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Daily Article Digest - Updated Throughout the Day

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403(b) and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

Use the SEARCH feature to located specific items from this digest and from our ARCHIVE.


    
Washington Tweaks Retirement Fund Policy to Encourage Annuities

Summary: The U.S. Treasury Department said on Friday it was tweaking its policy for retirement funds to encourage savers to buy annuities, a measure aimed to keep them from outliving their savings. The DOL and the Internal Revenue Service will let retirement funds offer long-term deferred annuities as a default investment in 401k retirement accounts.

Source: Reuters.com, October 2014

Lifetime Income Provided Through Target Date Funds in 401k Plans

Summary: This IRS notice (#2014-66) provides a special rule that enables qualified defined contribution plans to provide lifetime income by offering, as investment options, a series of target-date funds that include deferred annuities among their assets, even if some of the TDFs within the series are available only to older participants.

Source: Irs.gov , October 2014

Maximize Your Retirement Savings - Tips on Using the Fee and Investment Information From Your Retirement Plan

Summary: While there are a number of factors to consider in making sound investment decisions, start with the information provided by your plan. Your plan administrator should provide you with key information about certain investment options offered by the plan every year. This information is provided in a format that allows you to compare the investment options. To help you use the investment-related information provided by your plan, this article describes some of the key information you will receive from your plan and provides tips on using this information in evaluating your investment choices in your plan.

Source: Dol.gov, October 2014

IRS Announces 2015 401k Plan Contribution Limits

Summary: On October 23, 2014, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015. Many of the pension plan limitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.

Source: 401khelpcenter.com, October 2014

Retirement 'Not Happening' -- For Those With No Retirement Plan

Summary: Having access to a 401k also seems to positively impact a sense of what is possible. Nearly 6 out of 10 (58%) non-retirees without access to a 401k plan say "it is not possible" to pay bills and "still" save for retirement, compared with about a third (32%) of those who have access to a plan but say they can't save and pay bills at the same time.

Source: Napa-net.org, October 2014

Frequently Asked Questions About 401k Plans

Summary: The Investment Company Institute has updated their FAQ on 401k retirement plans. Some of the questions covered are: How large is the 401k market? How many Americans have 401ks? What is the average 401k plan account balance? What role do mutual funds play in 401k plan investing?

Source: Ici.org, October 2014

Preliminary Information on IRA Balances Accumulated as of 2011

Summary: In 2014, the U.S. federal government will forgo an estimated $17.5 billion in tax revenue from IRAs. Congress limited annual contributions to IRAs to prevent the tax-favored accumulation of unduly large balances, but concerns have been raised that tax benefits accrue primarily for higher -income individuals. This GAO report provides observations based on ongoing work on information on IRA balances in terms of reported fair market value aggregated by taxpayers.

Source: Gao.gov, October 2014

State of U.S. Employee Retirement Preparedness

Summary: Financial Finesse has released its annual research report on the state of U.S. employee retirement preparedness for 2014. This 15 page report finds employers are taking the right steps to improve retirement plan preparedness, but economic and market uncertainty may be creeping into the national psyche.

Source: Financialfinesse.com , October 2014

Longevity Insurance in DC Plans -- Paving the Way for QLACs

Summary: The IRS's QLAC regulations are a step in the right direction toward helping individuals better manage longevity risk. This is a seven page detailed review of the 2014 regulations on qualifying longevity annuity contracts and plan sponsor considerations.

Source: Aon.com , October 2014

How Mariner Holdings Is Angling to Become a $3-billion 401k Company Overnight

Summary: Marty Bicknell has catapulted his company into the 401k business with advised assets of $3 billion and a very senior staff, and another RIA may get nicked for $2 billion in the bargain. The chief executive and founder of Mariner Holdings in Leawood, Kan. accomplished this feat by poaching a good portion of the Kansas City team that was formerly part of SageView Advisory Group.

Source: Riabiz.com, October 2014

Venue Selection Clause in Retirement Plan is Enforceable According to Sixth Circuit

Summary: On October 14, 2014, in Smith v. AEGON Companies Pension Plan, the US Court of Appeals for the Sixth Circuit held that a venue selection clause in a retirement plan governed by ERISA that limited venue to a specific district court was enforceable.

Source: Practicallaw.com, October 2014

Tips for Effective Retirement Practice Marketing

Summary: Marketing skill is essential in building up a retirement advisory practice, says Sean Ciemiewicz of Retirement Benefits Group, but public relations can be overwhelming for the unprepared. The first marketing lesson Ciemiewicz shares with advisers, both independents and those affiliated with a larger firm, is that it is possible to be successful in marketing without spending all that much time on it.

Source: Planadviser.com, October 2014

What a 401k Plan Really Owes Employees

Summary: If you had a choice between two share classes of the same mutual fund -- the only difference being that one class charged higher fees and was therefore guaranteed to have poorer returns -- the choice would not seem to be difficult. But trustees of one 401k plan decided to take the one that charged higher fees. Article deals with the trustees responsibilities.

