Saying Thank You Protects Me

During prayer, it is firstly not about me. Even less is prayer a shopping list where I only tell God what I want. No, God is at the centre of my prayer. Payer is the place where I become less and God more. In prayer, I get off the chair and allow God to take his rightful place as Head in my life.When I pray to God, I realise that everything comes from Him. Without God in my life I am nothing. I understand my own inability and that I’m actually useless. When I look back at my life and see what God has already done for me, I have to praise Him. I am overcome with gratitude.Then I’m totally aware of my worthlessness compared to all that God gives me. When I pray, I am aware of my chest going up and down and I thank God that I can breathe. Yes, the things that I take for granted, things like my heart that pumps five litres of fresh blood through my body every single minute. How great is our God who planned and created everything in the finest detail! Again I’m overcome with gratitude.

2 Pray diligently. Stay alert, with your eyes wide open in gratitude.The King James version puts it as follows: 2Continue in prayer, and watch in the same with thanksgiving.The word guard takes me back to my army days when we regularly stood guard at night. Man, for me that was a difficult thing to do, because after a whole day of being chased all over the place you needed your sleep. That made it really difficult to stand guard. Look, when you’re tired, you fall asleep just like that. And then it would land you in big trouble if the lieutenant caught you sleeping while you should’ve been on guard.In those years we had to stand guard to ensure that the people we were protecting would come to no harm.In the same way, we have to stand guard in prayer or ensure that we thank God. This is a command that we have to obey at all cost. We mustn’t fall asleep or forget to praise God. It’s for our own protection too, because when we say thank you, God gets his rightful place in our lives and we move to the background.Now for the part that’s harder to do: When things aren’t going well, we also have to thank God. Often saying thank you brings healing.This hymn puts it so well:
When upon life’s billows you are tempest tossed,
When you are discouraged, thinking all is lost,
Count your many blessings, name them one by one,
And it will surprise you what the Lord hath done.Count your blessings, name them one by one,
Count your blessings, see what God hath done!
Count your blessings, name them one by one,
And it will surprise you what the Lord hath done.

Are you ever burdened with a load of care?
Does the cross seem heavy you are called to bear?
Count your many blessings, every doubt will fly,
And you will keep singing as the days go by.And when you see all these blessings, you will be overcome with gratitude towards God.ScriptureColossians 4:2-6ReflectionDo you thank God enough?How can you change this?PrayerFather, please help me to be on my guard and to talk to You all the time. My heart overflows with gratitude that You are always available and that You love it when I talk to You. Amen.

Choosing A Retirement Plan For Your Small Business

A qualified retirement plan can be beneficial to employers and employees alike, yet for a small business owner who is busy with daily operations, the time and effort involved in choosing a plan can seem daunting. It does not have to be.

Retirement plans come in two flavors: qualified and non-qualified. A qualified plan is desirable because it provides a vehicle for tax-deferred retirement savings for both the business’ employees and its owner, with allowable contributions in excess of those permitted for IRAs. A qualified plan also provides the employer an immediate deduction for the contributions made. Depending on the plan, it can encourage employees to maximize the business’ profits and to remain with the employer. Plans can be customized with optional features.

Non-qualified plans do not have to meet many of the requirements imposed on qualified plans, and have a wider range of features and provisions as a result. However, in most cases the employer does not get an immediate tax deduction for a non-qualified plan. Such arrangements also have to avoid “constructive receipt” by the employee in order to defer the employee’s taxes until the money is actually distributed. This usually exposes the employee to credit risk if the business fails before the deferred compensation is paid out. Non-qualified plans are sometimes useful, but most small businesses will prefer one of the qualified plan arrangements described in this article.

All of this can leave your head swimming, especially if personal finance is not your area of expertise. To simplify the exercise, think of finding a retirement plan that fits your small business like buying a new car. You should consider what retirement plan vehicle will fit your business’ size, needs and budget, as well as offering any special features you want. The more “tricked out” your retirement plan, the more costly it will be to establish and maintain.

The SEP (Simplified Employee Pension) IRA is the bare-bones model that gets you from point A to point B. It is easy to adopt, and typically custodians like Schwab or T. Rowe Price offer a basic form to start one. A SEP can be established as late as the employer’s income tax filing deadline, including extensions. After the initial set-up, the employer has no further filing requirements.

