BPP401k.com Newsletter September 1

Fee disclosure regs expand obligations The U.S. Department of Labor recently issued interim final regulations requiring that service providers to pension, 401(k) and other retirement plans disclose information to assist plan fiduciaries in assessing the reasonableness of the service providers’ compensation and potential conflicts of interest. The fee disclosure regulations will have an impact on plan fiduciaries and plan sponsors. The regulations will become effective on July 16, 2011. Source: Benefit News

IRS: Those small-business pension plans were too good to be true In a warning to small business owners, the Internal Revenue Service has sued a Los Angeles area man, saying he set up bogus pension plans allowing such clients to wrongfully duck at least $30 million in taxes. Source: Forbes

Asset Allocation, Diversification and Correlation The rational investor understands that there is a point where dollar wealth can increase more by risk control activities than by seeking higher investment returns. This insight is invaluable and lies at the heart of the rational investing approach. Source: Schultz Collins Lawson Chambers

DOJ sues adviser over pension plan fraud The Justice Department has filed suit to stop a Pasadena man from promoting a tax fraud scheme involving sham pension contributions and welfare benefit plans. Source: Employee Benefit News

Retirement Spending: Does the Four Percent Rule Hold Up? As a baseline guide for setting individuals' spending expectations at retirement, it's in the ballpark, generating an initial spending recommendation that is arguably close to what comes out of a more complicated analysis. Source: Vanguard.

How to Tell if You Have a Good 401k Plan A good 401k plan can boost your chances of a secure retirement and perhaps even allow you to retire sooner—if you take advantage of it. A generous employer contribution and low-cost investment options coupled with the tax deferral will help your savings grow. Conversely, an expensive 401k plan with poor investment choices will make it more difficult to save for retirement. Here's how to tell if your company has a competitive 401k plan. Source: U.S. News & World Report.

Employers Adding 401k Plan Features to Drive Participation and Savings Charles Schwab released new insights into the growing number of employers providing their employees with value-added 401k plan features that help drive positive plan participation and savings behaviors. Source: 401khelpcenter.com

Retirement Industry Acronyms and Abbreviations Like many industries, the retirement profession is acronym and abbreviation crazy. We have compiled this list of the more common acronyms and abbreviations to help those who are not familiar with their meaning. Source: 401khelpcenter.com

FASB Proposed Accounting Standards Update Re: DC Plan Loans The objective of this proposed FASB rule is to clarify how loans to participants should be classified and measured by DC plans. Participant loans are currently classified as an investment. This proposal would require that participant loans be classified as notes receivable, which are segregated from plan investments and measured at their unpaid principal balance plus any accrued but unpaid interest. Source: Spark Institute

Retirement Plans: 401ks and Hardship Withdrawals Fidelity Investments, the nation's largest provider of workplace retirement savings plans, reported last week that in the second quarter savings were up, but hardship withdrawals from these 401ks also increased. If you aren't familiar with hardship withdrawals, here's what the Internal Revenue Service says about hardship withdrawals. Source: Bankrate.com

On the Subject of Being a Non-ERISA 403(b) Since the final 403(b) regulations in July of 2007, there have been questions about how a non-ERISA 403(b) arrangement may maintain the status of being exempt from ERISA. This article addresses that issue. Source: McKay Hochman.

Technical Q & A Regarding 403(b) Plans Information Sharing The SPARK Institute has posted more than 20 answers to new questions it has received regarding its 403(b) Plans Information Sharing Data Elements Best Practices. The questions and answers deal with a range of topics, including loans, hardship withdrawals, distributions, and data transmission standards. Source: The SPARK Institute.

Best Practices for Multiple Vendor 403(b) Plans - Form 5500 Aggregation ERISA covered 403(b) plans that use multiple vendors must gather and aggregate data from their vendors in order to complete Form 5500. This aggregation has created unique challenges. These best practices were developed to address the challenges. Source: The Spark Institute

Debating Target-Date Funds' Tricky Labels The debate on how to re-label target-date funds is heating up. Source: Wall Street Journal Online.

