10 Things 401(k) Providers Won't Tell You

SmartMoney recently ran an article 10 Things 401(k) Providers Won't Tell You in their Rip-Offs column. Do you agree with it? Let us know.

BPP401k.com Newsletter June 30

Court Approves Settlement in Revenue-Sharing Suit A federal judge has approved a $13.8 million revenue-sharing based settlement between a provider and the 401(k) plans it supports, but lawyers will take nearly half. Source: Plan Sponsor

The Briskin Consulting Study of Small-Retirement-Plan Sponsors This new research study explores the drivers of satisfaction and discontent among small-plan sponsors. It offers insights into the issues that spur decisions to switch plan providers and reveals which kinds of providers are more likely to be chosen—and why. In short, the Study offers valuable lessons for small-plan providers who wish to improve their client service and retention efforts—and win business from their competitors. Source:Briskin Consulting

Liability Reducing Strategies for Today's 401k Plan Sponsor What can the typical 401k fiduciary do to better prepare for the possible consequence of impending regulatory changes? Here's the straight-forward advice: Be aware, or be at risk. Here are four liability reducing strategies for today's 401k Plan Sponsor. Source: Fiduciarynews.com.

Freezing Defined Benefit Pension Plans In the current economic climate more companies are freezing their defined benefit plans. when considering a plan freeze, a plan sponsor should carefully analyze its long-term strategies for the management and disposition of the frozen plan to avoid significant liability exposure in the future. Source: Groom Law Group.

DC Deferral Amount What Participants Can Afford Half of employees participating in a recent survey say they decided on their defined contribution plan contribution because it was the most they could afford. Source: Plansponsor.com.

When It Comes to Retirement, 67 Is the New 55 Looking forward to retirement? You may have to wait a bit longer. Financial pressures are pushing up retirement ages all over. Benefit cuts and higher retirement ages are becoming the norm. Source: National Public Radio.

Employee Plans News - Summer 2010 Edition The Employee Plans News is a periodic IRS newsletter with retirement plan information for retirement plan practitioners. Source: IRS.gov

DailyAccess Corporation offers a variety of optional financial education resources for retirement plan participants Source: Daily Access

Restoring the 401k Match Six months after it suspended its matching contribution to employees' 401k's, Briggs & Stratton decided it was time to bring the dollars back. The company is part of a trend: Of the 293 U.S. employers that suspended matching contributions last year, 44 percent have already restored the match or intend to restore it by next year. Source: Workforce.com

When it comes to 401(k) fees, more money = more problems When it comes to 401(k) fees, a new analysis gives credence to two known clichés: You can’t compare apples to oranges, and indeed, the rich are different. Source: Employee Benefit News

401k Fee Litigation: June Update 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 updated overview of current litigation and background information. Source: Groom Law Group.

ERISA Plans' Ultimate and Criminal Prohibited Transaction Rule We all know that doing something as foolish as buying a plan sponsor a car in order to keep its 401k business would clearly step over the line. But there some other, and familiar, arrangements which could raise some issues. Source: Business of Benefits Blog.

The Employers' Perspective on Retirement Benefits and Planning The 11th Annual Transamerica Retirement Survey finds that employers continue to believe employee-funded retirement plans are important to employees, second only to health insurance. Large companies are more likely than small companies to believe in the importance of these self-funded plans. Trending shows a steady decline in the perceived importance of defined benefit plans to employees. One third of employers do not think they are important, up from just over one quarter last year. Source: Transamerica Center for Retirement Studies (PDF File).

Comparative Costs and Risks for Sponsors of Traditional DB, DC, and Hybrid Plans Study results show that costs and risks for sponsors vary significantly with plan type, funding strategy and participant demographics. Throughout the scenarios, the hybrid plan exhibits good features of cost efficiency and risk reduction to the plan sponsor. Source: Social Science Electronic Publishing.

Advice Trumps Performance for Small Plan Sponsors Small plan sponsors are generally satisfied with their 401k providers, but most are not happy with the advice they're getting on fiduciary and regulatory matters, says a new survey. Source: Employee Benefit News

Participants Are Saving More to Make Up for Market Downturn More than one-third (38%) of retirement plan participants have increased the amount they are saving for retirement following the market downturn of recent years. In addition, 20% of participants have moved into more aggressive investment options, reports a just released survey of retirement plan participants conducted by Diversified Investment Advisors. Source: 401khelpcenter.com.

