Watching Wholesalers to Predict Consolidation & Business Health Many experts have been predicting massive consolidation among DC record keepers but the big push has yet to begin.
IRS Allows Safe Harbor Plans to Suspend Nonelective Contributions The IRS published a proposed rule to allow 401(k) or 403(b) plan sponsors experiencing a “substantial business hardship” to reduce, suspend, or eliminate “safe harbor” nonelective contributions during a plan year under rules similar to those already in place for safe harbor matching contributions. By doing so, however, they are giving up their plans’ safe harbor status. Absent this welcome relief, an employer’s only recourse to reduce or stop safe harbor nonelective contributions mid-year was to terminate the plan.
Tips to Keep Your 401k Plan on Track - Summary: Plan sponsors face many challenges in developing a well-structured DC plan to help meet the retirement requirements of their workers, while minimizing the fiduciary risk of managing the plan and its investment lineup. The significant decline in the capital markets has ramifications for recordkeepers, trustees, and investment managers. Here are ten issues to investigate. Located at: Insurancenewsnet.com. Click on headline for full article.
Labor Delays Washington Investment Advice Date Again The Labor Department has delayed for the second time the effective date for its investment advice regulation for defined contribution plans to Nov. 18.
Four Ways to Destroy Your Retirement - Summary: Robert Brokamp, advisor of the Motley Fool's "Rule Your Retirement" newsletter, warns against four common mistakes that can lead to a disastrous retirement. Located at: Motley Fool. Click on headline for full article.
How Does Your Investment Committee Stack Up Against Others? - Summary: Whether you're a new or veteran committee member, you may wonder how your group compares with others in making investment decisions. Preliminary findings from a survey conducted by Vanguard Investment Counseling & Research show that committees do many things right, but they also fall into some behavioral patterns that can prove counterproductive. Located at: Vanguard. Click on headline for full article.
DC Plans: What Does Reform Mean to Employers? - Summary: This article focuses on DC plan design reforms rather than on distribution or investment option reform. Specifically, it reviews the growth of DC plans, describes four proposals for DC plan design reform, and poses questions to consider in assessing whether these proposals would provide a more secure and reliable retirement system. Located at: Buck Consultants (PDF File). Click on headline for full article.
Workers Who Left Their Jobs Have Also Left Their 401k Behind - Summary: As unemployment continues to rise and many struggle to keep their retirement savings on track, Charles Schwab released new data showing a significant number of 401k assets held by workers who leave their jobs have been left behind in former employers' plans. Located at: 401khelpcenter.com. Click on headline for full article.
Rules Surrounding Partial Plan Terminations - Summary: This article discusses the collateral issue of plan partial terminations following events that affect the level of overall retirement plan participation, such as a reduction in force. Located at: Planadviser.com. Click on headline for full article.
Second Circuit Affirms Dismissal of Excessive Fees Lawsuits - Summary: The Second Circuit Court of Appeals affirmed the dismissal of two related actions, concluding that the plaintiffs failed to state claims based on allegations that plan fiduciaries failed to diversify plan investments and invested in funds that carried excessive fees. Located at: Groom Law Group (PDF File). Click on headline for full article.
Radio Shack Fiduciary Breach Case Plaintiffs Seek Class Action Nod - Summary: Lawyers representing plaintiffs alleging a fiduciary breach in the operation of the RadioShack 401k have asked a federal judge to certify the suit as a class action to potentially represent as many as 13,000 current and former employees. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Bill Would Waive Some 401k Withdrawal Penalties - Summary: Participants who are undergoing specific financial hardships would get some relief on 401k penalties under new legislation. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
401k Fee Litigation May 2009 Update - Summary: Over the past several years, more than two dozen lawsuits have been filed relating to 401k plan fees and, more specifically, revenue sharing arrangements with plan service providers. This is a written update from the Groom Law Group on these lawsuits. Located at: Groom Law Group (PDF File). Click on headline for full article.
Updated Chart of 401k Fee Litigation - Summary: More than two dozen lawsuits have been filed relating to 401k plan fees and revenue sharing arrangements with plan service providers. This is an updated chart showing the current state of each lawsuits. Located at: Groom Law Group (PDF File). Click on headline for full article.
Retirement Group to Propose Changes to 401k Disclosure Bill - Summary: An industry association that represents the interests of retirement plan service providers will suggest this week modifications to proposed legislation that would require the industry to break out 401k fees on investors' statements. Located at: Investment News (free registration may be required). Click on headline for full article.
Terminating a 403(b) Plan - Summary: The final 403(b) regulations brought additional (though incomplete) clarity to an important topic: terminating a 403(b) plan. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
How Well Are Employees Saving and Investing in 401k Plans - Summary: Hewitt recently released a study which analyzes the quality of participation, plan balances, investment behavior, account activity, and demographics of over 2.7 million employees. The report shows that despite the significant decline in the stock market during 2008, most participants did not change their saving and investment behavior throughout the year. Located at: MJM401k.com. Click on headline for full article.