Source: Nytimes.com, October 2014

To Have an Expert or Not: A Fiduciary's Quandary

Summary: Generally, the only real requirement for someone to act as a fiduciary of a benefit plan under ERISA is that they be a "reasonably prudent person" and that they act with diligence and due care. That is the essence of ERISA Section 404. However, Section 404 includes that the measurement of care is based on a reasonable person "familiar with such matters." Thus, the law recognizes that someone could possibly have to look outside of their own knowledge in order to be acting reasonably. Author talks about what this means.

Source: Foxrothschild.com, October 2014

Saving for Retirement Not Happening for a Third of Middle Class

Summary: Saving for retirement is a formidable challenge for middle-class Americans, with 34% not currently contributing anything to a 401k, an IRA or other retirement savings vehicle, according to the fifth annual Wells Fargo Middle-Class Retirement study. Forty-one percent of middle-class Americans between the ages of 50 and 59 are not currently saving for retirement. Nearly a third (31%) of all respondents say they will not have enough money to "survive" on in retirement, and this increases to nearly half (48%) of middle-class Americans in their 50s.

Source: 401khelpcenter.com, October 2014

How to Lower 401k Costs in a Buyer's Market

Summary: Changes in technology have "flipped the field" for 401k plan services. New technologies offer better and cheaper ways to deliver traditional plan services. These technologies are cheap, scalable and available to all plans. As a result, plan sponsors are in the power position when selecting retirement plan professionals, regardless of the number of employees or total assets in the plan.

Source: Marketwatch.com, October 2014

Borzi Taking a Back Seat on Fiduciary Rule

Summary: The leading player in the DOL's effort to raise investment advice standards for retirement plans is patiently waiting on the sidelines while her boss talks to opponents of the measure. Labor Secretary Thomas Perez has been meeting with industry representatives to hear their qualms about the measure, which would expand the definition of fiduciary under federal retirement law to include more advisers, such as brokers who sell individual retirement accounts.

Source: Investmentnews.com (free registration may be required), October 2014

401k Index Shows Higher-Than-Normal Movement Away From Equities

Summary: According to the Aon Hewitt 401k Index, which tracks the 401k trading activities of nearly 1.3 million participants, representing nearly $160 billion in collective assets, five of the first 11 trading days of October saw "moderate" or "high" levels of 401k trading activity.

Source: 401khelpcenter.com, October 2014

Fees Can Be Touchy Subject for Advisers

Summary: No one wants to talk about it, but everyone wants to know: How do other retirement plan advisers arrive at a fee for their plans? The basis of compensation -- flat fee or using a percentage of plan assets -- is one of the biggest dividing lines in determining fees. Here, some advisers weigh in on their methods.

Source: Planadviser.com, October 2014

A Look at Private-Sector Retirement Plan Income After ERISA

Summary: The importance of private-sector DB pensions in providing retirement income is often exaggerated. The time before the emergence of 401k plans in 1981 has been characterized by many as the golden age of the golden watch: a time when most private-sector workers retired with a monthly pension check that replaced a significant portion of their pre-retirement income. Against this standard, 401k plans are judged to be falling short. The facts support a different narrative.

Source: Ici.org , October 2014

Interview: Jerry Schlichter Reveals Three Ways 401k Plan Sponsors Can Avoid a Fiduciary Breach

Summary: Jerry Schlichter has made a name for himself and his firm as lead attorney on numerous cases on behalf of employees and retirees involving claims of excessive fees and fiduciary breaches in large 401k plans. Here, he talks about how plan sponsors might reduce their fiduciary liability while helping retirement savers have the best chance to enjoy a comfortable retirement.

Source: Fiduciarynews.com, October 2014

Nearly Half of Americans Surveyed Think They Pay Zero Retirement Investment Fees

Summary: A new survey commissioned by retirement investment advisory firm Rebalance IRA finds that many full-time employed baby boomers do not have a clear understanding of the fees they are paying in their retirement accounts. When asked what they pay in retirement account fees, 46 percent believed that they do not pay any fees at all.

Source: 401khelpcenter.com, October 2014

Five Ways Employers Can Improve Their 401ks

Summary: 401k's and similar plans play a vital role in the American retirement system by helping workers save and invest for retirement. Yet, workers need to save more to achieve a financially secure retirement and a few plan design changes could help them do so. Here are five suggestions.

Source: 401khelpcenter.com, October 2014

Court Dismisses Stock Drop Case Against UBS

Summary: A federal district court judge has found a participant in the UBS Savings and Investment Plan lacks standing to sue regarding the offering of UBS company stock in the plan's investment lineup.

Source: Plansponsor.com, October 2014*

Hardship Distributions From 401k Plans

Summary: Hardship distributions are a valuable component of many 401k plans, but authorizing plan distributions that do not satisfy the IRS hardship requirements can result in plan disqualification and adverse tax consequences for the participants and the plan sponsor. This article is a close-up look at the rules concerning hardship distributions.

