BPP401k.com Newsletter January 27

Obama To Propose ‘Automatic Workplace IRAs’ In his State of the Union address Jan. 27, President Barack Obama will propose the creation of a new employer-sponsored retirement account: the “automatic workplace IRA.” Source: Employee Benefit Adviser

Mercer Puts Out ‘10 for ’10’ list for DC sponsors To start the new year, Mercer has combined some of my favorite things: lists and clever plays on words/numbers — oh, and good information, too. Source: Employee Benefit News

How Much Are You Paying? A Guide to 401(k) Fees Retirement savings is a central topic in the Obama administration's proposed initiatives to help struggling middle class families. And one of the concerns to be addressed is improving the ability of workers to determine how much they're paying for the management of their 401(k) plan. Source: New York Times

FREE DOWNLOAD: Federal Withholding Tables with Highlights Source: Wolters Kluwer

Some Plan Sponsors Still Hazy on PPA, Fiduciary Issues A new AllianceBernstein study suggests that small-plan sponsors could use some help understanding the Pension Protection Act (PPA) and their fiduciary roles. Source: PlanAdviser

U.S. Justices Decline To Hear 401(k) Case The U.S. Supreme Court decided this week not to hear a lawsuit that claimed unreasonable fees were being charged for investment options. Source: LegalNewsline.com

401(k) Fees: Check Out Yours Now Congress and Corporate America have dithered and stalled for years coming up with a clear way to show 401(k) participants the fees they pay in their 401(k) plans; effectively stonewalling Americans from obtaining information that is central to successful investing. Source: CBS Money Watch

Benefit Plans Plus Announces New, Expanded Roles As part of the long-term plan to strategically manage the growth and success of the firm, Benefit Plans Plus has promoted Michelle Meyer to Manager of Operations and Julie Martin to Supervisor.

The SPARK Institute Releases Final 5500 Guidelines For Multiple Vendor 403(b) Plans The SPARK Institute has just released the final version of its guidelines on Form 5500 Aggregation for multiple vendor ERISA-covered 403(b) plans, said Larry H. Goldbrum, General Counsel. Source: Benefits Link

Guidelines for Multiple Vendor 403(b) Plans - 2009 Form 5500 Aggregation 2009 Form 5500 aggregation across multiple investment-provider vendors is expected to create unique challenges. As such, these 2009 Guidelines were developed exclusively to address the challenges of completing the 2009 Form 5500. Source: The Spark Institute

More Advisors Focusing On 401(k) Business Jerry Verseput has a plan to grow his advisory business in 2010: focus on 401(k) clients.Verseput, whose firm, Veripax Financial Management LLC in El Dorado Hills, Calif., oversees $14 million for about 80 clients, says a fifth of his business is already retirement plans for small employers, such as a local construction firm and a not-for-profit. But those accounts have largely come piecemeal, in at least one case because a local business owner was already one of his individual clients. Source: Financial Advisor

Federal Court Approves 401(k) Settlement Involving Hartford Life A federal court in Connecticut has approved a partial settlement in a class-action civil suit involving the handling of 401(k) plans by Hartford Life Insurance Co. Source: Insurance & Financial Advisor

Your Best 401k Moves For 2010 Fear played a big part in limiting contributions to retirement plans last year. But 401k's are still a good investment, and these 5 moves can help rejuvenate yours. Source: MSN Money

Automatic Enrollment Leads to Higher Match Rates From Large Plan Sponsors New research from the nonpartisan Employee Benefit Research Institute finds that employers adopting automatic enrollment in their 401k plans have also generally increased the employer match to participant's accounts—in some cases, by a significant amount. Source: Employee Benefit Research Institute

Significant Compensation and Benefit Due Dates for 2010 This Hewitt compliance calendar assumes a plan administered on a calendar year-end basis by an employer with a calendar year-end fiscal year. Events that are non-annual in nature, or directly related to specific circumstances of individual participants (such as retirement forms), are not included in this calendar. In general, the information for pension plans applies to single employer plans. Source: Hewitt Associates

Plan Rollovers to a Roth IRA This is the second in a series of Technical Updates, covering Roth IRA issues, including 2010 law changes, plan to Roth IRA rollovers, Roth IRA conversions, recharacterizations and reconversions, and taxation issues associated with Roth IRA transactions. This part of the series discusses the rules relating to pre-tax plan rollovers to a Roth IRA. Source: Sungard/Relius

