The Pros and Cons of Automatic 401k Enrollment A 2006 law designed to increase retirement savings allowed companies to auto-enroll employees in 401k plans. The debate on whether this is good or bad continues. Here's a practical list of five pros and five cons of 401k auto-enrollment. Source: DailyFinance.
Service Provider Fee Disclosure Requirements Amended The U.S. Department of Labor's (DOL) Employee Benefits Security Administration announced this week that it's amending the effective date of Service Provider Fee Disclosure Requirements under ERISA to April 1, 2012. In addition, the deadline for meeting participant-level disclosure under ERISA 404(a) has been extended to 60 days after the effective date of the 408(b)(2) requirements. The new deadline for issuing the initial participant-level disclosure is May 31, 2012.
This date extension from January 1, 2012 was based on the DOL's careful review of requested comments by service providers, plan fiduciaries and plan administrators for further guidance.
The DOL wants to ensure that thorough and accurate disclosures, in compliance with the final 408(b)(2) regulation, are furnished to plan fiduciaries to help them carefully analyze plan service contracts and arrangements in compliance with their fiduciary duties under ERISA. The change to the participant-level disclosure will align the sequence of disclosures so that the participant-level disclosure is effective after the plan sponsor disclosure. The DOL intends to publish a final 408(b)(2) regulation in the Federal Register before the end of the year, and does not expect that the changes to the "interim final regulations" are likely to require additional time for compliance. Source: Department of Labor
12th Annual Transamerica Retirement Survey The 12th Annual Transamerica Retirement Survey found that for the first time since the recession began, rising employer confidence is accompanied by an increase in enhancements to retirement benefits as well as reinstatement of benefits that had been suspended. Source: Transamerica Center for Retirement Studies
VIDEO: ASPPA Regulatory Update: Electronic Disclosure In this two minute video, ASPPA's General Counsel and Director of Regulatory Affairs, Craig Hoffman explains why it's crucial to harmonize the rules between the IRS and DOL for efficiency and to make electronic disclosure the default an option for participants. Source: ASPPA.
Effective Due Diligence for Guaranteed Lifetime Income Options This article highlights some of the critical issues and questions that companies must consider as they evaluate GLIOs for their own retirement plans and conduct due diligence about specific products. The viewpoint reflects conversations we have had with large insurers on their offerings to their own client base and plan sponsors as they explore whether these benefits should be included in their retirement plans. Source: Institutional Retirement Income Council
Target-Date Funds: Are They Hitting the Target Are target-date funds accomplishing their goal of providing long-term investment allocations that will provide growth, preservation of capital, and, finally, a secure nest egg for participants? This white paper reviews their progress, discuss the changes they have undergone, and ultimately ask the question, "Are they hitting the target?" Source: Arnerich Massena
Your 401k Plan Has Auto-Enrollment, Now What? There has been a good deal of discussion on success measures for auto-enrollment, and we've previously established that by adding auto-enrollment a plan sponsor can immediately make its plan appear to have 100% participation. But is that enough? Source: Milliman.
IRS Compliance Project Targets 403(b) Plans of Universities The Compliance Unit under the Employee Plans division of the Internal Revenue Service has begun a project to gather information from institutions of higher learning concerning compliance with the universal availability requirement for 403(b) plans. Questionnaires will be sent to a random national sample of 300 large, medium and small public and private higher education organizations sponsoring 403(b) plans. Source: PricewaterhouseCoopers LLP
Fiduciary Support Services Not a Differentiator for DC Plan Providers Although regulatory changes to fiduciary responsibilities and disclosures loom on the horizon, plan sponsors of all sizes say that strong fiduciary support services falls low on the list of factors that influence their choice of plan providers. While concerning, this lack of focus is a blessing for most plan providers who have yet to convince plan sponsors that they provide strong fiduciary support services. Source: 401khelpcenter.com.
SIFMA Gives SEC Ideas for a New Fiduciary Standard In anticipation of the agency's moving ahead with a rule that would require broker-dealers to meet the same requirements as investment advisers — acting in a client's best interests — the Securities Industry and Financial Markets Association laid out in a letter to the SEC what it called a fiduciary framework. Source: Investmentnews.com
Survey Finds Majority Would Not Be Saving for Retirement Without a 401k Fidelity Investments announced survey results that reveal more than half (55 percent) of current workplace savings plan participants say they would not be saving for retirement if not for their 401k plan. The research also found nearly one in five respondents (19 percent) currently enrolled in workplace plans report they have no retirement savings at all outside this key retirement benefit. Source: 401khelpcenter.com.
Retirement Timelines Fade Amid Uncertainty as More Americans Stay on the Job Shifting and uncertain target dates for retirement are becoming the norm in the American workforce, making it harder for employees to establish meaningful financial plans, recent MetLife research indicates. Source: 401khelpcenter.com.
Americans Focus on New Approach to Post-Recession Retirement Americans have emerged from the economic recession with a new set of expectations around the purpose, timing and funding of retirement, according to a new study sponsored by SunAmerica Financial Group in collaboration with Age Wave. Source: 401khelpcenter.com.
SunAmerica Retirement Re-Set Study This study reveals how retirement has changed in the past decade. Emerging from the recession, Americans are beginning to define retirement differently than previous generations of retirees. They now see it as a time for new priorities, new opportunities, and new solutions to today's challenges. This 24 page report provides a summary of findings. Source: SunAmerica
Rising Employer Confidence is Translating Into a Renewed Commitment to Retirement Benefits A new report released today reveals an encouraging sign that employer confidence is rising and that it appears to be translating into a renewed commitment to retirement benefits for the first time since the recession began. Source: 401khelpcenter.com.
What Employers Lose in the Shift From DB to DC Plans and How to Get it Back The four objectives of this white paper are to: 1) Highlight the plan design features that have been lost in the shift from DB to DC plans. 2) Identify the workforce management challenges posed by the shift from DB to DC plans. 3) Describe how incorporating income solutions into DC plans can help address these challenges. 4) Provide a case study that demonstrates the benefits of incorporating income solutions into DC plans for employers and employees. Source: Prudential
Analysis: Capping Tax-Preferred 401k Contributions Will Hurt All Workers A new analysis from the nonpartisan Employee Benefit Research Institute finds that the National Commission on Fiscal Responsibility and Reform proposed tax reform for 401k-type retirement plans would cause the greatest reduction in retirement savings for both the highest- and lowest-income workers. Source: 401khelpcenter.com.
What CIGNA v. Amara Means for You In a move that might open the door to more lawsuits, the U.S. Supreme Court decided on May 16 in CIGNA Corp. et al. v. Amara et al. that a summary plan description is not the plan document and therefore not legally binding. This article provides a summary of the case and highlights some key issues the courts raised. Source: ERISAdiagnostics.com
Deadlines Revised; Prepare Now for New Rules for Retirement Plan Fiduciaries The DOL has slightly delayed the deadlines on significant new affirmative obligations for fiduciaries of retirement plans subject to ERISA. Although the deadlines have been pushed back to April 1, 2012, employers should be preparing now to ensure that they are ready to comply with the new requirements. Source: Ballard Spahr.
DOL Extends Deadlines for Fiduciary and Participant Level Disclosures On July 13, 2011, the DOL issued new guidance delaying the effective date of the new fiduciary-level disclosure rules required by interim final regulations under Section 408(b)(2) of ERISA until April 1, 2012. The DOL's new guidance also delayed the date that initial participant-level fee disclosures must be provided under the final regulations under Sections 404(a) and 404(c) of ERISA (the "Participant Disclosure Regulations"). Source: Proskauer Rose LLP.
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