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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.


    
The New Prudent Fee Fiduciary Standard

Summary: The United States District Court for Southern District of New York has provided the long-anticipated introduction, or more specifically the judicial verification, of Vanguard's funds' fees as a comparative basis for assessing excessive of fund fees was established. While the case is not binding on other courts, the rationale used by the court is persuasive and will undoubtedly be referenced by plaintiffs' attorneys in both 401k and other cases where breach of fiduciary issues involving fee issues are involved.

Source: Prudent Investment Adviser Blog, December 2014

How to Settle an ERISA Breach of Fiduciary Duty Case: A Checklist for Plan Trustees to Consider

Summary: Settling fiduciary breach claims is often viewed by trustees as a bitter pill to swallow, as it requires them to abandon their right to defend themselves when they feel they have done nothing wrong. But prudence dictates that, before any case is settled, the trustees pursue all practical means, with the aid of their counsel, to reduce this risk to the barest minimum. Article reviews some strategies to consider.

Source: Proskauer.com, December 2014

The Importance of Hiring a Skilled Plan Auditor

Summary: For plan sponsors with more than 100 participants, one the most important fiduciary duties is to ensure the plan receives a quality and independent annual financial review. A report from AICPA reminds plan sponsors at mid- and large companies of the importance of their duty to hire a qualified independent auditor to examine the plan each year.

Source: Plansponsor.com, December 2014

The Future of Technology and Services for Retirement Plans

Summary: Many retirement plan service providers are investing in technology to link and leverage data from banks, insurers and other places where participants hold assets outside their retirement accounts. "I'm expecting differentiation in the coming years that will see leading plan provider Internet sites become highly responsive and customizable for the individual participant," says Gary Josephs, managing principal at Retirement Benefits Group.

Source: Plansponsor.com, December 2014

DOL Releases Form 5500 and Form M-1 for 2014 Plan Year

Summary: Those responsible for preparing and filing Forms 5500 and M-1 will want to familiarize themselves with the new requirements, and might consider allowing extra preparation time to gather the additional required information. Remember that these are informational copies of these Forms, which must be filed electronically.

Source: Ebia.com, December 2014

DOL 2014 Fall Regulatory Agenda

Summary: The Department of Labor has released the 2014 Fall Regulatory Agenda. The updated agenda provides the anticipated publication dates for the next steps in the regulatory process for nearly a dozen ERISA items. This bulletin discusses the agenda for the retirement plan projects that we believe are most important to plan sponsors and service providers.

Source: Drinkerbiddle.com, December 2014

401k Plan Asset Allocation, Account Balances, and Loan Activity in 2013

Summary: This comprehensive 56 page report is an update of EBRI and ICI's ongoing research into 401k plan participants' activity through year-end 2013.The report is divided into four sections: the first describes the EBRI/ICI 401k database; the second presents a snapshot of participant account balances at year-end 2013; the third looks at participants' asset allocations, including analysis of 401k participants' use of target-date, or lifecycle, funds; and the fourth focuses on participants' 401k loan activity.

Source: Ebri.org , December 2014

Majority of New 401k Participants Rely on Balanced and Target-Date Funds, EBRI

Summary: The evolution of 401k plan designs has resulted in a significant increase in the use of balanced funds, including target-date funds, by recently hired 401k plan participants in 2013 compared with recently hired participants 15 years ago, according to a newly updated annual report by the Employee Benefit Research Institute (EBRI).

Source: Ebri.org , December 2014

Mercer Identifies 10 Steps DC Plan Sponsors Should Take in 2015

Summary: In this piece, Mercer has defined ten steps that DC plan sponsors should take in 2015 to mitigate fiduciary risks and provide participants with access to solutions that meet their long-term retirement needs.

Source: 401khelpcenter.com, December 2014

Baby Boomers Are Revolutionizing Retirement, Are Employers Ready?

