Thanks for asking ... Due to the amazing number of questions we've had about the BPP/QPS merger, we've decided to dedicate a large portion of our weekly newsletter to address these topics. As always, please feel free to contact us with any questions, comments or concerns.
Will my plan be transferred to the other team based on geography? Will I still work with the same Retirement Plan Specialist?
Your existing contacts will remain unchanged and you can continue using the same communication channels to which you are accustomed. Your plan will not be transferred based on your geographic location. All service agreements in place will be honored.
Should advisors address proposals to the different teams based on territory or state?
No. The new BPP will double its sales force, augment its products and services and dramatically increase advisory referral channels. Our team is not approaching the merger with a Missouri/Illinois split in mind; both teams have always served the entire St. Louis metro region and Illinois and will continue to do so.
Is Nancy Flachsbart retiring?
No, Nancy is not retiring and she will continue to lead the BPP-Illinois team in Highland. “I wanted to ensure the business I’ve built over the last quarter of a century was going to be in good hands. I’ve looked into other merger opportunities in the past, but none have been the right fit, until now,” says Flachsbart. “We have served the Metro St. Louis area with such a high quality of service. When I’m ready to retire in the next three to five years I needed to make sure my employees and clients would be treated well – and they will.”
Will my fees increase?
We will continue to honor your existing pricing agreement for the foreseeable future.
Why did BPP/QPS merge?
This merger is part of a long-term business plan and strategy to maximize opportunities in today’s competitive markets. The new organization is uniquely positioned to provide the most comprehensive retirement plan solutions in the marketplace.
What does the BPP service line include?
Expanded product offerings include custom plan design, compliance and administration services for 401(k), 403(b), 457 and Cafeteria/125 plans. In addition consulting services such as technical corrections, searches, as well as an exclusive Fiduciary Health Check™ are available.
Where did the QPS website go?
The QPS website has been incorporated into www.bpp401k.com FSA information can be found HERE Employer forms can be found HERE
House Panel Approves 401(k) Transparency Bill A bill advanced by a House subcommittee seeks to make 401(k) participants more aware of plan fees and, hopefully, rebuild confidence in their retirement programs.
Role of Target-Date Funds Questioned at Joint Hearing The Department of Labor and Securities and Exchange Commission held a hearing last week to address concerns about the role of target-date funds in retirement savings.
Study Illuminates 401(k) Participants’ Preferences for Fee Disclosures 10th Annual Transamerica Retirement Survey Reveals Opportunities to Increase Awareness of Fees
IRS Adds Tools to Help Prepare for Plan Audits The Internal Revenue Service (IRS) has recently added updated tools to its Employee Plan Team Audit (EPTA) Web site.
For more information visit www.bpp401k.com
6.17.2009
BPP401k.com Newsletter June 17
Advisers Will Have Trouble Dabbling in Retirement Increasingly complex market trends will make it impossible for financial professionals to dabble in the retirement space, a new report says.
Complying with ERISA's Fidelity Bonding Requirements - Summary: This article answers common questions about ERISA's fidelity bonding requirements. Located at: Sidson Consulting (PDF File). Click on headline for full article.
Many Americans Are Not Financially or Emotionally Prepared for Retirement - Summary: Almost four in 10 Americans are not currently saving for retirement and, despite market losses, six in 10 Americans have not adjusted their thinking about what age they will retire, according to a survey by Charles Schwab. Located at: 401khelpcenter.com. Click on headline for full article.
Economy Not Putting Pressure on Small Biz Ability to Offer 401k - Summary: According to a Nationwide Financial Services survey released today, most small businesses don't think the economy will impact their ability to offer a 401k retirement plan. Located at: 401khelpcenter.com. Click on headline for full article.
Schwab Releases Data on Employer and Worker 401k Behavior - Summary: Charles Schwab released new 401k plan data indicating that while the economic downturn has impacted some aspects of employer and worker behavior in plans, both groups have largely stayed the course and remained committed to their plans. Located at: 401khelpcenter.com. Click on headline for full article.
Employers Are Divided Over Adequacy of 401ks - Summary: Employers are evenly split between those who say their 401k plans can provide adequate retirement savings for employees and those who say they can't or are unsure, according to a Mercer survey. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Study Shows 401k Participants' Continued Resilience During Volatile First Quarter of 2009 - Summary: In the face of the U.S. stock market's 44% drop over the 15 months ended March 31, 2009, the 3 million participants in defined contribution plans administered by Vanguard experienced a median decline in their account balance of less than half of that for the period, according to new research from Vanguard. Located at: 401khelpcenter.com. Click on headline for full article.
More 401k Plan Sponsors Considering Collective Trusts - Summary: Move over mutual funds. The number of collective investment trusts available to institutional investors is exploding, and the trusts are offering many 401k plan sponsors a less expensive way to provide competitive investment options to employees. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Fidelity Released the Results of Its Second Couples Retirement Study - Summary: The results show that despite two years of unprecedented economic and financial instability, which has severely impacted most American households, husbands and wives have done little to improve their communication, planning and management of retirement finances. Located at: Fidelity Investments. Click on headline for full article.
Borrowing From 401ks - Summary: A new government report breaks from conventional wisdom and casts doubt on some long-held beliefs about the negative effects of borrowing from a 401k fund. Shifting expensive consumer debt to defined-contribution plans may make sense for some workers. Located at: Human Resource Executive Online. Click on headline for full article.