Making the Case for Employer-Sponsored Retirement Plans: Fees and Expenses - Summary: This white paper examines two concerns regarding plan fees and expenses. The first relates to claims that employer-sponsored retirement plans and their investments are expensive and may erode American workers' retirement savings. The second addresses concerns that employer-sponsored retirement plans and their investment fees and expenses are not adequately understood and disclosed. Located at: The Spark Institute (PDF File). Click on headline for full article.
Mitigating Fiduciary Risk in a Down Market - Summary: The dramatic increase in ERISA litigation in recent years is causing plan sponsors and fiduciaries to take a fresh look at who is serving in a fiduciary capacity and whether those individuals are prudently performing their duties. Plan fiduciaries should understand their duties and accurately document their prudent execution. Here are some suggestions for what to do now. Located at: Workforce.com (free registration may be required). Click on headline for full article.
IRS Finalizes Regulations for QACA Safe Harbor - Summary: The IRS has finalized regulations addressing the nondiscrimination safe harbor for certain qualified automatic contribution arrangements (QACAs) in defined contribution plans. Located at: Watson Wyatt. Click on headline for full article.
IRS Employee Plans News Edition - Summary: Discusses the IRS' proposed regulations that would allow the reduction or suspension of safe harbor nonelective contributions. Located at: IRS (PDF File). Click on headline for full article.
EBSA Again Extends Effective Date of Advice Rule - Summary: The U.S. Department of Labor’s Employee Benefits Security Administration said the final rule about invest. advice under the Pension Protection Act will be extended to November 18. Located at: Planadviser.com. Click on headline for full article.
IRS Proposes Rules on Reducing Safe Harbor Nonelective Contributions - Summary: The IRS has come up with some new rules to "ease the pain" of these dire economic conditions and has issued some proposed regulations allowing employers to reduce or suspend their 401k or 403(b) safe harbor nonelective contributions mid-year in the case of a "substantial business hardship described in section 412(c) [of the Internal Revenue Code]." Located at: Benefits Blog. Click on headline for full article.
DOL Sues to Appoint Independent Fiduciary for 401k Plan Abandoned by Employer
For more information visit www.bpp401k.com
5.20.2009
BPP401k.com Newsletter May 20
Proposed Regulations Allow Suspension or Reduction of Safe Harbor Nonelective Contributions Mid-Year The proposed regulations would permit an employer that incurs a substantial business hardship to reduce or suspend safe harbor nonelective contributions during a plan year, providing an alternative to terminating the safe harbor plan.
Self-Directed IRA Myths - Summary: One of the hottest financial concepts, the so-called 'self-directed individual retirement account,' has lots of material available ranging from websites offering simple 'hands off' custody and recordkeeping services, to traditional broker-dealers marketing trading accounts, to promoters of 'how to' books, to what amount to little more than modern-day snake-oil sales pitches. In the opinion of the author, most of these materials perpetuate certain myths -– even among the lawyers -– that range from merely incomplete to outright wrong. Located at: Groom Law Group (PDF File). Click on headline for full article.
Effects of Financial Crisis Shake Plan Sponsors Into Action - Summary: As the financial crisis continues, it appears U.S. employers view the situation as significantly more serious than they did just six months ago. A follow-up survey conducted by the International Foundation of Employee Benefit Plans in May 2009 found that the crisis has forced both DB plan sponsors and DC plan sponsors to make changes to their retirement coverage and plan design. Located at: 401khelpcenter.com. Click on headline for full article.
Majority of Workers Continued to Fund 401k Accounts During First Quarter - Summary: Fidelity's data, based on more than 17,500 corporate defined contribution plans and 11.3 million participants, showed that 97 percent of active participants continued to make contributions in the first quarter of 2009. Additional data reported also. Located at: 401khelpcenter.com. Click on headline for full article.
Despite Historical Losses, Few Employees Changed Their 401k Habits - Summary: Despite U.S. employees sustaining record losses in their 401k savings in 2008, their 401k saving and investing habits showed very little change, according to an annual study by Hewitt Associates. Located at: 401khelpcenter.com. Click on headline for full article.
Study Finds Longevity Risk, Participant Education as Opportunities for Service Providers - Summary: Improved participant education and products that mitigate longevity risk are two of the biggest opportunities for service providers to help employees improve retirement preparedness, according to a recent study by String Financial, LLC. Located at: 401khelpcenter.com. Click on headline for full article.
