BPP401k.com Newsletter December 22

401k Benchmarking Survey 2010 Edition The 2010 installment of the 401k Benchmarking Survey revealed that the spotlight is shifting to retirement readiness as plan sponsors are taking an increased interest in whether employees are preparing for a comfortable retirement. In fact, we saw "participant retirement readiness" move up the list to the most important improvement plan with which providers would like more help. However, these plan sponsors appear unsure about which tools and offerings are most effective at helping participants manage retirement planning. Source: Deloitte Consulting

Despite Years of Revenue-Sharing Litigation, No Real Clarity for Plan Sponsors Plan sponsors looking for certainty on 401k fees are not getting any satisfaction from the courts. Since 2006, more than two dozen lawsuits relating to 401(k) plan fees have been filed in federal courts around the country but, after four years of litigation, experts still cannot say if sponsors won or lost the legal battle. Source: Plansponsor.com.

Offering Managed Accounts and Target Date Funds in a DC Plan: It's Not 'Either/Or' A target date fund provides the simplicity of a single election, whereas a managed account provides the individual flexibility of aggregating other sources and managing to an overall portfolio. Given the ostensible fiduciary protection of using either option and the significant growth of both solutions, the question remains among plan sponsors, "Which is the right solution for my plan?" Source: J.P. Morgan

403(b) Plan Response to Changing Conditions In October 2010, PSCA conducted a snapshot survey of 403(b) plan sponsors to determine how they are responding to multiple changes in today's economic and regulatory environment. You can find the results here. Overall, the results show that plan sponsors are adapting to the new regulations and coping with difficult economic times. Source: Profit Sharing/401k Council of America

Flight to Equities in 401ks Continues in November With mixed November market results, 401k participants continued to transfer monies from fixed income investments into equities, according to the latest data from the Aon Hewitt 401k Index. Source: Plansponsor.com.

Cultivating a Culture of Fiduciary Responsibility Cultivating a culture of fiduciary responsibility is critical to helping people entrusted with performing these critical duties and responsibilities, and minimizing liability for you, your company, and your Board. Source: Pentegra Retirement Services

Study Finds More Americans Counting on Social Security for Retirement Social Security is becoming increasingly important as a source of retirement income for Americans as they face a weak economic environment, high unemployment and an uncertain future, according to a new study released today by The Hartford Financial Services Group. Source: 401khelpcenter.com.

Educational Matters: The Impact of Educational Attainment on Worker Retirement Outlook Since 1999, the Transamerica Center for Retirement Studies has conducted a national survey of U.S. business employers and workers regarding their attitudes toward retirement. The overall goals for the study are to illuminate emerging trends, promote awareness, and help educate the public. The 11th Annual Transamerica Retirement Survey found that level of education plays a vital role in workers' ability to save and plan for retirement. Source: Transamerica Center for Retirement Studies

401k and Profit Sharing Plan Response to Current Conditions PSCA conducted a survey of 401k and profit sharing plan sponsors to determine how they are responding to current economic and regulatory changes. PSCA received 531 responses from plan sponsors across the country. The majority of plan sponsors and participants continued making contributions to their defined contribution plan. Source: Profit Sharing/401k Council of America

Employer Match Triples Odds of Employee Participation The existence of an employer matching contribution is the single most significant factor in determining whether employees contribute to a DC plan or not. Source: 401khelpcenter.com.

401k Holdings in Company Stock Continued to Shrink Participants in 401k plans continued to reduce their holdings in their employers' company stock, according to the latest data from the EBRI/ICI 401k database. Source: Employee Benefit Research Institute

Emerging Markets Equities as a DC Plan Option This paper defines EME and then examine pros and cons of offering this asset class in a 401k plan as a stand-alone option. Source: J.P. Morgan

Survey: 85% Contributing to 401ks, up From 81% in 2009 Contributions to 401k plans increased in the last year, Principal Financial found in a survey of 1,159 employees and 529 retirees in October. Source: Employee Benefit News.

New DOL Proposed Regulations Require Additional Disclosures for QDIAs Part I of this article provides historical background regarding target date retirement funds and why the DOL believes additional rulemaking in this area is necessary, part II provides an overview of the proposed regulation's requirements and compares them to similar proposed regulations issued by the Securities and Exchange Commission, and part III recommends actions plan fiduciaries should take now in light of the proposed regulations. Source: Paul, Hastings, Janofsky & Walker LLP

In-Plan Roth Rollover Guidance This guidance supplies the retirement plan community with answers to the many questions that have arisen regarding the implementation, ongoing administration, and reporting of in-plan Roth conversion. Source: McKay Hochman.

IRS Issues Guidance on In-Plan Roth Rollovers The Internal Revenue Service has issued Notice 2010-84 which allows plan sponsors to adopt, even after December 31, 2010, amendments providing for 2010 in-plan Roth conversions. The notice also addresses the tax rules governing in-plan Roth conversions. Source: Buck Consultants

IRS Issues Guidance on In-Plan Roth Rollovers under 401k and 403(b) Plans The IRS recently issued Notice 2010-84, which provides a series of questions and answers concerning how employers that sponsor 401k plans and 403(b) plans (Plans) may implement in-plan Roth rollovers as permitted under the Small Business Jobs Act of 2010. Source: Drinker Biddle & Reath LLP

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