Default, Framing and Spillover Effects: The Case of Lifecycle Funds in 401k Plans - Summary: Important behavioral factors such as default and framing effects are increasingly being employed to optimize decision-making in a variety of settings, including individually-directed retirement plans. Yet such approaches may have unintended "spillover" effects, as this paper shows with regard to the introduction of lifecycle funds in U.S. 401k plans. Located at: Pension Research Council at The Wharton School (free registration may be required). Click on headline for full article.
U.S. Retirement Market Data for 2008 - Summary: ICI published its annual report on the U.S. retirement market, which shows that Americans held $14.0 trillion in retirement assets at year-end 2008, down 22 percent from year-end 2007. Located at: Investment Company Institute (PDF File). Click on headline for full article.
Monthly Regulatory Round-Up - Summary: This monthly regulatory round-up produced by Towers Perrin is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large plan sponsors. Located at: Towers Perrin (PDF File). Click on headline for full article.
Administration Explores 'R Bond' As Option for Retirement Accounts - Summary: Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the president's proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds. Located at: Investment News (free registration may be required). Click on headline for full article.
Bill Would Allow Independent Advisers to Counsel Plan Participants - Summary: A key Congressional committee is expected to vote on a proposal - as early as next week -that could potentially bar thousands of brokers from providing invest. advice to 401k participants, according to sources. Located at: Investment News (free registration may be required). Click on headline for full article.
Summary of The Defined Contribution Plan Fee Transparency Act of 2009 - Summary: This is the official summary of a bill (H.R. 2779) that would add new Section 4980H to the Internal Revenue Code requiring notice to plan participants and taxes for failure to comply. Located at: American Benefits Council (PDF File). Click on headline for full article.
ABC's Proposed Modifications to H.R. 1984 - Summary: Paper from the American Benefits Council with suggested modifications to H.R. 1984, The 401k Fair Disclosure for Retirement Security Act Of 2009. Located at: American Benefits Council (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
Complying with ERISA's Fidelity Bonding Requirements - Summary: This article answers common questions about ERISA's fidelity bonding requirements. Located at: Sidson Consulting (PDF File). Click on headline for full article.
Many Americans Are Not Financially or Emotionally Prepared for Retirement - Summary: Almost four in 10 Americans are not currently saving for retirement and, despite market losses, six in 10 Americans have not adjusted their thinking about what age they will retire, according to a survey by Charles Schwab. Located at: 401khelpcenter.com. Click on headline for full article.
Economy Not Putting Pressure on Small Biz Ability to Offer 401k - Summary: According to a Nationwide Financial Services survey released today, most small businesses don't think the economy will impact their ability to offer a 401k retirement plan. Located at: 401khelpcenter.com. Click on headline for full article.
Schwab Releases Data on Employer and Worker 401k Behavior - Summary: Charles Schwab released new 401k plan data indicating that while the economic downturn has impacted some aspects of employer and worker behavior in plans, both groups have largely stayed the course and remained committed to their plans. Located at: 401khelpcenter.com. Click on headline for full article.
Employers Are Divided Over Adequacy of 401ks - Summary: Employers are evenly split between those who say their 401k plans can provide adequate retirement savings for employees and those who say they can't or are unsure, according to a Mercer survey. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Study Shows 401k Participants' Continued Resilience During Volatile First Quarter of 2009 - Summary: In the face of the U.S. stock market's 44% drop over the 15 months ended March 31, 2009, the 3 million participants in defined contribution plans administered by Vanguard experienced a median decline in their account balance of less than half of that for the period, according to new research from Vanguard. Located at: 401khelpcenter.com. Click on headline for full article.
More 401k Plan Sponsors Considering Collective Trusts - Summary: Move over mutual funds. The number of collective investment trusts available to institutional investors is exploding, and the trusts are offering many 401k plan sponsors a less expensive way to provide competitive investment options to employees. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Fidelity Released the Results of Its Second Couples Retirement Study - Summary: The results show that despite two years of unprecedented economic and financial instability, which has severely impacted most American households, husbands and wives have done little to improve their communication, planning and management of retirement finances. Located at: Fidelity Investments. Click on headline for full article.
Borrowing From 401ks - Summary: A new government report breaks from conventional wisdom and casts doubt on some long-held beliefs about the negative effects of borrowing from a 401k fund. Shifting expensive consumer debt to defined-contribution plans may make sense for some workers. Located at: Human Resource Executive Online. Click on headline for full article.
Default, Framing and Spillover Effects: The Case of Lifecycle Funds in 401k Plans - Summary: Important behavioral factors such as default and framing effects are increasingly being employed to optimize decision-making in a variety of settings, including individually-directed retirement plans. Yet such approaches may have unintended "spillover" effects, as this paper shows with regard to the introduction of lifecycle funds in U.S. 401k plans. Located at: Pension Research Council at The Wharton School (free registration may be required). Click on headline for full article.
U.S. Retirement Market Data for 2008 - Summary: ICI published its annual report on the U.S. retirement market, which shows that Americans held $14.0 trillion in retirement assets at year-end 2008, down 22 percent from year-end 2007. Located at: Investment Company Institute (PDF File). Click on headline for full article.