Summary: The nonprofit Transamerica Center for Retirement Studies just released a new report, Baby Boomer Workers are Revolutionizing Retirement: Are They and Their Employers Ready?, which examines the retirement vision among Baby Boomer workers (born between 1946 and 1964) and the level of involvement among employers to facilitate their transitioning into retirement. Report details included in article.

Source: 401khelpcenter.com, December 2014

DCIO Distribution Staffs to Grow in 2015, Survey

Summary: Defined Contribution Investment-Only (DCIO) providers, those asset managers who offer investment products separately from recordkeeping services, will continue expanding their distribution staffs in 2015. A survey of DCIO organizations found that 79% of them plan to increase staffing further in at least one distribution-related role, according to new research from Ignites Retirement Research.

Source: 401khelpcenter.com, December 2014

Cerulli Numbers Buttress the RIAs-Supplant-Brokers Theorem

Summary: The market share of the RIA channel will grow 40% over the next four years and wirehouses will lose 5% of their towering market share, according to a new report from Cerulli Associates of Boston. But not all experts agree.

Source: Riabiz.com, December 2014

Plan Participants Share Advisor Selection Criteria

Summary: Are the advisors 401k plan participants use associated with their retirement plan, or do they use an outside advisor? What reasons were involved in making these decisions? For nearly nine-in-ten (89 percent) of retirement plan participants, honesty and trustworthiness are the most important criteria in choosing a financial advisor.

Source: Spectrem.com, December 2014

Understanding the DOL's Suggested Process for Evaluating Target-Date Funds

Summary: In this 3:14 minute video, J.P. Morgan's Client Portfolio Manager, Lynn Avitabile, discusses the U.S. Department of Labor's tips for evaluating target-date funds.

Source: Youtube.com, December 2014

IRS Amends Qualified Retirement Plan Rollover Safe Harbor Notices

Summary: The IRS has recently updated its model safe harbor notices in Notice 2014-74. This notice is to be used by plan administrators of qualified retirement plans to satisfy this rollover tax notice requirement. The changes to the safe harbor notices reflect the IRS's revised position regarding the allocation of after-tax rollover amounts where distributed to more than one destination and where the distribution consists of both pre-tax and after-tax amounts.

Source: Sgrlaw.com, December 2014

Ten Tips for Retirement Plan Executives and Managers

Summary: This article examines ten proven actions that all executives can follow to significantly and quickly improve their organizations' ERISA-related risk management programs.

Source: Rolandcriss.com , December 2014

The Adviser's Duty of Loyalty

Summary: Fred Reish and Joan Neri co-authored this article discussing the duty of loyalty of a fiduciary adviser under ERISA. Specifically, the article explains that the legal duty of a fiduciary adviser runs directly to the participants and this duty overrides any duty the fiduciary adviser may have to the plan sponsor.

Source: Planadviser.com, December 2014

The Australian Retirement Income System: Comparisons With and Lessons for the United States

Summary: Paper briefly compare the Australian and US economies and demographics, and then describes the Australian arrangements and assess its econ efficiency and efficacy in delivering retirement support. Concludes by considering insights for the evolution of the US pension reform debate as demographic change unfolds.

Source: Pensionresearchcouncil.org, December 2014

Using the Saver's Tax Credit to Increase 403(b) Plan Participation

Summary: The saver's credit is one way to providing meaningful opportunity for employees to participate in a 403(b) plan. Ellie Lowder discusses how the saver's tax credit works and provides a crib sheet of sorts from the IRS.

Source: Ntsa-net.org, December 2014

Four Tips for Plan Sponsors in 2015

Summary: If your company's 401k plan is on auto-pilot, it's time to take control. There are several timely things you should look into in order to improve the plan for the company and your employees in 2015. Here are four of the most important.

Source: Cfo.com, December 2014

Pension Power for the 401k

Summary: Companies want their employees to retire at a reasonably young age, like 65. The employees want the same. Increasingly, neither is getting their wish. New federal guidance could spur demand for guaranteed lifetime income products, which ideally can function similarly to pensions.

