401(k) plans must adapt to new economic realities If you had it to do all over again, how would you do it differently? No, this isn't one of those questions a life coach would ask you. Rather, a question from someone who has seen the beginning and evolution of 401(k) plans and thinks now is an appropriate time for plan sponsors to reevaluate the extent to which 401(k) plans are accomplishing their objectives. Source: Employee Benefit News
Do 401(k) fees really matter? The issue of 401(k) fees is in the spotlight again. A 401(k) fee disclosure provision has been added to the new stimulus bill, the $190 billion American Jobs and Closing Tax Loopholes Act that the House is supposed to vote on this week. Source: Bankrate.com
IRS Launches Largest Employment Tax Audit In History The IRS is about to launch a program to audit the payroll tax records of 6,000 employers. Their focus will include worker classification, exec comp and the full range of qualified fringe benefits. Listen in as tax attorney Kevin Johnson explains. Source: Employee Benefit Adviser
403(b)s Embracing 401(k) Standards Contrary to expectation, many 403(b) plans--particularly those in the private non-profit space--have actually made it a point to embrace a boatload of complex regulations from the U.S. Treasury Department and the Internal Revenue Service (IRS) that came at them in 2007 and as a result, are starting to increasingly resemble their 401(k) counterparts. Source: Investment Advisor
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IRS Retirement News for Employers: Spring 2010 401k Questionnaire Coming to 1,200 Employers - Upcoming 5500 Filing Deadline - Small Business Week - Improper Forfeiture Suspense Accounts IRS Employee Plans Videos- Save the Date for Our Nationwide Tax Forums! New Profit Sharing Publication - Who Can Represent a Plan Sponsor During an Employee Plans Examination? DOL News. Source: IRS
Small-Business Employees Often Left Out of Savings Plans The gulf between large and small company benefit offerings is stark, the report highlights. Seventy-two percent of employees at small businesses said their companies did not offer any program, while 78 percent of workers at larger companies did have access to them. Source: Business First of Columbus.
Three Critical Fiduciary Duties Every ERISA Plan Sponsor Must Know Now is a great time for ERISA Plan Sponsors (as well as those who provide invest. advice to ERISA plans or participants), to familiarize themselves with the nature of fiduciary duties. Source: Fiduciarynews.com.
Retirement Debate Focuses on Annuities The steady evaporation of pensions, the asset-sucking sting of the recession and the prospect of Americans living deeper into their retirement years is driving insurers and the government alike to ratchet up a push for annuity products. Source: Thestreet.com.
Roth 401ks, Roth IRAs and 2010 Roth Conversions The year 2010 is important for Roth conversions for a few reasons – the elimination of income limits on conversions and the anticipated "sunset" of Bush administration tax cuts. This article reviews key factors underlying participant decisions about Roth conversions. Source: Aon Consulting
Target-Date Funds Not a Total Retirement Solution Target-date funds are being marketed as a total retirement solution; however, the reality is that investors are using them as a small part of their overall retirement plan. In a new study, "Rethinking Lifecycle Funds," Financial Research Corporation takes a closer look at the myths and realities of target-date and target-risk funds. Source: 401khelpcenter.com.
Big 401k Mistakes That Sap Savings A new look at retirement trends by the human resources consulting firm Hewitt Associates shows that both inertia and strategic mistakes take a toll when it comes to planning for a secure retirement. Neither the market losses of 2008 nor the robust rally of 2009 have motivated workers to make their 401k plans their top priority. Source: Thestreet.com.
BofA Merrill Lynch Sees Uptick in Participant Contributions, Use of Advice Bank of America Merrill Lynch's Retirement & Benefit Plan Services quarterly report of activities within its proprietary 401k plan business shows an increase in total plan assets to $85.8 billion from $82 billion as of year-end 2009 due to market recovery, increased contributions by participants, and new business commitments. Source: Plansponsor.com.
Outline of 401k Fee Litigation Over the past several years, more than two dozen lawsuits have been filed relating to 401k plan fees and, more specifically, "revenue sharing" arrangements with plan service providers. This is an outline of current litigation and background information. Source: Groom Law Group
401k Fee Litigation May 2010 The focus of these lawsuits against the plan sponsors has evolved over time to include broader challenges to, among other things, the plan sponsors' selection of actively managed mutual funds as plan investment options. Source: Groom Law Group
Federal District Court Dismisses 401k Excessive Fee Litigation In Renfro, et al. v. Unisys Corp., et al., the U.S. District Court for the Eastern District of Pennsylvania granted defendants' motions to dismiss claims under ERISA challenging the fees charged to a large 401k plan. Source: Goodwin Procter LLP.
DOL's Amicus Brief in Lingis v. Motorola The district court erred in holding that ERISA section 404(c) immunized the fiduciary Defendants from liability for imprudence in selecting and maintaining plan investment option simply because the Plan offered nine investment options. Section 404(c), and its implementing regulation make clear that fiduciaries escape liability only for plan losses that result from control exercised by plan participants and beneficiaries. The large losses that the Plaintiffs allege the Plan suffered here did not result from the participants' exercise of control under the 404(c) regulation, but rather from the fiduciaries' imprudence in offering company stock that was unduly risky because of nearly $2 billion in undisclosed corporate debt. Source: U.S. Department of Labor.
Employer Not Required To Do Hardship Withdrawal Disclosure The Bank of America Corp. was under no obligation to provide detailed disclosures about its 401k plan hardship withdrawals, District Court rules. Source: Plansponsor.com.
Push for Fiduciary Standard Fading in Senate After more than two weeks of debate on a comprehensive financial-regulatory-reform bill, it looks as if the Senate will not act on fiduciary-standards amendments. Source: Investmentnews.com (free registration may be required).
IRS Issues Final Regs on Diversification Requirements for Company Stock The Internal Revenue Service is issuing final regulations under section 401(a)(35) of the Internal Revenue Code relating to diversification requirements for certain defined contribution plans holding publicly traded employer securities. Source: Planadviser.com.
IRS Announces 401k Compliance Check Questionnaire Project Plan sponsors selected for the 401k Compliance Project will receive a letter that includes a 401k Compliance Check Questionnaire. The Questionnaire is 46 pages long and covers the gamut of 401k plan compliance issues. Source: Lane Powell PC.
IRS 401k Compliance Questionnaires Issued The IRS has initiated a 401k compliance review by sending questionnaires to 1,200 plan sponsors. This is the first time that the IRS has undertaken such an initiative. The IRS intends to use the information gathered from the compliance questionnaires to gauge plan compliance and to gain a better understanding of how to address any noncompliance trends. Source: Morgan, Lewis & Bockius LLP
