401(k) Expense Ratios Average 71 Basis Points; Most Invested In No-Load Funds Average expense ratios for 401(k) plan assets held in stock mutual funds have fluctuated between 71 basis points and 75 basis points for the past five years, according to the Investment Company Institute (ICI) Source: Wolters Kluwer
Retirement Plan Audits, From the CPA Perspective At last week's Northeast Area Benefits Conference, co-sponsored by the IRS and ASPPA, two Certified Public Accountants discussed the many moving parts of a retirement plan audit. Source: Planadviser.com.
7 Signs of a Good 401k Plan The recession has made employers less likely to contribute to workers' retirement savings, or less generous with the options they do provide. Source: MSN Money
Best Practices in Financial Education for Gen X: A Generation Caught in the Middle Gen X has a different world view - one where there are no guarantees. The economic situation they came of age in gave them a more skeptical outlook than other generations. Overall, Generation X employees have formidable challenges in planning for retirement, but financial education that is tailored to this generation can help. Here are some best practices in financial education for Generation X employees. Source: 401khelpcenter.com.
Work Later in Retirement? For Many, it Won't Be Enough If you can't afford to retire at 65, how long after that will you have to work before you have enough money? A new analysis by the nonpartisan Employee Benefit Research Institute finds that for many people, it could be a very long time -- for lower-income workers especially, well into their 70's. Source: Employee Benefit Research Institute
401k Plan Sponsors: Is It Time for a Fee Policy? Plan sponsors need to have in place a rigorous governance process to deal with fee decisions and to explain their decision-making to plan participants if necessary. As part of this process, plan sponsors are establishing formal Fee Policy Supplements to Investment Policy Statements to govern fee decisions and importantly, to demonstrate prudent process. Source: Orrick, Herrington & Sutcliffe LLP.
HR Focuses on Retirement-Plan Governance The number of lawsuits, combined with regulatory complexity, the growing cost of benefits and the volatility of investments, has motivated some U.S. companies to beef up the governance of their retirement plans, say experts. But relatively few are proactively addressing governance risks. Source: HREonline.com.
Qualified Plan & IRA Creditor Protection Rules Creditor protection rules differ between retirement accounts held within qualified plans subject to Title I of ERISA and Individual Retirement Accounts (IRAs). Participants in qualified retirement plans that are subject to Title I of ERISA should consider the degree of creditor protection afforded when deciding whether to leave their accounts in the qualified retirement plan or rolling them out of the plan into an IRA. Source: McKay Hochman.
A New Plan Design Feature for Qualified Plans: The Roth "In-Plan" Rollover A summary of the prior law is set forth in this four page article that was first published in the Journal of Pension Benefits. Also included is a summary of the new provision and the IRS guidance issued to facilitate implementing the provision. Lastly, the article reviews the key implementation steps when adding the new Roth rollover feature. Source: Groom Law Group
Retirement Calculators Threaten the Stability of Your Entire Plan Having a retirement calculator should be a good thing. It helps to perform computations and projections that would otherwise be out of reach to the common 401k participant. Most calculators, without much input other than simple variables, can determine what your savings goal should be. But with a goal established, now what? Source: Invest n Retire.
Expert Discusses Elements of a Legally Sound Handbook Christine V. Walters, MAS, JD, SPHR, discussed how to develop or improve upon various handbook sections and what they should be used for. Source: CCH.
Fiduciary Liability Policies May Not Cover Costs Associated With DOL Investigations Responding to DOL investigations can result in significant expenses -- including legal fees -- even if no violations ultimately are uncovered. This article discusses how a plan's fiduciary liability insurance carrier might respond to claims related to these Department of Labor investigations. Source: Segal Group
New Reality: Pensions Have Become an Acceptable Expense Companies have successfully shifted a considerable amount of the risk associated with DB programs to set DC programs, transferring the risk from the company to the individual. The result is a legacy program which over the next several decades will mostly work its way out of the last bastions of the U.S. labor market, and out of existence. Source: Businessweek.com.
403(b) Transfers and Exchanges The final 403(b) regulations changed the terminology for "transfers" and "exchanges" that take place on or after September 25, 2007. This impacts the methods used to move 403(b) accounts of participants and beneficiaries. Source: McKay Hochman.
Provider Tenure Less Than Three Years in 30% of Retirement Plan A Spectrem Group study looked at the switching behaviors of plan sponsors and found that nearly a third who changed retirement plans in the past 12 months had been with their previous provider less than three years. Source: FA-mag.com.
Retirement Income and the 4% Rule Is it prudent to set a withdrawal rate of 4% from a portfolio that is intended to support retirement income? For many years, 4% has been the “rule of thumb” in financial planning community. But the 4% rule is controversial, and there are strong opinions on both sides. Source: Schultz Collins Lawson Chambers
Final Regulation on Participant-Level Fee Disclosures MetLife announced that it is has prepared this white paper entitled, Final Regulation on Participant-Level Fee Disclosures, to help plan administrators understand their new obligations regarding the communication of investment-related performance and fee information to ERISA plan participants. Source: MetLife
401k Match Motivates Retirement Saving Most workers are lured into 401k plans by the promise of an employer contribution. 401k matches are the primary reason that workers participate in 401k plans, according to a Boston Research Group survey of 1,000 current and retired 401k participants sponsored by Fidelity Investments. Source: U.S. News & World Report.
Not Saving Enough and Living Beyond Means Are Top Obstacles to Financial Success Americans continue to show resilience post-financial crisis, but a new study released by the Principal Financial Group and conducted by Harris Interactive reveals that many still need help to envision their financial dreams. Only 1 in 10 financial professionals said their clients find it easy to visualize their financial dreams, according to the study. Source: 401khelpcenter.com.
The Hartford Finds More Americans Saving for Retirement Despite a sluggish economy, more Americans say they are confident their personal finances will improve during the next 12 months. This trend is translating into more people saving for retirement, according to new research from The Hartford. Source: 401khelpcenter.com.
IRS Seeks Comments on Instructions for Requesting Rulings and Determination Letters The IRS is seeking comments on an extension of a currently approved collection of information in final regulations (T.D. 9006) concerning requirements for requesting rulings and determination letters. Written comments should be received on or before August 22, 2011. Source: CCH.
DOL Aligns Deadlines for Retirement Plan Fee Disclosures The final rule extends by three months the applicability date of the DOL's interim final rule on fee disclosures by plan service providers to plan sponsors/fiduciaries (known as ERISA section 408(b)(2) disclosures), and aligns that regulation with its previously issued final rule on quarterly fee disclosures by plan sponsors to plan participants. Source: Society for Human Resource Management.
Fee Disclosure Deadlines Extended On July 13th, 2011 the Department of Labor issued a final rule delaying the deadlines for compliance with the new fee disclosure regulations. This final rule affects both the participant level fee disclosure and the sponsor level fee disclosure. Source: Sentinel Benefits & Financial Group.
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