SEC's Target Date Fund Proposal Garners Little Response With the comment period on the Securities and Exchange Commission's proposed rules regarding target date funds having officially closed Monday, August 23, it won't take the securities regulator long to sift through the paltry 44 recommendations it received from industry officials and lawmakers. Source: Investmentadvisor.com

An Employee Benefits Legal Update This August 2010 employee benefits update covers summary annual report deadline for calendar year defined contribution plans, DOLs new rules on fee disclosure and a number of other employee benefit related issues. Source: Reinhart Berne Van Demure

EBSA to Issue Proposed Rule on ERISA Prohibited Transaction Exemption Procedures The Department of Labor’s Employee Benefit Security Administration is issuing a proposed rule that would supersede the existing procedure governing the filing and processing of applications for administrative exemptions from the prohibited transaction provisions of the Employee Retirement Income Security Act. Source: Planadviser.com

DOLs Agenda for Hearing on Lifetime Income Options for Retirement Plans DOL released the agenda for the upcoming joint hearing with the Department of the Treasury on lifetime income options for retirement plans. The hearing begins at 9:00 a.m. (EST) on September 14 and 15, 2010. A live webcast of the hearing will be available on EBSAs website. Source: U.S. Department of Labor

Service Provider Fee Disclosure Regulations: Covered Plans and Service Providers This is the second in a series explaining the recently released DOL regulations relating to service provider contracts with plans and discusses the plans and service providers covered by the regulations. Source: SunGard/Relius.

The DOL's 408(b)(2) Regulation: Impact on Registered Investment Advisers This article focuses on the impact of the regulation on independent (not affiliated with a broker-dealer, mutual fund management complex or recordkeeper) registered investment advisers that provide nondiscretionary advisory services (as opposed to discretionary investment management services) to plan fiduciaries. Source: Reish & Reicher

August Edition of the IRS Employee Plans News April 30, 2010, was the last day of the two-year period for adopting employers of EGTRRA pre-approved defined contribution (DC) plans to adopt an approved restated document and file for a determination letter application, as described in Announcement 2008-23. Since then, the IRS has received numerous inquiries from adopting employers who failed to file a determination letter application with respect to a DC pre-approved plan by April 30, 2010, but would now like to do so. Source: IRS

Summer 2010 Edition of IRS Retirement Plan News for Employers New relief for single-employer and multi-employer plans from certain minimum funding requirements and benefit restrictions under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. Source: IRS

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 August 25

Americans Saving, but Not Necessarily in 401k Plans Americans are busy squirreling away savings more aggressively than in decades, but not necessarily in their 401k plans. And that has observers wondering if employees are short-changing their retirement savings. Source: Chicago Tribune.

The Impact of Mergers, Acquisitions and Dispositions on Your Retirement Plan When considering a purchase/sale transaction with another organization, it is important to address the retirement plans of both entities, taking into consideration five topics. Located at: Principal Financial Group

5500 Filed Timely but Processed Late Under EFAST2, a preparer must file the 5500 electronically no later than midnight (using the time zone of the plan administrator) of the day of the filing deadline (e.g., August 2, 2010 for a calendar year plan). Some preparers have filed a 5500 shortly before the deadline but because the filing was not processed by midnight or initially was not processed at all, the DOL considers the filing late. In discussing the matter with the DOL, the DOL has confirmed that it considers the filing late and that the government may generate an automatic penalty letter. Source: Sungard Relius

DOL's Fee Disclosure Rule Likely to Aid Investment Consultants The Department of Labor's long-awaited rule detailing the fee and compensation information that service providers must give to plan sponsors is expected to be a boon to investment consultants. The rules, intended to shine a light on the potential conflicts of plan service providers, apply to both defined benefit and defined contribution plans, but most of the impact will be on defined contribution plans. Source: Pensions & Investments Online.

