BPP401k.com Newsletter December 29

Maximum 401k Contribution Per Year Review Maximum 401 contribution per year is a variable amount that is determined annually by the Internal Revenue Service but can additionally be limited by a 401K sponsor (employer) and/or specific retirement plan policies. Source: Investment Advisor Tips

A Year in Review: Looking Back at Your Money In 2010 While 2010 marked the end to a very fascinating decade, the year itself did have its own shares of ups and downs. Looking back at some of the biggest 2010 stories, you’d see the economy and stock market carried over some momentum from last year’s recovery effort, and the recession was declared officially over. On the other hand, unemployment still hovered around 10 percent, the housing market failed to bounce back and Americans are slowly starting to spend again. Source: GoBankingRates.com

Trendsmas Recap: 2010's Top Videos Here's a quick recap of the many top 10 lists we put out showing 2010's best and most popular YouTube videos Source: YouTube Trends

2010 Year In Review Top 10 Searches Source: Yahoo

Politics 2010: A Look Back at 12 Unpredictable Months The Twists and Turns of a
Surprising Year in the Political Arena Source: ABC News

Our Favorite Movies of 2010 Source: Gawker

2010 Year in Review - News and Pop Culture 2010 102 Things That Made Us Proud This Year. Source: Esquire

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 December 22

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 December 15

MOVING NEWS To better serve our clients the BPP-IL team will be moving from Highland to Edwardsville, Illinois effective today. All email addresses and phone numbers will remain unchanged. The new address is: 2220 S. State Route 157, Ste. 300 | Glen Carbon, IL 62034

The Value Of A Good TPA When it comes to retirement plan administration, too often retirement plan sponsors pick a third party administration (TPA) firm on price. This is a mistake because good TPA firms can provide a value in plan design and minimizing a plan sponsor’s liability that outweighs any savings by hiring a low cost TPA. Plan sponsors should be concerned on fees, but quality of plan administration is a more important criteria in choosing a TPA. Source: Rosenbaum Law Firm

Social Security Administration Limits Retirement Do-Overs The Social Security Administration announced a rule change aimed at scuttling a strategy that allowed some well-heeled seniors to retire early without permanently reducing their benefits. Source: USA Today

Ranking Reveals 30 Best 401(k) Plans BrightScope, a provider of independent retirement plan ratings and investment research, has crunched out its second annual Top 30 Ratings List covering 401(k) plans with more than $1 billion in assets. Source: The Street

New Worries for 401(k) Investors Retirement savers have already learned how much damage the markets can do to a nest egg. But for anyone with a 401(k) plan, stock market performance may be overshadowed by other worries: fraud and theft. Source: Smart Money

Company Securities in Pension Plan Assets Despite recent discussion about making pension plan contributions in the form of company securities instead of cash, a recent Towers Watson analysis shows that while a few companies contributed company securities to their DB plans over the last year, the overall trend has been away from holding these securities as pension assets. Source: Towers Watson.

Employers Slow to Allow Roth 401k Conversions Employees can convert their traditional 401k or 403(b) accounts to a Roth account in the same plan beginning this year. But, so far, few companies have amended their plans to offer the conversion option. Source: U.S. News & World Report.

401k Contributions Rise Along with Concerns over Future of Social Security Contributions to 401k plans increased in the last year, underscoring increased efforts by American workers to improve their financial well-being, according to the Principal Financial Well-Being Index. Source: 401khelpcenter.com.

The New Normal for Retirement: Get a Job Even with their current average retirement nest eggs so woefully under funded, respondents generally feel that they will be able to finance at least 10 years of an anticipated 20-year retirement. Source: Workforce.com

Finding "Best Fit" in a Retirement Plan Provider Through the RFP Process Much has been written about what plan sponsors should include in a Request for Proposal (RFP) when they embark upon a search to hire or replace a retirement plan provider. But written proposals submitted in response to an RFP will never capture all of the essential elements that plan sponsors should assess in selecting a provider. It is therefore vital that plan sponsors recognize the potentially significant limitations of relying too heavily upon the RFP as a decision tool. Source: 401khelpcenter.com.

When It's Time to Rothify Your 401k Taxpayers are still awaiting clarity on some tax issues this year, but the fog has lifted on one: conversions from a regular 401k retirement plan to a tax-free Roth 401k account. Source: Wall Street Journal.