Source: Markleyactuarial.com, October 2014

The Fiduciary Duty to Hire Expert Advisers

Summary: This 34 page article in the Journal of Deferred Compensation by Fidelity's Tom Peller explains when fiduciaries must hire experts and the three steps courts expect fiduciaries to follow when using expert assistance.

Source: Fidelity.com , October 2014

Hiring an ERISA 3(38) Investment Manager

Summary: In recent years, several high-profile lawsuits have alleged that employers violated their fiduciary duty to prudently select and monitor the investment options offered in their 401k plans. These lawsuits have targeted larger plans, but the fiduciary standards cited apply equally to both large and small business retirement plans. Because employers want to avoid 401k litigation, hiring an ERISA 3(38) Investment Manager can be the simplest way to limit 401k investment liability.

Source: Employeefiduciary.com, October 2014

A Benefits Balancing Act

Summary: Senior finance executives are increasingly treating employee benefits as an opportunity for competitive advantage, as they seek to balance their core fiscal-responsibility mandate while giving employees what they want -- and need.

Source: Cfo.com, October 2014

New Rules for IRA Rollovers Coming

Summary: The Department of Labor is likely to hold broker-dealers who chase IRA rollovers to the same fiduciary standards that retirement advisors must meet. That was the prediction offered Friday by ERISA attorney Fred Reish, who noted that, with an estimated $2 trillion in the 401k accounts of baby boomers at stake, regulators are "taking it all very seriously."

Source: Benefitspro.com, October 2014

IRS Drafting New Form for Qualified Longevity Annuity Contracts

Summary: The IRS is drafting a new form to be used to report the status of Qualified Longevity Annuity Contracts held in retirement plan accounts and IRAs. The new form, not yet released by the IRS, is Form 5498-A, Qualified Longevity Annuity Contract Information.

Source: Ascensus.com, October 2014

Is Your QDIA Increasing Your Fiduciary Risk?

Summary: If a Qualified Default Investment Alternative is supposed to help employees, how can it increase your fiduciary risk? The QDIA is supposed to go under a due diligence screen similar to your other investments. This screen is your fiduciary liability unless you transfer the risk to a financial professional that takes on the risk of its selection, monitoring and replacement. Many financial professionals and the press say that the target date strategy is the most popular. They often then rush to recommend its use. However, what is it and what are the other choices?

Source: 401kadvisor.us, October 2014

Payments to 401k Following Misappropriation Are Restorative, Not Plan Contributions

Summary: In a private letter ruling, the IRS has concluded that an employer's proposed payments to a 401k plan to replace losses resulting from fraudulent activity will constitute restorative payments, not plan contributions. The proposal followed a DOL investigation that uncovered misappropriation of plan funds and related false statements (in violation of ERISA) over a period of nearly five years by an individual employed by a plan service provider, ultimately leading to criminal charges against the individual.

Source: Ebia.com, October 2014

Pursuing Rollovers in an Evolving Regulatory Landscape

Summary: The current regulatory environment can present challenges to advisors who provide services to retirement plans or retirement plan participants. Paper identifies steps for advisors to consider in light of the current regulatory environment and anticipated developments pertaining to capturing rollovers.

Source: Pershing.com, October 2014

Managed Services Help Recordkeepers Evolve Their Operations & Grow Revenue

Summary: Both technology and operational issues make it difficult for retirement administrators to tame back-office complexity, reduce costs, deliver new products and services, and communicate over new channels. Managed services, including IT outsourcing and business process outsourcing, can help retirement administrators overcome these challenges.

Source: Sungard.com, October 2014

Farewell to Company Stock, or Not?

Summary: This article deals with DC litigation around company stock and the potential effect of the recent Supreme Court decision in Fifth Third Bancorp v. Dudenhoefferon. It suggests that the risk to plan sponsors of offering company stock may be slightly higher given the Court's rejection of the presumption of prudence and explains that simply "hardwiring" company stock into a DC plan document and then following the document without more process will not be sufficient.

Source: Pimco.com , October 2014

The Australian and United States Retirement Income System: A Comparison

Summary: This paper compares the Australian and US economies and demographics, and then describe the Australian arrangements and assess its efficiency and efficacy in delivering retirement support. It focuses especially on the means testing of the first pillar in Australia and the mandated membership of pre-funded private pension plans.

Source: Pensionresearchcouncil.org, October 2014

2014 Guardian Workplace Benefits Study

Summary: This 70 page study examines five key issues from both the employer and employee perspectives. It also examines additional issues related to how this changing benefits environment is affecting American workers. Findings in this study suggest that while there may be changes in how benefits are offered and administered in the coming years, employee benefits continue to play a vital role in workforce financial and general well-being, as well as being an important element in attracting and retaining employees.

