Last Minute Retirement Plans for 2011
Business owners with employees can still set up a qualified plan for
2011, such as a 401(k), a profit sharing plan, or a defined benefit
plan. And it might be worth trying to do so. Source: Stamford Advocate
Cuts for the Already Retired Retired police and firefighters from Central Falls, R.I., have agreed to sharp pension cuts, a step thought to be unprecedented in municipal bankruptcy and one that could prompt similar attempts by other distressed governments. If approved by the bankruptcy court, the agreement could be groundbreaking, said Matthew J. McGowan, the lawyer representing the retirees. Source: New York Times
Top 30 401(k) Plans of 2011 Brightscope has released its third annual list of the best 401(k) plans for 2011. These plans have at least $1 billion in assets as reported by plan sponsors and recordkeepers. Brightscope also uses publicly available data from the Department of Labor and the Securities and Exchange Commission in its analysis. Source: AdvisorOne
Gen X and Gen Y Saving More Than Boomers More than a quarter of Baby Boomers are unsure if they will be able to meet their savings goals by the time they are ready to retire, while their children appear to be on sounder footing, according to a TD Ameritrade survey. Source: Reuters
Majority of Retirement Plan Sponsors Do Not Feel Prepared for New Fee Disclosure Rules Sixty-five percent of middle market executives say benefits costs are the leading factor impacting compensation decisions, largely outweighing a mere four percent of survey respondents who say economic conditions/financial performance is the leading factor, according to the Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey. The survey also found that the vast majority (61%) of retirement plan sponsors do not feel prepared for new fee disclosure rules. Source: 401khelpcenter.com
Advisers Who Are Asset Fee-Based Feel Handcuffed After another disappointing year in the markets, many financial advisers who base their fees on assets under management are thinking that there has to be a better way. But few have the stomach to make any changes right now — and that may be the wisest course. Source: Investmentnews.com
Why You Should Care About the Labor Department's Redefining "Fiduciary" Guidelines Many plan sponsors have not paid much attention to the DOL's current effort to substantially broaden the definition of a plan fiduciary, agrees Lynn Dudley, Senior Vice President, Policy, at the Washington-based American Benefits Council. They do it at their peril, she suggests. "Because there are so many lawsuits based on investment menus and investment choices, this is not something to take lightly," she says. Source: Plansponsor.com
Four Regulatory Hot Spots and What They Mean for You What will be the top four regulatory items for financial advisers to deal with in 2012? Josh Cohen and Ben Jones of Russell Investments shared their thoughts. Source: Planadviser.com
2012 Key Administrative Dates and Deadlines for Calendar-Year DC Retirement Plans The Milliman 2012 DC calendar contains general information on key administrative dates and deadlines for calendar-year defined contribution retirement plans. Source: Milliman
Been There, Done That. Now What: The Road Ahead for Plan Sponsors By some accounts, this was supposed to be a year of change-which wound up being another year of waiting for that change. Regulations promised were proposed, re-proposed, and/or deferred for further consideration. There was, however, plenty for plan sponsors to deal with in 2011. Here is a look at the trends that were on our mind this past year-and those just over the horizon. Source: Plansponsor.com
Sample Certification of Reasonableness of Plan Services This is a sample certification that illustrates the type of documentation that plan sponsors need to establish compliance with 408(b)(2) requirements. Source: Dalbar
Target Benefit Plans: On the Edge of Extinction One of the more interesting effects caused by the IRS' elimination of the National Sponsor category in Rev. Proc. 2011-49 may be the projected elimination of pre-approved target benefit prototype and volume submitter plans. While some of you may be thinking "who cares" and others may be thinking "this will never happen," author shares some analysis that may change your mind. Think of target benefit plans as the canaries in our coal mine of a plan document system. Source: Pension Protection Act Blog
403(b) Plans Progressing Despite Shaky Economy In the face of prolonged economic instability, 403(b) plan sponsors are forging ahead with a variety of plan improvements—such as increased use of automatic enrollment, greater participant education, refined investment lineups and more. Consequently, many plans also reported higher participation rates. These and other insights are revealed in this 403(b) plan sponsor survey. Source: Plan Sponsor Council of America
The 408(b)(2) Burden on Fiduciaries In evaluating service providers, plan fiduciaries should not limit their analysis to cost. Instead, fiduciaries must take into account other factors that are relevant to making a prudent decision, such as conflicts of interest, the results being produced by the service provider, references, and the needs of the plan and its participants. Source: Plansponsor.com
The Fiduciary Duty to Ask for Help Fiduciaries are held to the highest legal standard. Where they are unsure of their expertise, fiduciaries must seek the advice of experts and carefully evaluate the advice given. Source: Mohler, Nixon & Williams
Benchmarking Target-Date Funds: Two Simple Choices for Fiduciaries Much debate and controversy surround the benchmarking of target-date funds (TDFs). The challenge revolves around the fact that the asset allocation, and therefore risk, of TDFs changes through time. But if fiduciaries will take a step back to look at the big picture, there are really only two choices: Procedural Prudence or Substantive Prudence. Source: Targetdatesolutions.com
Annual Compensation, Retirement and Benefits Trends Survey The annual Compensation, Retirement and Benefits Trends Survey conducted by Verisight and RSM McGladrey is designed to uncover key trends across the broad spectrum of retirement, benefits, and employee reward programs. More than 850 organizations participated in the survey. The majority of participants are mid-sized, private and not-for-profit companies. Source: Verisight
Three in Four African American Small Business Owners: Retirement Preparedness Crisis Looms A new small business survey by Nationwide Financial finds that seventy eight percent of African American small business owners say the number of workers financially unprepared for retirement is at "crisis levels." Source: 401khelpcenter.com
2011 Northern California 401k Plan Survey Report The survey offers a regional perspective of 401k plans, and recent trends. The survey was conducted with over 90 Northern California plan sponsors and benefit plan managers participating. The participants were asked about their current plan offerings and structure, and recent and expected changes. Source: Mohler, Nixon & Williams
Do Low-Income Workers Benefit From 401k Plans? Economists frequently assume that employees "pay for" employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401k plan. Source: Urban Institute
The Small Market 401k Opportunity Craig Howell, who heads up Business Development for The Online 401k, talks about the business opportunity for advisors in the small plan space and how they're trying to make 401k's more compelling for the 90% of businesses that don't have one. Source: Retiremaphq.com
Morningstar Changes the Way It Classifies Fixed-Income Funds Morningstar is drilling down deeper than ever before when it looks at fixed-income funds, the investment research firm said, announcing the launch of a new fixed-income classification system. Source: Financial-planning.com
Overview of the Small Business Pension Promotion Act (H.R. 3561) To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reduce administrative burdens and encourage retirement plan formation and retention. Source: American Benefits Council
