Frequently Asked Questions
You asked, we answered.
You asked, we answered.
Is the workIRA a qualified retirement plan covered by ERISA?
No. It is a retirement savings arrangement that allows your employees to save money for retirement via their paycheck into their own Individual Retirement Account (IRA).
Our business cash flow is pretty erratic, so I have never offered a retirement plan. Would workIRA work for our circumstances?
Absolutely. The workIRA program allows your employees to save for retirement, but there are no contribution requirements for the company.
Can an employer contribute to workIRA for its employees?
Employers can contribute through our SIMPLE IRA program. workIRA must be funded by the employee only.
We have a lot of independent contrators on our payroll. Can they participate in workIRA?
Yes they can if they are paid through your payroll process. All such employees, independent contractors or consultants are eligible to participate regardless of full or part-time status.
I am concerned about the cost of offering a retirement plan. How much will it cost us to offer workIRA to our employees?
For employers, workIRA is free. There are no hidden charges for employers, and no startup, ongoing or termination fees.
It may be free, but I don’t want to offer anything that is going to take a lot of my time and energy to offer. How complicated is workiRA?
workIRA is the simplest retirement savings arrangement an employer can offer. It will take less than five minutes for you to sign up for the program. Once it is operating, it folds into your normal payroll process. It’s that easy.
What kind of government filings am I going to have to complete each year with workIRA?
There are no filing requirements either Federal or State at this time.
Who is behind workIRA?
workIRA was developed by Prudent Investor Advisors, a leading retirement plan advisor and consultant. It has partnered with some of the leading companies in the retirement plan industry to create a sophisticated yet simple solution for the 50% of American businesses that do not or cannot offer a retirement plan to their employees.
Who is responsible for the menu of investments offered in this program?
Prudent Investor Advisors (Prudent) as part of its services to each employee provides a menu of fund offerings. Prudent is solely responsible for the selection of the IRA investment menu.
Who is responsible for investing the funds in an account?
Each employee is responsible for investing their own account. If an employee fails to make an investment selection, Prudent is solely responsible for selecting a suitable default investment for them.
Where are my employees’ accounts held for safekeeping?
workIRA has contracted with MG Trust, a wholly-owned subsidiary of Broadridge, a NYSE listed company that processes more than $5 trillion of equity and fixed income trades per day. It provides transparency into the distribution of over 90% of mutual fund and ETF assets.
My employees do not have any investment experience. How will they be helped?
workIRA features second generation target date income funds that are designed to provide a lifetime investment solution for individuals. In addition, workIRA features a menu of individual mutual funds from several leading companies for those employees who wish to build their own portfolio.
What kind of IRA accounts does workIRA offer?
Both traditional IRA and ROTH IRA accounts are offered. Employees can choose which one based on their own circumstances.
Can someone take a loan from their workIRA?
No, loans are not possible with a workIRA. This plan is designed for people to save for retirement. Loans are harmful to the long-term financial health of employees.
What happens to their workIRA account when someone leaves my company?
Nothing at all. As a personal IRA, workIRA belongs to the employee. When they leave, the account does not change. What the employee cannot do is continue contributing through your payroll.
Do I have to enroll my employees into the workIRA program?
No, workIRA has an automated, online process to enroll employees. All you have to do is provide workIRA with a simple census (first name, last name and email for each employee) and we take care of the rest.
How do I know how much money to take out of each employee’s paycheck?
Each employee will complete a payroll deduction form that provides authorization for you to withhold and transmit funds to workIRA.
How do the employee deposits get delivered to workIRA?
The funds are transmitted via ACH during each payroll period directly to MG Trust, the workIRA custodian.
As the owner of the business, can I invest in workIRA too?
Yes, as long as you have compensation through your company payroll.
How much can someone contribute into their workIRA account each year?
Up to $5,500 per year, or $6,500 per year if they are age 50 or older. 2016 Federal Contribution limits.
I know I need to save for retirement, but how hard is it to sign up for workIRA?
The signup process is very simple and straightforward. All you need is some personal information and your beneficiary information. We will answer any questions you may have.
How do I tell my employer how much I want taken out of my paycheck and deposited into my workIRA account?
You complete a one-page Salary Deferral Agreement (SDA) and turn it in to your employer. They will take care of the rest.
What happens if I want to change the amount I am contributing to my workIRA account?
Simply fill out another Salary Deferral Agreement (SDA) and turn it in to your employer.
If I need to, can I stop contributing to my workIRA account?
Yes. You can stop contributing to your workIRA account whenever you have to. All you need to do is contact your employer and have them stop taking money from your paycheck.
What happens to my workIRA account when I no longer work for my employer?
Not much. Because it is your own IRA account, it stays with you. The only change is you can no longer contribute to the account through your old employer’s payroll process.
Does workIRA offer ROTH IRA accounts?
Yes. workIRA offers both traditional and ROTH IRA accounts. It is best to consult with a tax professional to determine which type of IRA may be best suited for you.
What kind of investments does workIRA offer?
workIRA offers institutional mutual funds and other low-cost, highly diversified investments. A key feature of the workIRA program is the suite of Dimensional Target Date Income Funds. These funds offer a complete lifetime solution for most investors. We would encourage you to read more about these advanced second generation target date funds.
Is there someone to help me understand what I should do?
Certainly. The workIRA program offers several tools and additional materials to help you answer three important questions: How much income do I need in retirement? How much should I save for retirement? How am I doing?
I really don’t know anything about investments. Do you have any suggestions on what I should do with my savings?
Yes, the target date income funds are a good solution for an employee that would like a pre-built solution for them. All you need to do to get started is to select the appropriate target date income fund for your age bracket.
How come my employer is not contributing anything into my workIRA?
Current regulations do not allow employers to contribute anything into an employee’s IRA.
How do I get information about my workIRA account?
You can always access your account online at www.workIRA.com by clicking on the link to your workIRA account portal. You can also generate statements on demand whenever you like.
Can I take a loan from my workIRA account?
No. The workIRA program is designed for people to successfully save for retirement. Loans create significant financial damage towards your future.
What is the cost of workIRA?
The fees compare very favorably to the price of a small plan 401(k). There is a full fee disclosure on the Legal & Terms page available for anyone to review.
I have other IRA accounts. Can I consolidate my other accounts with workIRA?
The answer is maybe. Simplifying your life with fewer accounts makes good sense. We have a department that helps people transfer existing IRAs into the appropriate accounts. They will help determine if your IRAs are rollover or transfer eligible.
How much can I contribute to my workIRA account each year?
In 2016, you can contribute up to $5,500 if you are under the age of 50. For those who are 50 or older, you can contribute up to $6,500 for the year. Check back each year for an update on contribution limits.