Source: Guardianworkplace.com , October 2014

More 403(b) Plan Sponsors Adopting Industry Best Practices

Summary: Higher education retirement plan sponsors have made great strides in 2013 and 2014 toward enhancing their retirement plan designs in order to increase participant success, lessen their administrative burden, and minimize fiduciary risk, according to the fourth edition of the 'Higher Education Retirement Plan Survey' from Cammack Retirement Group.

Source: 401khelpcenter.com, October 2014

End of "Amateur Hour" Sharpens the Focus of DCIO Sales Efforts

Summary: "Amateur hour is over, we're now fighting for every dollar," this is how a defined contribution investment-only sales leader from a large global asset manager recently described the DCIO business. Research just released takes an in-depth look at DCIO distribution benchmarks and strategy.

Source: 401khelpcenter.com, October 2014

Canada's Retirement Income System Ranks High

Summary: Canada's retirement income system maintained its 'B' grade in the 2014 edition of the Melbourne Mercer Global Pension Index (MMGPI), reinforcing its position as one of the leading retirement income systems in the world. While Canada's ranking fell from sixth to seventh after the addition of five new countries, Canada's overall score in the index increased slightly from 67.9 to 69.1.

Source: Benefitscanada.com, October 2014

Bill Sharpe on Retirement Planning

Summary: "When you are talking about retirement-income strategies, you're discussing probability distributions of what your income will be next year and every year thereafter. You've got 40 or 50 dimensions, even if you only do annual joint-probability distributions. To think about what one of those problems looks like boggles the mind. To compare an outcome with another two, three, four or 10 outcomes to decide which one you like best is a nasty, nasty problem."

Source: Advisorperspectives.com, October 2014

Are Employees Getting What They Need From Their Workplace Benefits?

Summary: Seventy-four percent of middle-income employees derive the majority of their financial security from the benefits they receive at the workplace, according to the 2014 Guardian Workplace Benefits Study. Despite the importance of benefits, only one in four employees finds their company's communications helpful in choosing what's right for them.

Source: 401khelpcenter.com, October 2014

Information on Brokerage Windows Requested by DOL

Summary: The DOL recently released a request for information concerning brokerage windows in 401k plans. The RFI includes 39 questions covering definitional issues, plan offerings, participation, selection, information available to fiduciaries, costs, disclosure, the role of advisors, fiduciary duties and reporting. This article begins by reviewing the brokerage window issue and then discusses the DOL's RFI.

Source: Octoberthree.com, October 2014

NEPC 2014 Defined Contribution Plan & Fee Survey: What Plan Sponsors Are Doing Now

Summary: NEPC's Defined Contribution practice group conducts an annual Defined Contribution Plan and Fee Survey to help plan sponsors understand and benchmark the fees, pricing and structure of their defined contribution plans. In its ninth year now, this 2014 Survey includes data from 113 plans, encompassing over 1.4 million plan participants. This is a five page summary.

Source: Nepc.com , October 2014

Why Women Are Losing the Retirement Savings Game

Summary: When it comes to putting money away for retirement, women outmatch men. They are more diligent savers and more likely to put a bigger percentage of their paycheck into a savings plan. But when it comes to the final savings tally, women are falling far behind.

Source: Cnn.com, October 2014

3(16)s: Prudent Course or Invitation for Mischief?

Summary: Plan sponsors for years have shared fiduciary duty by outsourcing to a 3(21), meaning someone who recommends a menu of investment choices. They also can hand over investment selection and management duties by using a 3(38) service provider. Now, increasingly, sponsors are turning to 3(16) services to offload the job of selecting and monitoring trustees and other service providers, investments, as well as the investment adviser to their plans. It's, like, the ultimate sponsor solution -- if done right.

Source: Benefitspro.com, October 2014

Supreme Court to Hear Imprudent 401k Fees Case

Summary: The U.S. Supreme Court on Oct. 2 agreed to hear a case that, if overruled, could make 401k fee lawsuits by participants in employer-sponsored defined contribution retirement plans much easier.

Source: Thompson.com, October 2014

Helping Participants Manage Longevity Risk: Proceed With Caution

Summary: The DOL and IRS have published final rules for a certain type of annuity, called a qualifying longevity annuity contract or QLAC. These rules do not solve all the problems or answer all the questions related to QLACs. Income adequacy, including maximizing retirement income and managing it during retirement, is a major challenge for DC plan participants that requires a cohesive solution involving participants, employers and government. These regulations may be a first step along the road to helping participants manage the risk of outliving their retirement income, but plan sponsors should proceed with caution.

Source: Sibson.com , October 2014

Another Strategy for Increasing Participation in the 403(b) Plan

Summary: Are there recommendations for increasing participation in 403(b) plans? One is adding the Roth 403(b) option to the plan which will appeal to a wider audience of employees. As an example, we know that younger employees, currently in low income tax brackets, may not be particularly interested in income tax deferral. But those same employees, will be motivated with the opportunity to save after-tax dollars in the Roth option, in order to look forward to a significant number of years in which growth or earnings can be accumulated, and ultimately, distributed tax free.