Monthly Regulatory Round-Up - Summary: This monthly regulatory round-up produced by Towers Perrin is a high-level summary of legal and regulatory developments that occurred during May 2009 that may be relevant to large plan sponsors. Located at: Towers Perrin (PDF File). Click on headline for full article.
Administration Explores 'R Bond' As Option for Retirement Accounts - Summary: Officials in the Obama administration are moving quickly to develop the investment infrastructure behind the president's proposal for mandatory automatic enrollment in individual retirement accounts, which could be supported by the creation of Treasury-issued retirement bonds. Located at: Investment News (free registration may be required). Click on headline for full article.
Bill Would Allow Independent Advisers to Counsel Plan Participants - Summary: A key Congressional committee is expected to vote on a proposal - as early as next week -that could potentially bar thousands of brokers from providing invest. advice to 401k participants, according to sources. Located at: Investment News (free registration may be required). Click on headline for full article.
Summary of The Defined Contribution Plan Fee Transparency Act of 2009 - Summary: This is the official summary of a bill (H.R. 2779) that would add new Section 4980H to the Internal Revenue Code requiring notice to plan participants and taxes for failure to comply. Located at: American Benefits Council (PDF File). Click on headline for full article.
ABC's Proposed Modifications to H.R. 1984 - Summary: Paper from the American Benefits Council with suggested modifications to H.R. 1984, The 401k Fair Disclosure for Retirement Security Act Of 2009. Located at: American Benefits Council (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
6.15.2009
Two Local Third Party Administrators Merge to Create the Region’s Second Largest Firm -- Bolstering Presence and Services Throughout Midwest
St. Louis (June 15, 2009) – Benefit Plans Plus (BPP) and Qualified Plan Services (QPS) have merged to become the second largest locally owned Third Party Administrator firm in the St. Louis region, with locations in St. Louis and southern Illinois. BPP will expand their Midwest footprint with the addition of the new plans.
This merger is part of a long-term business plan and strategy to maximize opportunities in today’s competitive markets. The new organization is uniquely positioned to provide the most comprehensive retirement plan solutions in the marketplace according to Benefit Plans Plus Managing Member, Patrick Shelton.
Expanded service offerings include custom plan design, compliance and administration solutions for 401k, 403b, 457b and Cafeteria/125 plans. BPP also offers additional consulting services and a proprietary Fiduciary Health Check™.
"Bringing our two companies together provides a deeper, more experienced staff, a broader array of services and an expanded geographical presence,” says Shelton . “The new BPP will double its sales force, augment its products and services and dramatically increase advisory referral channels. Our team is not approaching the merger with a Missouri/Illinois split in mind; both teams have always served the entire St. Louis metro region and will continue to do so.”
The merger reflects a national trend, a lack of succession planning which is becoming an issue in the third party retirement plan administration business according to Kent Novell of Retirement Research, Inc.
"Many well established TPA firms are finding it difficult to pass the baton to a new generation of management within their firm. That, coupled with careful attention to profit margins in today’s economic climate, is precipitating a wave of consolidation among TPA firms,” says Novell. “Expect to see more of this over the next two to three years as larger firms look to leverage their scale and smaller ones look for an effective exit strategy.”
The merger with Benefit Plans Plus was a very good fit according to Nancy A. Flachsbart owner of Qualified Plan Services. “I wanted to ensure the business I’ve built over the last quarter of a century was going to be in good hands. I’ve looked into other merger opportunities in the past, but none have been the right fit, until now,” says Flachsbart. “We have served the Metro St. Louis area with such a high quality of service. When I’m ready to retire in the next three to five years I needed to make sure my employees and clients would be treated well – and they will.”
The organization will operate under the Benefit Plans Plus brand with offices in St. Louis , Missouri and Highland , Illinois . Annual revenues are expected to increase by 60 percent. Patrick Shelton will continue in his role as Managing Member of BPP and Nancy Flachsbart will serve as the Member in charge of the BPP Illinois office.
About Benefit Plans Plus
Benefit Plans Plus, LLC offers customized retirement plan design and administration, fiduciary compliance management and consulting services for retirement plans. Through unique offerings including the Fiduciary Health Check™ and the SBO 401k. BPP serves nearly 750 retirement plans throughout the Midwest.
Benefit Plans Plus holds the Centre for Fiduciary Excellence, LLC (CEFEX) recordkeeper certification for third party administrator services and the American Society of Pension Professionals and Actuaries (ASPPA) seal of service for provider excellence -- the top recognitions in the industry. BPP is a member of NIPA, ASPPA and ICEBS. In addition, the well credentialed team of retirement plan specialists averages at least 17 years of experience each. For more information about Benefit Plans Plus, a subsidiary of Brown Smith Wallace, LLC, visit www.bpp401k.com or call 314.983.1200.
This merger is part of a long-term business plan and strategy to maximize opportunities in today’s competitive markets. The new organization is uniquely positioned to provide the most comprehensive retirement plan solutions in the marketplace according to Benefit Plans Plus Managing Member, Patrick Shelton.
Expanded service offerings include custom plan design, compliance and administration solutions for 401k, 403b, 457b and Cafeteria/125 plans. BPP also offers additional consulting services and a proprietary Fiduciary Health Check™.