The New Definition of "Accredited Investor" Under the Dodd-Frank Act The Dodd-Frank Act signals sweeping changes to the financial services industry, including significant alterations to the method of determining the $1 million net worth threshold for accredited investors. In addition, Congress provided a road map for possible future adjustments to the definition of "accredited investor." Source: Sutherland Asbill & Brennan LLP

Dismissal of 403(b) Fee Lawsuit In Montoya vs. NY State Teachers, plaintiffs challenged fees, revenue sharing arrangement and "alleged" fee kickbacks. Source: Groom Law Group

401k and Profit Sharing Plan Eligibility Survey 2010 In the fall of 2010, PSCA collected defined contribution plan eligibility data from 529 companies. The vast majority of plans (96.8 percent) permit employee contributions to an employer-sponsored defined contribution plan, three-quarters of plans offer employer matches, and more than half make non-matching company contributions. Source: Profit Sharing/401k Council of America

Core Menu Construction: Optimizing Your Investment Options In this white paper, Arnerich Massena discusses how a simplified core menu might fit into a tiered 401k investment option structure and why it may be advantageous. Source: Arnerich Massena

Retirement Benefits Helping Employers Attract and Retain New Workers Retirement benefits -- especially defined benefit programs -- are giving employers an added advantage when it comes to attracting and retaining new employees, according to a survey of more than 3,000 workers conducted by Towers Watson. Source: Towers Watson.

DOL Disputes Home Depot's Win in Stock Drop Suit In an Amicus Brief, the U.S. Department of Labor said a court that cleared Home Depot of wrongdoing in a stock drop suit misinterpreted the Employee Retirement Income Security Act. Source: Planadviser.com.DOL Calls for Stock Drop Ruling Reversal The U.S. Department of Labor has asked a federal appeals court to overturn a lower court ruling that cleared ING of wrongdoing in a stock-drop lawsuit. Source: Planadviser.com.

Bankruptcy-Appointed Trustee Can Bring ERISA Action In his second attempt to bring suit against a custodian used by a rogue plan administrator, bankruptcy-appointed trustee John C. McLemore is again getting support from the U.S. Department of Labor. Source: Planadviser.com.

Utah Company Faces ERISA Benefits Lawsuit The lawsuit held that the defendants failed to forward delinquent employee contributions to the company's 401k profit-sharing employee savings plan. The allegation suggests a violation of the Employee Retirement Income Security Act, or ERISA. Source: Lawyersandsettlements.com.

Revised Lehman Stock Drop Suit Unsealed Ex-Lehman Brothers CEO Richard Fuld and other Lehman executives kept their use of Repo 105, a method of financing designed to hide billions of dollars in debt, a secret, according to a 401k stock-drop lawsuit. Source: Planadviser.com.

Court Tosses Suit Over 401k Deferral Limits A federal judge in New Jersey said that a 401k participant has no legal right to sue his employer over the company's deferral limit of 15%. Source: Planadviser.com.

Obscure IRS Shift Provides Contradiction Instead of Clarity for DC Annuities While the IRS has firmed up the position that payments from these sorts of hybrid products are "payments as an annuity" subject to 417, it left us with confusion as to when that status actually occurs. An opportunity to settle the issue has been missed. Instead, we are left with a new, self-constructed bump in the road for DC annuities -- without any particular policy consideration serving as its basis. Source: Business of Benefits.

IRS Proposed Regulations: User Fees for Enrolled Retirement Plan Agents This document contains proposed amendments to the regulations relating to the imposition of user fees for enrolled agents and enrolled retirement plan agents. The proposed regulations separate the enrolled retirement plan agent user fees from the enrolled agent user fees and lower the initial enrollment and renewal of enrollment fees for enrolled agents and enrolled retirement plan agents. Source: The SPARK Institute

DOL Proposes Further Disclosures for Target Date Funds The DOL proposed new regulations requiring plan fiduciaries to provide enhanced disclosures about target date funds to retirement plan participants directing their own investments. The proposal would also amplify the investment information that must be disclosed about a plan's qualified default investment alternative, even if it is not a target date fund. Source: Sutherland Asbill & Brennan LLP

DOL Proposes to Amend the Qualified Default Investment Alternative Regulation

The Department of Labor has issued a proposed regulation that would add additional disclosure requirements related to target-date retirement funds and other similar investments offered in 401k-type pension plans by amending the qualified default investment alternative ("QDIA") regulation and the participant-level disclosure regulation. Source: Jorden Burt LLP

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 December 8

7 deadly sins of 401(k) investing Commentary: Learn from your mistakes, protect your portfolio Source: Market Watch

Liability Driven? As an ERISA fiduciary, your liability is personal. Source: Plan Sponsor

Employer 401k Match a Powerful Motivator The formula employers use for their matching contributions in their 401k plans serves as a strong cue to workers for how much to contribute, analysis by The Principal finds. Source: Employee Benefit News.

Hybrid Pension Plans: Yesterday, Today and Tomorrow Hybrid pension plans have been around since the mid-1980s and their evolution has been a rocky one, with very strong initial adoption rates among large employers followed by legal challenges and regulatory glitches and delays. Today's news is as much about comparing hybrid plans with defined contribution plans, such as 401k plans, in light of the financial crisis. Source: Towers Watson.