With a SEP, the employer makes contributions for all eligible employees. The common threshold for eligibility is an employee who is at least age 21 and who has been employed by the employer for three of the last five years, with compensation of at least $550 during the year. Eligibility standards can be less strict than this if the employer chooses. Contributions are an equal percentage for each employee’s income. The maximum contribution for 2013 is 25 percent of compensation, but no more than $51,000 total ($52,000 in 2014). (The same limits on contributions made to employees’ SEP-IRAs also apply to contributions if you are self-employed. However, special rules apply when figuring the maximum deductible contribution.) In a year where cash is limited, an employer does not have to make a contribution. SEP contributions are due by the employer’s tax filing deadline, including extensions.

A SEP is a great choice for a sole proprietor or a small business with a few employees, where the employer would like to have a retirement savings vehicle that allows larger, tax deductible contributions than does a traditional IRA with minimal fuss and maximum flexibility.

A SIMPLE (Savings Incentive Match Plan for Employees) IRA is also easy to establish and has no ongoing filing requirements for employers. SIMPLE IRAs are only available to businesses with fewer than 100 employees and no other retirement plan in place. These plans operate on a calendar-year basis and can be established as late as October 1.

While only the employer can contribute to a SEP IRA plan, a SIMPLE IRA allows employees to contribute to their own accounts, up to $12,000 in 2013 and 2014. Also, participants age 50 and older can make additional contributions, up to $2,500. The employer can either match employee contributions up to 3 percent of compensation (not limited by an annual compensation limit) or make a 2 percent of compensation nonelective contribution for each eligible employee (limited to an annual compensation limit of $255,000). The employer’s matching contribution can go as low as 1 percent when cash is constrained; however, the employer can use this option no more than 2 years out of a 5-year period. Unlike a SEP, a SIMPLE plan requires that the employer contribute each year.

An employer must deposit employees’ salary reduction contributions within 30 days of the end of the month in which the money is withheld from employee paychecks. The matching or nonelective contributions are due by the due date of the employer’s federal income tax return, including extensions.

All employees who have earned income of at least $5,000 in any prior 2 years and are reasonably expected to earn at least $5,000 in the current year must be eligible to participate in a SIMPLE IRA.

A SIMPLE can be a good choice for a small employer who would like to benefit from the tax deduction for employer contributions while encouraging his or her employees to save for retirement. Many employees will find this sort of plan attractive because it allows for higher contributions than a traditional IRA and requires employer contributions. It entails a greater administrative burden than a SEP, although this burden is still relatively small, and offers less flexibility. If cash flow is not an issue, a SIMPLE plan might be for you.

Once an employer makes a contribution to a SEP or SIMPLE plan, the employee is 100 percent vested in that contribution. Employees can take their contributions with them, even if they quit the next day. If employee retention is a concern, a plan that allows for deferred vesting, such as a Money Purchase Plan (MPP) or Profit Sharing Plan (PSP), may be a better fit. Vesting can either be graduated over a period of years of service or take effect all at once after a certain period of years. These plans are the middle-of-the-line models that provide more features than the most basic plans.

Similar to a SEP, a PSP allows for discretionary contributions by the employer. This is a beneficial feature if the business’ cash flow is a concern. The employer contributes what he or she can and the contributions are divided among employees based on a formula set by the plan. This is commonly based on an individual employee’s compensation relative to total compensation. Employer contributions are limited to the lesser of 100 percent of the employee’s compensation or $51,000 for 2013 ($52,000 for 2014). An employer can deduct amounts that do not exceed 25 percent of aggregate compensation for participants. A plan must be established by the last day of the business’ fiscal year. Contributions are due by the business’ tax filing deadline, including extensions.

A PSP is a good choice if cash flow is variable. It can motivate workers to increase profits and the likelihood of receiving a contribution. However, many employees might not find it as beneficial as a plan with guaranteed contributions. These employees may prefer a Money Purchase Plan (MPP).

A MPP is similar to a PSP, but it requires an annual contribution of a specific percentage of employee compensation, up to 25 percent. This creates a liability for the business, and thus may not be a good choice if cash flow is uncertain. An MPP must be established by the last day of the business’ fiscal year. Contributions must be made by the due date of the employer’s tax return, including extensions.

Standard eligibility requirements for both a PSP and an MPP are employees over age 21 and who have at least one to two years of service with the employer. If two years of service are required for participation, contributions vest immediately.

MPPs and PSPs also may allow loans to participants, a feature that employees often find attractive. Loans are usually limited to either (1) the greater of $10,000 or 50 percent of the vested balance or (2) $50,000, whichever is less. Loans must be repaid, with interest, over 5 years, unless they are used to purchase the employee’s principal residence.