December ERISA Litigation Newsletter Reviews the following: Third circuit finds "inequitable" the enforceability of a clear ERISA welfare plan reimbursement provision that deprived a participant of a full recovery; District court dismisses ERISA § 502(a)(2) claim based on plaintiffs' failure to make pre-suit demand - and DOL takes notice; and, Application of ERISA section 510 to internal workplace complaints: a review of circuit court decisions. Source: Proskauer Rose LLP
Fourth Circuit Rules on Duty to Investigate and Diversify Investments A very recent decision by the Fourth Circuit Court of Appeals clarifies an important point with respect to the duty of ERISA trustees to investigate investment alternatives and to diversify the portfolio in which the plan funds are invested. In vacating the judgment of the United States District Court, the Fourth Circuit held that a breach of the fiduciary duty to investigate investment alternatives or breach of the duty to diversify does not necessarily mean the actual investments were imprudent. Therefore, such a finding, in and of itself, is insufficient to impose liability on the trustees. Source: Nixon Peabody LLP
Puerto Rico Qualified Retirement Plan Provisions Are Finally Amended On December 10, 2011, Governor Luis Fortuño signed into law Act No. 232-2011 (formerly, House Bill No. 3410), a technical amendments bill to the Internal Revenue Code for Puerto Rico. The Act brings a number of major changes to Puerto Rico qualified retirement plans, which are outlined in this article. Source: McConnell Valdes LLC
Investors Will Scream When They See 401k Fees The new Department of Labor 401k fee disclosure rules that go into effect on April 1st will radically shake up the industry, according to Tom Gonnella, senior vice president of corporate development at Lincoln Trust, who gave six predictions for the defined contribution industry in 2102. Source: Onwallstreet.com
Time for Balance It's time for balance in the discussion about whether or not defined contribution plans can provide "adequate" retirement benefits. Source: Plan Sponsor Council of America
IRS Announcement 2011-82: Notice of Upcoming Changes in Determination Letter Procedures This announcement describes several important changes to the Employee Plans determination letter program that will take effect in 2012. These changes eliminate features of the determination letter program that are of limited utility to plan sponsors in comparison with the burdens they impose. The changes also are expected to improve IRS efficiency by reducing the time it takes the Service to process determination letter applications. Under these modified procedures, many employers will no longer apply for determination letters. Source: Benefitslink.com
DOL Slightly Expands E-Delivery Options for Participant Fee Disclosures At present, on or before May 31, 2012, many participant-directed defined contribution plans must deliver the first annual disclosures to participants under the new fee disclosure rules. The DOL just released Technical Release 2011-03R, which gives plans additional options for delivery of required information. Source: Sungard/Relius
Electronic Disclosure for ERISA 404(a)(5) Participant Fee Disclosure A paper that describes the Department of Labor Technical Release No. 2011-03 which relaxes the requirements for electronic delivery of the disclosures required by the ERISA 404(a)(5) Fee Disclosure regulations. Source: Dalbar
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
12.19.2011
BPP401k.com Newsletter December 21
Been There, Done That. Now What: The Road Ahead for Plan Sponsors By some accounts, this was supposed to be a year of change-which wound up being another year of waiting for that change. Regulations promised were proposed, re-proposed, and/or deferred for further consideration. There was, however, plenty for plan sponsors to deal with in 2011. Here is a look at the trends that were on our mind this past year-and those just over the horizon. Source: Plansponsor.com
Advisers Who Are Asset Fee-Based Feel Handcuffed After another disappointing year in the markets, many financial advisers who base their fees on assets under management are thinking that there has to be a better way. But few have the stomach to make any changes right now — and that may be the wisest course. Source: Investmentnews.com
New Regulations Might Boost Your 401(k) Balance In 2012 The hard-earned dollars you defer each month into your 401(k) are about to get the money equivalent of a face lift in 2012. Why? Fees that affect your net 401(k) plan balance could drop on account of regulatory changes in 2012. These changes force providers to disclose all their fees to your employer and to you for the first time ever. Source: Forbes
Low-income workers benefit from 401(k) plans A new paper from the Center for Retirement Research at Boston College challenges the assumption that the tax deferral advantage offered by 401(k) plans mainly benefits high-income workers, who face higher marginal tax rates. Source: Employee Benefit News
Automate Your 401(k) Considering all the turbulence of the past year, the thought of ratcheting up your 401(k) contribution may make you somewhat seasick. But an unstable market means you need to save and invest more, not less, if you want to better the odds of still being afloat in retirement. Source: US News
Majority of Retirement Plan Sponsors Do Not Feel Prepared for New Fee Disclosure Rules Sixty-five percent of middle market executives say benefits costs are the leading factor impacting compensation decisions, largely outweighing a mere four percent of survey respondents who say economic conditions/financial performance is the leading factor, according to the Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey. The survey also found that the vast majority (61%) of retirement plan sponsors do not feel prepared for new fee disclosure rules. Source: 401khelpcenter.com
2012 Key Administrative Dates and Deadlines for Calendar-Year DC Retirement Plans The Milliman 2012 DC calendar contains general information on key administrative dates and deadlines for calendar-year defined contribution retirement plans. Source: Milliman
Target Benefit Plans: On the Edge of Extinction One of the more interesting effects caused by the IRS' elimination of the National Sponsor category in Rev. Proc. 2011-49 may be the projected elimination of pre-approved target benefit prototype and volume submitter plans. While some of you may be thinking "who cares" and others may be thinking "this will never happen," author shares some analysis that may change your mind. Think of target benefit plans as the canaries in our coal mine of a plan document system. Source: Pension Protection Act Blog
403(b) Plans Progressing Despite Shaky Economy In the face of prolonged economic instability, 403(b) plan sponsors are forging ahead with a variety of plan improvements—such as increased use of automatic enrollment, greater participant education, refined investment lineups and more. Consequently, many plans also reported higher participation rates. These and other insights are revealed in this 403(b) plan sponsor survey. Source: Plan Sponsor Council of America
The 408(b)(2) Burden on Fiduciaries In evaluating service providers, plan fiduciaries should not limit their analysis to cost. Instead, fiduciaries must take into account other factors that are relevant to making a prudent decision, such as conflicts of interest, the results being produced by the service provider, references, and the needs of the plan and its participants. Source: Plansponsor.com
The Fiduciary Duty to Ask for Help Fiduciaries are held to the highest legal standard. Where they are unsure of their expertise, fiduciaries must seek the advice of experts and carefully evaluate the advice given. Source: Mohler, Nixon & Williams
Why You Should Care About the Labor Department's Redefining "Fiduciary" Guidelines Many plan sponsors have not paid much attention to the DOL's current effort to substantially broaden the definition of a plan fiduciary, agrees Lynn Dudley, Senior Vice President, Policy, at the Washington-based American Benefits Council. They do it at their peril, she suggests. "Because there are so many lawsuits based on investment menus and investment choices, this is not something to take lightly," she says. Source: Plansponsor.com