Source: Cfo.com, December 2014

Information Copies of 2014 Forms 5500 and Schedules Available

Summary: The DOL and IRS have jointly announced the release of the 2014 Form 5500, Annual Return/Report of Employee Benefit Plan, Form 5500-SF, Short Form Annual Return/Report of Small Employee Benefit Plan, and related filing schedules.

Source: Ascensus.com, December 2014

Top 30 401k Plans of 2014, BrightScope

Summary: BrightScope announced their sixth year-end ranking of the top 30 401k plans to recognize companies with the best 401k plans containing more than $1 billion in assets.

Source: 401khelpcenter.com, December 2014

"Choice" Architecture for 401k Plan Sponsors

Summary: Over the years, a lot of thought has gone into plan design features -- choice architecture -- that can help participants make better decisions (or, in some cases to make better decisions on their behalf). But policymakers and regulators, and the academics who sometimes advise them, tend to forget that the employer's decision to keep, and to offer these programs in the first place, is also a choice. A choice that the rules, regulations and limits bounding these programs don't always encourage.

Source: Linkedin.com, December 2014

How Small Business 401k Plans Will Look in 10 Years

Summary: Change will come about because the fundamental balance of power between plan provider and plan participant will shift to the participant. Technology has already caused some shifts. Look for these changes to accelerate. Millennials will drive these changes, as their values begin to shape financial markets.

Source: Marketwatch.com, December 2014

Form 5500 Changes Coming

Summary: Government regulators, hoping for a clearer picture on the condition of retirement plans, have announced changes to the Form 5500 and its short-form cousin that include estimates of an employer's annual contributions to a plan.

Source: Benefitspro.com, December 2014

ERISA Advisory Committee on Outsourcing Employee Benefit Plan Services

Summary: The ERISA Advisory Council presented its recommendations on two retirement issues it studied in 2014: Facilitating Lifetime Plan Participation and Outsourcing Employee Benefit Plan Services. This article briefly reviews and evaluates its findings and recommendations with respect to outsourcing employee benefit plan services.

Source: Octoberthree.com, December 2014

Lockheed Settles 401k Lawsuit

Summary: Lockheed Martin Corp. agreed to settle a $1.3 billion lawsuit over claims the defense contractor shortchanged the 120,000 workers and retirees who participate in its pension plans as a trial was set to begin this week.

Source: Bloomberg.com, December 2014

ERISA Advisory Committee on Lifetime Plan Participation

Summary: The ERISA Advisory Council presented its recommendations on two retirement issues it studied in 2014: Facilitating Lifetime Plan Participation and Outsourcing Employee Benefit Plan Services. This article discusses their recommendations on "lifetime plan participation" and how they may play out in regulatory or sponsor initiatives.

Source: Octoberthree.com, December 2014

Seven Questions to Ask Non-Profit Plan Sponsors

Summary: "Whether it's seven administrative sins, seven deadly sins, or the seven words you can't say on television, there doesn't seem to be a lot of lists showing seven positive things. I will therefore take it upon myself to list seven positive questions that should be asked of non-profit retirement plan sponsors," writes Aaron Friedman, National Practice Leader - Tax-Exempt, at the Principal Financial Group.

Source: Principal.com, December 2014

PSCA Releases Research on 403(b) Plans

Summary: Most not-for-profit organizations believe they have a responsibility to encourage their employees to save for retirement, but only 10.6 percent of those organizations are able to measure potential participant outcomes as part of their retirement plans, according to a new survey of 403(b) plan sponsors from the Plan Sponsor Council of America.

Source: 401khelpcenter.com, December 2014

Seven Reasons to Avoid 401k Loans

Summary: The flexibility offered by allowing loans is often touted as one of the good features of the 401k. However taking a loan from your 401k also carries some downsides. Here are seven reasons to avoid 401k loans.