The vesting and loan features make MPPs and PSPs more difficult to establish and maintain than SEP or SIMPLE plans. Both types of plan require employers to file Form 5500 with the IRS annually. These plans also both require testing to ensure that benefits do not discriminate in favor of highly compensated employees. Employers may also find the administration of plan loans to be burdensome. The added features of MPPs and PSPs make them more costly and complicated than the standard model SEP and SIMPLE plans.

You may choose an MPP or PSP if you would like a plan that encourages employee retention and you can handle the extra paperwork. Whether you choose an MPP or a PSP depends mainly on your cash flow.

The fully loaded model retirement plan is the traditional 401(k). These plans allow employee and employer contributions, vesting of employer contributions (employee contributions are always fully vested), and other options such as loans. These plans can be as basic or as complex as the employer wants. However, with complexity comes cost.

Annual employee contributions for a 401(k) are limited to $17,500 for 2013 and 2014. Participants age 50 and older can contribute an additional $5,500. Combined, the employer and employee contributions can be up to the lesser of either 100 percent of compensation or $51,000 for 2013 ($52,000 for 2014). Employers can deduct contributions up to 25 percent of aggregate compensation for participants and all salary reduction contributions. A 401(k) must be adopted by the end of the business’ fiscal year, and contributions are due by the business’s tax filing deadline, plus extensions.

An employer’s contribution to a traditional 401(k) plan can be flexible. Contributions can be a percentage of compensation, a match for employee contributions, both or neither. However, the plan must be tested annually to determine that it does not discriminate against rank-and-file employees in favor or owners and managers. A Safe Harbor 401(k) does not require discrimination testing but does require the employer to make either a specified matching contribution or a 3 percent contribution to all participants.

Commonly, 401(k) plans must be offered to all employees over age 21 who have worked at least 1,000 hours in the previous year.

A 401(k) is a good option for an employer who would like a plan with salary deferral, like a SIMPLE IRA, but also allows for vesting of employer contributions. An employer considering this sort of plan should be able to afford the contributions and the additional administrative work required. A 401(k) is a good option for larger businesses, where the maintenance of such a plan is less burdensome.

The plans I have described in this article are all defined contribution plans. This mean that the plan determines the contributions made, not the ultimate benefits received. Once the contribution is made, the employee invests it however he or she sees fit. At retirement, the amount the employee can withdraw is dictated by the performance of those investments. Poor investments lead to smaller retirement savings.

Defined benefit plans, in contrast, are the Rolls Royces of the retirement plan world. These plans include traditional pension plans, which pay out a set amount to an employee in retirement. The employer, not the employee, takes on the investment risk and will have to make up most shortfalls if the money originally set aside does not cover the ultimate expense.

While in theory an employee could do better with a defined contribution plan, depending on investment results, the certainty of a set payout in retirement makes defined benefit plans highly attractive to participants. However, such plans are costly and administratively complex. On top of annual filings, the plan needs to be tested by an actuary. The required future payments become a liability of the company. The burdens of these plans have made them unattractive for many businesses, and they have become much less common in recent years. In most cases, especially for small businesses with employees, it is not economical to adopt a defined benefit plan.

Adopting a qualified plan for your small business need not be a hassle, even if you want to adopt one for the 2013 tax year. However, be prepared for the administrative complexity, and cost, to grow in step with the plan’s features. In general, though, the benefits of tax-deferred savings and contribution deductions for employers make setting up and maintaining one of these vehicles worth the price tag.

Thirteen Elements of Effective Planning

All plans are not good plans. In fact, even good plans can fail. We cannot predict the future – we can only imagine it imperfectly. In our companies and organizations, effective planning is a social activity. Deciding on a strategic planning process as a group, rather than as an individual, adds even greater complexity to an already complex task. Collaborative and effective planning techniques, then, require 13 essential elements.

1. Effective and Strategic Planning Process

First, effective planning requires a process, and that strategic planning process should include the remaining 12 elements of good planning. In collaborative team planning, that process must be structured and disciplined in order to be efficient and thorough. Without a process, your planning techniques will be awkward, inefficient and often insufficient.

2. Effective Planning Techniques: An Envisioned Future / Objective

When we envision the future, we must describe it clearly and provide specific measurements in order to judge our success. To this end, the objective of our effective planning techniques is goal we envision attaining in the future. Objectives must be clear to all involved. They must also have a scope that is commensurate with the span of control of those involved with the effective planning process. An objective that is not achievable by those tasked with developing a plan is, obviously, doomed to failure. Objectives must also be measurable. Without measurements of success, there is no means of establishing whether or not the objective was achieved, and your strategic planning process will be flawed.