The 7 Most Popular 401(k) Investments Equity funds are clearly the most popular investment choice for 401(k)
participants. But other investment selections vary largely as a function of age
and job tenure. Among young and newly hired workers, target-date funds are the
second most common investment choice. Investors on the verge of retirement are
more likely to choose stable value funds. Here’s a look at the seven major types
of investments that hold 96 percent of company 401(k) plan assets. Source: US News

Regulation of Target-Date Funds - A Look Back and a Look Ahead This column provides a brief background on target-date funds, surveys regulatory interest in target-date funds over the past few years, summarizes expected new regulatory initiatives and closes with suggestions for plan fiduciaries with target-date funds. Source: Winston & Strawn LLP

Study Reveals Average 401k Participant Can't Afford to Retire Until Age of 73 The six-month study reviewed nearly 10,000 retirement accounts from employees at 110 public and private companies. The study evaluated how contributions to their 401k, the primary retirement tool for most of these employees, would affect the age at which they could retire. Source: 401khelpcenter.com.

Are Self-Directed Brokerage Accounts Making a Comeback? It appears, according to recent survey data, that self-directed brokerage accounts are being rediscovered by a whole new generation of 401k participants. Source: Employee Benefit News.

Retirement Industry Reps Blast Fiscal Commission Report Reaction from some in the retirement services community to President Obama's fiscal commission's final report was decidedly negative, warning of dire consequences if the ideas in it are enacted. Source: Plansponsor.com.

Financially Struggling Employers Sometimes Tempted to Raid Worker 401k Contributions Your 401k statement is always late and the balance doesn't reflect all your contributions. Meanwhile, former co-workers complain that they're having trouble getting benefits paid to them. This may be more than just a case of sloppy bookkeeping. These can be signs that your employer is using workers' contributions to run the company or to cover the owner's personal expenses. Source: The Baltimore Sun.

Impact of Fee Disclosure on 403(b)s New fee disclosure rules from the U.S. Department of Labor present unique challenges to 403(b) plans. Source: Plansponsor.com.

WEBCAST: The New Fiduciary Regulation and How it Will Affect Advisers The Department of Labor has issued a proposed regulation to redefine when a person becomes a fiduciary because of making investment recommendations. The proposal eliminates several of the conditions that previously protected advisors from being fiduciaries. If finalized in its current form, the regulation will cause many more advisors to be classified as fiduciaries. In combination with 408(b)(2) disclosures, these changes will affect the benefits community, particularly RIAs, insurance brokers, broker dealers and financial advisors. Presenter is Fred Reich. Source: The Standard.

Allocating Fees Among Participant-Directed Plan Participants This Reish & Reicher white paper analyzes the obligation of fiduciaries with respect to the proper allocation of revenue sharing among participants and the obligation to disclose information about that allocation to the participants. Source: Reish & Reicher

Examine Loans and Withdrawals in the Right Context Data widely reported in the industry media on loans and withdrawals from 401k plans have generated quite a buzz among plan sponsors. Some reports in recent months characterized participant loan and withdrawal activity as being at "record levels." However, a Vanguard analysis of loans as well as in-service and hardship withdrawals tells a different story. Source: Vanguard.

The Role of IRAs in U.S. Households' Saving for Retirement, 2010 Americans are accumulating significant resources in IRAs largely through rollovers from employer-sponsored retirement plans, according to this new report published by the Investment Company Institute. More than half of U.S. households owning traditional IRAs had rollover assets in their traditional IRAs. Among households reporting rollover activity, 85 percent indicated the entire plan balance was preserved with the rollover. Source: Investment Company Institute

BLS Examines Popular 401k Retirement Plans This report presents access and participation rates by several categories as well as employee contribution requirements. For access and participation rates, information is available for such worker characteristics as full-time/part-time, bargaining status, and level of wages. Information by establishment characteristics includes establishment size, geographic location, industry sector, and ownership. Source: U.S. Bureau of Labor Statistics

DOL Proposes Rule to Enhance Target-Date Fund Disclosures DOL's Employee Benefits Security Administration today announced a proposed rule that will help America's workers better understand target-date retirement funds and other similar investments offered in 401k-type pension plans. Source: 401khelpcenter.com.

DOL Target-Date Retirement Fund Disclosures Fact Sheet The Employee Benefits Security Administration released a proposed rule that will help America's workers better understand target-date retirement funds and other similar investments offered in 401k-type pension plans. This is their background and overview fact sheet. Source: U.S. Department of Labor.

Federal Register: Target-Date Disclosure Copy of the DOL's proposes rule to enhance target-date retirement fund disclosures published in the November 30 edition of the Federal Register. Source: U.S. Department of Labor

First Round of Guidance on Roth "In-Plan" Conversions The IRS recently posted changes to the 2010 Form 1099-R to address some of the reporting and withholding questions on Roth "in-plan" conversions. The actual guidance is explained in the attached memo and is consistent with guidance we requested as part of our comment letter to the IRS on these issues. Source: Groom Law Group

DOL Issues Final Participant Disclosure Regulations for DC Plans The Department of Labor (DOL) has released final regulations intended to ensure that participants in self-directed individual account plans such as 401k plans have sufficient information to manage their accounts. The regulations will be applicable for plan years beginning on or after November 1, 2011 (e.g., January 1, 2012 for calendar year plans). Source: Buck Consultants

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