Retirement Plans: Former Employees Can Be Current Problems While plans can cash out some participants automatically, such as those with small account balances, participants with higher balances might choose to stay in the plan. When they do, administrators run the risk of losing track of them and don't understand the full impact these former employees can have on their retirement plan. Source: Society for Human Resource Management.

Quick Poll Finds Workplace Financial Education Needed In a recent survey conducted by the Personal Finance Employee Education Foundation with the support of the Employee Benefits News, 91% of respondents cited employee financial literacy as being extremely important or important in reducing the vulnerability of the American economy to major economic crises. Source: Employee Benefit News.

FASB: DC Plans Shouldn't Classify Participant Loans As Investments Corporate 401k and other defined contribution plans would no longer include participant loans as part of investments under a proposal unveiled Wednesday by the Financial Accounting Standards Board. Source: Pensions & Investments Online.

A Cross-Testing Primer A profit sharing plan may not treat highly compensated employees more favorably than nonhighly compensated employees. Thus, the plan must have a definitely determinable allocation formula that passes nondiscrimination testing. This is an overview. Source: McKay Hochman.

Performance That Plan Sponsors Value Most Plan sponsors are looking for advice and assistance that goes beyond the usual bread-and-butter issues of operations and plan compliance. Nearly two-thirds felt that they were not receiving adequate advice on fiduciary-related issues, nearly half wanted better regulatory updates, and nearly a third felt that the quality of participant education and advice left a lot to be desired. Source: Advisor Perspectives.

Fidelity Data Shows Loans and Hardship Withdrawals on the Rise Fidelity Investments released its quarterly data on the state of the 401k that show positive, steady savings behavior by the majority of participants. However, it also cited an increase in the use of loans and hardship withdrawals by participants. Source: 401khelpcenter.com.

DC Participants Have Significant Unmet Needs and Misunderstandings The Second Annual DC Participant Experience Study provides some surprising new retirement planning insights and provides insight into which tools and communications media work best. Source: 401khelpcenter.com.

The Great Target-Date Fund Debate There's a common misconception among investors that when a target-date fund reaches the date in its name, it will be composed entirely of safe investments. Some investment advisers say that their clients think that what they have in their account at that date is what they'll have for the rest of their lives. Source: AARP.

Target-Date Funds and Managed Accounts Although Congress gave 401k fiduciaries a free pass when it comes to deciding on the type of QDIA, the selection and monitoring of the specific target-date fund or managed account provider are fiduciary duties that are anything but trivial and routine. To illustrate this, this white paper raises several issues and the challenges facing the fiduciaries will be apparent. Source: Investment Horizons (PDF File).

Summary of Rules Relating to 401k Fee Disclosure or Invest. Advice Guidance Recent guidance, some proposed and some final, relate to 401k plan fee disclosure and invest. advice are reviewed and described in this six page legal alert. Source: Employee Benefits & Executive Compensation (PDF File).

It's Not Just 12(b)-1 Fees, Say SEC Critics Soft dollars, shelf space fees, platform fees and recordkeeping fees, among others, are all costs borne by mutual funds that are indirectly charged to investors. And while these expenses are disclosed, they often are buried in legal documents that investors rarely read and often don't understand. Source: Investmentnews.com.

12(b)-1 Reform Could Hit American Funds and Others in the 401k Biz Hard 12(b)-1 fees as we know them may soon be dead, if the Securities and Exchange Commission has its way, and their quasi-death could have big implications for mutual fund firms working inside 401ks. American Funds, OppenheimerFunds and other fund firms in the micro market may face more of an uphill battle than ever before, while fundsters who reach out to insurance-based 401k providers may see greater success. Fundsters looking for retirement plan distribution should take heed. Source: MutualFundWire.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

BPP401k.com Newsletter August 18

Stop playing hide-and-seek with lost plan participants Worker mobility has created a significant problem for plan sponsors and retirement plan professionals in the 21st century —
“lost” retirement plan participants. Source: The Daily Record

Department of Labor Commences Proxy Voting Inquiry The Office of the Inspector General of the Department of Labor recently mailed a letter to certain retirement plans requesting information regarding proxy voting activities. Source: Sutherland