Annual Compensation, Retirement and Benefits Trends Survey The annual Compensation, Retirement and Benefits Trends Survey conducted by Verisight and RSM McGladrey is designed to uncover key trends across the broad spectrum of retirement, benefits, and employee reward programs. More than 850 organizations participated in the survey. The majority of participants are mid-sized, private and not-for-profit companies. Source: Verisight (PDF File)
Three in Four African American Small Business Owners: Retirement Preparedness Crisis Looms A new small business survey by Nationwide Financial finds that seventy eight percent of African American small business owners say the number of workers financially unprepared for retirement is at "crisis levels." Source: 401khelpcenter.com
Do Low-Income Workers Benefit From 401k Plans? Economists frequently assume that employees "pay for" employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401k plan. Source: Urban Institute
The Small Market 401k Opportunity Craig Howell, who heads up Business Development for The Online 401k, talks about the business opportunity for advisors in the small plan space and how they're trying to make 401k's more compelling for the 90% of businesses that don't have one. Source: Retiremaphq.com
Four Regulatory Hot Spots and What They Mean for You What will be the top four regulatory items for financial advisers to deal with in 2012? Josh Cohen and Ben Jones of Russell Investments shared their thoughts. Source: Planadviser.com
Morningstar Changes the Way It Classifies Fixed-Income Funds Morningstar is drilling down deeper than ever before when it looks at fixed-income funds, the investment research firm said, announcing the launch of a new fixed-income classification system. Source: Financial-planning.com
Overview of the Small Business Pension Promotion Act (H.R. 3561) To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reduce administrative burdens and encourage retirement plan formation and retention. Source: American Benefits Council
December ERISA Litigation Newsletter Reviews the following: Third circuit finds "inequitable" the enforceability of a clear ERISA welfare plan reimbursement provision that deprived a participant of a full recovery; District court dismisses ERISA § 502(a)(2) claim based on plaintiffs' failure to make pre-suit demand - and DOL takes notice; and, Application of ERISA section 510 to internal workplace complaints: a review of circuit court decisions. Source: Proskauer Rose LLP
Fourth Circuit Rules on Duty to Investigate and Diversify Investments A very recent decision by the Fourth Circuit Court of Appeals clarifies an important point with respect to the duty of ERISA trustees to investigate investment alternatives and to diversify the portfolio in which the plan funds are invested. In vacating the judgment of the United States District Court, the Fourth Circuit held that a breach of the fiduciary duty to investigate investment alternatives or breach of the duty to diversify does not necessarily mean the actual investments were imprudent. Therefore, such a finding, in and of itself, is insufficient to impose liability on the trustees. Source: Nixon Peabody LLP
Puerto Rico Qualified Retirement Plan Provisions Are Finally Amended On December 10, 2011, Governor Luis Fortuño signed into law Act No. 232-2011 (formerly, House Bill No. 3410), a technical amendments bill to the Internal Revenue Code for Puerto Rico. The Act brings a number of major changes to Puerto Rico qualified retirement plans, which are outlined in this article. Source: McConnell Valdes LLC
IRS Announcement 2011-82: Notice of Upcoming Changes in Determination Letter Procedures This announcement describes several important changes to the Employee Plans determination letter program that will take effect in 2012. These changes eliminate features of the determination letter program that are of limited utility to plan sponsors in comparison with the burdens they impose. The changes also are expected to improve IRS efficiency by reducing the time it takes the Service to process determination letter applications. Under these modified procedures, many employers will no longer apply for determination letters. Source: Benefitslink.com
DOL Slightly Expands E-Delivery Options for Participant Fee Disclosures At present, on or before May 31, 2012, many participant-directed defined contribution plans must deliver the first annual disclosures to participants under the new fee disclosure rules. The DOL just released Technical Release 2011-03R, which gives plans additional options for delivery of required information. Source: Sungard/Relius
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
Advisers Who Are Asset Fee-Based Feel Handcuffed After another disappointing year in the markets, many financial advisers who base their fees on assets under management are thinking that there has to be a better way. But few have the stomach to make any changes right now — and that may be the wisest course. Source: Investmentnews.com
New Regulations Might Boost Your 401(k) Balance In 2012 The hard-earned dollars you defer each month into your 401(k) are about to get the money equivalent of a face lift in 2012. Why? Fees that affect your net 401(k) plan balance could drop on account of regulatory changes in 2012. These changes force providers to disclose all their fees to your employer and to you for the first time ever. Source: Forbes
Low-income workers benefit from 401(k) plans A new paper from the Center for Retirement Research at Boston College challenges the assumption that the tax deferral advantage offered by 401(k) plans mainly benefits high-income workers, who face higher marginal tax rates. Source: Employee Benefit News
Automate Your 401(k) Considering all the turbulence of the past year, the thought of ratcheting up your 401(k) contribution may make you somewhat seasick. But an unstable market means you need to save and invest more, not less, if you want to better the odds of still being afloat in retirement. Source: US News
Majority of Retirement Plan Sponsors Do Not Feel Prepared for New Fee Disclosure Rules Sixty-five percent of middle market executives say benefits costs are the leading factor impacting compensation decisions, largely outweighing a mere four percent of survey respondents who say economic conditions/financial performance is the leading factor, according to the Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey. The survey also found that the vast majority (61%) of retirement plan sponsors do not feel prepared for new fee disclosure rules. Source: 401khelpcenter.com
2012 Key Administrative Dates and Deadlines for Calendar-Year DC Retirement Plans The Milliman 2012 DC calendar contains general information on key administrative dates and deadlines for calendar-year defined contribution retirement plans. Source: Milliman
Target Benefit Plans: On the Edge of Extinction One of the more interesting effects caused by the IRS' elimination of the National Sponsor category in Rev. Proc. 2011-49 may be the projected elimination of pre-approved target benefit prototype and volume submitter plans. While some of you may be thinking "who cares" and others may be thinking "this will never happen," author shares some analysis that may change your mind. Think of target benefit plans as the canaries in our coal mine of a plan document system. Source: Pension Protection Act Blog
403(b) Plans Progressing Despite Shaky Economy In the face of prolonged economic instability, 403(b) plan sponsors are forging ahead with a variety of plan improvements—such as increased use of automatic enrollment, greater participant education, refined investment lineups and more. Consequently, many plans also reported higher participation rates. These and other insights are revealed in this 403(b) plan sponsor survey. Source: Plan Sponsor Council of America
The 408(b)(2) Burden on Fiduciaries In evaluating service providers, plan fiduciaries should not limit their analysis to cost. Instead, fiduciaries must take into account other factors that are relevant to making a prudent decision, such as conflicts of interest, the results being produced by the service provider, references, and the needs of the plan and its participants. Source: Plansponsor.com
The Fiduciary Duty to Ask for Help Fiduciaries are held to the highest legal standard. Where they are unsure of their expertise, fiduciaries must seek the advice of experts and carefully evaluate the advice given. Source: Mohler, Nixon & Williams