Source: Thechicagofinancialplanner.com, December 2014

Too Hot to Handle? The Truth About Retirement Plan Audits

Summary: With the recently enacted ERISA fee disclosure rule, the DOL has increased its vigilance on plan sponsors, resulting in increased numbers of DOL audits and enforcement actions for retirement plans of all sizes. This article presents a discussion of key trends, common questions, and red flags to help retirement plan sponsors better prepare for a DOL audit.

Source: Rolandcriss.com , December 2014

Nationwide Settles 13-Year-Old Revenue Sharing Suit

Summary: After 13 years and a number of court opinions, all granting relief in the plaintiff's favor, Nationwide has presented a motion to settle a lawsuit over its revenue-sharing practices.

Source: Planadviser.com, December 2014

Lockheed Martin Case Puts 401k Plans on Trial

Summary: A trial gets under way in St. Louis that could have a big impact on the way companies select 401k plans for their employees. Lockheed Martin is being sued for choosing retirement funds that shortchanged its employees and charged high fees. The case tests the limits of a company's responsibilities to its employees at a time when 401k plans have become a central part of the nation's retirement system.

Source: Mprnews.org, December 2014

QDRO Distributions and the Age of 50

Summary: A defined contribution plan document generally may call for either waiting until the participant is age 50 or permit distribution of the designated amounts as soon as the order is otherwise deemed to a QDRO. If the document is silent on the issue, the alternate payee(s) must wait until the participant attains age 50 to receive a QDRO distribution.

Source: Mhco.com, December 2014

402(f) Notice Revised

Summary: In Notice 2014-74, the IRS issued revisions to the IRS model §402(f) notice to address both Notice 2014-54 changes for distributions scheduled to go to multiple destinations when a participant has after-tax amounts or Roth amounts and other changes. Article reviews the changes and effective dates.

Source: Mhco.com, December 2014

Onerous New 5500 Requirement for MEPs; Other Developments

Summary: Following are three recent developments affecting multiple employer 401k plans. The developments include (i) a requirement that Form 5500 filed on behalf of a multiple employer plan include an attachment identifying participating employers by name, (ii) a report that the DOL was asked to consider the application of the "open MEP" rules to a PEO MEP arrangement, and (iii) clarification from the IRS shutting down a distribution option for some MEPs.

Source: Fiduciaryprg.com, December 2014

IRS Provides Reminder on Required Distributions From Retirement Plans and IRAs

Summary: The IRS recently reminded taxpayers born before July 1, 1944, that they generally must receive payments from their IRAs and workplace retirement plans by Dec. 31st. The required distribution rules apply to owners of traditional IRAs and to participants in various workplace retirement plans, including 401k, 403(b) and 457(b) plans.

Source: Erisalawyerblog.com, December 2014

Excessive Fee Case Against Lockheed Martin Goes to Trial -- An Updated

Summary: On Monday, December 15, 2014, the excessive fee lawsuit against Lockheed Martin goes to trial in the Southern District of Illinois after 8 years since the case was filed, two trips to the 7th Circuit and one failed cert petition to the Supreme Court.

Source: Fraplantools.com, December 2014

MEP Reform: Is it Necessary? A Rebuke

Summary: Author takes issue with a recent article that claims the promotion of MEP's is "a conspiracy of Wall Street to hoist unnecessary and expensive financial products on small plans, as a way to further promote mutual fund interests."

Source: Businessofbenefits.com, December 2014

Fiduciary Advisor Files Amicus Brief on Behalf of Petitioners in Tibble V. Edison

Summary: Cambridge Fiduciary Services filed an amicus brief with the U.S. Supreme Court in Tibble v. Edison. Cambridge collaborated with Bailey & Glasser LLP, a law firm specializing in high stakes litigation, including ERISA claims. Brief outlines reasons that the Ninth Circuit should be reversed.