Morningstar says fees top stars as investment predictor You've got to give Morningstar credit. The investment-analysis firm has invested a lot of time and money promoting its "star" ratings for mutual funds, but it's willing to admit the system's limitations. Source: St. Louis Post-Dispatch

Chubb, Law Firm Team up for ERISA Guide An Employee Retirement Income Security Act (ERISA) law firm and an insurer have teamed up to prepare a guide about ERISA’s fiduciary liability provisions and how fiduciary insurance can help mitigate potential liability. Source: Plan Sponsor

Gospel of Matthew Hutcheson “Save America” is the name of one of Matthew D. Hutcheson’s latest website projects, and the name alone gives you some idea of the scale and scope of this 40-year-old retirement industry entrepreneur’s transcontinental ambitions. Source: Retirement Income Journal

Hidden fees keep many 401(k) investors in dark Your 401(k) isn't free, but most employees — and even some employers — have no idea how much they're paying for the popular retirement plan. Source: St. Louis Post-Dispatch

How to Reduce Your ERISA Risks, and the Role of Fiduciary Liability Insurance - Summary: In this white paper, Charles C. Jackson and D. Ward Kallstrom from Morgan Lewis & Bockius discuss the responsibilities of ERISA fiduciaries, the types of litigation that may be brought against them, and practical suggestions on plan design and administration. Alison L. Martin shares her insights on how the role of fiduciary liability insurance and other forms of protection may help to mitigate against financial loss to plan sponsors and their fiduciaries when faced with a lawsuit. Source: Chubb

Does Your 401k Plan Put Your Business at Risk? As a business owner, you probably do your best to provide your employees with quality benefits, including a 401k retirement plan to help them save for their golden years. So why would offering this benefit expose you and your business to the risk of a lawsuit? Source: Businessweek.com

Getting Greater Integration of Payroll and 401k Administration In the unconnected world of payroll processing and 401k administration, there are a multitude of steps that need to be done in order to get the employee's 401k contribution into the 401k recordkeeper's platform. Source: Employee Benefit News

Options for Obtaining a Determination Letter for Your Prototype Plan Employers need to consider alternatives if a determination letter wasn't obtained for a prototype plan and to confirm that current documents are being maintained to preserve the qualified status of a retirement plan. The alternatives available to employers is reviewed here. Source: Employee Benefit News

More 401ks Offering Self-Directed Brokerage Accounts Defined contribution plans are adding self-directed brokerage accounts as a way of giving participants more choices even as some plans reduce the number of core investment options. DC plan executives want more simplicity in the core offerings, and the window has become an outlet for people who might be unhappy with the changes or who want more choices. Source: Investmentnews.com

How to Successfully Manage a 401k Plan Closure 401k plan closure is a lengthy, complicated, and daunting process. Attention to detail, comprehensive communication efforts, staying in compliance, reviewing all necessary documents and procedures, finding missing participants, and finally distributing all of the plan assets are all critical elements of a successful 401k closure. Source: Keane Retirement Solutions

How America Saves 2010: A Report on Vanguard 2009 DC Plan Data This report is based on records for more than 3.2 million plan participants. It found that many participants in 2009 experienced higher account balances, traded minimally in response to market volatility, increasingly diversified their assets through automatic investment programs, and protected their retirement nest egg when they left their employer. Only a very small group of participants appeared to be adversely affected by the tough economy, leading to a modest decline in plan participation and savings rates and slight increases in loans and hardship withdrawals. Source: Vanguard

The U.S. Retirement Market, First Quarter 2010 According to this ICI study, total U.S. retirement assets were $16.5 trillion as of March 31, 2010, up 2.6 percent from $16.1 trillion on December 31, 2009; Americans held $4.2 trillion in all employer-based defined contribution retirement plans, of which $2.9 trillion was held in 401k plans; and, assets in lifecycle mutual funds grew 9.8 percent in the first quarter. Source: Investment Company Institute