Participant Account Balance Size Influences 401k Plan Fees According to a report published by the 401k Averages Book titled, "Are All $5 million 401k Plans Created Equal?," the size of a 401k plan's average participant account balance will influence the amount of fees they pay. Source: 401khelpcenter.com.

Congress Kicks Fiduciary Debate to SEC for Study Legislators finally reached a compromise on the fiduciary standard bill. While the House's version pushed for the SEC to create a fiduciary standard, the Senate preferred instead to have the SEC study differences between fiduciary standards without giving them the power to do anything about it. The final bill contained elements of both. Source: Financial-planning.com.

H.R. 4213 and How Much Does My 401k Investment Really Cost? U.S. employers should begin by reviewing current fee disclosures and trying to make them as complete and accurate as possible, and consider including some of the new information that would be required if H.R. 4213 became law. Finally, it is important to keep an eye out for new final regulations at all times, as these will affect all 401k sponsors. Source: Pensions & Benefits Law Blog.

IRS Extends 401k Deadlines in Storm-Torn States According to IRS notice 2010-48, the IRS has extended the deadline for restating affected pre-approved defined contribution plans and, if applicable, for submitting determination letters to the IRS to July 30 for Alabama, Connecticut, Massachusetts, Mississippi, New Jersey, Rhode Island, Tennessee and West Virginia declared Presidential Disaster Areas. Source: Credit Union Times.

DOL Issues Final Regulations on Timing and Order of QDROs The DOL issued final regulations on the timing and order of domestic relations orders (DROs). These final regulations provide plan administrators, service providers, participants and alternate payees with further guidance regarding when a DRO will satisfy the qualified domestic relations order requirements of ERISA. Source: Ice Miller.

For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com

BPP401k.com Newsletter June 23

How to Attract and Serve the Underserved Gen Y Now Advisors have always viewed the transfer of wealth—in particular high-net-worth wealth—as a legacy issue, and this is how they have approached their clients which means that advisors need to change their approach toward Generation Y, the beneficiaries and often the creators of this wealth. Source: Investment Advisor

Legal Alert: IRS rulings breathe new life into PTO-401(k) transfer In the early 1990s, the Internal Revenue Service issued a technical advice memorandum on how unused vacation or sick pay can be transferred to 401(k) plans. The IRS also issued a private-letter ruling providing further insight into this concept. The practice, however, has not seen significant use by employers. During the current economic downturn and with IRS initiatives to provide tools to help employers and employees save for retirement, the IRS issued Revenue Ruling 2009-31and Revenue Ruling 2009-32, which breathe new life into this planning idea. Source: Employee Benefit News

Research Cautions against 4% Spending in Retirement Rule The “4% rule" - the most commonly offered advice for spending in retirement proffered by investment professionals - can ultimately be harmful to the interests of people who follow it, according to new research. Source: PlanSponsor

One Year Later – Reinstating Your 401k Match As we appear to emerge from the worst of the economic doldrums, many companies are reinstating their matching contributions, either to their prior levels or to some other level. While this seems like a simple, well-intentioned change, it could bring with it some challenges. Source: Aon (PDF File)

12 Ways to Make the Most of Your 401(k) By now, you'd think that everyone with a job has at least one 401(k) account. But unfortunately, not all employers offer retirement accounts. And not everyone with access to a 401(k) participates. Even among retirement investors, some 401(k) participants need serious help planning for a comfortable retirement. Here are 12 ways to make the most of your 401(k). Source: US News & World Report

How an adviser can help a troubled business turn things around Once a company admits financial hardship and seeks help from a turnaround consultant, what is the next step? Source: Smart Business

Time to Consider Adding Roth to the 401k Plan Adding and communicating a Roth-designated account can be well worth the effort, especially in the current environment. The addition of Roth can serve as an excellent way of reinvigorating a plan and re-engaging employees in their efforts to save for retirement. Source: Workforce.com (free registration may be required)

The Four "R's" of the Mid-Year 401k Checkup Process Recent market volatility has caused many 401k investors to wonder if their retirement savings are on track. Charles Schwab is encouraging people to perform a mid-year review of their 401k plan investments using this simple process. Source: 401khelpcenter.com

