BPP401k.com Newsletter September 28

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Debunking the Myth of Free 401(k) Administration When it comes to the retirement plan industry, the biggest urban legend out there, the Loch Ness monster, the abominable snowman, or drugged travelers harvested for their kidneys legend, is the myth of free 401(k) administration. Source: Rosenbaum Law Firm

DOL to Re-Propose Rule on Definition of a Fiduciary The DOL will re-propose its rule on the definition of a fiduciary. The agency anticipates revising provisions of the rule including, but not restricted to, clarifying that fiduciary advice is limited to individualized advice directed to specific parties, responding to concerns about the application of the regulation to routine appraisals and clarifying the limits of the rule's application to arm's length commercial transactions, such as swap transactions. Source: 401khelpcenter.com.

Electronic Participant Disclosures: New DOL Guidance The Department of Labor just issued Technical Release 2011-03 regarding the use of electronic media to satisfy the new participant disclosure requirements (the Participant Disclosure Regulation). Though temporary, these rules may simplify the providing of required disclosures electronically. Source: Drinker Biddle & Reath LLP

Do You Know What You Are? ERISA Titles Matter The question may sound like the title to a Dr. Seuss book, but it really has great bearing on how to you are treated under ERISA. Knowing your title also creates clarification as to what your duties are, and what they are not. What you are defines your risks and responsibilities. Source: Fox Rothschild LLP.

401k study: Help can improve performance by 3 pct. Sometimes it pays to get help. A new study of 401(k) accounts provides further evidence that workers who get help pocket higher returns than those handling their own investment choices. Source: Associated Press

Borzi Vows to Keep IRAs in Labor's Revamped Fiduciary Proposal A fervent outcry from a wide range of financial industry groups and bipartisan lawmakers helped persuade the Labor Department to withdraw a proposed rule that would expand the definition of fiduciary for advisers to retirement plans. Although opponents won a victory in the battle, the war is far from over. In fact, the most controversial aspect of the original rule including IRAs will return when the agency issues a revised regulation early next year. Source: Investmentnews.com (free registration may be required).

Labor Official on Fiduciary Issue: We Aren't Backing Down The Department of Labor will define the responsibilities of a fiduciary "with as much vigorous debate as possible," a top DOL official said Thursday at an industry convention in Las Vegas. "The core argument (of the proposed regulations) is solid," Mr. Davis said. "We are not backing down." Source: Businessinsurance.com.

DOL Releases Interim Guidance on Electronic Disclosure to Participants of Fee and Expense Information On September 13, 2011, the Department of Labor (DOL) issued Technical Release 2011-03, which provides interim guidance on the electronic disclosure of fee and expense information by participant-directed individual account retirement plans under ERISA Reg. § 2550.404a-5 (the "participant fee disclosure regulation"). This is a three page review. Source: Sutherland Asbill & Brennan LLP

DOL Broadens Electronic Participant Fee Disclosure The new participant fee disclosure rules for participant directed defined contribution plans are effective for plan years beginning after October 31. The rules require annual disclosures of plan, expense, and investment information, and quarterly disclosures of expenses incurred. Under recently revised guidance, the annual disclosures are due for calendar year plans by May 31, 2012, and the first quarterly disclosures by August 14, 2012. Source: Sungard/Relius.

Interest Rate for 401k Plan Participant Loans May Need to Be Prime Plus 2% During a recent phone forum, an IRS agent stated that the agency views an interest rate equal to prime plus 2 percent as a reasonable interest rate effectively establishing a safe harbor rate. This article reviews this guidance and what action plan administrators may want to consider. Source: Troutman Sanders LLP.

401k Record Retention: What Should I Keep and for How Long? As a plan sponsor, have you ever wondered how long you should maintain various plan records? Are you running out of storage space for your existing records? Source: Cambridge Investment Research.

401k Deferral Elections for Partners, Sole Proprietors & LLC Members The question is, when are the owners of these businesses supposed to elect their 401k deferrals and when are they supposed to deposit their 401k deferral contributions when they don't know what their net earnings will be until after the end of the plan year? Source: TRI-AD.

Depositing 401k Contributions The Department of Labor, not the plan sponsor, determines what is "as soon as reasonably possible" for depositing 401k contributions. If a plan sponsor fails to meet this requirement, or has a late transmittal, they must deposit lost interest on the late contributions/repayments. Source: Cambridge Investment Research.

