in order to properly file crucial tax documents ahead of the deadline.



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© 2021 Ubiquity Retirement + Savings
Privacy Policy
44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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