BPP401k.com Newsletter March 23

ERISA Compliance Guide: Tips and Traps from the Trenches Sweeping reforms introduced by the DOL over the past five years will become effective in 2011 and 2012 and are expected to present numerous and unique challenges for broker-dealers and advisers. This article provides a road map for broker-dealers to consider when developing and deploying an ERISA compliance program and emphasizes the need to address the effects of the firm's proffered strategy as it relates to implementation across all affected areas of the firm. Source: Pension-resources.com.

Two Truths and A Lie about Your 401(k) Have you ever played the game “Two Truths and a Lie?” It’s a classic get-to-know-you ice breaker that I recently played with some colleagues. The goal is to figure out which statement is actually a lie. In 2011, for those 49 years old or younger, you can put $16500 in your 401(k) account plus receive a match or profit share if your company provides one or both. This means anyone making $110000 or less a year can put in 15 percent ... Source: Forbes

401(k) Mistakes Job Hoppers Make Here’s how to keep your nest egg intact when moving on to a new job. Source: US NEWS

Retirement Coaching Gives Employees a Handle on Future Retirement looks a lot different from decades past when traditional pensions were common, Social Security was a sure thing and people had shorter life spans. Today, with more employees bearing the responsibility to prepare for a secure retirement, a growing number of employers are offering retirement coaching as part of their benefits package. Source: Society for Human Resource Management.

Small Law Firms May Want to Consider Tiered Profit Sharing 401k A tiered profit sharing 401k, also known as an advanced profit sharing plan, enables partnerships and other business types to customize profit sharing allocations in their 401k plan by group, tenure or age. This can allow the largest share of the firm's contributions to be allocated in tiers that reward partners at the highest percentage followed by descending percentages of allocations to groups comprised of attorneys, paralegals and administrative staff, etc. Source: Law.com.

Customer Service Pays Off for Plan Providers Firms offering retirement services to large and small employers are learning that attention to detail, an improved communication with the plan sponsors and, indirectly, plan participants can dramatically improve their customer retention and satisfaction rates. Source: Employee Benefit News.

An Improved Economic Forecast Brings Out the Old and the New in 401k Education Programs As the economy starts to stabilize, retirement plan experts say plan sponsors need to emphasize certain elements of their retirement education and advice programs to get workers back on track and saving for retirement. The first thing employers need to recognize is that employees are ready to hear the message again about saving for retirement. Source: Employee Benefit Adviser.

401k Account Balances as Monthly Retirement Income About a year ago, the Departments of Labor and Treasury issued a RFI about sustainable retirement income. The Institutional Retirement Income Council (IRIC), provided detailed and thoughtful responses to the questions. This article quotes four of the questions asked by those agencies and provides the answers given by IRIC. The purpose is not to persuade you to agree with those conclusions, but rather to encourage you to think about the questions and answers. Source: Reish & Reicher

New Puerto Rico Tax Code Means Significant Changes to Retirement Plans Employers with Puerto Rico employees should consider significant changes to the requirements for qualified retirement plans made by a new Puerto Rico tax code. Immediate action may be necessary to comply with tax and withholding requirements for plan distributions. Source: McDermott Will & Emery.

Should Target-Date Funds Be Managed Like DB Plans? Lately a variety of investment managers and financial services providers have been touting the idea that target-date funds (TDFs) should be managed like defined benefit plans. Typical recommendations include using "best in class" active managers, incorporating more specialized asset classes, or including a variety of alternative investments within TDFs. This commentary discusses the implications and challenges of adopting complex "DBization" strategies within a TDF for both defined contribution plan sponsors and participants. Source: Vanguard Research and Commentary

Are Target-Date Funds a Bad Idea? The most common complaint about TDFs is generally expressed as follows, "No fund based solely on years-to-retirement can be the best investment strategy for every participant with the same number of years to retirement." This article is written to give needed perspective to this issue. Source: Target Date Analytics

A Review of the 410kWire Influencers Summit Outlines the top trends the author found and expands on a few including: Improving Plan Outcomes, Advisor Is Ascendent, Leveraging Mobile and Social Technology and Disruption: From Where? Source: Retiremap Blog.