Disclosures About an Employer's Participation in a Multiemployer Plan On September 21, 2011, the Financial Accounting Standards Board (FASB) finalized Accounting Standards Update (ASU) No. 2011-09 Disclosures about an Employer's Participation in a Multiemployer Plan, to increase awareness of the commitments and risks associated with employer participation in multiemployer pension plans. Source: Lindquist LLP.

403(b) Task Force Fights for Transparency Standards The National Tax Sheltered Accounts Association (NTSAA) and the American Society of Pension Professionals & Actuaries (ASPPA) want to make it easier for 403(b) participants to compare retirement plan options. The organizations are creating a task force focused on creating national fee and services disclosure standards to increase transparency within the 403(b) market. Source: Benefitspro.com.

New Study Provides 403(b) Market Overview Sponsors in all segments of the 403(b) market are looking to their providers as 403(b) partners and experts. Providers offering solutions to help ease plan administration and cost will have a competitive edge. Government regulation and more transparent fee reporting are driving both innovation and consolidation. Source: 401khelpcenter.com.

What Accounts Are Considered by the IRS and DOL to Be in a 403(b) Plan? Since the 403(b) termination guidance creates a 403(b) contract that exists outside of an employer plan, the rules for what accounts are in the plan need to be revisited. The following is an article on what accounts are considered part of the employer's plan for IRS purposes and what are considered part of the plan for DOL Form 5500 filing purposes. Source: McKay Hochman.

Prescience 2015: Expert Opinions on the Future of Retirement Plans As the retirement plan industry comes of age and enters a period of relative calm following a period characterized by tumultuous economic, socio-cultural and regulatory change, experts predict the growing role of retirement advisors will be one of the most noteworthy changes the industry will see over the next five years. According to Diversified's just released Prescience 2015: Expert Opinions on the Future of Retirement Plans, the need for ongoing holistic service from a third party is leading many plan sponsors to opt for a professional retirement plan advisor that services plans on a fee or retainer basis. Source: Diversified Investment Advisors

Evolving Retirement Plan Market Presents New Opportunities for Advisors In the wake of recent industry and regulatory developments, advisors in the retirement plan industry have a great opportunity to reflect on their roles and clearly identify how they want to deliver value to clients. In order to be successful, however, advisors have to know where to look for help. Source: The Standard

Summary of the Automatic IRA Act of 2011 (S. 1557) Under the Automatic IRA Act of 2011, employees of firms with 10+ employees that do not sponsor a retirement plan would be automatically enrolled in IRAs at their workplace. Contributions would be purely voluntary; employees would be free to opt out at any time. Source: Senate.gov

Multiple Employer Plans: Tax and ERISA Considerations In light of the expanding regulatory requirements, plus increased 401k plan fee and fiduciary litigation, small and mid-sized employers may be looking for options to provide their employees with the benefits of a well managed 401k plan while reducing their administrative burdens and mitigating fiduciary risk. One approach that is gaining wider acceptance among both plan sponsors and their advisers is the "open" multiple employer 401k plan. The purpose of this white paper is to explore the legal bases for establishing, and operational requirements that apply to, the open multiple employer 401k plan. Source: American Pension Services

Retirement Income Solutions: DC Plan Participants Look to Transfer Risk While Retirement Income Solutions have received industry-wide attention, including an inquiry from the DOL, there are very few products in the marketplace. Fewer still have had much success. Yet it is essential that plan sponsors understand the mechanics, benefits and risks associated with these new products as they think holistically about designing and managing a successful defined contribution plan. Source: Captrust Advisors

Stable Value Products: An Increasingly Important Component of the Retirement Market This Prudential white paper details how stable value products can provide fiduciaries and participants with protections not generally available within other investment choices in retirement plans. The paper further explores the role stable value products will serve in the retirement market of the future and examines the benefits of the asset class. Source: Prudential Retirement

Retirement Sustainability for DC Plan Participants Retirees will be looking to their defined contribution plans for continuing advice. This paper looks at how DC plan sponsors can help retiring participants get the most from their nest eggs and avoid the dreaded scenario of running out of money in retirement. Source: Russell

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