Understanding Early Withdrawals from Retirement Accounts Those with 401k plans are likely to withdraw savings before retirement. About 40 percent of withdrawals can be linked to events such as the onset of poor health, job loss, home purchases, and college expenses. But half of withdrawals may represent unnecessary loss of retirement savings. Source: The Urban Institute (PDF File)

401k Annuities: An Idea Whose Time Has Come? A small but growing number of companies are enhancing their employees' defined contribution plans by offering deferred annuities that provide a guaranteed income stream in retirement. But annuities may not be the right choice for every retiree. Source: AARP

Study Reveals Why Plan Sponsors Select, Stick With, and Switch Plan Providers The Briskin Consulting Study of Small Retirement Plan Sponsors explores the issues that concern plan sponsors within smaller companies and reveals their satisfaction and displeasure with the 401k plan services offered by investment and insurance companies, TPAs, RIAs, and banks and broker-dealers. Source: 401khelpcenter.com

DC Plan Sponsors Reward Providers That Deliver on Critical 401k Services A new study by Cogent Research concludes that retirement plan sponsors' needs and priorities vary significantly by plan size, and providers that succeed in delivering in these specific areas enjoy stronger loyalty among the plans they service. Source: 401khelpcenter.com

Is 401k a Brand Wasteland? The 401k industry is full of "brand overspray" from other financial services and industry businesses, and those 401k providers definitely have room for improvement. That's one of the conclusions presented in Cogent Research's inaugural Retirement Planscape study of 401k plan sponsors. Source: Cogent Research (PDF File)

Where Do RIAs Stand in the 401k Business Among mega 401k plans that use an outside advisor, nearly half are working with an RIA, according to a new Cogent Research study that also suggests that RIAs are poised to win more of the defined contribution market. Source: RIAbiz.com

AUDIO: Stable Value Funds: Stable, Valued? Capital preservation funds may not have made the list of "long-term" solutions under the final QDIA regulations, but they remain a popular default choice for many plan sponsors, and remain an important asset class overall. What the new generation of stable value choices could bring to your program-and what the next generation has in store. Source: Plansponsor.com

Weigh the Cost Without Paying the 403(b) Piper! It is very important to consider cost of administration and regulatory guidance that has matured and appears to be less complicated, but you should take a broad look at the before and after prior to making the decision to terminate your 403(b) plan with the intent to set up a 401k plan. Source: Businessofbenefits.com

Will 401k World Change by Fall? Potential new rules may dramatically change how 401k plan sponsors manage their companies' retirement plans. Failure to understand the implication of these changes can ensnare companies and their ERISA trustees with unexpected liability issues. Author reviews three impending changes. Source: Fiduciarynews.com

Chairman Miller Wants Senate to Put 401k Fee Disclosure Back Into H.R. 4213 Miller called the elimination of important reforms to expose hidden 401k fees "unacceptable" and vowed to fight to include the reforms. Source: House Education and Labor Committee

Fee Disclosure Not in Senate Tax Extenders Bill Senate Finance Committee Chairman Max Baucus' (D-Montana) substitute amendment (S. Amdt. 4301) now pending in the Senate does not include the 401k fee disclosure rules included in a version passed by the House. Source: Planadviser.com

IRS Tax Requirements Affect 401k Plan Design Like all retirement plans, a 401k plan must meet certain tax requirements to be a qualified plan. It's important to consider how IRS-specific 401k requirements can impact your plan design and ultimately your plan's success. This article reviews the big six 401k requirements. Source: Employee Benefit News (free registration may be required)

IRS Reminds Plan Sponsors of Upcoming Form 5500 Deadline The IRS has reminded sponsors of plans using a calendar year of the upcoming deadline for filing the Form 5500. Plan sponsors must file Form 5500 series returns on the last day of the seventh month after their plan year ends. Source: CCH

DOL Issues Final Regulations on QDRO Timing The DOL has issued final regulations on the timing and order of qualified domestic relations orders (QDROs). The regulations provide that a plan administrator cannot disqualify a QDRO solely because it is issued after or revises another domestic relations order or QDRO, or is issued after the plan participant's death, divorce, or annuity starting date. Source: Buck Consultants (PDF File)

DOL Issues Final Rule on QDROs A final rule clarifying certain requirements for qualified domestic relations orders (QDROs) was recently published by The U.S. Department of Labor. The rule is designed to give retirement plan administrators additional guidance when deciding whether to turn over money from the plan to someone other than a plan participant to satisfy a domestic relations obligation, such as alimony or child support. Source: Thompson Publishing