The Curious Matter of 403(b) Plan Disqualification We all know what happens when a 401(a) rule is violated, its affect on plan qualification, and what to do about it. We would be badly mistaken if we were to apply those same concepts, experiences and rules to managing problems arising from the violation of a 403(b) rule. 403(b) plan disqualification isn't what you might otherwise think. It is truly a curious matter. Source: Business of Benefits Blog

Survey Shows Wide Gap in Knowledge of Fiduciary Responsibility This new research reveals significant differences between small and large defined contribution plan sponsors in their understanding of fiduciary responsibility. Source: 401khelpcenter.com

A 2010 Fiduciary Planning Guide for Plan Sponsors This is a 2010 planning calendar designed to be used primarily by sponsors of single employer plans. Covers both DC and DB calendar year and non-calendar year plans. Source: MassMutual

Fiduciary Focus: A Frank Discussion for Plan Sponsors Sherryann Plessé, principal and head of Vanguard's Strategic Retirement Consulting team of defined contribution and defined benefit consultants, shares essential advice on fiduciary topics such as mitigating risk, offering advice, and managing fees -- so you can better understand your fiduciary responsibilities under ERISA. Source: Vanguard

Towers Perrin Retirement Legislative Tracking Chart 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. Source: Towers Perrin

2009 Legislative and Regulatory Year in Review and the Outlook for 2010 This two-part Hewitt report rounds up key legislation and regulatory guidance enacted in 2009 and forecasts the outlook for legislative activity in 2010. Source: Hewitt Associates

Supreme Court Won't Hear Deere 401k Suit Appeal The U.S. Supreme Court rejected a review of the dismissal of a lawsuit against Deere & Co. and two Fidelity Investments units, claiming unreasonable fees were charged for investment options in Deere's $3.1 billion 401k plan. Source: Workforce.com

SEC Adopts Amendments to Investment Adviser Custody Rule While the Custody Rule currently requires advisers that have custody of client funds or securities to implement controls designed to safeguard those client assets from being lost, misused, or misappropriated or subject to the adviser's bankruptcy, recent enforcement actions have lead the SEC to conclude that additional safeguards relating to custody of clients assets are appropriate. Source: Paul, Hastings, Janofsky & Walker LLP

DOL Finalized Deferral Deposit Safe Harbor The DOL has finalized regulations establishing a safe harbor for a small employer to timely deposit elective deferrals, other employee contributions, and participant loan repayments. Source: Sungard/Relius

IRS Issues Question-and-Answer Guidance Addressing Heart Act Changes The IRS has issued guidance, including 20 questions and answers, addressing miscellaneous provisions of the HEART Act that mostly affect qualified retirement plans, including 401k plans. Source: Employee Benefits Institute of America

IRS Extends Deadline for Certain PPA Amendments Recently, the IRS published Notice 2009-97 which extends the deadline for amending qualified retirement plans for certain PPA provisions to the last day of the first plan year beginning on or after January 1, 2010. Source: Prudential

Bankruptcy Doesn't Relive Plan of ERISA Mandates A DOL administrative law judge has rejected the appeal by a 401k plan administrator of an $86,500 civil penalty, ruling that bankruptcy did not relieve the administrator of requirements to properly file an annual report. Source: Planadviser.com

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BPP401k.com Newsletter january 20

Get Prepared for the Fed's Focus on Expenses ERISA makes testing of fees for services a fundamental duty of primary fiduciaries. Seek outside help if you do not have the internal capabilities to properly evaluate and benchmark your current service providers' fees and services. Source: Roland|Criss

Is 35 the New 40? Though 40 once was widely considered something of a milestone that defined middle age, a new survey suggests that overall stress and concerns about health are bringing that threshold lower. Source: Plan Sponsor

Required Minimum Distributions Are Back Late in 2008, when the markets were doing so poorly, Congress passed a law that suspended Required Minimum Distributions (RMDs) from IRAs, 401ks, 403(b)s and other defined contribution plans for 2009. That was a nice break, but it was only for one year and now that we have entered 2010, it is important to remember that RMDs are back and there are a few rules that everyone should be aware of. Source: Boston Globe

Be Prepared for the New Form 5500--More Sponsor Involvement Required There is a big change coming with the new 5500 and plan sponsors need to be ready. As both the content and filing changes will result in processes very different from the past, it is important than sponsors contact their recordkeepers and TPAs soon to discuss the Form 5500 filing process with them. Source: Profit Sharing/401k Council of America