Why You Should Care About the Labor Department's Redefining "Fiduciary" Guidelines Many plan sponsors have not paid much attention to the DOL's current effort to substantially broaden the definition of a plan fiduciary, agrees Lynn Dudley, Senior Vice President, Policy, at the Washington-based American Benefits Council. They do it at their peril, she suggests. "Because there are so many lawsuits based on investment menus and investment choices, this is not something to take lightly," she says. Source: Plansponsor.com
Annual Compensation, Retirement and Benefits Trends Survey The annual Compensation, Retirement and Benefits Trends Survey conducted by Verisight and RSM McGladrey is designed to uncover key trends across the broad spectrum of retirement, benefits, and employee reward programs. More than 850 organizations participated in the survey. The majority of participants are mid-sized, private and not-for-profit companies. Source: Verisight (PDF File)
Three in Four African American Small Business Owners: Retirement Preparedness Crisis Looms A new small business survey by Nationwide Financial finds that seventy eight percent of African American small business owners say the number of workers financially unprepared for retirement is at "crisis levels." Source: 401khelpcenter.com
Do Low-Income Workers Benefit From 401k Plans? Economists frequently assume that employees "pay for" employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401k plan. Source: Urban Institute
The Small Market 401k Opportunity Craig Howell, who heads up Business Development for The Online 401k, talks about the business opportunity for advisors in the small plan space and how they're trying to make 401k's more compelling for the 90% of businesses that don't have one. Source: Retiremaphq.com
Four Regulatory Hot Spots and What They Mean for You What will be the top four regulatory items for financial advisers to deal with in 2012? Josh Cohen and Ben Jones of Russell Investments shared their thoughts. Source: Planadviser.com
Morningstar Changes the Way It Classifies Fixed-Income Funds Morningstar is drilling down deeper than ever before when it looks at fixed-income funds, the investment research firm said, announcing the launch of a new fixed-income classification system. Source: Financial-planning.com
Overview of the Small Business Pension Promotion Act (H.R. 3561) To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reduce administrative burdens and encourage retirement plan formation and retention. Source: American Benefits Council
December ERISA Litigation Newsletter Reviews the following: Third circuit finds "inequitable" the enforceability of a clear ERISA welfare plan reimbursement provision that deprived a participant of a full recovery; District court dismisses ERISA § 502(a)(2) claim based on plaintiffs' failure to make pre-suit demand - and DOL takes notice; and, Application of ERISA section 510 to internal workplace complaints: a review of circuit court decisions. Source: Proskauer Rose LLP
Fourth Circuit Rules on Duty to Investigate and Diversify Investments A very recent decision by the Fourth Circuit Court of Appeals clarifies an important point with respect to the duty of ERISA trustees to investigate investment alternatives and to diversify the portfolio in which the plan funds are invested. In vacating the judgment of the United States District Court, the Fourth Circuit held that a breach of the fiduciary duty to investigate investment alternatives or breach of the duty to diversify does not necessarily mean the actual investments were imprudent. Therefore, such a finding, in and of itself, is insufficient to impose liability on the trustees. Source: Nixon Peabody LLP
Puerto Rico Qualified Retirement Plan Provisions Are Finally Amended On December 10, 2011, Governor Luis Fortuño signed into law Act No. 232-2011 (formerly, House Bill No. 3410), a technical amendments bill to the Internal Revenue Code for Puerto Rico. The Act brings a number of major changes to Puerto Rico qualified retirement plans, which are outlined in this article. Source: McConnell Valdes LLC
IRS Announcement 2011-82: Notice of Upcoming Changes in Determination Letter Procedures This announcement describes several important changes to the Employee Plans determination letter program that will take effect in 2012. These changes eliminate features of the determination letter program that are of limited utility to plan sponsors in comparison with the burdens they impose. The changes also are expected to improve IRS efficiency by reducing the time it takes the Service to process determination letter applications. Under these modified procedures, many employers will no longer apply for determination letters. Source: Benefitslink.com
DOL Slightly Expands E-Delivery Options for Participant Fee Disclosures At present, on or before May 31, 2012, many participant-directed defined contribution plans must deliver the first annual disclosures to participants under the new fee disclosure rules. The DOL just released Technical Release 2011-03R, which gives plans additional options for delivery of required information. Source: Sungard/Relius
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
12.12.2011
BPP401k.com Newsletter December 14
Be Prepared for an Audit (Even if you Don't Want One) Rumors continue to swirl that the DOL is increasing its audits of 401k plans. A diligent plan sponsor would want to be prepared for an audit. So while we all hope we are not audited, the best practices are to be prepared that one might occur. Look over your documentation and practices now and make sure you have everything in place just in case. Source: Fox Rothschild LLP
401k Fee Disclosure to Change DC Game Plans are headed for another fundamental shift in 2012. In April, all 401k providers will begin disclosing fees to sponsors and investors-putting fees and services under a white-hot spotlight. Source: Financial-planning.com
Should 401k Plan Sponsors Sell Their Souls for One-Stop-Shopping? From banks to insurance companies, from payroll processors to mutual fund families, the appeal of convenience often lures the 401k plan sponsor to these bundled service providers. But are the purported lower fees of bundling real, or are they a figment of some marketing department's imagination? Worse, do bundled providers act as a fiduciary trap given the very real conflicts-of-interest embedded within them? Source: Fiduciarynews.com
Offering a 401k Plan: Easier Than You Think The smaller the company, the less chance of a retirement plan being offered--and that includes sole proprietor businesses. As most businesses evaluate their benefits around the end of the year, now is a good time to address four common myths about 401k and to set the facts straight. Source: Foxbusiness.com
Multiple Employer Plan Issues Raised The purpose of this asap is to alert members to an issue that has come to the attention of ASPPA’s
Government Affairs Committee (GAC) and which may be relevant to those considering or currently marketing a “multiple employer plan” (MEP) design. Source: ASPPA
DOL Issues Final Participant Advice Regulations After several detours on the road to implementation, the U.S. Department of Labor has released its final regulation on participant investment advice. The final regulation, effective December 27, 2011, makes it clear that the DOL recognizes the benefits of participant advice programs, and is good news for both participants and plan sponsors. Source: Vanguard
Conerly on the Economy for December 2011 "Conerly on the Economy" displays charts of the most important economic indicators, with Bill's comments on the charts and the outlook. Bill Conerly connects the dots between the economy and business decisions, helping corporate executives and small business owners make more profitable decisions. Source: Conerly Consulting
Employee Benefit Plan Year End Action Items This article contains important action items plan administrators may need to process prior to year end. The items include amendments, notices and other compliance matters for tax-qualified retirement plans, 403(b) plans, nonqualified deferred compensation and welfare plans. These items do not represent an exhaustive list, but is intended to provide a reminder of the general issues that may need to be reviewed and considered. Source: O'Connor Davies Munns & Dobbins LLP