Target Date Fund Managers Response to Turbulent Times - Summary: The majority of target date fund managers are avoiding a knee-jerk reaction to the market crisis. They continue to examine the situation closely, but are being measured in their response. Located at: 401khelpcenter.com. Click on headline for full article
Obama Administration Budget Proposals on Retirement Savings and Insurance Products - Summary: Treasury Department released details of the Administration's Fiscal Year 2010 Revenue Proposals including retirement plan changes. Proposals relating to retirement savings and insurance products are summarized in this document. Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
Green Book Outlines Automatic IRA Similarity to 403(b) - Summary: The Green Book, published May 11, 2009, by the Treasury Department, contains further details on Obama's workplace pensions first described in his budget proposals. It creates a new scheme of individual pensions, much akin to the 403(b) arrangements of the past. Located at: Business of Benefits. Click on headline for full article.
401k Auto Enrollment Not in Obama Budget - Summary: A proposal that would require automatic enrollment of participants in existing 401k plans was not included in President Barack Obama's fiscal 2010 budget. Located at: Workforce.com (free registration may be required). Click on headline for full article.
SF Law Firm Wins Round One in 401k Consulting Suit - Summary: A federal judge in California has rebuffed demands from JP Morgan Chase and Co. that it dismiss a lawsuit alleging mistakes that could imperil the tax-favored status of a San Francisco law firm's profit sharing/401k plan. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Helping Tomorrow's Retirees Better Prepare Today - Summary: If tomorrow's retirees hope to achieve the financial security enjoyed by many of their parents, more disciplined retirement savings behaviors must be adopted and more extensive and efficient use must be made of mortality-contingent products. As the cornerstone of most of today's retirement plans, employer-based defined contribution plans are the natural point of delivery for both the substantial education efforts required to change participant behaviors, as well as for innovative product solutions to help participants mitigate longevity risk. Located at: String Financial (PDF File). Click on headline for full article.
The New Take on 404(c): Confusion in the Federal Courts - Summary: ERISA Section 404(c) provides fiduciaries with a defense against losses incurred by participants who exercise control over their accounts. But the protection applies only to the investment decisions made by the participants and not to the selection and monitoring of the investment options offered to the participants ... right? Maybe. For the present, we have an anomaly; the answer depends on where you live. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
SEC, DOL to Hold Joint Hearing Examining Target Date Funds - Summary: The Securities and Exchange Commission and the U.S. Department of Labor will hold a joint one-day hearing on June 18 to explore issues relating to target date or lifecycle funds and other similar investment options. Located at: Mondovisione.com. Click on headline for full article.
For more information visit www.bpp401k.com
Self-Directed IRA Myths - Summary: One of the hottest financial concepts, the so-called 'self-directed individual retirement account,' has lots of material available ranging from websites offering simple 'hands off' custody and recordkeeping services, to traditional broker-dealers marketing trading accounts, to promoters of 'how to' books, to what amount to little more than modern-day snake-oil sales pitches. In the opinion of the author, most of these materials perpetuate certain myths -– even among the lawyers -– that range from merely incomplete to outright wrong. Located at: Groom Law Group (PDF File). Click on headline for full article.
Effects of Financial Crisis Shake Plan Sponsors Into Action - Summary: As the financial crisis continues, it appears U.S. employers view the situation as significantly more serious than they did just six months ago. A follow-up survey conducted by the International Foundation of Employee Benefit Plans in May 2009 found that the crisis has forced both DB plan sponsors and DC plan sponsors to make changes to their retirement coverage and plan design. Located at: 401khelpcenter.com. Click on headline for full article.
Majority of Workers Continued to Fund 401k Accounts During First Quarter - Summary: Fidelity's data, based on more than 17,500 corporate defined contribution plans and 11.3 million participants, showed that 97 percent of active participants continued to make contributions in the first quarter of 2009. Additional data reported also. Located at: 401khelpcenter.com. Click on headline for full article.
Despite Historical Losses, Few Employees Changed Their 401k Habits - Summary: Despite U.S. employees sustaining record losses in their 401k savings in 2008, their 401k saving and investing habits showed very little change, according to an annual study by Hewitt Associates. Located at: 401khelpcenter.com. Click on headline for full article.
Study Finds Longevity Risk, Participant Education as Opportunities for Service Providers - Summary: Improved participant education and products that mitigate longevity risk are two of the biggest opportunities for service providers to help employees improve retirement preparedness, according to a recent study by String Financial, LLC. Located at: 401khelpcenter.com. Click on headline for full article.