The Spark Institute Comments on IRS 401k Compliance Questionnaire The SPARK Institute has submitted a letter to the Internal Revenue Service expressing concerns about its recently initiated 401k Compliance Check Questionnaire Project, which requires a random sample of 1,200 employers to complete a lengthy online survey providing details about their 401k plans. Source: 401khelpcenter.com

IRS Rulings Breathe New Life Into PTO-401k Transfer In the early 1990s, the Internal Revenue Service issued a technical advice memorandum on how unused vacation or sick pay can be transferred to 401k plans. The IRS also issued a private-letter ruling providing further insight into this concept. The practice, however, has not seen significant use by employers. Source: Employee Benefit News (free registration may be required)

SEC Proposes New Disclosure Rules for Target-Date Funds On the heels of the turmoil caused by the financial crisis, regulators are proposing new rules governing how target-date funds are named and marketed. Source: Marketwatch.com

For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com

Benefit Plans Plus Announces Nancy A. Flachsbart Retirement

After nearly three decades serving the retirement plan community, Nancy A. Flachsbart, a member of Benefit Plans Plus, has announced she is stepping down as an active member of Benefit Plans Plus however she will continue to be an active mentor to the team.

Flachsbart, who founded Qualified Plan Services (QPS) in 1982, has been responsible for developing and maintaining effective working relationships with key business and community leaders’ in the St. Louis and Southern Illinois and throughout the nation.

"Nancy has played an integral role in the community," said Benefit Plans Plus Managing Member Patrick Shelton. "Her leadership, professionalism and can-do attitude are hallmarks of her tenure. Although we will miss her as part of the BPP family and want to thank and congratulate her for her endless contributions, we know that she will continue to be a vital member of our team."

Flachsbart is a pioneer in the area of 401(k) administration, her expertise has grown to include all aspects of the administration of Cafeteria 125 Plans and Non-Qualified Deferred compensation plans. Flachsbart is a nationally recognized expert within the pension administration field. She founded the National Alliance of Professional Plan Administrators (NAPPA) the premier organization for TPAs and served as President for the first four years.

As part of the long-term business succession plan and strategy to maximize opportunities in today’s competitive markets QPS merged with BPP in May 2009. BPP is uniquely positioned to provide the most comprehensive retirement plan solutions in the marketplace. The merger with Benefit Plans Plus was a very good fit according to Flachsbart.

“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 and now that I’m ready to step down I know our employees, clients, advisors and wholesalers will be treated well.”

Flachsbart is looking forward to taking some time off to relax. She also looks forward to spending more time with her family, improving her golf game and searching out new endeavors.

About Benefit Plans Plus
Benefit Plans Plus, LLC (BPP) offers customized retirement plan design, plan 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. BPP 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. Our credentialed teams of retirement plan specialists averages at least 17 years of experience each and have earned numerous professional designations. For more information about Benefit Plans Plus, a subsidiary of Brown Smith Wallace, LLC, visit www.bpp401k.com or call 314.824.5200.

For more information contact Danielle Oser, APR doser@bpp401k.com

BPP401k.com Newsletter June 16

Vote For BPP! This is your chance to SPEAK UP and vote in Benefits Selling's 2010 Readers' Choice Awards! Take a moment to cast your vote for your favorite TPA (BPP of course) and more ... and let industry giants know how you see the benefits business.

The Six Biggest 401k Mistakes Like everything else in life, 401ks don’t provide absolute retirement security. Here are six mistakes many people are making with their 401k plan. Source: U.S. News & World Report

Long 401k Menus Prove Hard To Digest Providers of 401k plans face a fundamental question these days: Is more, or is more less? In theory, it would seem employees are better off having a wide range of fund offerings in a plan. But, it's a really tricky issue, and the pendulum has swung back and forth. Source: Wall Street Journal

Senate Moves to Keep 401(k) Fees Hidden Participants in 401(k) plans pay billions of dollars in fees — but most of them don’t know it. And the U.S. Senate apparently would like to keep it that way. Source: CBS Moneywatch