The 401k Regulatory Tsunami A regulatory tsunami is headed toward companies sponsoring 401k plans. It will arrive next year when new federal rules take effect, creating an unprecedented burden of accountability for employers. Source: Smart Business
401k Plans Add Lifetime-Income Options Some companies are now letting workers invest in annuities, so that their 401k savings will eventually yield an income stream, but there are advantages and pitfalls to this new retirement option. Source: Marketwatch.com
Where Congress's Goals and Fiduciary Conduct Conflict In adopting auto-pilot and QDIA programs, all too many fiduciaries have inadvertently made themselves easy targets for 401k fiduciary lawsuits. However, it is easy for fiduciaries to correct their mistakes. Source: Investment Horizons (PDF File)
A Closer Look at Fiduciary Status Under ERISA Get the details on plan sponsors as default fiduciaries and how ERISA fiduciary status is determined. Article provides advisors with some essential information about the meaning of fiduciary status under ERISA. Source: Morningstar.com
Fiduciary Investment Advice for Participants There is a growing concern about the quality of participant investing in 401k and 403(b) plans... since that is one of the critical factors in determining whether participants will accumulate adequate benefits at retirement. For example, industry studies show that many participants are invested too aggressively or too conservatively, rather than having balanced portfolios that lie between those extremes. If a participant is invested too conservatively, then his or her account will probably not grow at a rate needed to provide adequate benefits. On the other hand, if a participant is invested too aggressively, the account may suffer severe losses in the years preceding retirement. Source: Drinker Biddle & Reath LLP
MetLife White Paper Finds Employee Financial Wellness a Growing Global Concern for Employers In recognizing that employees need assistance in managing their financial future and understanding the value of employee benefits aimed at building financial wellness, employers are, in increasing numbers, providing employees with the financial education they need, according to a new white paper released today by MetLife. Source: 401khelpcenter.com
A Look at Private-Sector Retirement Plan Income After ERISA The movement away from employer-managed DB plans toward employee-directed DC plans has raised concerns among some in the public policy community. To help provide context for retirement policy discussions, this paper examines the role that private-sector pensions historically have played in providing retirement income. Source: Investment Company Institute
Older Americans Expect to Work Longer and Many Expect Never to Retire Not only are older American workers (age 50 and over) expecting to work longer, but many now say they expect to never retire, according to the nonpartisan Employee Benefit Research Institute. Data suggest the trend may be tied to the recent economic recession. Source: Employee Benefit Research Institute
Companies Trim Investment Choices in 401ks While the trend over the past decade has been for companies to increase the number of investment options in their 401ks — the median number of investments companies offer is now 18, up from 10 in 2001, according to consulting firm Aon Hewitt — some companies are switching gears and reducing the number of options, or at least streamlining and simplifying their investment menus. Source: Marketwatch.com
Report Examines Growth of Investment Options in DC Plans Record-setting levels of defined contribution assets will continue to grow, yet mutual funds will not be the sole beneficiary. Celent, a financial research and consulting firm, examines the current retirement landscape in the U.S. in its report, “Developments in the Defined Contribution Market: New Funds and New Investment Vehicles in the U.S. Market.” Source: Planadviser.com
Small Business Retirement Plan Market Largely Untapped According to the U.S. Small Business Administration, there are about 28 million small businesses in the United States. With only 20 percent of small businesses offering retirement plans, financial advisors are missing out on a lucrative opportunity. Source: Benefitspro.com
Supreme Court Declines to Apply Fiduciary Exception to Attorney-Client Privilege: What Implications for ERISA Plans? The U.S. Supreme Court considered the "fiduciary exception" for the first time in a non-ERISA setting and found that the United States, as trustee of tribal property, was entitled to confidential communications with its legal counsel despite its fiduciary status. The Supreme Court's rejection of the “fiduciary exception” in this context has raised hope that ERISA fiduciaries may be entitled to greater confidentiality in obtaining legal advice regarding plan administration. Source: McGuireWoods
Presumption of Prudence Shields Fiduciaries From Liability Following Decline in Value Of Employer Stock Adopting the presumption of prudence that applies when a 401k plan requires stock of the sponsoring employer to be offered as an investment option, the Court of Appeals in New York City (CA-2) ruled that plan fiduciaries did not breach their ERISA duties by retaining company stock as an investment option despite a significant drop in value that may have been foreseeable because of the company's deep exposure to subprime mortgage securities. Source: CCH
Plan Administrator Not Required to Look Behind Sham Divorce A recent federal appellate court ruling held that a pension plan administrator could not recover benefits distributed to alternate payees under QDROs, despite evidence that the underlying divorces were orchestrated by participants and their spouses solely to enable them to receive lump-sum, in-service distributions not otherwise permitted under the plan. Source: Benefit Consultants Group
Technical Release No. 2011-03R - Revised Interim Policy on Electronic Disclosure On December 8, 2011, the DOL issued Technical Release 2011-03R, which revises the department's interim policy regarding the use of electronic media to satisfy the disclosure requirements under the department's final participant-level fee disclosure regulation. Source: U.S. Department of Labor
DOL Raises the Stakes for the Audit Quality Initiative The DOL initiative to review the quality of employee benefit plan financial audits has been in place for many years, but there are signs that it has recently intensified. Some have heard that the DOL is starting to dig deeper into the financial audits that are filed with the Form 5500 and in some cases have rejected the audits and imposed penalties. Source: Kilpatrick Townsend & Stockton LLP
House GOP Presses DOL's Solis on Fiduciary Re-Proposal Rule Fifty-five House Republicans, led by Rep. Judy Biggert, R-Ill., sent a letter to Department of Labor Secretary Hilda Solis on Monday detailing what criteria should be met when the DOL re-proposes its rule amending the definition of fiduciary under ERISA early next year. Source: Advisorone.com
DOL Finalizes Regulation Aimed at Improving Access to Investment Advice for 401k Plan Participants Because of the onerous conditions imposed on the investment advice arrangements sanctioned by the Regulations, there appears to be little incentive for third-party service providers to establish these arrangements and for plan sponsors to engage these service providers to provide investment advice. Further reform is needed to encourage the proliferation of investment advice arrangements. The Regulations are effective December 27, 2011. Source: Orrick, Herrington & Sutcliffe LLP
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
401k Fee Disclosure to Change DC Game Plans are headed for another fundamental shift in 2012. In April, all 401k providers will begin disclosing fees to sponsors and investors-putting fees and services under a white-hot spotlight. Source: Financial-planning.com
Should 401k Plan Sponsors Sell Their Souls for One-Stop-Shopping? From banks to insurance companies, from payroll processors to mutual fund families, the appeal of convenience often lures the 401k plan sponsor to these bundled service providers. But are the purported lower fees of bundling real, or are they a figment of some marketing department's imagination? Worse, do bundled providers act as a fiduciary trap given the very real conflicts-of-interest embedded within them? Source: Fiduciarynews.com