Source: 401khelpcenter.com, December 2014*

IRS Issues 2014 Cumulative List of Changes for Cycle E Plans, Gives Extension for Cycle D Plans

Summary: Sponsors of individually designed Cycle E plans, and their advisors, should carefully review the 2014 Cumulative List to ensure that their plan documents and determination letter applications address the issues the IRS has identified for review. Sponsors of plans with target-date funds, longevity annuities, Roth or other after-tax amounts, and plans with language that needs to be revised in light of the Windsor decision will want to take special note of the items marked new on the 2014 Cumulative List.

Source: Ebia.com, December 2014

IRS Amends Safe Harbor Rollover Notices for Revised Allocation Rules and In-Plan Roth Conversions

Summary: Notice 2014-74 lists each change to the current safe harbor notices, and then restates both safe harbor notices in their entirety. Plan sponsors and administrators who have tailored the notices to their plans will find the list of changes in Part III particularly helpful.

Source: Ebia.com, December 2014

Company Stock in DC Plans: An Update

Summary: Since 2005, the incidence of company stock in DC plans has declined. Fewer plans offer employer stock and fewer participants hold concentrated company stock positions in their retirement savings accounts. A higher proportion of plans offering company stock now impose restrictions on the option. This is an update of prior research on the changing nature of company stock in employer plans

Source: Vanguard.com , December 2014

Lifetime Annuity Income Provided Through Target-Date Funds

Summary: The DOL and IRS have issued coordinated guidance on a DC plan with target-date funds that include annuities for participants aged 55 or older. The IRS established a special nondiscrimination testing rule by allowing sponsors to treat a series of TDFs as a single investment option. The DOL indicated that the series of TDFs with deferred annuities can serve as a qualified default investment option. Article provides a detail summary.

Source: Towerswatson.com, December 2014

Industry Groups Urge No Further Rules for Brokerage Windows

Summary: Responding to a request for information from the DOL, most industry groups said they believe no further regulation is necessary to govern use of brokerage windows in retirement plans.

Source: Plansponsor.com, December 2014

Solicitor General Argues for Reversal of Tibble Decision

Summary: A brief submitted by the U.S. Solicitor General to the United States Supreme Court argues in favor of plaintiffs in Tibble v. Edison International -- a case that could have implications for retirement plan sponsors' ongoing duty to monitor investments.

Source: Planadviser.com, December 2014

Managed Account Services Growing More Complicated

Summary: The biggest challenge for retirement plans offering managed account services to participants is creating simplicity out of increasing complexity, says Cerulli Associates.

Source: Planadviser.com, December 2014

Trends, Legislation, Regulations and Litigation Will Continue to Affect the Retirement Industry in 2015

Summary: The retirement plan industry is an ever-evolving landscape, shaped each year by growing and emerging trends, as well as prior and new legal initiatives. Here is a good summary of what to watch for in 2015.

Source: Planadviser.com, December 2014

Still Clueless About 401k Fees

Summary: According to Allen Greenberg, there is good news and bad about retirement plan fees. Which do you want first?

Source: Benefitspro.com, December 2014

Edison Case Exposes Deceptive Practice of Revenue Sharing

Summary: The Supreme Court is slated to hear the Tibble v. Edison case in 2015, which promises to be a landmark ruling for the corporate retirement space. According to Brian Menickella, managing partner at The Beacon Group, "This case should serve as a wakeup call to plan sponsors. To fulfill their responsibilities and avoid penalties, employers need to make sure they are compliant."

Source: Benefitnews.com, December 2014

Summary of Leading Proposals to Expand Retirement Plan Coverage

Summary: This 15 page chart was prepared by the firm Davis and Harman, LLC. It lists the proposal and then information columns for: Mandatory or Voluntary, Description, Employers Affected, Contribution Structure, Investment of Contributions, and Tax Treatment.

Source: Americanbenefitscouncil.org , December 2014

For Retirement Preparation, Higher Ed Is at the Head of the Class

Summary: College faculty and staff are better prepared for retirement than the general population, according to a new TIAA-CREF survey. In addition to saving in their employer-sponsored retirement plan, 42 percent of higher education employees have saved in an IRA, compared to 34 percent of American employees overall. While 36 percent of college faculty and staff say they have met with a financial advisor, only 22 percent of the general population report the same.