In Volatile Times, It Pays To Revisit the IPS By laying out the strategy and processes used to manage a portfolio in a manner that best serves the interests of investors, the IPS is essentially a business plan for the portfolio. Unlike a standard business plan, however, the IPS is a governing document that sets directives and constraints. Consequently, stewards and advisers should be careful to amend the IPS if they intend to depart from its terms. Source: Investmentnews.com (free registration may be required)

A Dangerous Leap Through the Brokerage Window In its survey, Trends and Experience in 401k Plans for 2009, Hewitt Associates noted that more plan sponsors were offering employees the option of a self-directed brokerage window. But, letting 401k plan participants jump through the brokerage window is tantamount to giving the inmates run of the asylum. Source: Workforce.com (free registration may be required)

Launch a Solo 401k for Small-Business Clients Many small-business clients run their operation as a one-person show. Once the business has turned the corner, the owner can focus on setting aside more funds for retirement. And the more he or she can save each year, the merrier the client will be. Strategy: Point out the benefits of a solo 401k plan. Source: Accountingweb.com

Beware of Trap in Restarting Matching Contributions Many employers discontinued matching contributions for 2009 because of the downturn in the economy. Some of these employers are intending to resume matching contributions at some time during 2010 or 2011. However, the employer should be careful to avoid a "trap" that could occur for the plan year in which the matching contributions are restarted. Source: Miller, Johnson, Snell & Cummiskey

Study Examines the Motivations of Plan Sponsors Employers considering finding a new defined contribution provider in the next two years are almost equally concerned with understanding legislation, costs/fees, and encouraging employee participation, according to a new study. Source: Planadviser.com

Study: Most Roadblocks To Successful Retirement Savings Self-Imposed A new survey of financial advisors across the U.S. found that the top three roadblocks to Americans' financial security are living beyond ones means (70 percent), not saving enough (66 percent) and just plain fear (62 percent). Source: 401khelpcenter.com

Most 401k Plans Have Yet To Adopt Auto Enrollment Although familiarity with automatic enrollment and automatic escalation is high among large employers with 401k plans, the majority of respondents to a new AARP survey have yet to adopt either feature. Source: Financial-planning.com

Keeping Defaulted Participants from Defaulting on Retirement Savings Goals As more and more employers opt to auto-enroll employees in target-date funds to give workers a nudge toward a secure retirement, new research from J.P. Morgan shows that while plan sponsors are aiming for the bulls eye, they may be shooting slightly off center with their target-date strategy. Source: Employee Benefit News (free registration may be required)

Prevalence of Retirement Plans by Type in the Fortune 100 The movement from traditional DB plans to account-based plans has resulted in a redistribution of employer funding toward retirement — with that funding now far less targeted to older workers. Towers Watson has been tracking the retirement plans offered to newly hired employees of Fortune 100 companies for several years. This is their latest report. Source: Towers Watson

Proskauer Rose's ERISA Litigation Newsletter This newsletter focuses on two different, but equally important, sections of ERISA. The first article provides insight on the U.S. Supreme Court's decision in Hardt v. Reliance Insurance Co., and the second article reviews a recent decision from the U.S. District Court for the Northern District of Illinois in Rogers v. Baxter, Int'l. Source: Proskauer Rose LLP

Court Moves Forward Claims of Defaulted Participant A federal court judge has refused to dismiss claims by a 401k participant that plan fiduciaries breached their duties when they transferred his accounts into a new default fund. Source: Plansponsor.com

Supreme Court Ruling May Have Implications for ERISA Excessive Fee Cases The Jones v. Harris Associates decision is expected to have a substantial impact for plans and fiduciaries defending the rash of pending litigation under the ERISA, involving allegations of excessive fees charged by service providers under 401k plans. Source: McDermott Will & Emery

Nine On-Line DOL Resources for 401k Plan Sponsors The DOL has put together several free on-line "booklets" and "fact sheets" to assist and inform 401k plan sponsors and fiduciaries. Source: Fiduciarynews.com

DOL Releases Final Regulations Relating To Time and Order of QDROs The regulations, which are effective July 30, 2010, are substantially similar to the interim final rule issued in 2007, but several changes were made to the examples given, and one additional example was added. Source: Sutherland Asbill & Brennan LLP (PDF File)

DOL's Final Rule Relating to Time and Order of Issuance of DROs This regulation finalizes an interim rule published in 2007, which was adopted in response to the specific statutory directive contained in the Pension Protection Act of 2006, requiring the Secretary of Labor to issue regulations clarifying certain issues relating to the timing and order of domestic relations orders. Source: U.S. Department of Labor (PDF File)