Paradigm Shift Occurs in Defined Contribution World According to a recent MetLife study, employees are looking for strategies to create and protect retirement income they can't outlive. Nearly half (49%) of those who have a retirement nest egg are interested in learning about how to protect their retirement income. Source: 401khelpcenter.com

Target-Date Funds Questioned New academic research finds that managers of target-date funds tend to invest in their own family of funds, which can result in higher fees and lower performance. What can HR do to ensure its workers who use such funds are properly saving for their retirement? Source: HREonline.com

Does a Custom Target-Date Fund Really Add Value? As target-date funds continue their growth in adoption by defined contribution plans, so too grows the debate surrounding them. One commonly held belief is that a custom-built series of target-date funds is inherently superior to the proprietary strategies that are more widely available. In this article, two Vanguard experts consider this belief. Source: Vanguard

Court Dismisses ERISA 401k Class Action Against Keycorp The United States District Court for the Northern District of Ohio, Eastern Division, granted KeyCorp’s motion to dismiss the ERISA class action complaint which was filed on behalf of certain participants who held KeyCorp common stock in their accounts in the Keycorp 401k Savings Plan. Source: 401khelpcenter.com

Court OKs $16.5M Caterpillar 401k Fee Pact A federal judge has given final approval to a $16.5-million settlement of an excessive 401(k) fee suit against Caterpillar, Inc. Source: Planadviser.com

Fiduciaries Held Liable for Selecting Retail Mutual Funds The court determined that the Edison plan's fiduciaries violated their ERISA duty of prudence when the fiduciaries chose to invest in retail shares of mutual funds rather than the institutional shares of the same funds. This was an easy conclusion for the court to reach for those funds that provided "the exact same investment at a lower cost to Plan participants." Source: McGuire Woods LLP

Most Plan Loans Now Exempt From Truth-in-Lending Act Disclosures Revised regulations issued by the Board of Governors of the Federal Reserve System now exempt most plan loans from the Truth in Lending Act's disclosure requirements. Here are the details. Source: BenefitsLink.com

The 408(b)(2) Regulation: An Overview On July 16, 2010, the DOL's interim final regulation under ERISA §408(b)(2) was published in the Federal Register. This article describes the final regulation in detail, with a few comments on the likely impact of certain provisions. Source: Reish & Reicher

DOL Issues New Regulations on Fee Disclosures The Interim Final Regulations are set to become effective on July 16, 2011, and will apply to arrangements entered into on or after the effective date, as well as to arrangements already in effect. This article a brief overview of the background leading up to the new regulations and a good summary of the material terms of the Interim Final Regulations. Source: Proskauer Rose LLP

DOL Issues Final Rules Relating to Qualified Domestic Relations Orders - Summary: The final rules are effective August 9, 2010 and provide guidance to retirement plan administrators, service providers, participants and alternate payees on the requirements of qualified domestic relations orders (QDROs) under ERISA. Source: Snell & Wilmer LLP

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

BPP401k.com Newsletter August 11

5 Ways to Size Up Your 401(k) Match 401(k) matches vary considerably from company to company. Vanguard administered more than 200 different 401(k) match formulas ranging from less than 1 percent to over 10 percent of pay in 2009, according to a new analysis of 600 Vanguard retirement with 1.3 million eligible employees. How soon you become eligible for the match and how much you need to save to get the full match also play a role in how prepared you will be for . Here is how to tell if your employer’s 401(k) match is competitive. Source: US News & World Report

Common 401k Rollover Mistakes 401k Rollover Mistakes to Avoid Source: NASDAQ

Class action 401k lawsuit settled for $15 million A class-action lawsuit that alleged that tens of thousands of participants in two General Dynamics 401K plans were charged excessive fees has been tentatively settled for $15.15 million. Source: St. Louis Post-Dispatch

New Resource Center for the Latest Employee Benefits Resources, Tools and Trends Source: Guardian

401(k) needs watching for fraud Like a lot of busy people, Kevin Pursell didn't give close scrutiny to his 401(k) statements. After all, he's an electrician, not an investment pro. His attention level changed when he got a call from a friend at his old employer. Source: St. Louis Post-Dispatch

Earn One Credit of Continuing Education Source: Investment Advisor

Roth 401k Accounts Failing to Gain Traction Since their introduction in January 2006, only about 31% of 401k plans have added the Roth 401k as a savings option. Further, only 7% of 401k investors with access to a Roth 401k use one. These statistics baffle many advisors. Located at: 401khelpcenter.com.