3. Dynamic, Adaptable Planning

In terms of effective planning, “dynamic” means that plans are adaptable, in two ways. First, the act of effective planning considers the current and predicted environment and adapts the plan accordingly. Second, in the strategic planning process, plans must be devised in such a way so that they are not overly detailed. Effective planning ensures that your plans can adapt to changes that occur while the plan is being executed.

4. Iterative Improvements

Effective planning at your organization will also be iterative. By “iterative,” we mean that a plan will improve continuously from one iteration, or version, to another before it is executed in the strategic planning process. The iterative nature of planning supports its adaptive or dynamic nature. Iteration can be sped up by an effective planning technique known as “Red Teaming.” In Red Teaming, a group of individuals outside the planning effort are invited to criticize the plan or expose its weaknesses, acting as a form of rapid iteration and improvement.

5. Effective Planning Requires that You Learn from Experience

A complex and rapidly changing environment demands the ability to rapidly learn from the changes in that environment. Even the most well-educated and trained organization will soon become obsolescent as changes in the environment eventually overwhelm it. Good organizational planning requires sophisticated and effective planning techniques that the organization learns continually, through interaction with its environment and the execution of its plans.

6. Means to Achieve / Course of Action

The central element of all effective planning techniques is the Course of Action (COA). These are the actual tasks that must be completed, whether in parallel, in series, or a combination of both, to achieve the goal. For the most part, in a strategic planning process, the Course of Action, for simple plans, is intuitive or even obvious. However, for most organizations, plans may require great detail. Therefore, an effective planning process must be flexible enough to handle both simple and detailed plans. Effective planning processes should have the ability to repeat the planning process at successively lower levels in the organization, while supporting the objectives of the overall plan.

7. Decentralized Effective Planning

Another effective planning technique is the decentralization of plans, closely related to the flexible and successively repeatable nature of the Course of Action. Effective planning teams should not plan beyond their scope or expertise. In other words, the executive team of a large corporation should not develop the details of a strategic planning process to replace a main server in their IT infrastructure. Such a task is both out of their scope and, most likely, their expertise.

8. Individual Accountability

The scope and detail of effective planning is concluded when each task within a Course of Action is assigned to a single individual, not a team, to complete. Without individual accountability to each task and each plan, there is a significant risk of miscommunication, misunderstanding, and ultimately, failure.

9. Effective Planning Techniques Support Initiative and Good Judgment

General George S. Patton said that plans “[...] should be made by those who are going to execute them.” Decentralization and accountability go far in supporting the success of effective planning techniques. However, when a strategic planning process is developed by the team responsible for accomplishing the plan’s objective, the overall quality and likelihood of creating a successful plan improves exponentially.

10. Consider Resources

Effective planning means not committing to or wasting resources unnecessarily. In a strategic planning process, planners must determine the appropriate targets or objectives and focus resources upon those objectives. Because resources are often limited, prioritizing and planning successive phases of implementation may be necessary.

11. Assess Risk: Leadership Responsibility

Resources are considered carefully at every level of effective planning. Furthermore, the assessment of objectives, threats and resources are critical steps in every strategic planning process that, when taken together, form the basic risk assessment for any plan. Without the necessary resources to either avoid or mitigate the threats to accomplishing an objective, the risks in undertaking that plan should be given due consideration by the leadership within the organization. Because risk is often necessary, the final decision to execute the plan is left to its leaders, not the planning team.

12. Participatory and Cognitively Diverse

Isolating planning in a single individual or a group of individuals without the benefit of field experience and a diversity of knowledge, skills, and abilities is a recipe for failure. The world we live in is increasingly complex. Problem-solving in our complex world requires teams of cognitively diverse individuals contributing their unique knowledge to form a combination of effective planning techniques. If planning is conducted by a single individual or by groups of people with similar knowledge, skills and abilities, the qualities necessary to solve complex problems and to create an innovative strategic planning process will be absent.

13. The Most Effective Plans are Simple

The more complex a design, the more likely it will fail. As Statistical Process Control and Six Sigma methodologies instruct, the greater the number of steps in a process, the greater the potential for a defect. That is why it is critical that the planning process remains simple. Simplicity is not just about minimizing the number of tasks, it’s about making sure that each task is clearly defined through answering some simple questions: “who will do what and when.”

There is a paradox at work in effective preparation. It is simply this: that our human tendency is to implement plans rigidly while the purpose of a plan, in light of the complexity and constant change in the world, is to define objectives and establish a point of departure to react to change. The paradox of the strategic planning process is that effective planning does not involve merely creating a list of sequenced tasks, but establishing a constantly evolving problem-solving process that adapts and thrives in the environment.