PODCAST: More Fiduciary Responsibilities For Brokers On The Horizon SOURCE: Employee Benefit Adviser

Why Is Your 401(k) In Trouble? Because You Don’t Have Time To Read This Post Time-starved? Rushing from pillar to carpool to assisted-living open house? No wonder your 401(k) is in trouble. Source: CBS Money Watch

Unscrambling Fiduciary Confusion In seeking clarity about the "type" of 401k professional it has retained, plan sponsors often find the answers they are given to be incoherent with a slant in favor of the 401k industry instead of plan participants. The residual fuzziness plan sponsors are left feeling about this topic is a source of significant irritation to them. This article attempts to unscrambling the fuzziness. Source: 401khelpcenter.com

Uncertainty About Fiduciary Practices is Dangerous In spite of ERISA's clarity about the standard to which people who serve as its plans' fiduciaries are held accountable, a shockingly high number are dangerously close to harsh personal consequences. Fiduciaries that do not adhere to ERISA's fiduciary standard expose their personal assets to legal judgments for imprudent conduct. Source: Roland|Criss

Hidden Fees on 401(k) Plans Deserve Light of Day What next? A lawsuit plaintiff against a 401(k) plan sponsor (the employer) went ballistic and shot two people in a courthouse back in Missouri. His was one of the growing number of complaints launched in situations where 401(k) providers were charging investors what knowledgeable financial people would agree was way too much money. Source: Mercury News

Automatic 401(k) May Not Boost Retirement Savings Employers who automatically enroll their workers in 401(k) plans match their employees' savings at a lower level than do other employers, a new study finds. Source: Forbes

Efforts to Raise 401k Participation Hit Snags The thinking two years ago seemed logical enough: If more companies would automatically enroll employees in 401k plans, then offer them the simplest of investment strategies, the employees would get a leg up on retirement savings, and we'd all be better for it. But logic has given way to reality, and even such basic 401k premises are coming under scrutiny. Source: USA Today
ERISA Designates Investment Fiduciaries by Their Actions, Not by Their Titles Some service providers to ERISA qualified retirement plans tout a "co-fiduciary" status or promote a warranty for their service. Many ERISA plan sponsors accept these claims to mean that use of such a provider's services or investment products eliminates all of a sponsor's fiduciary liability. According to ERISA's standard, this is simply not true. Source: Roland|Criss

DC Plan Sponsors Say Reviewing Fees Most Important Fiduciary Action Callan Associates finds DC plan sponsors saying that reviewing plan-related expenses was the most important fiduciary action they took over the past year. Source: Plansponsor.com (free registration may be required)

Survey Finds Plan Sponsors to Focus on Strategic Initiatives in 2010 Callan Associates' 2010 Defined Contribution Trends Survey: Getting the DC Plan Back on Track finds that DC plan sponsors are seeking ways they can reposition their plans following the market collapse to avoid future pitfalls. Source: 401khelpcenter.com
Survey Shows Unabated Climb in Workplace Class Action Litigation The sixth annual Workplace Class Action Litigation Report by Seyfarth Shaw LLP analyzes class action and collective action court rulings of 2009 involving claims against employers in federal and state courts. This is a summary of the survey findings. Source: 401khelpcenter.com

Retirement Plan Participation: Effect of Education How does education affect the likelihood of participating in a retirement plan? Source: Employee Benefit Research Institute (PDF File)

DOL Issues Final Safe-Harbor Rule on Depositing Employee Contributions The U.S. Department of Labor announced the publication of a final rule to protect employee contributions deposited to small pension and welfare benefit plans with fewer than 100 participants by providing a safe harbor period of seven business days following receipt or withholding by employers. Source: 401khelpcenter.com
VIDEO: The EFAST2 Online Filing System Filers must submit the 2009 and 2010 annual return/report forms and schedules electronically through EFAST2. This is a helpful video produced by the US Department of Labor on the electronic filing of form 5500. Source: U.S. Department of Labor

EFAST2 Ready for Online Form 5500 Filings Plan sponsors can now take full advantage of a new federal government system for online filing of the required annual report to the Employee Benefits Security Administration at the U.S. Labor Department. Source: Plansponsor.com (free registration may be required)

Paper 5500 Option No Longer Available for Plan Year 2009 With the exception of 2008 plan years, the option of filing paper copies of the Form 5500 has expired. The DOL expects plan sponsors now to file electronically under EFAST2. In this technical update, we address the questions regarding the paper option for filing a Form 5500. Source: Sungard/Relius