Tapping 401k Funds Can Open Your Business to Tax Problems Did you use 401k funds to start your business, or are you tapping into your retirement to get you business through the current credit crisis? Business Week recently drew attention to a possible trap: The IRS is starting to pay more attention to entrepreneurs who finance their businesses using money from their 401k funds. Located at: Small Business Trends.

Cheaper Choice in 401ks An increasing number of 401k plans offer investment options that look a lot like the typical mutual funds. But they're actually a whole different animal—and investors would be smart to know the difference. Located at: Wall Street Journal.

Exercising Fiduciary Control Over the Investment Menu in 403(b) Plans Under ERISA 403(b) plans, the plan sponsor and other fiduciaries are responsible for the management of the plan and its investments in accordance with the demanding standards of ERISA Section 404. There are four central duties under this provision, which require fiduciaries to act. Source: Plansponsor.com

Allocation of Revenue Sharing Most 401k fiduciaries have not focused on properly allocating the revenue sharing received by their plan's recordkeeper. In fact, it is possible that many plan fiduciaries are not aware that their recordkeepers are receiving revenue sharing from the investments, while others may assume that the recordkeepers are handling the matter properly, or assume that it is not an issue of concern for plan sponsors. Those are dangerous assumptions. Located at: Reish & Reicher.

Fund Facts Sheets Fail Under 404(c) While the full prospectus must still be available on request, having to automatically provide only the summary may help simplify 404(c) compliance. However, plan sponsors should be careful. What you think is a summary prospectus may not be one at all. Located at: Reish & Reicher.

The Price of Offering Employer Stock in Your 401k Plan In favorable economic times, offering company stock as an investment option allows employees to share in the success of the company, engendering a sense of loyalty by linking the employee's and employer's fortunes together. But when things go awry, that same loyalty often disintegrates into allegations of fiduciary misconduct, lawsuits and financial settlements. So what can other fiduciaries learn from these situations? Located at: Employee Benefit Solutions (PDF File).

Ten Things You're Probably Still Doing Wrong As a Plan Fiduciary A list that is a compilation based on experiences of a group of experts and a list of "Common Plan Mistakes" from the Internal Revenue Service. Source: Planadviser.com

12(b)-1 Cap Could Zap Retirement Fund Providers American Funds, Fidelity Investments and Lord Abbett & Co. LLC are among a number of fund companies that will have to rethink how they serve the retirement marketplace through advisers if a proposed revamp of 12(b)-1 passes. Located at: Investmentnews.com

ETFs Shunned by Many Plans Investment advisers are big fans of exchange-traded funds. But that often doesn't extend to putting them on the menus of corporate retirement programs. Located at: Wall Street Journal.

Half of Americans Wish They Had a Traditional Pension Given that half of those with 401ks have balances of less than $5,000, it should come as no surprise that seven out of ten adults not yet retired say they have a lot more to do financially before they are ready to retire. Unfortunately, while there is no silver bullet to fulfill the retirement needs of Americans, and four out of ten currently believe that they will outlive their retirement savings, creating an understandable and easily navigated pathway toward a guaranteed retirement lifetime income stream seems not only appropriate, but an absolute necessity. Located at: 401khelpcenter.com.

Retirement Income Adequacy: How Big Is the Gap? The nonpartisan Employee Benefit Research Institute published a summary of its May 2010 policy forum, which addressed the topic "Retirement Income Adequacy: How Big Is the Gap and How Might the Market Respond?" Located at: 401khelpcenter.com.