Source: 401khelpcenter.com, December 2014

Changes to Plan Design Result in Better Outcomes and Increased Plan Participation

Summary: White paper from Prudential has found that changing a plan's design, including the addition of an in-plan guaranteed lifetime income solution, improved participation and contributions. According to the paper, plans can increase participation rates nearly 35 percent by making slight modifications to plan design, with the addition of a lifetime income solution and the use of auto enrollment and auto escalation.

Source: Prudential.com , December 2014

Designing Balanced DC Menus: Considering Equity Investments

Summary: Today's DC equity lineups often lack broad access to global markets. What's more, lineups are often shackled to market-capitalization-weighted indexes, which may further hamper returns and heighten volatility. By restructuring the equity lineup to include global, dividend and enhanced index strategies, plan sponsors may improve DC participants' risk-adjusted return opportunity and the likelihood of retirement success.

Source: Pimco.com, December 2014

Target-Date Funds: Why Low Cost Does Not Mean Low Risk

Summary: There appears to be a mistaken perception emerging in the marketplace that the lowest cost options offer the lowest risk for participants and plan sponsors. Fees are an important factor in choosing a target-date fund, but they should not be used as the starting and ending point to the evaluation process. Doing so may place participants' retirement security at greater risk, as well as open up plan sponsors to potential fiduciary liabilities.

Source: Jpmorgan.com , December 2014

401k Plan Costs Decline As Indexing Becomes More Popular

Summary: Average asset-weighted total plan costs for 401k plans dropped to 39 basis points in 2012 vs. 49 basis points in 2009, according to a report released Monday. The decline in expenses, management fees, administrative fees, advice fees and other costs, was felt most strongly by the largest plans and the smallest plans, the report said. One possible contributor to lower costs is the growing popularity of index funds.

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

Investment Policy Statements in Retirement Plans: Are They Plan Documents?

Summary: In Murphy v. Verizon Commc'ns, Inc., the Court of Appeals for the Fifth Circuit was asked specifically to consider whether plan investment guidelines must be provided upon request to plan participants and beneficiaries. The Court looked at the requirements in ERISA and determined that the real question was one as to whether the investment policy statement was actually binding on the operation of the plan.

Source: Foxrothschild.com, December 2014

Why Longevity Annuities Aren't As Popular With 401k Fiduciaries As Regulators Think

Summary: They're still relatively new, but there doesn't appear to be a rush of individual investors or even 401k plan sponsors knocking the doors down to obtain Longevity Annuities. Why not?

Source: Fiduciarynews.com, December 2014

Multiple Employer Plans Are a Marketing Play, Not a Way to Cut Costs

Summary: Author writes, "The idea that small employers cannot provide low-cost plans to their employees is a myth perpetuated by vested interests in the financial services industry. MEPs are a solution to a problem that does not exist, and they bring other potential risks to small employers."

Source: Employeefiduciary.com, December 2014

Qualifying Longevity Annuity Contracts -- Frequently Asked Questions

Summary: The recently announced regulations make longevity annuities accessible to the defined contribution and individual retirement account markets. This resource seeks to provide clarification on common questions that plan sponsors and their advisors may have regarding these new regulations.

Source: Dciia.org , December 2014

DOL Survey Finds 'Unacceptable' Rate of Plan Audit Deficiencies, Official Says

Summary: More than a third of all employee benefit plan audits have deficiencies, a rate that is "unacceptable," said Timothy D. Hauser, deputy assistant secretary for program operations of the DOL's Employee Benefits Security. The deficiency rate is increasing, not abating. One of his frustrations is the number of plans with serious deficiencies. "The trend is going opposite the direction we'd like," he said.