"Bringing our two companies together provides a deeper, more experienced staff, a broader array of services and an expanded geographical presence,” says Shelton . “The new BPP will double its sales force, augment its products and services and dramatically increase advisory referral channels. Our team is not approaching the merger with a Missouri/Illinois split in mind; both teams have always served the entire St. Louis metro region and will continue to do so.”
The merger reflects a national trend, a lack of succession planning which is becoming an issue in the third party retirement plan administration business according to Kent Novell of Retirement Research, Inc.
"Many well established TPA firms are finding it difficult to pass the baton to a new generation of management within their firm. That, coupled with careful attention to profit margins in today’s economic climate, is precipitating a wave of consolidation among TPA firms,” says Novell. “Expect to see more of this over the next two to three years as larger firms look to leverage their scale and smaller ones look for an effective exit strategy.”
The merger with Benefit Plans Plus was a very good fit according to Nancy A. Flachsbart owner of Qualified Plan Services. “I wanted to ensure the business I’ve built over the last quarter of a century was going to be in good hands. I’ve looked into other merger opportunities in the past, but none have been the right fit, until now,” says Flachsbart. “We have served the Metro St. Louis area with such a high quality of service. When I’m ready to retire in the next three to five years I needed to make sure my employees and clients would be treated well – and they will.”
The organization will operate under the Benefit Plans Plus brand with offices in St. Louis , Missouri and Highland , Illinois . Annual revenues are expected to increase by 60 percent. Patrick Shelton will continue in his role as Managing Member of BPP and Nancy Flachsbart will serve as the Member in charge of the BPP Illinois office.
About Benefit Plans Plus
Benefit Plans Plus, LLC offers customized retirement plan design and administration, fiduciary compliance management and consulting services for retirement plans. Through unique offerings including the Fiduciary Health Check™ and the SBO 401k. BPP serves nearly 750 retirement plans throughout the Midwest.
Benefit Plans Plus holds the Centre for Fiduciary Excellence, LLC (CEFEX) recordkeeper certification for third party administrator services and the American Society of Pension Professionals and Actuaries (ASPPA) seal of service for provider excellence -- the top recognitions in the industry. BPP is a member of NIPA, ASPPA and ICEBS. In addition, the well credentialed team of retirement plan specialists averages at least 17 years of experience each. For more information about Benefit Plans Plus, a subsidiary of Brown Smith Wallace, LLC, visit www.bpp401k.com or call 314.983.1200.
6.10.2009
BPP401k.com Newsletter June 10
Cutting Through Retirement Myths and Misinformation - Summary: Dallas Salisbury, president of the Employee Benefit Research Institute, has long been a go-to numbers guy for anyone writing about retirement issues. He urges reporters to use data to knock down myths and cut through political rhetoric. Located at: St. Louis Post-Dispatch. Click on headline for full article.
401k Plans Eye Annuities With Caution - Summary: Given the stock market’s volatility, a number of plan sponsors are seriously discussing adding an annuity option to their 401k plans. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Does Your 401k Need an Annuity? - Summary: Several firms have introduced a new type of 401k plan that combines elements of traditional pensions and 401k accounts. Like pensions, they offer a deferred annuity to provide a guaranteed income throughout retirement. As a result, the new 401k plans allow you to essentially create a steady paycheck for your retirement. Located at: Mainstreet.com. Click on headline for full article.
Leaving 401k Money With Former Employer Could Protect Savings - Summary: If you've been fielding irate calls or notices from creditors, or worry about the impact of a creditor judgment from medical bills or a lawsuit on your retirement account, you could be better off leaving your 401k with your former employer. Located at: Wall Street Journal Online. Click on headline for full article.
Bolster Employee Retirement Benefits by Making Statements Comprehensible - Summary: Participants who open and read their 401k statements, almost three-fourths (72%) took less than three minutes to consume and process information that many individuals readily admit they do not understand. Article suggests some solutions. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Older Worker Confidence in Retirement Security Drops Sharply - Summary: Older workers are much less confident about their retirement security than they were two years ago as a result of the financial crisis, according to a new survey by Watson Wyatt. Located at: 401khelpcenter.com. Click on headline for full article.
Is the 401k a Good Deal for America's Workers? - Summary: Some believe the 401k system can be reformed to encourage workers to invest more and protect them from market swings. Other experts have suggested a hybrid system that would put workers into government-sponsored purchasing pools, in which investors would benefit from lower fees and more professional management. Located at: National Public Radio. Click on headline for full article.
Rethinking Conventional Wisdom About 401k Loans - Summary: Americans could save as much as $5 billion a year — or $275 per household — by borrowing from their 401k retirement accounts instead of more costly consumer loans, Federal Reserve economists Geng Li and Paul A. Smith conclude in a recent Fed working paper. Located at: Wall Street Journal. Click on headline for full article.
New Evidence on 401k Borrowing and Household Balance Sheets - Summary: This working paper posits that households might utilize 401k loans less than expected due to risk-aversion, self-control problems, and confusion about the potential gains, and suggest better financial education that clarifies the conditions under which 401k borrowing is advantageous. Finally, it suggests that allowing households to repay 401k loans gradually even after separation from their employers could improve household welfare by reducing the risks of 401k borrowing. Located at: Federal Reserve Board. Click on headline for full article.