Target Date Fund Managers Response to Turbulent Times - Summary: The majority of target date fund managers are avoiding a knee-jerk reaction to the market crisis. They continue to examine the situation closely, but are being measured in their response. Located at: 401khelpcenter.com. Click on headline for full article
Obama Administration Budget Proposals on Retirement Savings and Insurance Products - Summary: Treasury Department released details of the Administration's Fiscal Year 2010 Revenue Proposals including retirement plan changes. Proposals relating to retirement savings and insurance products are summarized in this document. Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
Green Book Outlines Automatic IRA Similarity to 403(b) - Summary: The Green Book, published May 11, 2009, by the Treasury Department, contains further details on Obama's workplace pensions first described in his budget proposals. It creates a new scheme of individual pensions, much akin to the 403(b) arrangements of the past. Located at: Business of Benefits. Click on headline for full article.
401k Auto Enrollment Not in Obama Budget - Summary: A proposal that would require automatic enrollment of participants in existing 401k plans was not included in President Barack Obama's fiscal 2010 budget. Located at: Workforce.com (free registration may be required). Click on headline for full article.
SF Law Firm Wins Round One in 401k Consulting Suit - Summary: A federal judge in California has rebuffed demands from JP Morgan Chase and Co. that it dismiss a lawsuit alleging mistakes that could imperil the tax-favored status of a San Francisco law firm's profit sharing/401k plan. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Helping Tomorrow's Retirees Better Prepare Today - Summary: If tomorrow's retirees hope to achieve the financial security enjoyed by many of their parents, more disciplined retirement savings behaviors must be adopted and more extensive and efficient use must be made of mortality-contingent products. As the cornerstone of most of today's retirement plans, employer-based defined contribution plans are the natural point of delivery for both the substantial education efforts required to change participant behaviors, as well as for innovative product solutions to help participants mitigate longevity risk. Located at: String Financial (PDF File). Click on headline for full article.
The New Take on 404(c): Confusion in the Federal Courts - Summary: ERISA Section 404(c) provides fiduciaries with a defense against losses incurred by participants who exercise control over their accounts. But the protection applies only to the investment decisions made by the participants and not to the selection and monitoring of the investment options offered to the participants ... right? Maybe. For the present, we have an anomaly; the answer depends on where you live. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
SEC, DOL to Hold Joint Hearing Examining Target Date Funds - Summary: The Securities and Exchange Commission and the U.S. Department of Labor will hold a joint one-day hearing on June 18 to explore issues relating to target date or lifecycle funds and other similar investment options. Located at: Mondovisione.com. Click on headline for full article.
For more information visit www.bpp401k.com
5.13.2009
BPP401k.com Newsletter May 13
Vast Regulatory Reform Bill Will Be Law By Yearend Systemic-risk regulator would have sweeping powers to regulate financial activity. Investment News
When Will Retirement Savings Rebound? - Summary: Depends on who you ask, but nearly four out of 10 Americans—or 39 percent—said they expect it'll take at least three years to recover the value of their retirement savings that were lost in the downturn. Located at: Workforce.com (free registration may be required). Click on headline for full article.
More People Tap Retirement Accounts - Summary: The number of companies reporting early withdrawals for hardship from 401k and 403(b) plans rose to 44% last month from 15% in October 2008, according to a recent Watson Wyatt study that polled executives at 141 U.S.-based companies using an online questionnaire. Located at: Wall Street Journal. Click on headline for full article.
Women Need a Three-Legged Stool to Break the Retirement Glass Ceiling - Summary: Women remain at a higher risk for retirement insecurity as compared to men, according to a new research brief issued today by the National Institute on Retirement Security. That risk can be reduced by ensuring women have the combination of a traditional pension, supplemental 401k-type individual savings, and Social Security. Located at: 401khelpcenter.com. Click on headline for full article.
Increasing Low-Income Employee Participation in 401k Plans - Summary: Suppose you're a plan sponsor that wants to increase 401k participation among your low income employees, what do you do? Located at: Retirement Plan Blog. Click on headline for full article.
401ks Hit by Withdrawal Freezes - Summary: Some investors in 401k retirement funds who are moving to grab their money are finding they can't. Investors cry foul as some funds close exits. Located at: Wall Street Journal. Click on headline for full article.
Does America Need a New Retirement System? - Summary: Some says 401ks are being criticized unfairly in this unprecedented economic crisis, while others say the downturn proves that 401ks were never meant to be anyone's primary source of retirement savings. Should we be rethinking our retirement savings system? Located at: MSN.com. Click on headline for full article.
Putnam CEO Calls for Sweeping Retirement Reform Agenda - Summary: Recognizing the declining role of traditional pension plans and Social Security, Reynolds calls for dramatic expansion and strengthening of 401ks and other defined-contribution savings plans to reliably deliver lifelong income to workers, including improvements in regulatory oversight, plan design and tax incentives. Located at: 401khelpcenter.com. Click on headline for full article.
Insurance to Protect 401ks: The Trick Is to Figure Out How - Summary: If ever there were a product whose time has come, this would seem to be it: a guarantee that you won't lose the money you've amassed in your 401k as you near retirement, whatever happens with the market. And you can convert that money into a stream of paychecks that will last your entire life. Located at: Wall Street Journal. Click on headline for full article.