Source: Ntsa-net.org, October 2014

The PPA Restatement Process

Summary: The PPA restatement process is underway. The Pension Protection Act of 2006 restatement process for pre-approved defined contribution, 401(a) plans, which began May 1, 2014, will run until April 30, 2016. This article addresses frequently asked questions about the restatement process and suggests some broad considerations to bear in mind as plans are restated.

Source: Ftwilliam.com , October 2014

Recent IRS Guidance on Roth Rollovers Lifts Long-Standing Ambiguity, Practitioners Say

Summary: Recently released IRS guidance on rollovers of after-tax money to Roth individual retirement accounts cleared up ambiguity that had existed for years, practitioners said. The guidance in proposed rules (REG-105739-11, RIN 1545-BK08) and accompanying guidance in Notice 2014-54 clarified that plan participants can transfer after-tax savings from their retirement plans to Roth IRAs.

Source: Bna.com, October 2014

Top Four Reasons for Understanding Plan Fees

Summary: All services have costs and it's important that plan sponsors make prudent decisions regarding plan fees and expenses and document the evaluation process. Article reviews the top four reasons plan sponsors need to understand their plan fees and expenses.

Source: Blueprairiegroup.com, October 2014

Advisor Share of DC Assets Growing

Summary: Retirement plan advisors controlled 28 percent of the defined contribution market at the end of 2013, according to Cerulli Associates. That figure is expected to grow if only because plan sponsors facing greater regulatory oversight are more frequently turning to advisors to manage plans.

Source: Benefitspro.com, October 2014

2014 Year-End Qualified Retirement Plan Checklist

Summary: It's time to ensure year-end qualified plan deadlines are satisfied. Here is a checklist designed to help employers with this process. This checklist addresses both year-end deadlines and January 2015 deadlines which sponsors of qualified retirement plans may wish to begin preparing for now.

Source: Benefitsbryancave.com, October 2014

Firms Boost Equity Weighting in 401k Target-Date Funds

Summary: In changes that have raised the potential investment risks in many 401k retirement accounts, BlackRock, Fidelity and PIMCO are increasing the stock allocation of their target-date funds. The changes have prompted concerns from consultants and analysts.

Source: Reuters.com, October 2014

Too Early to Hit the PIMCO Panic Button

Summary: Plan sponsors should not be upset by outflows from the Total Return Fund and the abrupt departure of Bill Gross, PIMCO's lead portfolio manager, sources say. Even though $23 billion flooded out of the fund during the last days of September, there's been no "mass exodus of funds."

Source: Planadviser.com, October 2014

Judge Rejects Citigroup Bid to Dismiss 401k Fee Case

Summary: Nearly seven years after their lawsuit was filed, the plaintiffs in a "self-dealing" case against Citigroup will be allowed to move ahead with their claims. On Sept. 30, U.S. District Judge Sidney Stein denied Citigroup's motion for summary judgment, which would have thrown the case out of court based on Citigroup's assertion that the statute of limitations had passed.

Source: Benefitspro.com, October 2014

New Allocation Rules for Roth Account Rollovers

Summary: In proposed regulations and Notice 2014-54, the Treasury Department and the Internal Revenue Service have revised the manner in which the after-tax amounts credited to a Roth account under a 401k, 403(b) or governmental 457(b) plan may be rolled over to a Roth account in another employer plan or to a Roth IRA.

Source: Mcguirewoods.com, October 2014

Criminal Conviction for ERISA Disclosure or Reporting Violations -- Potential for Criminal Liability

Summary: ERISA requires plan administrators to provide various documents to plan participants, including: summary plan description, summary of material modification, summary annual report and periodic pension benefit statements. In addition, plan administrators must file annual reports with the DOL. Violating these disclosure and reporting obligations, or the obligation to retain records necessary to verify information on annual reports, could lead to criminal liability.

Source: Groom.com, October 2014

The 401k Conundrum: Lots of Cash, No Best Way to Make It Last

Summary: Even if you've socked plenty of money away in your 401k plan and invested it carefully, some of your toughest decisions lie ahead. Strategies for drawing down lump-sum accounts in retirement -- more important than ever in the 401k era -- have received little attention from policy makers. For retirees, choices about how to spend a life's worth of savings are fraught with tricky calculations about financial risk, taxes and death.

Source: Garp.org, October 2014

IRS Discussed Retirement Plans Startup Costs Tax Credit

Summary: In Retirement News for Employers, October 2, 2014 Edition, the Internal Revenue Service discusses the startup costs tax credit for retirement plans. Here's what they said.

Source: Erisalawyerblog.com, October 2014

Consequences of Plan Disqualification

Summary: When a retirement plan is disqualified, the plan's trust loses its tax-exempt status and becomes a nonexempt trust. Plan disqualification has sever affects three groups: employees, employer, and the plan's trust. Here is an overview.