IRS Launches 401k Compliance Checklist The information collected reportedly will be used to influence future IRS efforts on guidance and outreach – as well as possible enforcement activity. The results are expected to be summarized in a report next year. Source: Groom Law Group

For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com

BPP401k.com Newsletter June 9

Financial Reform: Four Reasons Stricter Regulation Isn't Enough Financial Reform: Four Reasons Stricter Regulation Isn't Enough Source: BNET

Five Ways 401(k) Fee Disclosure Impacts Savers The House of Representatives approved legislation that aims to make 401(k) fees more transparent on Friday. The bill would require 401(k) service providers to list all fees subtracted from employee retirement accounts. Here’s how the Defined Contribution Fee Disclosure Act of 2010, if it becomes law, would impact your 401(k). Source: US News and World Report

Data Indicates 401(k) Plan Sponsors on the Move for New Providers New data from LIMRA finds that, continuing the trend since the third quarter of 2008, the percentage of new 401(k) plans sold by leading providers remains lower than the percentage of plans taken over from other providers. Source: Plan Sponsor

How Does Your Retirement Program Stack Up? This report provides a comprehensive review of retirement plan benchmark data from a broad range of perspectives and financial effects. The report includes perspectives and in-depth analysis on the current state of pension programs, risk management with regard to benefits earned and the assets backing them, delivery of future benefits and retirement program life cycles, and management assumptions and decisions that drive accounting results. Source: Mercer

An Employer Checklist of 401k Plan Responsibilities Under ERISA As plan sponsor, an employer must ensure that those considered ERISA fiduciaries fulfill their responsibilities. This article is a review of subjects that can assist the employer sponsoring a 401k plan in avoiding or minimizing legal liability related to the plan. Source: Duane Morris LLP

Compliance “Deportment” Recently, the Internal Revenue Service (IRS) announced that it was sending a questionnaire out to about a thousand 401(k) plan sponsors. Source: Plan Sponsor

An Easy Guide to TPAs When it comes right down to it, there are three considerations for the large Fortune 1,000 buyer when it's seeking a third-party administrator (TPA). Source: Risk & Insurance

Required 2010 Tax-Qualified Plan Amendments Each year, plan sponsors should consider whether amendments are needed to reflect any intended design changes or to address any items contained in the latest "cumulative list" of plan amendments issued by the IRS. The IRS updates the "cumulative list" annually to include the latest regulatory and statutory changes that must be reflected in plan documents. Source: Groom Law Group

2009 Required Minimum Distribution Waiver The "2009 distribution calendar year" waiver of the required minimum distribution is over. As of 2010, required minimum distributions resume. However, for beneficiary's there may be some ripple effects from the 2009 RMD waiver. Source: McKay Hochman

The Saga of Relevant Minutiae Continues.... The author writes, "We have written often over the past few years on the minutiae of 403(b), particularly where they demonstrate the often goofy differences between 401k plans and 403(b) plans. We have also written some on the finer technical rules which apply to plan distributed annuities, which tend to apply in some pretty unusual ways." Source: Business of Benefits Blog

Independent Fiduciary Role Set To "Explode" When sponsors understand that they can outsource the fiduciary responsibility to an expert, it would seem to be an easy choice for them to make. And doing so may be ready to "explode," especially with the changes pending in DOL legislation that is expected to require that plans reveal all fees or costs to participants. Source: Wealth Manager

Outsourcing Does Not Make a Fiduciary Bullet Proof It has come in vogue to advocate hiring an "independent" third-party fiduciary to take responsibility for a plan's investments and other fiduciary functions in order to relieve the plan's sponsor, in-house, or named fiduciaries of liability under ERISA. However, the fact is that a named fiduciary is never completely free from fiduciary responsibility for the plan. Source: Profit Sharing/401k Council of America (PDF File)

Investment Committees: Vanguard's View of Best Practices This update to a previously published Vanguard paper discusses the best practices for investment committees as well as advice on how investment committees can adopt these best practices for their committees. Source: Vanguard (PDF File)

Automatic 401k Plans: Employer Views Although nearly all large employers with 401k plans are at least somewhat familiar with automatic enrollment, the majority have not adopted it for their own 401k plan. Specifically, less than half (42%) of respondents report that their 401k plan includes automatic enrollment. Source: AARP