Can 401k Plans Provide Adequate Retirement Resources? - Summary: This paper illustrates that moderate 401k contribution rates can lead to adequate income replacement rates in retirement for many workers; that adequate asset accumulation can be achieved using only a 401k plan; and that these results do not rely on earning an investment premium on risky assets. Located at: Pension Research Council at The Wharton School (free registration may be required). Click on headline for full article.
Key Issues 401k Plan Fiduciaries Need to Know - Summary: This is an outline of some of the issues that plan fiduciaries must consider in selecting and monitoring investment options and the costs associated with the management of plan investments. Located at: Kelley Drye & Warren LLP (PDF File). Click on headline for full article.
Surveys Relating to ERISA Fiduciary Performance and Litigation - Summary: This article is a list of surveys which contain some great information about how retirement plan fiduciaries are doing and the risks that they are facing. Located at: Fiduciary Guide Book Blog. Click on headline for full article.
Delegation for Plan Sponsors (Part 3) - Summary: In this article, the author will describe in some detail how it's possible to insulate the sponsor of a qualified retirement plan from virtually all day-to-day fiduciary investment risk as well as operational/administrative risk to which they would otherwise be subject in the act of sponsoring the plan. Located at: Morningstar.com. Click on headline for full article.
Responding to Participant Requests for Information - Summary: The Employee Retirement Income Security Act of 1974 regulates how employers respond to requests for plan-related information by participants and beneficiaries. No request for information should be taken lightly. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
Industry Opposes Mandatory Index Funds in 401k Plans - Summary: While index funds already have a place in the lineup of most 401k plans, a proposed federal mandate to require at least one index fund option in these plans is intrusive and unnecessary, according to industry experts. Located at: Financial-Planning.com. Click on headline for full article.
Court Finds 401k Loan Not a "Necessary Expense" - Summary: The repayment of a 401k loan may be a real debt obligation, but it's not a "necessary expense" for bankruptcy purposes, according to a recent court decision. Located at: Planadviser.com. Click on headline for full article.
SECs and DOLs Cross Agency Waltz - Summary: The SEC showing an increasing interest in all retirement plans and a "commonality of interests" with the DOL on things like disclosure and advice. Located at: Business of Benefits (PDF File). Click on headline for full article.
SEC Staff to Recommend Change for 12(b)-1 Fees - Summary: Rule governing mutual fund compensation is not well understood by investors, so SEC Commission Chairman Mary Schapiro has asked SEC staff to prepare a recommendation to change Rule 12(b)-1. Located at: Investment News (free registration may be required). Click on headline for full article.
SPARK Comments on Revenue Procedure for 403(b) Plans - Summary: In this comment letter, SPARK suggests changes and revisions to the draft language of the plan document and adoption agreement. Located at: Spark Institute (PDF File). Click on headline for full article.
ASPPA Comments on 403(b) Prototype Plan Program - Summary: Under Announcement 2009-34, the Internal Revenue Service announced its intention to establish a program for the pre-approval of prototype plans under §403(b) of the Internal Revenue Code. ASPPA provides their comments and recommendations in this letter. Located at: ASPPA (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
401k Plans Eye Annuities With Caution - Summary: Given the stock market’s volatility, a number of plan sponsors are seriously discussing adding an annuity option to their 401k plans. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Does Your 401k Need an Annuity? - Summary: Several firms have introduced a new type of 401k plan that combines elements of traditional pensions and 401k accounts. Like pensions, they offer a deferred annuity to provide a guaranteed income throughout retirement. As a result, the new 401k plans allow you to essentially create a steady paycheck for your retirement. Located at: Mainstreet.com. Click on headline for full article.
Leaving 401k Money With Former Employer Could Protect Savings - Summary: If you've been fielding irate calls or notices from creditors, or worry about the impact of a creditor judgment from medical bills or a lawsuit on your retirement account, you could be better off leaving your 401k with your former employer. Located at: Wall Street Journal Online. Click on headline for full article.
Bolster Employee Retirement Benefits by Making Statements Comprehensible - Summary: Participants who open and read their 401k statements, almost three-fourths (72%) took less than three minutes to consume and process information that many individuals readily admit they do not understand. Article suggests some solutions. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Older Worker Confidence in Retirement Security Drops Sharply - Summary: Older workers are much less confident about their retirement security than they were two years ago as a result of the financial crisis, according to a new survey by Watson Wyatt. Located at: 401khelpcenter.com. Click on headline for full article.
Is the 401k a Good Deal for America's Workers? - Summary: Some believe the 401k system can be reformed to encourage workers to invest more and protect them from market swings. Other experts have suggested a hybrid system that would put workers into government-sponsored purchasing pools, in which investors would benefit from lower fees and more professional management. Located at: National Public Radio. Click on headline for full article.
Rethinking Conventional Wisdom About 401k Loans - Summary: Americans could save as much as $5 billion a year — or $275 per household — by borrowing from their 401k retirement accounts instead of more costly consumer loans, Federal Reserve economists Geng Li and Paul A. Smith conclude in a recent Fed working paper. Located at: Wall Street Journal. Click on headline for full article.
New Evidence on 401k Borrowing and Household Balance Sheets - Summary: This working paper posits that households might utilize 401k loans less than expected due to risk-aversion, self-control problems, and confusion about the potential gains, and suggest better financial education that clarifies the conditions under which 401k borrowing is advantageous. Finally, it suggests that allowing households to repay 401k loans gradually even after separation from their employers could improve household welfare by reducing the risks of 401k borrowing. Located at: Federal Reserve Board. Click on headline for full article.