Source: Ekonbenefits.com , October 2014

High Court to Address Statute of Limitations for Suits Challenging Retirement Plan Fees

Summary: The U.S. Supreme Court announced that it will wade into the world of ERISA plan fee litigation. The case presents the question: whether participants in retirement plans can hold plan fiduciaries liable for including higher-cost investment funds in the plan when those funds were initially chosen more than six years before the lawsuit, or whether these types of claims are barred by the six-year statute of limitations found in ERISA.

Source: Bna.com, October 2014

SEC Commissioner Questions Need for Expanded Fiduciary Rule

Summary: SEC Commissioner Michael Piwowar has expressed doubts about the need to expand the "standard of care" fiduciary obligation to retail brokers. "It is not clear that changes in the regulations applicable to broker-dealers and investment advisers are necessary, including the adoption of a uniform fiduciary duty," said Piwowar.

Source: Benefitspro.com, October 2014

New IRS Program for Delinquent 5500 Filers for Plans Without Employees

Summary: The IRS recently announced a temporary program to provide delinquent-filer relief for One-Participant plans. The program will run through June 2, 2015, but may be made permanent after that date. No penalty or other fee must be paid for a report filed under the program. The IRS did indicate that if the program is made permanent a filing fee may be required.

Source: Bcgbenefits.com, October 2014

Millennials Worry About Finances, but Don't Know Who to Trust

Summary: According to Fidelity Investments' first-ever Millennial Money Study, far too many Millennials (aka Gen Y, born 1980-1989) struggle to answer that question. When asked who they trust most for information on money matters, one third (33 percent) of Gen Y-ers identify their parents as the top choice, but almost one in four (23 percent) indicate they trust "no one" when it comes to advice about money, making it the second most common response.

Source: 401khelpcenter.com, October 2014

Protection From Creditors for Retirement Plan Assets

Summary: Clients and their advisers are rightfully concerned about insulating retirement plan assets from potential creditor claims both inside and outside a federal bankruptcy action. This article will greatly help CPAs and tax lawyers come to grips with the overlapping and, seemingly, conflicting laws on the issue.

Source: Aicpa.org, October 2014

IRS Simplifies Procedures for Favorable Tax Treatment on Canadian Retirement Plans

Summary: The Internal Revenue Service just made it easier for taxpayers who hold interests in either of two popular Canadian retirement plans to get favorable U.S. tax treatment and took additional steps to simplify procedures for U.S. taxpayers with these plans.

Source: 401khelpcenter.com, October 2014

Supreme Court Decision on 401k Fee Case Could Have Domino Effect

Summary: As a landmark 401k excessive fees lawsuit makes its way to the U.S. Supreme Court, industry experts say the court's decision could set off a domino effect of changes -- from the process of choosing plan funds to fiduciaries' ability to obtain liability insurance.

Source: Investmentnews.com (free registration may be required), October 2014

Deposit Deadlines for ERISA and Non-ERISA 403(b) Plans

Summary: The deposit timing rules that are applicable to 401k plans also apply to elective deferrals under an ERISA 403(b) plan. With regard to non-ERISA 403(b) plans, regulation section 1.403(b)-8(b) requires that deferrals to a 403(b) plan must be transferred to the insurance company within a period that is not longer than is reasonable for the proper administration of the plan. IRS has not defined what is reasonable.

Source: Tagdata.com, October 2014

Employer's Fiduciary Liability in Investing Profit Sharing Contributions

Summary: A prospective client has a 401k plan. The investment of the plan's assets is directed by the participants with the exception of the employer profit sharing contribution. That is invested at the discretion of the employer. Article answers the question, "What is the employer's potential fiduciary liability with regard to the profit sharing source?"

Source: Tagdata.com, October 2014

IRS Mandates Electronic Filing by Large Retirement Plans

Summary: IRS issued final regulations requiring employer retirement plan sponsors or administrators that file at least 250 returns in a calendar year to submit Form 5500 annual reports and other plan-related documents electronically. The regulations are effective Sept. 29th.

Source: Thompson.com, October 2014

401k Plan Fee Disclosure Matters to the DOL

Summary: In speaking at the 2014 Washington Update presented by the New England Employee Benefits Council, Kristen Zarenko, Senior Law Specialist of EBSA's Office of Regulations and Interpretations, noted that EBSA enforcement actions will continue to require plan sponsors to provide copies of annual fee disclosures from covered service providers. Zarenko also observed that a surprisingly large number of plan sponsors have not been able produce the required documents during the first two years of enforcement.

Source: Thinkhr.com, October 2014

Three Ways to Increase Employee Participation in Your 401k Plan

Summary: Helping educate your employees about the benefits of a 401k plan, and in the process debunking common plan myths, can go a long way towards getting more employees to enroll. But there are other ways you can help increase participation too. Article takes a brief look at three of them.