Retirement at the Tipping Point: The Year That Changed Everything - Summary: To learn precisely how this past year has altered Americans' retirement hopes, worries, and plans, Age Wave and Harris Interactive have surveyed thousands of Americans. The results uncovered mounting fears and shifting plans, but also a renewed focus on what's important and an optimistic outlook about the possibilities for retirees' new role in American life. Located at: Age Wave (PDF File). Click on headline for full article.
Making the Case for Employer-Sponsored Retirement Plans: Coverage, Participation and Retirement Security - Summary: This white paper is the second installment in a series developed by The SPARK Institute to demonstrate that employer-sponsored retirement plans, particularly 401k plans, are the most effective, secure and viable way for American workers to save and invest to reach their retirement goals. Located at: The Spark Institute (PDF File). Click on headline for full article.
Delegation for Plan Sponsors (Part 2) - Summary: Plan sponsors that choose to delegate their responsibilities and liabilities to a professional named fiduciary can, in effect, get out of the retirement plan business and be free to concentrate fully on their business so they can stay in business during these troubled times instead of worrying about fiduciary risks they are neither prepared nor trained to manage. Located at: Morningstar.com. Click on headline for full article.
What Effect Does a Retirement Plan Adviser Have On a Plan? - Summary: Though the data are not staggering, it appears that plans with an adviser are more diligent about monitoring the plan provider and investments than plans without an adviser. Located at: Plan Adviser Magazine. Click on headline for full article.
How a 'Universal' Fiduciary Standard Would Change How Financial Advisers Do Business - Summary: How will things be different if a robust fiduciary standard, grounded in the Employee Retirement Income Security Act, is adopted for all advice givers? The high-level answer is that the advice would be uniformly recognized and regulated as a professional service. The era of regulating brokers under a commercial standard that treats advice as a byproduct dispensed without fiduciary accountability would end. Located at: Investment News (free registration may be required). Click on headline for full article.
Changes Coming for the 401k Plan - Summary: Policy makers and some industry representatives say major changes to retirement investing and 401k plans are becoming increasingly likely under the Democratic Party's control of Congress. Located at: Wall Street Journal. Click on headline for full article.
401k Reform on the Horizon? Q&A with Rep. Miller - Summary: For the second year in a row, Rep. Miller is trying to get legislation through Congress to force 401k providers to reveal their fees in plain English. In this recent interview with The Associated Press, Miller explains his view on fee disclosure and the prospects of getting legislation passed this year. Located at: The Post-Standard. Click on headline for full article.
Conflicted Invest. Advice Prohibition Act of 2009 - Summary: Text of bill introduced by Congressman Rob Andrews to update the invest. advice regulations to the Pension Protection Act to allow for independent invest. advice. Located at: Plansponsor.com (PDF File). Click on headline for full article.
Rep. Rob Andrews Introduces Invest. Advice Bill - Summary: Legislation introduced by Rep. Robert Andrews, D-New Jersey, would dramatically revamp the ground rules for offering invest. advice to participants in defined-contribution pension plans. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Final Guidance on Automatic Enrollment Plan Designs - Summary: The IRS published final regulations and addressed some of the concerns raised regarding the proposed rules. Plan sponsors that have adopted or are interested in adopting these designs should review the information provided in this publication. Located at: Prudential (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
When Will Retirement Savings Rebound? - Summary: Depends on who you ask, but nearly four out of 10 Americans—or 39 percent—said they expect it'll take at least three years to recover the value of their retirement savings that were lost in the downturn. Located at: Workforce.com (free registration may be required). Click on headline for full article.
More People Tap Retirement Accounts - Summary: The number of companies reporting early withdrawals for hardship from 401k and 403(b) plans rose to 44% last month from 15% in October 2008, according to a recent Watson Wyatt study that polled executives at 141 U.S.-based companies using an online questionnaire. Located at: Wall Street Journal. Click on headline for full article.
Women Need a Three-Legged Stool to Break the Retirement Glass Ceiling - Summary: Women remain at a higher risk for retirement insecurity as compared to men, according to a new research brief issued today by the National Institute on Retirement Security. That risk can be reduced by ensuring women have the combination of a traditional pension, supplemental 401k-type individual savings, and Social Security. Located at: 401khelpcenter.com. Click on headline for full article.
Increasing Low-Income Employee Participation in 401k Plans - Summary: Suppose you're a plan sponsor that wants to increase 401k participation among your low income employees, what do you do? Located at: Retirement Plan Blog. Click on headline for full article.
401ks Hit by Withdrawal Freezes - Summary: Some investors in 401k retirement funds who are moving to grab their money are finding they can't. Investors cry foul as some funds close exits. Located at: Wall Street Journal. Click on headline for full article.