Can 401k Plans Provide Adequate Retirement Resources? - Summary: This paper illustrates that moderate 401k contribution rates can lead to adequate income replacement rates in retirement for many workers; that adequate asset accumulation can be achieved using only a 401k plan; and that these results do not rely on earning an investment premium on risky assets. Located at: Pension Research Council at The Wharton School (free registration may be required). Click on headline for full article.
Key Issues 401k Plan Fiduciaries Need to Know - Summary: This is an outline of some of the issues that plan fiduciaries must consider in selecting and monitoring investment options and the costs associated with the management of plan investments. Located at: Kelley Drye & Warren LLP (PDF File). Click on headline for full article.
Surveys Relating to ERISA Fiduciary Performance and Litigation - Summary: This article is a list of surveys which contain some great information about how retirement plan fiduciaries are doing and the risks that they are facing. Located at: Fiduciary Guide Book Blog. Click on headline for full article.
Delegation for Plan Sponsors (Part 3) - Summary: In this article, the author will describe in some detail how it's possible to insulate the sponsor of a qualified retirement plan from virtually all day-to-day fiduciary investment risk as well as operational/administrative risk to which they would otherwise be subject in the act of sponsoring the plan. Located at: Morningstar.com. Click on headline for full article.
Responding to Participant Requests for Information - Summary: The Employee Retirement Income Security Act of 1974 regulates how employers respond to requests for plan-related information by participants and beneficiaries. No request for information should be taken lightly. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
Industry Opposes Mandatory Index Funds in 401k Plans - Summary: While index funds already have a place in the lineup of most 401k plans, a proposed federal mandate to require at least one index fund option in these plans is intrusive and unnecessary, according to industry experts. Located at: Financial-Planning.com. Click on headline for full article.
Court Finds 401k Loan Not a "Necessary Expense" - Summary: The repayment of a 401k loan may be a real debt obligation, but it's not a "necessary expense" for bankruptcy purposes, according to a recent court decision. Located at: Planadviser.com. Click on headline for full article.
SECs and DOLs Cross Agency Waltz - Summary: The SEC showing an increasing interest in all retirement plans and a "commonality of interests" with the DOL on things like disclosure and advice. Located at: Business of Benefits (PDF File). Click on headline for full article.
SEC Staff to Recommend Change for 12(b)-1 Fees - Summary: Rule governing mutual fund compensation is not well understood by investors, so SEC Commission Chairman Mary Schapiro has asked SEC staff to prepare a recommendation to change Rule 12(b)-1. Located at: Investment News (free registration may be required). Click on headline for full article.
SPARK Comments on Revenue Procedure for 403(b) Plans - Summary: In this comment letter, SPARK suggests changes and revisions to the draft language of the plan document and adoption agreement. Located at: Spark Institute (PDF File). Click on headline for full article.
ASPPA Comments on 403(b) Prototype Plan Program - Summary: Under Announcement 2009-34, the Internal Revenue Service announced its intention to establish a program for the pre-approval of prototype plans under §403(b) of the Internal Revenue Code. ASPPA provides their comments and recommendations in this letter. Located at: ASPPA (PDF File). Click on headline for full article.
For more information visit www.bpp401k.com
6.03.2009
Benefit Plans Plus & Qualified Plan Services Announce Merger
We are excited to announce that Benefit Plans Plus (BPP) has merged with Qualified Plan Services (QPS). The two companies have merged and are operating as one entity in two locations. Patrick Shelton will continue in his role as Managing Member of BPP and Nancy Flachsbart will serve as the Member in charge of the BPP Illinois office.
The merger is part of our long-term strategic business plan. Our organization will operate under the Benefit Plans Plus brand with offices in St. Louis, Missouri and Highland, Illinois. BPP is now privileged to serve nearly 750 retirement plans throughout the Midwest.
We will continue to provide high quality, client-focused services to the Missouri and Illinois markets and beyond. Together, we are uniquely positioned to provide you with the most comprehensive retirement plan solutions available. Our expanded service offerings include custom plan design, compliance and administration solutions for 401(k), 403(b), 457 and Cafeteria/125 plans. We also offer additional consulting services and our exclusive Fiduciary Health Check™.
What does this mean for you?
As we progress, we will keep you updated on our improvements. Thank you in advance for your continued loyalty and support. In the meantime, please do not hesitate to contact us.
For more information visit http://www.bpp401k.com/
The merger is part of our long-term strategic business plan. Our organization will operate under the Benefit Plans Plus brand with offices in St. Louis, Missouri and Highland, Illinois. BPP is now privileged to serve nearly 750 retirement plans throughout the Midwest.
We will continue to provide high quality, client-focused services to the Missouri and Illinois markets and beyond. Together, we are uniquely positioned to provide you with the most comprehensive retirement plan solutions available. Our expanded service offerings include custom plan design, compliance and administration solutions for 401(k), 403(b), 457 and Cafeteria/125 plans. We also offer additional consulting services and our exclusive Fiduciary Health Check™.
What does this mean for you?
- An expanded range of services to meet your business needs.