For more information visit http://www.bpp401k.com/

BPP401k.com Newsletter January 13

How Does Your Small Business 401(k) Stack Up? Here's what to ask in a do-it-yourself check-up of your company retirement plan. Source: Forbes

Fact and Fiction Blur in 401(k) Fund Story It is an out-of-body experience to hear the industry talk about how well it has performed during the past two years. But that was the party line at a recent panel session in Washington. Source: US News & World Report

403(b) Plans Find general information about IRC section 403(b) retirement plans and DOL regulations requiring annual financial statement audits for ERISA-covered 403(b) plans beginning in 2009. Source: AIPCA

Efforts To raise 401(k) Participation Hit Snags The thinking two years ago seemed logical enough: If more companies would automatically enroll employees in 401(k) plans, then offer them the simplest of investment strategies, the employees would get a leg up on retirement savings, and we'd all be better for it. Source: USA Today

The Year of Reform Is Upon Us December was a big month for agenda setting in Washington as legislators and regulators looked ahead to making reform a reality in 2010. Here are some thoughts on what to expect. Source: fi360 Blog

Excessive Fee Suit Plaintiff Reported as St. Louis Plant Attacker A man believed to be an employee of a St. Louis manufacturing plant, a plaintiff in a 401(k) excessive fee class-action lawsuit against the company, apparently went on a shooting spree with an assault rifle Thursday at the facility where police said two people were killed and five others injured. Source: PlanSponsor





Ask the experts: What should we look for in retirement plan vendor? We’re considering changing our retirement plan vendor. What areas should we focus in on when searching for a new provider? Source: HR Morning.com

The Shape of Things to Come for 401k Plans 401k providers are still offering more and more features to plan sponsors. author sets forth three plan features that you are likely to see more of in 2010 and beyond. Source: Employee Benefit News

Improving on the Participant Directed 401k Investment Model The likelihood of investment success increases as the participant's involvement in investment decisions decreases. This article proposes an alternative approach to the participant-directed 401k investment model in order to allow, as far as possible, the fulfillment of the primary objective of a 401k plan. Source: Chang, Ruthenberg & Long PC

Achieving Sustainable Retirement Withdrawals: A Combined Equity and Annuity Approach Results of this research indicate that an equity portfolio with a fixed annuity component provides a higher chance of maintaining retirement distributions than other alternatives. Source: Journal of Financial Planning

The Value of TIPS in Pension and 401k Plans There is a growing sense that the monetary and fiscal policies required to exit the great recession of 2008/2009 are laying the groundwork for future inflation. In light of this, the author briefly examines the case for providing exposure to Treasury Inflation Protected Securities or “TIPS” in both pension plans and 401k plans. Source: Fiduciary Investor Blog

PSCA Honors Employers for A+ 401k Education For the last two years, employers have been pushing stay-the-course themes within their 401k communication and educational programs, but some do it a little better than others. Source: Employee Benefit News

Enduring Confidence in the 401k System: Investor Attitudes and Actions With millions of U.S. households personally directing their retirement savings, the Investment Company Institute has sought to get a sense of retirement savers' activity and sentiment in light of the extraordinary financial market volatility of the past two years. This paper summarizes results from two surveys conducted by ICI in the last two months of 2009. Source: Investment Company Institute

Survey Shows Significant Increase in Adoption of Auto Enrollment A new survey by Hewitt Associates shows a significant increase in the adoption by employers of automatic enrollment features in their 401k plans. The survey also found increased use of target date funds as default 401k investments and an increased focus on lowering plan expenses. Source: CCH

Plans That Suspended Their Matching Contribution Experienced Declines A new survey that companies that suspended their matching contributions experienced a decrease in plan participation and deferral rates to a much greater degree than those that did not change their matching contributions. Source: CCH

401k Participants May Proceed With Lawsuit Over Fees, Company Stock Claims that 401k fiduciaries violated ERISA by allowing a plan and its participants to pay excessive administrative fees cannot be dismissed, a federal district court in Illinois has ruled (George v. Kraft Foods Global). Source: Mercer

Is the Pressure Off to Regulate Target-Date Funds? Some believe a return to profit may ease investor worry about these retirement funds and move the push for regulation to the back burner. But others think now is the time to ratchet up regulation before the next recession burns more investors. Source: Financial-Planning.com