Knowing About Auto Features in DC Plans Doesn't Mean They're Used Ninety-four percent of large employers with defined-contribution plans are familiar with 401k automatic enrollment and 78 percent are familiar with automatic escalation, but only 42 percent use auto enrollment and 28 percent use auto escalation. Source: Workforce.com

Supreme Court Changes Rules for ERISA Attorney Fees This decision will likely result in an increase in fee petition filings under ERISA Section 502(g)(1) because claimants will now ask district courts to examine whether they achieved “some degree of success” under the Supreme Court's new test. Source: McDermott Will & Emery

Spark Institute Opposes Pending Fee Disclosure Legislation The Spark Institute has submitted a letter to the Senate expressing concerns about, and opposing, the defined contribution plan fee disclosure provisions in the American Jobs and Closing Tax Loopholes Act (H.R. 4213). Source: 401khelpcenter.com

House 401k Plan 'Slap in the Face' To Obama Administration A retirement plan fee disclosure provision that was passed in the House last Friday may clash with upcoming rules from the Labor Department. Source: Investmentnews.com

Treasury Torpedoes Key 401k Benefit The Treasury has effectively killed a key 401k benefit that allows 401k participants to buy disability insurance with their 401k contributions. Source: Businesswire.com

FTC Postpones Its Enforcement of Identity Theft Red Flags Rule The Red Flags Rule's broad definitions have raised questions about whether and how the Red Flags Rule applies to various employee benefit programs. While FTC guidance has clarified that a 401k plan's accounts would not need to be included in a written identity theft prevention program, further clarification would be helpful about the Red Flags Rule's application to other benefits. Source: Employee Benefits Institute of America

DOL Should Not Regulate Generally Accepted Investment Theories Employer groups, responding to the Labor Department's proposed invest. advice regulations, said that the DOL should not attempt to regulate what constitutes generally accepted investment theories. Source: CCH

For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com

BPP401k.com Newsletter June 2

How Does Your 401k Match Up? This article was written for the purpose of giving a better understanding of 401k plans and how your plan stacks up against other savings and thrift plans. Source: U.S. Bureau of Labor Statistics

The IRS Scrutinizes 401k Cash for Small Business As the credit crisis has made it tougher for small businesses to get funding, some would-be entrepreneurs have exploited a loophole that lets them finance a startup with 401k retirement funds without facing any taxes or penalties. Now the technique is catching the attention of the IRS. Source: Businessweek.com.

House Passes Fee Disclosure and Pension Funding Relief Bill The U.S. House of Representatives passed a bill Friday that provides for defined contribution plan fee disclosure and temporarily eases pension funding requirements. Source: Plan Sponsor

Measuring the Impact of 401(k) Fee Disclosures Starting soon, 401(k) plan sponsors will be required to tell employees clearly just how much they pay in fees. In turn, investment firms will have to spell out for plan sponsors what they shell out in charges. How might all this candor about costs change the settled world of 401(k) plans? Source: Institutional Investor

The Retirement Income Landscape As baby boomers begin to take lump-sum distributions from workplace retirement plans, a new generation of products has emerged to help them meet the retirement income challenge. In this article, the authors analyze conventional strategies as well as new ways to translate lump-sum savings into a stream of income in retirement. Source:Vanguard Center for Retirement Research

401k Fee Disclosure Passes House Fee disclosure reform is one step closer to implementation. In a get-away vote prior to breaking for the Memorial Day long weekend, the House passed the American Jobs and Closing Tax Loopholes Act (H.R. 4213) which contains the 401k fee disclosure language. Source:Mutualfundwire.com

401k balances are up, but Americans still worry about retirement The inbox has brought plenty of news about retirement in recent days. Some of it’s good, but a lot of it is worrisome. The good news comes from Fidelity Investments,which says the average 401k account balance rose 41 percent in the year that ended March 31. Most of that increase came from market gains, but people are saving more, too: Fidelity says that 7.5 percent of participants increased their contributions, while just 3.5 percent reduced them. Source: St. Louis Post-Dispatch

Shift Away From Traditional Pension Plans Continues The number of large U.S. companies that are replacing their traditional defined benefit plans with account-based retirement plans for new salaried employees continues to increase, according to a new analysis by Towers Watson. Account-based plans include defined contribution plans, such as 401k plans, and hybrid pension plans, typically cash balance plans. Source: Towers Watson