Offering a 401k Plan: Easier Than You Think The smaller the company, the less chance of a retirement plan being offered--and that includes sole proprietor businesses. As most businesses evaluate their benefits around the end of the year, now is a good time to address four common myths about 401k and to set the facts straight. Source: Foxbusiness.com
Multiple Employer Plan Issues Raised The purpose of this asap is to alert members to an issue that has come to the attention of ASPPA’s
Government Affairs Committee (GAC) and which may be relevant to those considering or currently marketing a “multiple employer plan” (MEP) design. Source: ASPPA
DOL Issues Final Participant Advice Regulations After several detours on the road to implementation, the U.S. Department of Labor has released its final regulation on participant investment advice. The final regulation, effective December 27, 2011, makes it clear that the DOL recognizes the benefits of participant advice programs, and is good news for both participants and plan sponsors. Source: Vanguard
Conerly on the Economy for December 2011 "Conerly on the Economy" displays charts of the most important economic indicators, with Bill's comments on the charts and the outlook. Bill Conerly connects the dots between the economy and business decisions, helping corporate executives and small business owners make more profitable decisions. Source: Conerly Consulting
Employee Benefit Plan Year End Action Items This article contains important action items plan administrators may need to process prior to year end. The items include amendments, notices and other compliance matters for tax-qualified retirement plans, 403(b) plans, nonqualified deferred compensation and welfare plans. These items do not represent an exhaustive list, but is intended to provide a reminder of the general issues that may need to be reviewed and considered. Source: O'Connor Davies Munns & Dobbins LLP
The 401k Regulatory Tsunami A regulatory tsunami is headed toward companies sponsoring 401k plans. It will arrive next year when new federal rules take effect, creating an unprecedented burden of accountability for employers. Source: Smart Business
401k Plans Add Lifetime-Income Options Some companies are now letting workers invest in annuities, so that their 401k savings will eventually yield an income stream, but there are advantages and pitfalls to this new retirement option. Source: Marketwatch.com
Where Congress's Goals and Fiduciary Conduct Conflict In adopting auto-pilot and QDIA programs, all too many fiduciaries have inadvertently made themselves easy targets for 401k fiduciary lawsuits. However, it is easy for fiduciaries to correct their mistakes. Source: Investment Horizons (PDF File)
A Closer Look at Fiduciary Status Under ERISA Get the details on plan sponsors as default fiduciaries and how ERISA fiduciary status is determined. Article provides advisors with some essential information about the meaning of fiduciary status under ERISA. Source: Morningstar.com
Fiduciary Investment Advice for Participants There is a growing concern about the quality of participant investing in 401k and 403(b) plans... since that is one of the critical factors in determining whether participants will accumulate adequate benefits at retirement. For example, industry studies show that many participants are invested too aggressively or too conservatively, rather than having balanced portfolios that lie between those extremes. If a participant is invested too conservatively, then his or her account will probably not grow at a rate needed to provide adequate benefits. On the other hand, if a participant is invested too aggressively, the account may suffer severe losses in the years preceding retirement. Source: Drinker Biddle & Reath LLP
MetLife White Paper Finds Employee Financial Wellness a Growing Global Concern for Employers In recognizing that employees need assistance in managing their financial future and understanding the value of employee benefits aimed at building financial wellness, employers are, in increasing numbers, providing employees with the financial education they need, according to a new white paper released today by MetLife. Source: 401khelpcenter.com
A Look at Private-Sector Retirement Plan Income After ERISA The movement away from employer-managed DB plans toward employee-directed DC plans has raised concerns among some in the public policy community. To help provide context for retirement policy discussions, this paper examines the role that private-sector pensions historically have played in providing retirement income. Source: Investment Company Institute
Older Americans Expect to Work Longer and Many Expect Never to Retire Not only are older American workers (age 50 and over) expecting to work longer, but many now say they expect to never retire, according to the nonpartisan Employee Benefit Research Institute. Data suggest the trend may be tied to the recent economic recession. Source: Employee Benefit Research Institute
Companies Trim Investment Choices in 401ks While the trend over the past decade has been for companies to increase the number of investment options in their 401ks — the median number of investments companies offer is now 18, up from 10 in 2001, according to consulting firm Aon Hewitt — some companies are switching gears and reducing the number of options, or at least streamlining and simplifying their investment menus. Source: Marketwatch.com
Report Examines Growth of Investment Options in DC Plans Record-setting levels of defined contribution assets will continue to grow, yet mutual funds will not be the sole beneficiary. Celent, a financial research and consulting firm, examines the current retirement landscape in the U.S. in its report, “Developments in the Defined Contribution Market: New Funds and New Investment Vehicles in the U.S. Market.” Source: Planadviser.com
Small Business Retirement Plan Market Largely Untapped According to the U.S. Small Business Administration, there are about 28 million small businesses in the United States. With only 20 percent of small businesses offering retirement plans, financial advisors are missing out on a lucrative opportunity. Source: Benefitspro.com
Supreme Court Declines to Apply Fiduciary Exception to Attorney-Client Privilege: What Implications for ERISA Plans? The U.S. Supreme Court considered the "fiduciary exception" for the first time in a non-ERISA setting and found that the United States, as trustee of tribal property, was entitled to confidential communications with its legal counsel despite its fiduciary status. The Supreme Court's rejection of the “fiduciary exception” in this context has raised hope that ERISA fiduciaries may be entitled to greater confidentiality in obtaining legal advice regarding plan administration. Source: McGuireWoods
Presumption of Prudence Shields Fiduciaries From Liability Following Decline in Value Of Employer Stock Adopting the presumption of prudence that applies when a 401k plan requires stock of the sponsoring employer to be offered as an investment option, the Court of Appeals in New York City (CA-2) ruled that plan fiduciaries did not breach their ERISA duties by retaining company stock as an investment option despite a significant drop in value that may have been foreseeable because of the company's deep exposure to subprime mortgage securities. Source: CCH
Plan Administrator Not Required to Look Behind Sham Divorce A recent federal appellate court ruling held that a pension plan administrator could not recover benefits distributed to alternate payees under QDROs, despite evidence that the underlying divorces were orchestrated by participants and their spouses solely to enable them to receive lump-sum, in-service distributions not otherwise permitted under the plan. Source: Benefit Consultants Group
Technical Release No. 2011-03R - Revised Interim Policy on Electronic Disclosure On December 8, 2011, the DOL issued Technical Release 2011-03R, which revises the department's interim policy regarding the use of electronic media to satisfy the disclosure requirements under the department's final participant-level fee disclosure regulation. Source: U.S. Department of Labor