ERISA Compliance: An Actionable Approach for Investment Advisers Most RIAs have an advantage over traditional broker-dealers, as they have already been working on a level fee and transparent contractual basis. However, these new regulations are going to require RIAs to amend existing contracts, adjust work flow processes and enhance their value proposition in order to differentiate and compete in this new environment. This article sets forth some foundational questions and action items for firms to consider when seeking to identify and implement the necessary organizational and/or operational changes that may be required to comply with the new regulations. Source: Pension-resources.com

EBRI Releases Their 2011 Retirement Confidence Survey In a sign that Americans are recognizing the realities they face about their chances for a comfortable retirement, the 2011 Retirement Confidence Survey (RCS) finds workers are more pessimistic than at any time in the two decades the RCS has been conducted: More than a quarter (27 percent) of workers now say they are "not at all confident" about retirement, up 5 percentage points from the level measured just one year ago. Source: 401khelpcenter.com.

The 2011 Retirement Confidence Survey This 40 page report find that instead of making fundamental adjustments to their spending and saving patterns in response to the decline in confidence, workers continue to change their expectations about how they will transition from work to retirement in what has been called an age of "the new normal." Source: Employee Benefit Research Institute

Trends and Insights: Focusing on the Fiduciary Agenda Summary of Grant Thornton's 7th annual Retirement Plan Survey. Trends and insights: Focusing on the fiduciary agenda, seeks to gain a general assessment of the level of understanding of investments, fees and administrative practices related to retirement plans. Source: 401khelpcenter.com.

Grant Thornton's 7th Annual Retirement Plan Survey This is a 24 page report on the results of Grant Thornton's 7th annual Retirement Plan Survey. Covers investments, employer/employee contributions, enhancing plan participation, maintaining compliance, 403(b) plans, and defined benefit plans. Source: Grant Thornton LLP

A Look at 2010 Defined Contribution Investors Study examines retirement investors in private and public sector employer Defined Contribution plans, looking at recent account experience, loan and hardship withdrawal patterns and investor demographics. Source: ING Institute for Retirement Research

Plan Sponsor Survey: Structuring DC Plan Automatic Features to Pump Up Retirement Savings The two facts combine to create a contribution gap that is looming as large today as the participation gap just a few years ago. Plan sponsors need now to devise strategies as effective in raising contribution levels as automatic enrollment has been in raising participation rates. Source: Defined Contribution Institutional Investment Association

Investments in DC Plans: Results and Analysis From the 2010 Survey of DC Plan Sponsors To better understand how plan sponsors are helping employees manage today's investment challenges, Towers Watson's 2010 Survey of DC Plan Sponsors asked employers about investment menus, communications regarding investment and other issues. This article reviews the results of the survey. Source: Towers Watson.

Employer in Stock Drop Suit Awarded $50k in Costs A federal judge in Illinois has awarded the employer in a stock-drop case $50,000 in costs nearly a year after ruling against the employee filing the case. Source: Plansponsor.com.

Certain Investment Options and Practices That May Restrict Withdrawals Not Widely Understood 401k plan sponsors are responsible for offering an array of appropriate investment options, and participants are responsible for directing their investments among those options. While participants expect to be able to switch investment options or withdraw money from their accounts, during the recent economic downturn, some 401k plan sponsors and participants found that they were restricted from doing so. GAO was asked to (1) identify some of the specific investments and practices that prevented plan sponsors and participants from accessing their 401k plan assets and (2) determine any changes the DOL could make to assist sponsors in understanding the challenges posed by the investments and practices that restricted withdrawals. Source: Government Accountability Office.

ASPPA Clarifies Position on Proposed Definition of Fiduciary Regulation Brian Graff clarifies that ASPPA strongly supports the DOL's efforts to update the Definition of Fiduciary regulation and by doing so, provide plan fiduciaries with the necessary information to understand what type of recommendations they are receiving. Source: 401khelpcenter.com.

DCPIC Position on Participant Rollovers from Qualified Retirement Plans Current and proposed regulations however can prevent the advisor to a retirement plan from also providing advice to individual participants if that advisor receives compensation from that advice. The Defined Contribution Plan Investment Council urges regulators to review applicable regulations with the ultimate goal to exempt from prohibited transaction status the provision of advice to participants by that plan's advisor(s) at the time of a distributable event. Source: Defined Contribution Plan Investment Council

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