Source: Bna.com, December 2014

TDFs to Capture 90% of 401k's Contributions

Summary: Target-date funds have been the "next big thing" in 401k plans for a few years now and, if the latest projection is accurate, will only get bigger. In a report released Tuesday, Boston-based Cerulli Associates said that 401k flows into TDFs are expected to more than double by 2019 what they were in 2013.

Source: Benefitspro.com, December 2014

Part-Time Employment Adds Leg to Traditional Retirement Stool

Summary: You have probably have heard about the three-legged stool approach to retirement planning. It was generally understood that each source of funds was responsible for providing one-third of the total living expenses required in retirement. Over the years the three-legged stool approach has been modified to include part-time employment.

Source: Benefitnews.com, December 2014

Cumulative List for Individually Designed Plans

Summary: The IRS has released Notice 2014-77 containing the 2014 cumulative list of qualification items that must be addressed in certain individually designed retirement plan documents submitted to the IRS for determination, opinion, or advisory letters. Specifically, the 2014 cumulative list applies to all individually designed documents (IDDs) of plans in remedial amendment Cycle E.

Source: Ascensus.com, December 2014

Maintaining Your Retirement Plan Records

Summary: As an employer sponsoring a retirement plan, you are required by law to keep your books and records available for review by the IRS. But which plan records should you keep in case of an IRS audit? And for how long?

Source: Irs.gov, December 2014

Retirees' Target-Date Funds Making Hedge Fund Style Bets

Summary: A fast-growing segment of U.S. retirement plans is using hedge-fund type strategies to bet a small, but increasing slice of their assets. BlackRock and Manning & Napier are among the managers that use strategies such as shorting stocks and trading derivatives in some 401k retirement plans, including target-date funds.

Source: Reuters.com, December 2014

Cumulative List of Changes in Retirement Plan Qualification Requirements

Summary: This annual Cumulative List is intended to identify, on a year-by-year basis, all changes in the qualification requirements resulting from changes in statutes, or from regulations or other guidance published in the Internal Revenue Bulletin, that are required to be taken into account in a written retirement plan document that is submitted for a determination letter or an opinion or advisory letter.

Source: Irs.gov, December 2014

The Uniform Fiduciary Standard and ERISA Plans - A New Kind of Status Quo Is Emerging for Brokers

Summary: As argued in this four page article, until new fiduciaries rules are proposed and finalized, brokers that work with 401k and other benefit plans fall under the modified version of the status quo. Those that wish to continue to be brokers may, without being considered ERISA fiduciaries, if they order their affairs under the five prong test described here. They will, however, have to adjust to the FINRA modified suitability rule, the scope of which is not clear at this point.

Source: Imca.org , December 2014

Plan Profile Series: A Close Look at 401k Plans

Summary: This 64 page BrightScope/ICI Defined Contribution Plan Profile focuses primarily on private-sector 401k plans. It analyzes more than 35,000 DC plans that have between four and 100 investment options. This report focuses on plan year 2012, presenting data on how 401k plans are structured, the types of service providers that plan sponsors engage with, and the fees and expenses paid by 401k participants and plan sponsors for these services.

Source: Ici.org , December 2014

What Do Jelly Beans and the Stock Market Have in Common?

Summary: This white paper reveals the results of an experiment on how jelly beans and the stock market have more in common than you may think. Hint, if you believe that the market has it wrong, you are pitting your knowledge or hunches against the combined knowledge of millions of other market participants.

Source: Greenspringwealth.com , December 2014

Benchmarking -- All About That Fee

Summary: ERISA 408(b)(2) is designed to provide a responsible plan fiduciary with sufficient information to determine if fees are reasonable and conflicts are avoided. A practical approach to benchmarking fees in a manner that complies with 408(b)(2) is outlined here.

Source: Fraplantools.com, December 2014

Three Quick Ways to Tell If Your 401k Rocks

Summary: Here are three ways to tell if your 401k is worthwhile. How does your plan stack up? If it falls short, you may want to contact your employer to see if you can improve the plan.