DOL Raises the Stakes for the Audit Quality Initiative The DOL initiative to review the quality of employee benefit plan financial audits has been in place for many years, but there are signs that it has recently intensified. Some have heard that the DOL is starting to dig deeper into the financial audits that are filed with the Form 5500 and in some cases have rejected the audits and imposed penalties. Source: Kilpatrick Townsend & Stockton LLP
House GOP Presses DOL's Solis on Fiduciary Re-Proposal Rule Fifty-five House Republicans, led by Rep. Judy Biggert, R-Ill., sent a letter to Department of Labor Secretary Hilda Solis on Monday detailing what criteria should be met when the DOL re-proposes its rule amending the definition of fiduciary under ERISA early next year. Source: Advisorone.com
DOL Finalizes Regulation Aimed at Improving Access to Investment Advice for 401k Plan Participants Because of the onerous conditions imposed on the investment advice arrangements sanctioned by the Regulations, there appears to be little incentive for third-party service providers to establish these arrangements and for plan sponsors to engage these service providers to provide investment advice. Further reform is needed to encourage the proliferation of investment advice arrangements. The Regulations are effective December 27, 2011. Source: Orrick, Herrington & Sutcliffe LLP
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
12.06.2011
BPP401k.com Newsletter December 7
Lifting the Lid on 401k Fees Making fees more transparent is expected to produce changes in the types of investments within 401k plans and greater competition among providers. Experts also expect to see less bundling of fees and more fees based on discrete services. Another likely impact is a reduction in the number of funds available in a typical plan. Source: CFO.com
Wal-Mart, Merrill Lynch Agree To Pay $13.5 Million To Settle 401(k) Fiduciary Lawsuit Wal-Mart Stores and Merrill Lynch, a unit of Bank of America, have agreed to pay a total of $13.5 million to settle a long-running class-action lawsuit alleging the world’s largest private employer and its retirement plan administrator breached their fiduciary duty toward nearly 2 million past and present Wal-Mart workers in the company’s 401k plan. Source: Forbes
Assessing Stable-Value Strategies: What Plan Sponsors Should Consider Stable value funds have performed relatively well, and investors have appreciated the benefits offered through them. However, a changing economic climate with greater regulatory uncertainty, diminishing wrap capacity and consistently lower yields has seemingly reduced the stability and value that investors have come to expect from stable value. Source: Towers Watson
Three-Quarters of Employers Have Restored 401k Matches The vast majority of U.S. employers that suspended their 401k plan matching contributions during the recent economic downturn have since restored them, according to new analysis by Towers Watson. Source: CCH
An Elite Group of Advisors Driving 401k Business While just over half (52%) of the estimated 315,000 retail investment advisors in the United States currently support at least one 401k plan, only 7% of advisors are Heavy plan producers with $25 million or more in 401k AUM. This elite group supports almost as many plans as all other 401k producers combined. Source: 401khelpcenter.com
10 Year-End Financial Moves As 2011 draws to a close, there are several financial moves that you should consider. Below are 10 steps that could help reduce your tax bill, solidify your investment strategy and ensure that your affairs are in order. Source: Financial Planning Association
Retirement Plans in a Quandary "What we've got here is a failure to communicate." That famous line, from the 1967 movie "Cool Hand Luke," summarizes the reason that retirement plans collectively - but unwillingly - hold billions of dollars that plan sponsors have unsuccessfully tried to distribute to former participants. Source: Employee Benefit News
Do Managed Accounts and Target-Date Funds Provide Genuine Value or Just a Feel-Good Solution? It's counter-intuitive to question the value of professional investment management, but article points out questions fiduciaries must be able to answer when dealing with target-date funds and managed accounts. Source: Investment Horizons
Target-Date Funds: On the Mark After All? Target-Date Funds aren't just getting bigger; they also seem to be getting better. An analysis by Morningstar in August found that losses during the summer market meltdown were far less severe for 2010 and 2015 TDF series than losses were for those funds in 2008. Source: Registeredrep.com
2011 Plan Year: Year-End Compliance Reminders Every year, plan sponsors must make sure their plans meet certain compliance requirements, including those listed in the article. Identifies the materials you need to review and will help you prepare for year-end. Source: Prudential
Relief for 403(b) Plan Compliance Failures The IRS confirmed that an update and expansion of EPCRS is expected in the "near future" so as to extend all correction opportunities, including remediation of document failures, to 403(b) plan sponsors. Source: Fox Rothschild LLP
Form 8955-SSA Reporting and 403(b) Plans Commencing with the 2009 plan year, the world turned upside down for 403(b) plans - a new set of regulations, a written plan requirement, and a requirement to include schedules and the audit with the Form 5500 filing. As if those requirements were not enough, with the elimination of the limited exemption regarding the Form 5500, an ERISA 403(b) plan must now file a Form 8955-SSA. This FAQs address these and other issues. Source: Sungard/Relius
FAQ on Form 8955-SSA for 403(b) Plans The IRS has provided this frequently asked questions and answers information regarding form 8955-SSA. Source: IRS
Rethinking 401k Litigation Risk Management There are several realities that fiduciaries and sponsors must recognize in order to create effective 401k risk management programs, including a few that are discussed in this article. Source: Investment Horizons
Stable-Value Strategies Becoming Riskier The changing economic climate and greater regulatory uncertainty -- combined with diminishing wrap capacity and consistently lower yields -- have reduced the stability and value that investors can expect from stable value investment strategies, according to global professional services company Towers Watson. Source: 401khelpcenter.com
Study: Number of Workers Financially Unprepared for Retirement at Crisis Level A new small business survey by Nationwide Financial finds that 75 percent of small business owners agree that so many Americans are financially unprepared for retirement that it has reached crisis levels. However, only one in five (19 percent) of these businesses offer their employees a 401k or other employee self-funded retirement plan. Source: 401khelpcenter.com
Analysis Highlights Positive Impact of Pension Protection Act on 401k Plans and Their Participants Fidelity Investments released an analysis of the far-reaching positive implications for workplace retirement plan design features (such as auto enrollment, default options and in-plan Roth deferrals) of the Pension Protection Act of 2006. Source: 401khelpcenter.com
Retirement Participation by Gender Male wage and salary workers have a higher level of retirement plan participation than women. Yet, when accounting for work status, women have higher participation levels, according to a new analysis from the nonpartisan Employee Benefit Research Institute. Source: Employee Benefit Research Institute
401k and Profit Sharing Plan Response to Current Conditions In October 2011, Plan Sponsor Council of America conducted a snapshot survey of 401k and profit sharing plan sponsors to determine how they are responding to multiple changes in today's economic and regulatory environment. PSCA received responses from 523 plan sponsors from across the country. This is a summary of the results. Source: Plan Sponsor Council of America
Applying the QDROtic Equation in Qualified Plans The recently decided Fifth Circuit decision, Brown v. Continental Airlines, Inc., demonstrates how nine airline pilots and their spouses creatively used qualified domestic relations orders (QDROs) and state domestic relations law to circumvent the early distribution rules in their retirement plan. Source: Fox Rothschild LLP