Do 401k Plans Need More Bond Funds? The looming retirement of the baby boom generation has heightened concerns among plan sponsors about inadequate exposure to fixed income markets in 401k plans. To address these concerns, some sponsors are considering increasing the number of bond fund options in their plan lineups, including options that offer targeted exposure to narrower segments of the bond market. Source: Vanguard

Investors Tap Into 401k Money Tax-Free for Business Startups An investor sets up a corporation, establishes a new 401k plan there, rolls over his or her existing 401k or IRA, and then uses part or all of the plan's assets to buy shares of the new company. This funds the new business, while keeping the tax- advantages of the retirement plan. But the transactions have drawn the scrutiny of the IRS. Source: Businessweek.com

Building a DC Investment Menu in a Changing Risk Environment The DC Committee discharges its fiduciary responsibility through the due diligent process of authorizing an investment menu for use by participants. It is important to consider the changing environment of investing when making investment menu decisions. This article will discuss the fact that the inclusion of inflation hedging funds, global asset allocation funds, and other options that have not been standard DC plan offerings may be appropriate. Source: NAGDCA

Target-Date Funds: Missing the Target and Hitting the Fiduciaries? Target-date funds are not as simple as often presented by the fund providers and must be carefully examined by plan fiduciaries to protect plan participants and prevent potential liability. Source: Drinker Biddle & Reath LLP

401k Fee Disclosure Provisions of H.R. 4213 Provisions included in H.R. 4213 regarding fee disclosure were based on the 401k Fair Disclosure and Pension Security Act, which was authored by Chairman Miller and approved by the Education and Labor Committee last year. Source: House Education and Labor Committee

Supreme Court Sets Standard for ERISA Attorney Fees The U.S. Supreme Court has set a new standard for litigants suing under Section 502(g)(1) of the Employee Retirement Income Security Act (ERISA) to be awarded attorneys' fees. Source: Plansponsor.com

401k Stock Drop Settlement on the Table for Boston Scientific There's a potential settlement in sight for participants in a 401k stock drop suit. Source: Plansponsor.com

Journey Well, Arrive Better - Redefining DC Investment Defined contribution plans require significant re-engineering if they are to better serve millions of individuals worldwide who were exposed to its failings during the financial crisis according to this Towers Watson publication. The publication reveals why employees have felt the full force of investment risks and exposes the many weaknesses which fiduciaries need to address to restore trust in DC. Source: Towers Watson UK

New Analysis Reveals Keys to Retirement Plan Success As financial professionals and their employer clients focus on helping American workers recoup market losses and rebuild retirement savings, a new report analyzes which factors help the most—and it's not investment performance. Source: Principal Financial Services

401k Compliance Questionnaire May Trap Unwary Plan Sponsors As part of a recent IRS compliance initiative, 1,200 sponsors of 401k plans will soon be asked to complete a lengthy Questionnaire. Before actually responding, however, an employer would be wise to seek legal counsel. Many of the questions on the Questionnaire go beyond the scope of the 401k plan. Source: Spencer Fane Britt & Browne LLP

A New IRS Initiative - The 401k Plan Compliance Check It is anticipate that the IRS will use the compliance questionnaire to develop a more focused examination program in the future. To better position themselves for enhanced audit activity, companies whose 401k plans have not been selected to complete the compliance questionnaire may want to perform their own compliance check, perhaps using the questionnaire as a guide, and correct any identified errors through the IRS voluntary correction programs. Source: PricewaterhouseCoopers LLP

New EFAST2 Filing Option The DOL has announced a new option for filing returns under EFAST2. The new option provides an alternative that may be particularly useful for employers which lack Internet access, or which do not wish to be bothered with electronic filing. Source: SunGard/Relius

DOL Host Fifth Webcast on 2009 Form 5500 Requirements The U.S. Department of Labor's Employee Benefits Security Administration will host a free webcast June 3rd to answer questions from employers, plan administrators and service providers about the Form 5500, EFAST2 and the new e-signature options for electronic filing requirements that began with the 2009 plan year. Source: U.S. Department of Labor

Form 5500 Roundup As we are rapidly approaching the due date for calendar year 5500s, this article provides a brief update on recently issued DOL guidance. Source: ERISAdiagnostics.com

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