- Broader support and resources.
- Additional highly credentialed professionals.
- A continuing commitment to innovation, ensuring your next-generation technology solutions.
- A financially strong partner with a long-term strategy for success.
As we progress, we will keep you updated on our improvements. Thank you in advance for your continued loyalty and support. In the meantime, please do not hesitate to contact us.
For more information visit http://www.bpp401k.com/
BPP401k.com Newsletter June 3
Target-Date Glide Paths Should Match Plan Demographics - Summary: A study by the Employee Benefit Research Institute (EBRI) found plan demographics affect individual participant contribution rates and target-date fund investment choices by participants. Located at: Planadviser.com. Click on headline for full article.
Boost Participation to Avoid the Dreaded 'Rebate' Check - Summary: Many highly compensated executives are less than thrilled when they have to take back money they have already contributed to their company's 401k retirement plan because it fails to meet non-discrimination rules. Boosting plan participation is one way to avoid the issue and this article suggests some ways to accomplish the task. Located at: Planadviser.com. Click on headline for full article.
Sponsors Need More Target-Date Due Diligence - Summary: Plan sponsors still have a good deal more work to do to make certain participants are getting the full benefits from target-date funds in their investment lineup, a new study asserts. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Under the Hood of 'Target Retirement Date' ETFs - Summary: The most significant advantage of target retirement date ETFs is relatively obvious: investors are able to purchase only one security that adapts over time to fit their circumstances, allowing them to "set it and forget it." There are, however, also some considerable drawbacks. Located at: Seekingalpha.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.
Informed Participation: The Path to Retirement Security - Summary: The path to financial security in retirement is paved with informed decisions. Financial education helps your employees better understand the value of the 401k plan and engages them in planning their own financial future. When coupled with inertia-busting automatic plan design, employees are put on a path to financial security. Located at: RetirementMadeSimpler.org (PDF File). Click on headline for full article.
The Burden of Good Intentions: Opportunities and Challenges for Target-Date Funds - Summary: Target-date funds may have the potential to become the preferred retirement investment vehicle for defined contribution plan participants. However, much remains to be done to see that they live up to this promise. Recent research shows that there are a number of significant challenges that may impact the continued viability and growth of target-date funds, from broad participant misuse and misunderstanding, to a lack of comprehensive education and fund due diligence on the part of plan sponsors. This paper summarizes the key findings of the research. Located at: Janus Capital Group (free registration may be required). Click on headline for full article.
Target-Date Fund Adoption in 2008 - Summary: The growing use of target-date funds in retirement plans continues to reshape participant investment patterns. Get the latest information on how these funds are being used in Vanguard retirement plans and the resulting impact on these plans and their participants in a new publication from the Vanguard. Located at: Vanguard Center for Retirement Research (PDF File). Click on headline for full article.
MassMutual Participant Report (Q1 2009) - Summary: Analysis of first quarter account activity suggests that participants continue to save for retirement and most are riding out economic uncertainty without drastic changes. In general, they are still concerned about the economy, want to talk to someone about their plan and are interested in secure investments. Located at: MassMutual (PDF File). Click on headline for full article.
Plan Demographics, Participants' Saving Behavior, and Target-Date Fund Investments - Summary: This analysis explores (1) whether plan demographic characteristics would affect individual participant contribution rates and target-date fund investments and (2) equity glide paths for participants in relation to plan demographics by considering target replacement income and its success rate. Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
Financial Literacy: Evidence and Implications for Financial Education - Summary: The paper discusses financial literacy in the United States in the context of retirement planning. Due to the long-term shift away from defined benefit to defined contribution pensions, it is important to examine whether workers are adequately equipped to manage the resultant increased responsibility for planning their retirement. Given that financial literacy is an important predictor of retirement planning and other important financial decisions, widespread illiteracy is a serious cause for concern. Located at: TIAA-CREF Institute (PDF File). Click on headline for full article.
The Case For "Distributed Custodial Accounts" From Terminated 403(b) Plans - Summary: One of the biggest disappointments arising from the issuance of the 403(b) regs has been the inability of employers to effectively terminate their plans. Located at: Business of Benefits Blog. Click on headline for full article.
DOL Comments on Fiduciary Status - Summary: Fiduciary duties under ERISA are often referred to in caselaw as "the highest known to law." And yet, many individuals are not aware that they are engaged in activities which would render them to be fiduciaries under ERISA. The DOL has a couple of Interpretative Bulletins online which provide some guidance for determining who is a fiduciary under ERISA. Located at: Fiduciary Guidebook Blog. Click on headline for full article.
IRS Proposes Business Hardship Changes to 401k Rules - Summary: Proposed Internal Revenue Service rules would allow employers that make automatic 401k plan contributions under a safe harbor provision to suspend or reduce those contributions if they incur a substantial business hardship. Located at: Businessinsurance.com. Click on headline for full article.
IRS Auditors Provide Tips and Trends on Retirement Plan Compliance - Summary: The U.S. Internal Revenue Service provides compliance trends and tips for qualified retirement plans from their Employee Plans Team Audit (EPTA) Program. Located at: IFEBP.com. Click on headline for full article.