Does America Need a New Retirement System? - Summary: Some says 401ks are being criticized unfairly in this unprecedented economic crisis, while others say the downturn proves that 401ks were never meant to be anyone's primary source of retirement savings. Should we be rethinking our retirement savings system? Located at: MSN.com. Click on headline for full article.
Putnam CEO Calls for Sweeping Retirement Reform Agenda - Summary: Recognizing the declining role of traditional pension plans and Social Security, Reynolds calls for dramatic expansion and strengthening of 401ks and other defined-contribution savings plans to reliably deliver lifelong income to workers, including improvements in regulatory oversight, plan design and tax incentives. Located at: 401khelpcenter.com. Click on headline for full article.
Insurance to Protect 401ks: The Trick Is to Figure Out How - Summary: If ever there were a product whose time has come, this would seem to be it: a guarantee that you won't lose the money you've amassed in your 401k as you near retirement, whatever happens with the market. And you can convert that money into a stream of paychecks that will last your entire life. Located at: Wall Street Journal. Click on headline for full article.
Retirement at the Tipping Point: The Year That Changed Everything - Summary: To learn precisely how this past year has altered Americans' retirement hopes, worries, and plans, Age Wave and Harris Interactive have surveyed thousands of Americans. The results uncovered mounting fears and shifting plans, but also a renewed focus on what's important and an optimistic outlook about the possibilities for retirees' new role in American life. Located at: Age Wave (PDF File). Click on headline for full article.
Making the Case for Employer-Sponsored Retirement Plans: Coverage, Participation and Retirement Security - Summary: This white paper is the second installment in a series developed by The SPARK Institute to demonstrate that employer-sponsored retirement plans, particularly 401k plans, are the most effective, secure and viable way for American workers to save and invest to reach their retirement goals. Located at: The Spark Institute (PDF File). Click on headline for full article.
Delegation for Plan Sponsors (Part 2) - Summary: Plan sponsors that choose to delegate their responsibilities and liabilities to a professional named fiduciary can, in effect, get out of the retirement plan business and be free to concentrate fully on their business so they can stay in business during these troubled times instead of worrying about fiduciary risks they are neither prepared nor trained to manage. Located at: Morningstar.com. Click on headline for full article.
What Effect Does a Retirement Plan Adviser Have On a Plan? - Summary: Though the data are not staggering, it appears that plans with an adviser are more diligent about monitoring the plan provider and investments than plans without an adviser. Located at: Plan Adviser Magazine. Click on headline for full article.
How a 'Universal' Fiduciary Standard Would Change How Financial Advisers Do Business - Summary: How will things be different if a robust fiduciary standard, grounded in the Employee Retirement Income Security Act, is adopted for all advice givers? The high-level answer is that the advice would be uniformly recognized and regulated as a professional service. The era of regulating brokers under a commercial standard that treats advice as a byproduct dispensed without fiduciary accountability would end. Located at: Investment News (free registration may be required). Click on headline for full article.
Changes Coming for the 401k Plan - Summary: Policy makers and some industry representatives say major changes to retirement investing and 401k plans are becoming increasingly likely under the Democratic Party's control of Congress. Located at: Wall Street Journal. Click on headline for full article.
401k Reform on the Horizon? Q&A with Rep. Miller - Summary: For the second year in a row, Rep. Miller is trying to get legislation through Congress to force 401k providers to reveal their fees in plain English. In this recent interview with The Associated Press, Miller explains his view on fee disclosure and the prospects of getting legislation passed this year. Located at: The Post-Standard. Click on headline for full article.
Conflicted Invest. Advice Prohibition Act of 2009 - Summary: Text of bill introduced by Congressman Rob Andrews to update the invest. advice regulations to the Pension Protection Act to allow for independent invest. advice. Located at: Plansponsor.com (PDF File). Click on headline for full article.
Rep. Rob Andrews Introduces Invest. Advice Bill - Summary: Legislation introduced by Rep. Robert Andrews, D-New Jersey, would dramatically revamp the ground rules for offering invest. advice to participants in defined-contribution pension plans. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Final Guidance on Automatic Enrollment Plan Designs - Summary: The IRS published final regulations and addressed some of the concerns raised regarding the proposed rules. Plan sponsors that have adopted or are interested in adopting these designs should review the information provided in this publication. Located at: Prudential (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
5.06.2009
BPP401k.com Newsletter May 6
The Challenge of Communicating 401k Cuts - Summary: A growing number of employers are struggling with the best way to inform the work force of such cuts. Employers want to make sure they convey to employees accurate legal information about the change, but they also want to address workers with compassion—and a clear message that sets the context for the decision. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Amending Your Plan to Reduce or Eliminate Employer Contributions - Summary: Many plan sponsors are asking about their ability to reduce or terminate matching and profit sharing contributions to their 401k retirement plans. This article provides some guidelines if you are faced with these decisions. Located at: M&I Institutional Trust Services (PDF File). Click on headline for full article.