Source: Mossadams.com, October 2014

PIMCO Is Losing Assets to Doubleline, Metwest, Blackrock and Others

Summary: Right or wrong, the market has been loud and clear over the past week that it believes Bill Gross' sudden departure from PIMCO marked the ultimate sell signal for the PIMCO Total Return Fund (PTTAX). The big issue now is where that money will land and why.

Source: Investmentnews.com (free registration may be required), October 2014

ICI Study Examines Who Gets Retirement Plans

Summary: An updated study released today by the Investment Company Institute finds that most workers who are likely to have the ability to save and to be focused primarily on saving for retirement have access to an employer-provided retirement plan. In Who Gets Retirement Plans and Why, 2013, ICI uses the most recent data on pension coverage to update its analysis of the employee characteristics that make some employers more likely to offer, and some workers more likely to seek, compensation packages that include retirement benefits.

Source: Ici.org, October 2014

Re-Proposal of DOL Fiduciary Advice Regulation

Summary: The DOL has pushed back the date for the re-proposal of the fiduciary advice regulation to January of next year. In addition, the SEC is working with the DOL to help determine the impact of an expanded fiduciary advice regulation on the ability of investors to continue to receive adequate investment services. Finally, the White House is also evaluating the potential impact of a regulation that expands the definition of fiduciary advice. The big question, of course, is what does all of this mean?

Source: Fredreish.com, October 2014

How to Help Millennials Save for Retirement: Four Tips for Plan Sponsors

Summary: But let's face it: learning about and using their employer's retirement program is just plain boring or worse yet, scary, to Millennials. So how can plan sponsors support and engage this fast-growing critical group of employees? Article provides four tips.

Source: Francisinvco.com, October 2014

Beyond Auto-Mania: The Future of 401k Plan Design

Summary: The movement toward auto-enrollment appears to have hit a plateau; the share of plans adopting it has stabilized at around 50 percent. Article discusses where we go beyond this "auto-mania" and new developments can we expect to see on the horizon.

Source: Fiduciarynews.com, October 2014

Video: Are Your Loan Repayments Processed in a Timely Manner?

Summary: "Sufficiently Similar" are the words that the Department of Labor used when describing a Plan's requirements to remit participant loan repayments on a timely basis. Watch this one minute video to learn what that means.

Source: Erisasunscreen.com, October 2014

High Court to Hear ERISA Fiduciary Breach Case

Summary: Lower courts have held that Edison International employees could not sue their 401k plan administrator for breach of fiduciary duty because their claims were time-barred under ERISA. Now the U.S. Supreme Court has agreed to consider the case.

Source: Cfo.com, October 2014

Secrets for Getting High Earners to Save More Through Retirement Plans

Summary: Plan advisers have a new arrow in their quiver when it comes to wooing new employer clients: plan designs aimed at helping highly-paid personnel save even more for retirement. Enter the cash balance pension plan and the profit-sharing plan, which can work alongside a 401k.

Source: Americasbest401k.com, October 2014

Supreme Court Grants Cert in Tibble v. Edison

Summary: On October 2, 2014, the United States Supreme Court granted the Plaintiffs' Petition for Writ of Certiorari in Tibble v. Edison International. Oral arguments in Tibble have not yet been set but currently the Court has availability in January. If heard that late, we can expect a decision sometime between late spring and the end of June when the term ends.

Source: 401kfeedisclosure.com, October 2014

Do Customized Target-Date Funds Hit the Target?

Summary: As automatic enrollment becomes a staple of 401k plan design, the resulting deferrals are increasingly invested in target-date funds. But a growing issue for plan sponsors is whether off-the-shelf TDFs are robust enough for their growing role in retirement plan investing. Article discusses the question of whether there are a better option for participants than the off-the-shelf TDFs offered in most 401k plans.

Source: Shrm.org, October 2014

The Slow Rise of the Tablet App for Retirement Plans

Summary: Apps that are created for use on tablets offer the potential for greater functionality than a typical mobile app, Corporate Insight says in its recent report "Retirement on the Move: Tablet Edition," an overview of retirement plan tablet apps. In the defined contribution world, users could view account balances and analyze fund data or asset allocations on the move, and the larger screens of tablets would make certain tools easier to use and multimedia resources more accessible.

Source: Planadviser.com, October 2014

Will ERISA Be Balkanized?

Summary: Despite its success, the private retirement system has been subject to the criticism that it is not sufficiently accessible to low wage workers, which has resulted in numerous proposals that would establish government-sponsored retirement savings arrangements for private-sector workers. Before signing off on these parallel systems, this article suggests that one should carefully examine the security of the funds they would control and whether their special rules would undercut support for the current system.

Source: Wagnerlawgroup.com , October 2014

Infographic: The Boomerang Generation's Retirement Planning

Summary: There are several steps Millennials can take to secure a better retirement. This infographic features 12 tips Millennials should consider when developing their retirement strategy.