IRS's Online Internal Controls Questionnaire - A Helpful Tool for Monitoring Fiduciaries - Summary: The IRS has recently posted on their website an Internal Controls Questionnaire which fiduciaries might find useful as a tool in determining whether their service providers have practices and procedures in place which will ensure compliance with plan terms and the statutory provisions of ERISA. Located at: Fiduciary Guidebook Blog. Click on headline for full article.
DOL and SEC to Hold Hearing on Target Date Funds
For more information visit www.bpp401k.com
Boost Participation to Avoid the Dreaded 'Rebate' Check - Summary: Many highly compensated executives are less than thrilled when they have to take back money they have already contributed to their company's 401k retirement plan because it fails to meet non-discrimination rules. Boosting plan participation is one way to avoid the issue and this article suggests some ways to accomplish the task. Located at: Planadviser.com. Click on headline for full article.
Sponsors Need More Target-Date Due Diligence - Summary: Plan sponsors still have a good deal more work to do to make certain participants are getting the full benefits from target-date funds in their investment lineup, a new study asserts. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Under the Hood of 'Target Retirement Date' ETFs - Summary: The most significant advantage of target retirement date ETFs is relatively obvious: investors are able to purchase only one security that adapts over time to fit their circumstances, allowing them to "set it and forget it." There are, however, also some considerable drawbacks. Located at: Seekingalpha.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.
Informed Participation: The Path to Retirement Security - Summary: The path to financial security in retirement is paved with informed decisions. Financial education helps your employees better understand the value of the 401k plan and engages them in planning their own financial future. When coupled with inertia-busting automatic plan design, employees are put on a path to financial security. Located at: RetirementMadeSimpler.org (PDF File). Click on headline for full article.
The Burden of Good Intentions: Opportunities and Challenges for Target-Date Funds - Summary: Target-date funds may have the potential to become the preferred retirement investment vehicle for defined contribution plan participants. However, much remains to be done to see that they live up to this promise. Recent research shows that there are a number of significant challenges that may impact the continued viability and growth of target-date funds, from broad participant misuse and misunderstanding, to a lack of comprehensive education and fund due diligence on the part of plan sponsors. This paper summarizes the key findings of the research. Located at: Janus Capital Group (free registration may be required). Click on headline for full article.
Target-Date Fund Adoption in 2008 - Summary: The growing use of target-date funds in retirement plans continues to reshape participant investment patterns. Get the latest information on how these funds are being used in Vanguard retirement plans and the resulting impact on these plans and their participants in a new publication from the Vanguard. Located at: Vanguard Center for Retirement Research (PDF File). Click on headline for full article.
MassMutual Participant Report (Q1 2009) - Summary: Analysis of first quarter account activity suggests that participants continue to save for retirement and most are riding out economic uncertainty without drastic changes. In general, they are still concerned about the economy, want to talk to someone about their plan and are interested in secure investments. Located at: MassMutual (PDF File). Click on headline for full article.
Plan Demographics, Participants' Saving Behavior, and Target-Date Fund Investments - Summary: This analysis explores (1) whether plan demographic characteristics would affect individual participant contribution rates and target-date fund investments and (2) equity glide paths for participants in relation to plan demographics by considering target replacement income and its success rate. Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
Financial Literacy: Evidence and Implications for Financial Education - Summary: The paper discusses financial literacy in the United States in the context of retirement planning. Due to the long-term shift away from defined benefit to defined contribution pensions, it is important to examine whether workers are adequately equipped to manage the resultant increased responsibility for planning their retirement. Given that financial literacy is an important predictor of retirement planning and other important financial decisions, widespread illiteracy is a serious cause for concern. Located at: TIAA-CREF Institute (PDF File). Click on headline for full article.
The Case For "Distributed Custodial Accounts" From Terminated 403(b) Plans - Summary: One of the biggest disappointments arising from the issuance of the 403(b) regs has been the inability of employers to effectively terminate their plans. Located at: Business of Benefits Blog. Click on headline for full article.
DOL Comments on Fiduciary Status - Summary: Fiduciary duties under ERISA are often referred to in caselaw as "the highest known to law." And yet, many individuals are not aware that they are engaged in activities which would render them to be fiduciaries under ERISA. The DOL has a couple of Interpretative Bulletins online which provide some guidance for determining who is a fiduciary under ERISA. Located at: Fiduciary Guidebook Blog. Click on headline for full article.
IRS Proposes Business Hardship Changes to 401k Rules - Summary: Proposed Internal Revenue Service rules would allow employers that make automatic 401k plan contributions under a safe harbor provision to suspend or reduce those contributions if they incur a substantial business hardship. Located at: Businessinsurance.com. Click on headline for full article.
IRS Auditors Provide Tips and Trends on Retirement Plan Compliance - Summary: The U.S. Internal Revenue Service provides compliance trends and tips for qualified retirement plans from their Employee Plans Team Audit (EPTA) Program. Located at: IFEBP.com. Click on headline for full article.
IRS's Online Internal Controls Questionnaire - A Helpful Tool for Monitoring Fiduciaries - Summary: The IRS has recently posted on their website an Internal Controls Questionnaire which fiduciaries might find useful as a tool in determining whether their service providers have practices and procedures in place which will ensure compliance with plan terms and the statutory provisions of ERISA. Located at: Fiduciary Guidebook Blog. Click on headline for full article.
DOL and SEC to Hold Hearing on Target Date Funds
For more information visit www.bpp401k.com
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