BPP401k.com Newsletter November 23

Year-End Compliance Issues for Single-Employer Retirement Plans By year-end 2011, sponsors of calendar-year single-employer retirement plans must act on necessary and discretionary amendments and perform a range of administrative procedures to ensure compliance with statutory and regulatory requirements. In addition, there are year-end issues that employers sponsoring nonqualified deferred compensation plans (NDCPs) should consider. This Client Action Bulletin looks at key areas such employers and sponsors of defined benefit or defined contribution plans should address by Dec. 31, 2011. Source: Milliman (PDF File)

Approaching Deadline for Defined Contribution Plans Employers who sponsor 401k or other defined contribution qualified retirement plans and who chose to take advantage of the opportunity to suspend required minimum distributions during 2009 must amend their plans to reflect the suspension before the last day of the plan year beginning on or after January 1, 2011. This means that calendar year plans must be amended by December 31, 2011. Source: McKenna Long & Aldridge LLP

Be Thankful: You Still Have Time to Meet These Benefit Deadlines As we wind down this year and prepare for a new one, it is important that you be reminded about these deadlines. Source: Baker & Daniels LLP

The Small Business 401k is the Holiday Gift That Keeps on Giving While the idea of handing out cash to employees may seem far-fetched and costly these days, it's actually very doable and affordable when packaged and gift-wrapped as a 401k. First and foremost, you are helping you and your employees prepare for retirement. Secondly, any matching contributions or profit sharing contributions from the employer to employees are tax deductible for the business. But that's really just the start. Source: Forbes

401ks: Watch Out for Speed Bumps Fast-growing companies are particularly prone to having their 401k plans get off track in one way or another. The combination of fluctuating asset levels, executive overload, and Internal Revenue Service rules that are structured in a way to almost ensure closely held companies will violate them means that CFOs at those companies need to keep an especially close watch on them, at least at a high level. Source: CFO.com

401k Retirement Plans Myths – Debunked Common myths about retirement plans are leading law makers to propose changes that have the potential to mar the face of the retirement industry and the primary way Americans save for retirement. Source: ASPPA

How Co-Workers Influence 401k Choices You may not realize it, but the choices you make when investing assets in your 401k plan may be influenced by the selections your co-workers are making. Source: U.S. News & World Report

Automatic Enrollment: Is It Right for Your Plan? The DOL and EBSA have a program for encouraging automatic enrollment plans for small businesses. Some people would argue that automatic enrollment helps plans with discrimination testing because all eligible employees are in unless they opt out. Others argue that automatic enrollment does not guarantee deferrals and real participation, plus it comes with the risks associated with default elections. Source: Fox Rothschild LLP

Ten Common Plan Compensation Mistakes Calculating compensation doesn't seem like something that should trouble retirement plan administrators and sponsors. Yet, it is one of the most common errors made in administering retirement plans. This is a list of ten common mistakes made when calculating plan compensation for defined contributions plans. Source: Warner Norcross & Judd LLP

Inside the Structure of Defined Contribution/401k Plan Fees The Investment Company Institute and Deloitte Consulting have prepared the second edition of the Defined Contribution/401k Fee Study that was first conducted and published in the 2009 study. Specifically, this report addresses and updates: The mechanics of defined contribution plan fee structures; Components of plan fees; and, Primary and secondary factors that impact fees ("fee drivers"). Source: Investment Company Institute (PDF File)

PLANSPONSOR 2011 DC Survey Sheds Light on 401k Fees and Other Key Issues The 2011 PLANSPONSOR Defined Contribution Survey provides insight into trends related to fee transparency, automatic enrollment, participant savings rates and other important issues facing 401k and other retirement plans. The survey also provides a candid assessment of retirement plan providers based on a wide range of measures. Source: 401khelpcenter.com

Points of Plan Design Differentiation Emerge in PLANSPONSOR's Annual DC Survey Whatever your current method(s) of assessment and evaluation, plan sponsors have long appreciated the reality that, while every program may have its own unique set of circumstances and constraints, there is value in being able to compare your retirement plan designs with a valid set of comparables, if only to ensure that your design remains competitive. Source: Plansponsor.com

Engaging Under-35 Workers a Challenge for DC Plans While most plan sponsors expressed confidence in their plan's ability to prepare younger workers for retirement, nearly 40 percent of plan sponsors and a majority of consultants interviewed were neutral or less than confident on that question. The study indicates that plan sponsors could take a number of steps in the near, medium and longer term to better engage these younger workers. Source: 401khelpcenter.com

The Path Forward: Engaging the Younger Employee in DC Plan Participation U.S. companies must act now to engage younger workers in employer-sponsored defined contribution plans if up-and-coming generations are to have a realistic chance of achieving a financially secure retirement, according to this new study from Northern Trust. Source: Northern Trust (PDF File)

80 Is the New 65 for Americans When It Comes to Retirement The concept of a "retirement age" is going the way of the typewriter, another 20th-century relic that has been made irrelevant by changing circumstances. Middle class Americans now expect to work until they have saved enough to afford to retire, according to results from the seventh annual Retirement Survey from Wells Fargo & Company. Source: 401khelpcenter.com

Survey Reveals Plan Sponsors May Have a False Sense of Security With Target-Date Funds A just-released survey by Janus found that DC plan sponsors are professing a higher level of confidence in their target-date fund knowledge and offerings compared to a year ago. In contrast to that sentiment, however, the data also revealed contradictory responses and the existence of a significant percentage of sponsors seemingly unaware or unconcerned about areas that could present real fiduciary risk. Source: 401khelpcenter.com

Plaintiffs With Variable Claims in ERISA Lawsuit Denied Class Certification On November 15, 2011, the U.S. District Court for the North District of Illinois issued an opinion denying class certification to certain employees of Motorola, Inc. in the ERISA lawsuit captioned Joe M. Groussman, et al. v. Motorola, Inc., et al., No. 10 C 911 (N.D. Ill.). This advisory outlines the plaintiffs' allegations and details the Court's findings. Source: Troutman Sanders LLP

What Fee Disclosure Rules Really Mean for Plan Sponsors The DOL rules will impact plan sponsors equally, if not more, than their service providers and will require an overhaul of the plan sponsor's approach to many formerly rote fiduciary activities. Source: Society for Human Resource Management

Now's the Time for Plan Sponsors to Prepare for Implementation of New DOL Fee Disclosure Regulations With the extended deadlines just around the corner, plan sponsors should begin now working with plan service providers and advisors to prepare for the considerable amount of information required to be provided in the disclosures. Here are some steps they should be taking. Source: Poyner Spruill LLP

Partial Plan Termination . . . What's That? If you have had a substantial reduction in your workforce and sponsor a retirement plan, you need to learn what a partial plan termination is right now. The IRS is actively pursuing employers whose retirement plans may have experienced a partial termination event. Source: Warner Norcross & Judd LLP

DOL Provides Guidance on Electronic Disclosures of Required Fee and Administrative Information Starting May 31, 2012, the Department of Labor will require employers to give participants and beneficiaries of 401k and similar plans disclosures regarding participant fees, expenses, and plan administrative costs. Plans may provide this information through a secure continuous access Internet site or via email. Article lists information defined as plan-related information. Source: Faegre & Benson LLP

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