Reforms Equal Smaller 401k's Two recent proposals to change the existing tax treatment of 401k retirement plans, if enacted, are likely to result in lower account balances for many 401k participants, according to a new analysis by the Employee Benefit Research Institute. Source: Employee Benefit News
DOL Staff Members Provide Informal Views on Form 5500 Record Retention, Fund Prospectuses, and QDIA Notices The Joint Committee on Employee Benefits of the American Bar Association has reported on its May 2011 Q&A session with DOL staff members. Highlights include unofficial, nonbinding remarks about the several issues affecting Form 5500 and 401k plans. Source: Thomson Reuters/EBIA
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
Wal-Mart, Merrill Lynch Agree To Pay $13.5 Million To Settle 401(k) Fiduciary Lawsuit Wal-Mart Stores and Merrill Lynch, a unit of Bank of America, have agreed to pay a total of $13.5 million to settle a long-running class-action lawsuit alleging the world’s largest private employer and its retirement plan administrator breached their fiduciary duty toward nearly 2 million past and present Wal-Mart workers in the company’s 401k plan. Source: Forbes
Assessing Stable-Value Strategies: What Plan Sponsors Should Consider Stable value funds have performed relatively well, and investors have appreciated the benefits offered through them. However, a changing economic climate with greater regulatory uncertainty, diminishing wrap capacity and consistently lower yields has seemingly reduced the stability and value that investors have come to expect from stable value. Source: Towers Watson
Three-Quarters of Employers Have Restored 401k Matches The vast majority of U.S. employers that suspended their 401k plan matching contributions during the recent economic downturn have since restored them, according to new analysis by Towers Watson. Source: CCH
An Elite Group of Advisors Driving 401k Business While just over half (52%) of the estimated 315,000 retail investment advisors in the United States currently support at least one 401k plan, only 7% of advisors are Heavy plan producers with $25 million or more in 401k AUM. This elite group supports almost as many plans as all other 401k producers combined. Source: 401khelpcenter.com
10 Year-End Financial Moves As 2011 draws to a close, there are several financial moves that you should consider. Below are 10 steps that could help reduce your tax bill, solidify your investment strategy and ensure that your affairs are in order. Source: Financial Planning Association
Retirement Plans in a Quandary "What we've got here is a failure to communicate." That famous line, from the 1967 movie "Cool Hand Luke," summarizes the reason that retirement plans collectively - but unwillingly - hold billions of dollars that plan sponsors have unsuccessfully tried to distribute to former participants. Source: Employee Benefit News
Do Managed Accounts and Target-Date Funds Provide Genuine Value or Just a Feel-Good Solution? It's counter-intuitive to question the value of professional investment management, but article points out questions fiduciaries must be able to answer when dealing with target-date funds and managed accounts. Source: Investment Horizons
Target-Date Funds: On the Mark After All? Target-Date Funds aren't just getting bigger; they also seem to be getting better. An analysis by Morningstar in August found that losses during the summer market meltdown were far less severe for 2010 and 2015 TDF series than losses were for those funds in 2008. Source: Registeredrep.com
2011 Plan Year: Year-End Compliance Reminders Every year, plan sponsors must make sure their plans meet certain compliance requirements, including those listed in the article. Identifies the materials you need to review and will help you prepare for year-end. Source: Prudential
Relief for 403(b) Plan Compliance Failures The IRS confirmed that an update and expansion of EPCRS is expected in the "near future" so as to extend all correction opportunities, including remediation of document failures, to 403(b) plan sponsors. Source: Fox Rothschild LLP
Form 8955-SSA Reporting and 403(b) Plans Commencing with the 2009 plan year, the world turned upside down for 403(b) plans - a new set of regulations, a written plan requirement, and a requirement to include schedules and the audit with the Form 5500 filing. As if those requirements were not enough, with the elimination of the limited exemption regarding the Form 5500, an ERISA 403(b) plan must now file a Form 8955-SSA. This FAQs address these and other issues. Source: Sungard/Relius
FAQ on Form 8955-SSA for 403(b) Plans The IRS has provided this frequently asked questions and answers information regarding form 8955-SSA. Source: IRS
Rethinking 401k Litigation Risk Management There are several realities that fiduciaries and sponsors must recognize in order to create effective 401k risk management programs, including a few that are discussed in this article. Source: Investment Horizons
Stable-Value Strategies Becoming Riskier The changing economic climate and greater regulatory uncertainty -- combined with diminishing wrap capacity and consistently lower yields -- have reduced the stability and value that investors can expect from stable value investment strategies, according to global professional services company Towers Watson. Source: 401khelpcenter.com
Study: Number of Workers Financially Unprepared for Retirement at Crisis Level A new small business survey by Nationwide Financial finds that 75 percent of small business owners agree that so many Americans are financially unprepared for retirement that it has reached crisis levels. However, only one in five (19 percent) of these businesses offer their employees a 401k or other employee self-funded retirement plan. Source: 401khelpcenter.com
Analysis Highlights Positive Impact of Pension Protection Act on 401k Plans and Their Participants Fidelity Investments released an analysis of the far-reaching positive implications for workplace retirement plan design features (such as auto enrollment, default options and in-plan Roth deferrals) of the Pension Protection Act of 2006. Source: 401khelpcenter.com
Retirement Participation by Gender Male wage and salary workers have a higher level of retirement plan participation than women. Yet, when accounting for work status, women have higher participation levels, according to a new analysis from the nonpartisan Employee Benefit Research Institute. Source: Employee Benefit Research Institute
401k and Profit Sharing Plan Response to Current Conditions In October 2011, Plan Sponsor Council of America conducted a snapshot survey of 401k and profit sharing plan sponsors to determine how they are responding to multiple changes in today's economic and regulatory environment. PSCA received responses from 523 plan sponsors from across the country. This is a summary of the results. Source: Plan Sponsor Council of America
Applying the QDROtic Equation in Qualified Plans The recently decided Fifth Circuit decision, Brown v. Continental Airlines, Inc., demonstrates how nine airline pilots and their spouses creatively used qualified domestic relations orders (QDROs) and state domestic relations law to circumvent the early distribution rules in their retirement plan. Source: Fox Rothschild LLP
Reforms Equal Smaller 401k's Two recent proposals to change the existing tax treatment of 401k retirement plans, if enacted, are likely to result in lower account balances for many 401k participants, according to a new analysis by the Employee Benefit Research Institute. Source: Employee Benefit News
DOL Staff Members Provide Informal Views on Form 5500 Record Retention, Fund Prospectuses, and QDIA Notices The Joint Committee on Employee Benefits of the American Bar Association has reported on its May 2011 Q&A session with DOL staff members. Highlights include unofficial, nonbinding remarks about the several issues affecting Form 5500 and 401k plans. Source: Thomson Reuters/EBIA
For more information about custom retirement plan design and how Benefit Plans Plus can help make your business more successful visit www.bpp401k.com
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