BPP401k.com Newsletter August 26

The DB(k): Pension of the Future An attractive new option for employer sponsored retirement plans becomes available next year. The "DB(k)" offers businesses with 500 or fewer employees an opportunity to provide a strong retirement plan for their employees with fewer hassles and less financial drain than a traditional pension plan. Source: Kiplinger

10th Annual Transamerica Retirement Survey Employers believe health insurance is the most important benefit to employees, followed by employee-funded retirement plans, life insurance, and disability insurance. Source: Transamerica

QAB 2006-3 and Restating for EGTRRA What should you keep in mind from QAB 2006-3 when restating onto the EGTRRA document? Source: McKay Hochman

401k Participants Remain Diligent Participants in 401k plans have shown little signs of panic, despite deep market losses and the uncertain economy, according to Vanguard. The fund company has found that plan participants continue to invest for retirement through the workplace programs and have engaged in only modest trading activity through the turbulent market. Source: Financial Advisor Magazine

Most Baby Boomers Not Converting IRAs to Roths Seventy-three percent of Baby Boomers who own a traditional IRA are not planning to convert it to a Roth IRA in 2010, when the previous household income limit of $100,000 will be eliminated, USAA Wealth Management found in a survey. Source: Money Management Executive

A Service to Make 401(k) Tweaking a Piece of Cake A small San Francisco company, Cake Financial, is introducing a $99-a-year automated service that attempts to tailor a mutual-fund portfolio. It’s designed to be simple, clear and relatively quick, using plain English, easy-to-understand graphics, and a step-by-step approach. In essence, it’s a robotic, low-cost investment adviser. Source: Personal Technology from the Wall Street Journal

How America Saves 2009 Vanguard's annual analysis of defined contribution (DC) plan data provides important insight into the trends and developments that characterized Vanguard-recordkept DC plans in 2008, and serves as a valuable reference tool for plan sponsors. Source: Vanguard (PDF File)

What Happens to Your 401k if You Lose Your Job? You may be allowed to leave the money in your former employer's plans even if you leave. But if you're required to move the money, it should transferred directly to an IRA custodian. Source: Los Angeles Times

New Caution in Handling of 401k's The recession jolted many 401k investors who had had their plans on autopilot. Maybe some people didn't realize what large portions of their accounts were in stocks — and how vulnerable those stocks had become. Source: NY Times

QVC Workers Cry Foul Over 401k Probe QVC employees fired over alleged irregularities in their 401k withdrawals said they were treated unfairly. The employees said they were driven to seek the retirement money because of company cutbacks. Source: Planadviser.com

Supreme Court to Clarify ERISA Plan Standards of Review The U.S. Supreme Court has agreed to review the decision of the Second Circuit Court of Appeals in Frommert v. Conkright, 535 F.3d 111 (2d Cir. 2008). At issue is the degree of deference courts should accord the decision of the administrator of a plan subject to ERISA that is made outside the context of an administrative claim for benefits. The Supreme Court will also consider what standard an appellate court should use in reviewing a lower court's interpretation of an ERISA plan's terms. Source: McGuire Woods LLP

Class Action Suit Against Hedge Fund Highlights the Standard of Care to Which ERISA Fiduciaries Are Held This line of cases highlights three issues relevant to hedge funds: (1) the question of when an alleged class of plaintiffs bringing suit against a hedge fund will be certified by a court; (2) the standard of care applicable to ERISA fiduciaries; and (3) the standard for consolidation and transfer of MDL cases. Source: Davis Wright Tremaine LLP (PDF File)

ERISA Section 404(c) Bars Fiduciary Liability Claims Against Trustee While the unusual facts may limit the impact of this case, it does demonstrate the potential benefits of an effective ERISA Section 404(c) defense. It also illustrates a fine point of the case law regarding the general fiduciary obligation to provide truthful information to participants. Source: Employee Benefits Institute of America

New Evidence on 401k Borrowing Despite news reports suggesting a rise in 401k borrowing in recent years, this report finds that the share of eligible households with 401k loans in the 2007 Survey of Consumer Finances was about 15 percent, roughly what it has been since 1995. Source: Federal Reserve (PDF File)

Use of Social Networking as HR Screening Tool Still Growing A CareerBuilder news release said that represented a big jump from the 22% who gave that response in a 2008 survey. Another 11% in the latest poll said they intend to start mining social networking sites for screening purposes. Source: Plan Sponsor

401(k) auto enrollment: What employees need to know If your company offers automatic 401(k) enrollment, you’re required to give employees a special notice prior to enrollment. Source: HR Morning.com

Safe Harbor for 2010 It will soon be time to consider whether to start or continue a safe harbor 401(k) plan for next year. Source: McKay Hochman

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BPP401k.com Newsletter August 19

Advisors Can Find Opportunity in 401(k)s, Fidelity Says Citing recent internal and external research, Fidelity Investments says financial advisors can boost their 401(k) business despite the tough market environment.

SHARE AWARE: Sharing Fees There is a fiduciary responsibility under ERISA to evaluate arrangements with service providers and to determine if they are reasonable.

Majority of Employers Plan to Restore 401(k) Match Within Next 18 Month As employers regain confidence, they plan to lift freezes on salaries, benefits and 401(k) matches, according to a series of reports.

Taking Advantage of the RMD Holiday for IRAs For 2009 only, the required minimum distribution (RMD) rules applicable to retirement plan withdrawals have been waived. This allows retirees to forgo a year’s distributions.