Employers Slow to Restore 401k Plan Matching Contributions As companies move to reinstate those contributions, some are altering the way they calculate them and, in some cases, linking them to company profitability. Source: Workforce.com

Auto IRA Introduced in Senate S.3760 would amend the Internal Revenue Code of 1986 to expand personal savings and retirement savings coverage by allowing employees not covered by qualified retirement plans to save for retirement through automatic IRAs, and for other purposes. Source: THOMAS.

Tentative Settlement Reached in General Dynamics 401k Lawsuit Pursuant to the terms of the settlement, a $15.15 million settlement fund will be created by General Dynamics' insurers, and FAMCO's insurers and other sources. After a deduction for plaintiffs' attorneys fees and administrative costs for settlement, the settlement fund will be allocated to the accounts of 401k plan participants. Located at: 401khelpcenter.com.

Paychex Cleared in Revenue Sharing Dispute Paychex may have been able to influence a 401k plan's investment lineup, but the employer still made the ultimate decision about which fund options to offer participants, a federal judge has ruled. Located at: Plansponsor.com

DOL to Hold Hearing on Lifetime Income Options The U. S. Department of Labor's Employee Benefits Security Administration and the Department of the Treasury announced a joint public hearing on Sept. 14, 2010, and if necessary on Sept. 15, to hear testimony on several specific issues relating to lifetime income and other arrangements that provide a stream of income after retirement for workers in employer-sponsored retirement plans. Located at: 401khelpcenter.com.

Form 5500 Schedule C - New Demands Create Hostilities amid Plan Sponsors and Service Providers Although the new 5500 regulation relates to all types of plans that file 5500s, this article specifically addresses some issues creating a potential rift between plan sponsors and service providers that could cause harm to retirement plans and their fiduciaries. Located at: Prime Trust Advisors

Schedule C -- A New Era in Annual Reporting The annual ritual of filing the Form 5500 is a familiar one for the hundreds of thousands of plan administrators charged with this responsibility. However, 2009 is a year of sweeping change for the Form 5500, and everyone involved, from plan administrators to plan service providers, is confronting new issues. Source: Prime Trust Advisors

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 August 3

No Blanket Extension of 5500 Due Date The DOL has decided not to grant a blanket extension for filers of Form 5500 and Form 5500-SF. In a letter to the American Benefits Council dated July 21, 2010, the DOL stated it has concluded that a blanket extension for all filers is neither necessary nor appropriate. Source: Sungard/Relius.

401k Fees Gain a Bit of Clarity After working on them for years, the Labor Department released rules that take a first step toward more clarity. The rules make it easier for employers to make apples-to-apples comparisons when shopping for 401k plans. Source: New York Times.

Adequate Benefit and Monthly Income Phyllis Borzi, the Department of Labor’s Assistant Secretary for the Employee Benefits Security Administration, has said that 2010 is the year in which we begin a national dialogue about retirement income for 401(k) participants. Source: Reish & Reicher

Fiduciaries breached duty of prudence by investing in retail share classes A recent federal District Court ruling should make fiduciaries of self-directed retirement plans think twice before offering retail share classes as investment options when less expensive institutional share classes are available. Source: Nixon Peabody

10 Ways Advisors Can Simplify Life in 2010 Downloading 10 Ways Advisors Can Simplify Life in 2010 will help you look at your business critically. Identifying opportunities and drawbacks and taking the appropriate action can make the difference between staying stuck and moving forward. Source: Cadaret, Grant.

ETF's: A Solution In Search of a Problem Although exchange traded funds are low-cost investments that can diversify a 401k portfolio, there is still uncertainty whether the funds are suitable as a 401k investment option. Source: Employee Benefit News

How to Start a Cash Balance Pension Plan If you are a procrastinator when it comes to putting money aside for your retirement or if your nest egg was hit hard by the economic turmoil of the past few years, you might consider establishing a cash-balance pension plan at your company. When done properly, these plans can be a great way for small-business owners to substantially accelerate their retirement savings. Source: Inc.com.