Pros and Cons of 401k Loans and Early Distributions - Summary: Retirement plans are intended to help employees save for retirement. Although fundamental, this concept has been eroded in the context of 401k plans because many employees believe that loans, hardship distributions and in-service distributions should be automatically permitted, particularly with regard to employee contributions. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
401k Plans Eye Annuities With Caution - Summary: Given the stock market's volatility, a number of 401k plan sponsors are seriously discussing adding an annuity option to their 401k plans, but have concerns ranging from fees to fiduciary issues. Located at: Workforce.com (free registration may be required). Click on headline for full article.
10 Myths About 401ks -- And the Facts - Summary: In recent months, several myths about 401ks have gained currency. This document has the top 10 myths about 401ks--and provides the facts. Located at: Investment Company Institute (PDF File). Click on headline for full article.
Hot Topics in Retirement 2009 - Summary: Hewitt Associates surveyed employers to learn their likely areas of focus and action in 2009 regarding the design, management, and delivery of their defined contribution, defined benefit, and retiree medical plans for their active, salaried U.S. employees. Located at: Hewitt. Click on headline for full article.
Form 1099-R Legal Authority - Summary: An answer to the question, "What is the legal authority for the requirement to file a Form 1099-R?" Located at: Benefitslink.com. Click on headline for full article.
Thoughts on Properly Delegating Fiduciary Duties - Summary: Recognizing the high anxiety of today's ERISA fiduciaries, some plan service providers are offering to "share the fiduciary load" by stating in their service agreements that they are co-fiduciaries. But what does that really mean? This article explains that co-fiduciary status is, at best, a half measure. Located at: Jones Day (PDF File). Click on headline for full article.
Wal-Mart Fee Case and Fighting Fiduciaries - Summary: The court battle continues over the class-action lawsuit against Wal-Mart, alleging excessive fees and conflicts of interest by 401k plan fiduciaries. Heavy hitters are lining up on opposing sides: The DOL on behalf of the employees and three large business organizations on the other. Located at: HREonline.com. Click on headline for full article.
"Red Flags Rule" Raises Questions for Some 401k Plan Sponsors - Summary: Plan sponsors that are considered financial institutions or creditors may be subject to the Red Flags Rule on and after May 1, 2009, with respect to employee benefit plans that offer plan loans or feature individual accounts. This Q&As explain the Red Flags Rule, provide guidance on determining whether the Rule applies to an entity, and outlines the Rule's requirements. Located at: Pillsbury Winthrop Shaw Pittman LLP (PDF File). Click on headline for full article.
Audio Interview with Fred Reish - Summary: As the retirement industry faces new regulations, what will it mean for retirement plan advisers? Located at: Plansponsor.com. Click on headline for full article.
403(b) Communication Takes on New Role - Summary: Retirement plan advisers have an opportunity to help 403(b) plan sponsors reach out to participants in a variety of ways. Located at: Planadviser.com. Click on headline for full article.
Towers Perrin Legislative Tracking Chart - Summary: This chart tracks bills related to retirement and executive compensation. Thousands of bills are introduced in Congress but only a select few are summarized on this chart. This selection represents Towers Perrin's best judgment on the likelihood of enactment and the relevance of the issue for employers. Located at: Towers Perrin (PDF File). Click on headline for full article.
Andrews 401k Legislation Raises Questions - Summary: Although it is too early to tell what will become of the proposed advice legislation, it raises practical application questions. Located at: Planadviser.com. Click on headline for full article.
More 403(b) Guidance on the Way, IRS Official Says - Summary: The IRS's Employee Plans unit will issue more guidance on how to satisfy the requirements for 403(b) plans, EP Tax Law Specialist Robert Architect stated on April 16, 2009 in an IRS phone forum. Located at: CCH. Click on headline for full article.
Prototype 403(b) Plans - Summary: As expected, the IRS recently announced that it will be establishing a prototype program for 403(b) plans (IRS Announcement 2009-34). The Announcement also includes a draft Revenue Procedure setting forth the parameters of the 403(b) prototype program. Located at: Sungard/Relius. Click on headline for full article.
Determining the Best Investment Choices for 403(b) Plans - Summary: While compliance efforts have led some 403(b) plan sponsors to adjust their investment menu, others have moved forward with existing offerings. There are a number of things plan sponsors should consider when deciding what to do about investments. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
2009 Investment Company Fact Book - Summary: ICI's annual compilation report and review of trends and activity in the mutual fund industry. Located at: Investment Company Institute (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
Amending Your Plan to Reduce or Eliminate Employer Contributions - Summary: Many plan sponsors are asking about their ability to reduce or terminate matching and profit sharing contributions to their 401k retirement plans. This article provides some guidelines if you are faced with these decisions. Located at: M&I Institutional Trust Services (PDF File). Click on headline for full article.