10 Ways To Gain Ground When Others Are Losing It

Plan Sponsor's Best Managers You Never Heard Of

More firms expect to restore salary cuts and 401(kMore firms expect to restore salary cuts and 401(k) matches soon) matches soon Some hope for workers who’ve suffered pay cuts or reductions in their company’s contribution to 401(k) retirement plans in this brutal recession: A growing number of employers say they’re planning to undo that damage in the next six months.

Average 401(k) Balance Rose 13.5% in Second Quarter The average 401(k) account balance rose 13.5% in the second quarter to $53,900, which was perhaps behind the trend for more investors to increase their deferral savings rate than to decrease it, Fidelity Investments reports.

Five Years of 401(k) Investments Wiped Out The average 401(k) balance is back at the level it was in 2004, according to a report by the Employee Benefit Research Institute—essentially wiping out the past five years of investing.

Nest Egg Can Get Shifted By Your Employer Employers can, and sometimes do, change an employee’s 401(k) investment options even after they’ve been made. This little-understood practice is likely to become more common.

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BPP401k.com Newsletter August 12

The Practical Side of Being a Fiduciary Despite all these forces that are swirling around, there are some practical ways that fiduciaries can effectively manage their responsibilities.

Will 401(k) participation wither without an employer’s matching contribution? Some people have wondered if it’s worth still contributing to a 401(k) - not just because their portfolios have lost so much, but because their employer no longer matches their contributions.

Recession Solution: Rethinking 401k Loans Why These Hefty Loans from Your Retirement Account Might Not Be Such a Bad Idea

Mutual fund boom bonus: Fees may climb more slowly With assets pouring in, the fee increases that are fueled by fixed service costs won't be as high, Morningstar says

10 Tips to Stay on Top in Uncertain Times

The pros and cons of required 401Ks President Obama is considering a plan that would require companies to open up and contribute to 401ks for their employees. Kai Ryssdal talks with Duke professor and behavioral economist Dan Ariely about why Americans have such a hard time saving money.

Should you borrow to repay a 401(k) loan?

Summertime Tax Tips Available The Internal Revenue Service is publishing summertime tax tips to provide useful and concise advice on topics that affect taxpayers.

401(k) participation: An overlooked factor New research suggests two other factors that may be important in predicting enrollment rates: race and ethnicity.

A Swiftly Tilting Planet In a compliance session at the recent NAPFA National Conference in Washington, Steve Blum, a business ethics professor at the Wharton School, talked about the difference between strict fiduciary standards, where the advisor works purely for the benefit of the client, and suitability standards, where the employee of the brokerage firm works on behalf of the company.

The Dreaded 'A' Word: All You Need To Know About ERISA Audits It's ERISA audit time again. Now that the regular tax season is over, accountants soon will be turning their attention to ERISA plan audits. If your retirement plan is subject to the audit requirements, here are the basics you should know.

Pension Plan Execs Look to Reduce Expenses Faced with high fees from hedge funds, poor returns from traditional active managers and sharp declines in their defined-benefit plans' funded status, corporate executives are looking to squeeze fees, adopt passive strategies and close or freeze their plans.

New Source for Multinational Pension & Benefit Professionals

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BPP401k.com Newsletter August 5

The Dreaded 'A' Word: All You Need To Know About ERISA Audits It's ERISA audit time again. Now that the regular tax season is over, accountants soon will be turning their attention to ERISA plan audits. If your retirement plan is subject to the audit requirements, here are the basics you should know

Top 5ive Retirement Mistakes to Avoid While saving up for retirement is difficult to begin with, it gets worse.

Women Take Lead in Cutting Back on Spending More women at tightening their belts than men in recession, study shows

Pension Plan Execs Look to Reduce Expenses Faced with high fees from hedge funds, poor returns from traditional active managers and sharp declines in their defined-benefit plans' funded status, corporate executives are looking to squeeze fees, adopt passive strategies and close or freeze their plans.

Match Pension Plans to Business Goals There are two types of pension plans to choose from that provide different benefits for employees and the company. Find a balance that’s right for your organization.

Should you borrow to repay a 401(k) loan?

Average 401(k) Plan Account Balances Doubled Between 1999 And 2007; Median Grew By 210% The average 401(k) plan account balance more than doubled for 2.4 million people who were consistently plan participants from 1999 through 2007.

Every Other Month Theory The Motley Fool explores why virtually every business, contractor, sales person says that every other month is slow.

Top 3 reasons to discourage 401(k) loans A recent study found that 401(k) loans are at all-time high. Unfortunately, employees don’t recognize the many ways they’re hurting their own future.
Have Your 401(k)ake and Eat It Too Prior to the enactment of EGTRRA, a 401(k) plan held no benefit for an owner-only business with no common-law-employees. Why? Because of elective deferrals inclusion as part of the 25% deduction limit.

Facing Your 401K Fears With the recent rebound in the stock market and stocks up 45 percent since March, it may be time to awaken from your fearful recession stupor and open those 401K statements -- and take control of your retirement.

Match Game: How to Cope With a Suspended 401(k) Without stellar investment returns – and not many people are depending on those – the only way to recoup losses is to step up your contributions.

IMHO: “Right” Minded Providers, like plan sponsors, have "personalities" and sometimes the chemistry that a good relationship needs to thrive just is not there, even when the plan's needs are reasonable and the provider's capabilities are top-notch.

FAQ of the Week A sole proprietor has a defined benefit plan with a minimum funding requirement of more than 25% of compensation. Can deductible contributions be made on the proprietor’s behalf to a defined contribution plan as well? ANSWER

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