IRS Rules on Annuity Issues in Defined Contribution Plans In a preface to the 2010 policy discussion about enhancing income security in defined contribution plans, the Internal Revenue Service ruled on several issues under current law related to the use of annuity contracts in these plans. Source: Sutherland Asbill & Brennan LLP

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BPP401k.com Newsletter January 6

10 Tips for Building Better Retirement Plans While many companies have turned to DC plans as an effective way to mitigate risk, improvements need to be made to the plans if they are to provide adequate retirement income to workers. Source: Employee Benefit News

Voice: Plan Sponsors Beware The DoL investigations are coming Excellent article pointing to the need for external fiduciary help. Source: PlanSponsor

Three (six) financial New Year’s Resolutions for 2010 Source: Market Watch

Participating in a Retirement Plan: Gender Differences How does gender affect the likelihood of participating in a retirement plan? Here are some of the key findings on gender in employment-based retirement plan participation. Source: Employee Benefit Research Institute

Annual Compliance and Review Requirements for Investment Advisers Investment advisers are subject to certain annual updating and review obligations, many of which apply regardless of whether an adviser is registered with the SEC. This article summarizes certain of these regulatory and compliance requirements. Source: Paul, Hastings, Janofsky & Walker LLP

10 Resolutions To Improve Your Financial Outlook In 2010 Experts say starting the new year on solid financial footing is essential to long- and short-term prosperity. But it's hard to know what to do -- beyond setting a budget and freezing your credit cards.

Making Promises You Can Keep – Building Pensions for the Future The financial and economic crisis has had a profound and ongoing impact on pension plans around the world. Neither Defined Benefit (DB) nor Defined Contribution (DC) plans have been able to escape unscathed – and the crisis has served to expose and magnify the differences between these two pension systems. Now that the dust seems to be settling, it is time to see what lessons can be drawn. Source: AEGON Global Pensions

Are 401ks Finally Recovering? Two recent studies indicate that most defined-contribution-plan participants have the same or higher balances in their accounts now, than before the stock market began to tank. Such reports should be taken with a grain of salt, however, say experts, who also advise HR leaders to continue educating employees on the importance of prudence and diversification -- in good times and bad. Source: Human Resource Executive Online

401k and Profit Sharing Plan Eligibility Survey 2009 This is the 12th year that PSCA has collected defined contribution plan eligibility data. The changes over time have been significant. In 1998, only 24 percent of plans allowed employees to begin contributing to their 401k plans immediately upon employment. This percentage has more than doubled since. Source: Profit Sharing/401k Council of America

Retirement Plan Participation: Race/Ethnicity Differences How do race and ethnicity affect the likelihood of participating in a retirement plan? How do the size of employers and the birthplace of workers affect these levels? Here are some of the key findings concerning race/ethnicity differences in employment-based retirement plan participation. Source: Employee Benefit Research Institute

The Fiduciary Role of Investment Advisors Because of the disjointed regulatory structure and lack of uniform advanced education requirements, even the advisors who are fiduciaries often have a limited understanding of the fiduciary code of conduct. Clearing up this confusion and enhancing consumer protections are among the goals of financial regulatory reform that is currently being debated by Congress. Source: fi360 Blog

House Democrats Introduce Bill Amending Qualified Plan Nondiscrimination Rules Representative Lloyd Doggett (D-TX) recently introduced H.R. 4126, the "Retirement Fairness Act of 2009," which would significantly strengthen the qualified plan nondiscrimination rules and potentially jeopardize the qualified status of many plans. Source: JP Morgan

The 403(b) Prohibited Transaction There are some technical differences between 401k plans and 403(b) plans. One of the more striking differences is that of the prohibited transactions. Source: Business of Benefits Blog

DOL Issues Ruling on Target-Date and Lifecycle Mutual Funds Although the DOL affirmed the current state of the law in its recent advisory opinion, regulatory and legislative initiatives affecting target-date funds and their use in retirement plans remain under discussion, and have been the subject of additional Congressional hearings. In addition, guidance for benefit plan fiduciaries on the selection and use of target-date funds is expected to be published by the DOL. Source: Dechert LLP

DOL Approves Use of Summary Prospectus to Satisfy ERISA 404(c) In September 2009, the DOL issued Field Assistance Bulletin 2009-03, permitting the use of summary prospectuses to satisfy the prospectus requirement of ERISA Section 404(c). Source: Prudential

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