Benefit and Retirement Plans Must Comply With ERISA Bonding Rules Although the ERISA bonding regulations are not new, plan sponsors are often confused about them. This year's increased reporting obligations for organizations with 403(b) plans have prompted questions regarding bonding rules. Source: Larson Allen LLP.

When to Second Guess Your Target-Date Fund Unless the government mandates standardization of target-date mutual funds, different investment companies will continue to have different investment mixes. Your choice of fund will have a profound effect on your risk and return over the next three decades. Source: USNews.com.

Tips for Documenting the Selection and Monitoring of Your Advisers In selecting service providers, the responsible plan fiduciary must engage in an objective process designed to elicit information necessary to assess the qualifications of the service provider, the quality of the work product, and the reasonableness of the fees charged in light of the services provided. In addition, this process should be designed to avoid self-dealing, conflicts of interest or other improper influence. Source: Reish & Reicher.

Common Mistakes in Preparing Plan Committee Minutes In most 401k and 403(b) plans, the fiduciary function of selecting and monitoring investments and service providers is carried out by a committee-typically, the financial and human resources officers. These meetings are an important part of fulfilling the fiduciary obligation to act for the exclusive purpose of providing benefits to participants and defraying reasonable expenses of operating the plan. An important part of showing that the committee has met this requirement is the documentation of its meetings. Source: Reish & Reicher.

Auto-Enrollment Helping Reduce Those At Risk of Running Short of Money in Retirement - Summary: The primary reason why “at-risk” levels are lower in 2010 than in 2003 is enactment of the Pension Protection Act of 2006, which led to increased adoption of automatic enrollment, automatic escalation of contributions, and diversified default investments in 401k plans. This in turn has led to increases in 401k participation rates, increased account accumulations, and better long-term retirement preparation prospects for many workers, especially those in lower-income brackets. Source: Employee Benefit Research Institute (PDF File).

Adoption of Auto Plan Features Stalled Very few employers surveyed that do not use auto plan features currently plan to adopt them in the next 12 months, according to a report from AARP. Source: Plansponsor.com.

Costs Do Have an Impact on Investor Selections The general investing public has finally realized what institutional investors have long known—that costs matter when selecting mutual funds or exchange-traded funds (ETFs), according to a recent Vanguard study. Source: Vanguard.

Employee Suits Alleging Excessive 401k Fees Gain Ground A ruling by a federal court judge, who said Edison International did 'substantial' harm to employees by not negotiating lower fees from the firm running the 401k plan, may bolster other cases. Source: Los Angeles Times.

Court Rejects Nationwide's Counterclaim Attempt in Revenue Sharing Suit - Summary: A federal judge has denied Nationwide Financial's move to certify a class of counterclaim defendants in a suit in which it is accused of breaching its fiduciary duties under the Employee Retirement Income Security Act for accepting revenue sharing payments from mutual fund companies. Source: Plansponsor.com.

Court Finds Directed Custodian Not a Fiduciary Under ERISA A custodian that transferred retirement plan assets at the direction of plan trustees is not liable under the Employee Retirement Income Security Act (ERISA) for plan losses. Source: Plansponsor.com.

SEC Proposes New Distribution Fee Framework The SEC announced July 21, 2010, that its staff was proposing a new rule and rule amendments that would place limits on the cumulative sales charges investors pay and encourage competition by allowing funds to permit broker-dealers to establish their own sales charges. The proposal would also eliminate Rule 12b-1. Source: Drinker Biddle & Reath LLP (PDF File).

Relaxed Plan Loan Disclosures Now Effective Regulations have resulted in the familiar prominent disclosures, in many consumer credit transaction documents, of such terms as "Annual Percentage Rate," "Finance Charge," "Amount financed," and "Total of Payments." An exempt loan does not have to comply with any of the Regulation Z disclosure requirements. The exemption is effective July 1, 2010. Source: Sungard/Relius.

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