Source: Retirementtownhall.com, October 2014

Third Circuit Affirms Dismissal of Excessive Fee Claims Against John Hancock

Summary: The plaintiffs alleged that the insurer acted as an ERISA fiduciary and violated ERISA by charging excessive fees, including fund advisory fees, sales & service fees, 12b-1 fees, and revenue sharing. The U. S. Court of Appeals for the Third Circuit affirmed dismissal of all claims against the defendant insurance company in a case challenging 401k plan fees.

Source: Jdsupra.com, October 2014

Terminating a Retirement Plan

Summary: Retirement plans must be established with the intention of continuing indefinitely. However, you may terminate your plan when it no longer suits your business needs. This IRS piece outlines the general steps you need to take to terminate a retirement plan.

Source: Irs.gov, October 2014

Have You Had Your Retirement Plan Check-Up This Year?

Summary: A retirement plan needs regular care to keep it operating properly. Your plan's care should include a regular review of your plan's basic operations. These one-page checklists are a quick way to start your review. Each checklist links to a Fix-It Guide with tips on how to find, fix and avoid each potential error.

Source: Irs.gov, October 2014

John Hancock Dodges ERISA Class Action -- An Analysis of the Bigger Picture

Summary: Author writes, "The open question from these cases is whether 3(21)(A)(iii) requires the actor to actually exercise their discretion or not, i.e. it's a fiduciary breach to be both malfeasant and nonfeasant. The reason this has not been as prominent is that in most instances, the allegations are centered around the investments which generate the fees and they have little to do with plan administration. The chances are high that allegations against the large service providers in the future will involve claims under 3(21)(A(iii), even if the investments are the core of the conduct, i.e. revenue sharing."

Source: Fraplantools.com, October 2014

Steps the 401k Fiduciary Can Take to Avoid Poor Plan Design

Summary: A poorly designed 401k plan, rather than promoting employee savings, actually dampens it. Poor plan design, specifically, leakage and weak savings, is the main villain in this drama. This article reviews a number of design alternatives.

Source: Fiduciarynews.com, October 2014

Does It Matter That the 401k Service Provider Is Not a Fiduciary?

Summary: Stephen Rosenberg comments here on the Third Circuit's decision last week in Santomenno v. John Hancock, in which the Court held that John Hancock's role as an advisor and service provider for a company 401k plan, by which it helped select fund options and administer participant investments, did not render it a functional fiduciary under ERISA for purposes of an excessive fee claim.

Source: Bostonerisalaw.com, October 2014

Why Retirement Plan Fiduciaries Need to Be More Engaged

Summary: For the 3rd consecutive year, Chatham Partners has conducted its 'TPA Satisfaction and Needs Assessment Study'; surveying 199 TPAs and gathering their opinions on 22 leading retirement service providers. The study assessed TPAs' attitudes and perceptions of leading retirement service providers, including their levels of satisfaction with providers' TPA support services, personnel, technology, product and service offering, and overall impressions. This is an overview of the findings.

Source: Benefitnews.com, October 2014

Chatham Partners Release TPA Benchmarking Study

Summary: For the 3rd consecutive year, Chatham Partners has conducted its 'TPA Satisfaction and Needs Assessment Study'; surveying 199 TPAs and gathering their opinions on 22 leading retirement service providers. The study assessed TPAs' attitudes and perceptions of leading retirement service providers, including their levels of satisfaction with providers' TPA support services, personnel, technology, product and service offering, and overall impressions. This is an overview of the findings.

Source: 401khelpcenter.com, October 2014

Role of the Independent Fiduciary

Summary: This is a seven page overview of the role of the independent fiduciary including background principles, common situations where an independent fiduciary is either legally required or advisable, the duties of an independent fiduciary and some practical pointers regarding what to expect when employing such a fiduciary.

Source: Ajg.com , October 2014

Considering a 401k Loan? Weigh Your Options Before Borrowing

Summary: Nearly one million 401k investors initiated a loan from their account during the past year. To help pay back these loans, many investors reduce or stop saving in their 401k altogether. But there can be long-term consequences for investors who stop saving, including the potential loss of up to hundreds of dollars in monthly retirement income. Here is a good review on the issue.

Source: 401khelpcenter.com, October 2014

How the Bill Gross Hire Completes the PIMCO-ization of Janus

Summary: For nearly a decade and a half, Janus Capital Group has been trying to shed its gunslinger image and has clearly developed a deeply felt PIMCO-envy. Now with Janus's chairman, chief executive and superstar seats filled by ex-PIMCO guys, the dream is coming true.

Source: Riabiz.com, October 2014

Retirement Plan Advisers Set to Flee PIMCO After Gross Exit

Summary: About 27,000 of the largest corporate 401k plans in the country had money in the Total Return Fund as of the end of 2012. The roster includes Wal-Mart's $18 billion plan, as well as Raytheon's and Verizon's. Bill Gross's sudden departure from PIMCO was the last straw for many advisors and they are advising clients to head for the exit.

Source: Reuters.com, October 2014


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