Pros and Cons of 401k Loans and Early Distributions - Summary: Retirement plans are intended to help employees save for retirement. Although fundamental, this concept has been eroded in the context of 401k plans because many employees believe that loans, hardship distributions and in-service distributions should be automatically permitted, particularly with regard to employee contributions. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
401k Plans Eye Annuities With Caution - Summary: Given the stock market's volatility, a number of 401k plan sponsors are seriously discussing adding an annuity option to their 401k plans, but have concerns ranging from fees to fiduciary issues. Located at: Workforce.com (free registration may be required). Click on headline for full article.
10 Myths About 401ks -- And the Facts - Summary: In recent months, several myths about 401ks have gained currency. This document has the top 10 myths about 401ks--and provides the facts. Located at: Investment Company Institute (PDF File). Click on headline for full article.
Hot Topics in Retirement 2009 - Summary: Hewitt Associates surveyed employers to learn their likely areas of focus and action in 2009 regarding the design, management, and delivery of their defined contribution, defined benefit, and retiree medical plans for their active, salaried U.S. employees. Located at: Hewitt. Click on headline for full article.
Form 1099-R Legal Authority - Summary: An answer to the question, "What is the legal authority for the requirement to file a Form 1099-R?" Located at: Benefitslink.com. Click on headline for full article.
Thoughts on Properly Delegating Fiduciary Duties - Summary: Recognizing the high anxiety of today's ERISA fiduciaries, some plan service providers are offering to "share the fiduciary load" by stating in their service agreements that they are co-fiduciaries. But what does that really mean? This article explains that co-fiduciary status is, at best, a half measure. Located at: Jones Day (PDF File). Click on headline for full article.
Wal-Mart Fee Case and Fighting Fiduciaries - Summary: The court battle continues over the class-action lawsuit against Wal-Mart, alleging excessive fees and conflicts of interest by 401k plan fiduciaries. Heavy hitters are lining up on opposing sides: The DOL on behalf of the employees and three large business organizations on the other. Located at: HREonline.com. Click on headline for full article.
"Red Flags Rule" Raises Questions for Some 401k Plan Sponsors - Summary: Plan sponsors that are considered financial institutions or creditors may be subject to the Red Flags Rule on and after May 1, 2009, with respect to employee benefit plans that offer plan loans or feature individual accounts. This Q&As explain the Red Flags Rule, provide guidance on determining whether the Rule applies to an entity, and outlines the Rule's requirements. Located at: Pillsbury Winthrop Shaw Pittman LLP (PDF File). Click on headline for full article.
Audio Interview with Fred Reish - Summary: As the retirement industry faces new regulations, what will it mean for retirement plan advisers? Located at: Plansponsor.com. Click on headline for full article.
403(b) Communication Takes on New Role - Summary: Retirement plan advisers have an opportunity to help 403(b) plan sponsors reach out to participants in a variety of ways. Located at: Planadviser.com. Click on headline for full article.
Towers Perrin Legislative Tracking Chart - Summary: This chart tracks bills related to retirement and executive compensation. Thousands of bills are introduced in Congress but only a select few are summarized on this chart. This selection represents Towers Perrin's best judgment on the likelihood of enactment and the relevance of the issue for employers. Located at: Towers Perrin (PDF File). Click on headline for full article.
Andrews 401k Legislation Raises Questions - Summary: Although it is too early to tell what will become of the proposed advice legislation, it raises practical application questions. Located at: Planadviser.com. Click on headline for full article.
More 403(b) Guidance on the Way, IRS Official Says - Summary: The IRS's Employee Plans unit will issue more guidance on how to satisfy the requirements for 403(b) plans, EP Tax Law Specialist Robert Architect stated on April 16, 2009 in an IRS phone forum. Located at: CCH. Click on headline for full article.
Prototype 403(b) Plans - Summary: As expected, the IRS recently announced that it will be establishing a prototype program for 403(b) plans (IRS Announcement 2009-34). The Announcement also includes a draft Revenue Procedure setting forth the parameters of the 403(b) prototype program. Located at: Sungard/Relius. Click on headline for full article.
Determining the Best Investment Choices for 403(b) Plans - Summary: While compliance efforts have led some 403(b) plan sponsors to adjust their investment menu, others have moved forward with existing offerings. There are a number of things plan sponsors should consider when deciding what to do about investments. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
2009 Investment Company Fact Book - Summary: ICI's annual compilation report and review of trends and activity in the mutual fund industry. Located at: Investment Company Institute (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
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