Source: Forbes.com, December 2014

What Is a Reasonable Interest Rate for Participant Loans?

Summary: This 1:28 minute video explores what a reasonable interest rate for participant loans is and how it should be documented.

Source: Erisasunscreen.com, December 2014

IRS Newsletter Highlights Draft Form 5500-SUP for Gathering Code-Specific Information on Form 5500 Filings

Summary: All Form 5500 retirement plan filers will want to acquaint themselves with the proposed Code-specific reporting requirements and ensure that systems will be in place to provide this additional information for 2015 filings. Form 5500-EZ filers will want to review the details of the IRS mandatory electronic filing requirement carefully to ensure they are in compliance. Filers that are required to file electronically but fail to do so will be treated as non-filers, subject to penalties.

Source: Ebia.com, December 2014

Time to Take Action on 401k Admin Fees

Summary: Employer sponsors of 401k plans may find themselves in a buyer's market when it comes to administrative fees. If you haven't revisited how much your plan is paying for recordkeeping services in a while, this article suggests that now may be the time to do so.

Source: Cfo.com, December 2014

More DOL Guidance on Brokerage Windows Could Cause Problems, Organizations Say

Summary: The general consensus among a slew of comment letters on the Department of Labor's request for information on standards for brokerage windows in participant-directed individual account plans is: More guidance isn't necessary.

Source: Bna.com, December 2014

Plaintiffs Make Their Case in Edison 401k Suit

Summary: The 9th Circuit Court of Appeals affirmed both of the lower court's rulings. But the plaintiffs are arguing that the appellate court's interpretation of the six-year limitation was "erroneous and should be reversed," according to court documents.

Source: Benefitspro.com, December 2014

Courts May Require Disclosure of Investment Policy Statements

Summary: In Murphy v. Verizon Commc'ns, Inc., the Court of Appeals for the Fifth Circuit considered whether investment guidelines must be provided upon request to plan participants and beneficiaries and determined that ERISA requires the disclosure of formal legal plan documents.

Source: Winston.com, December 2014

Final Regulations on Qualified Longevity Annuity Contracts

Summary: The final regulations contain numerous requirements and possible traps in order to achieve the requisite status under the RMD rules. Given all of these requirements and the overall complexity of explaining annuities generally to participants, it remains to be seen how quickly plan sponsors adopt these vehicles in their plans and even if they are permitted under the plan, how quickly participants embrace these products.

Source: Thompsoncoburn.com, December 2014

DOL Planning RFI on 408(b)(2) Disclosure Effectiveness

Summary: The Department of Labor wants to request new industry input and form focus groups about the effectiveness of retirement plan service provider fee disclosure requirements. The DOL says a new information collection effort is needed to explore current practices and effects of a final regulation.

Source: Plansponsor.com, December 2014

A Guide to Communications/Participant Education

Summary: DC plans are most successful when participants understand their choices and are empowered to take action. As a plan sponsor, you must transform complexity into simplicity, and fear into action. Yet, you are faced with many communications challenges; because participants crave simplicity, but DC plans are inherently complex. Though communication can be difficult, the benefits offered by a successful communication program outweigh the challenges.

Source: Nagdca.org, December 2014

Fee Compression Slowing, Fee Structures Changing

Summary: Asset levels continue to peak in DC plans, driving fees tied to asset levels higher in the investment management as well as recordkeeping and administration marketplaces. However, after three straight years of material compression in recordkeeping and administration expenses, the market may have found equilibrium.

Source: Multnomahgroup.com, December 2014

Evaluating Plan Expenses: A Road Map of Possible Routes and Potholes to Avoid!

Summary: It is important for plan fiduciaries to understand that while certain plan expenses can be paid out of plan assets, such expenses must be reasonable. A plan fiduciary must also evaluate and defray investment fees and expenses as part of that process because such costs could have a significant impact on plan investment returns. Therefore, to fully satisfy his/her fiduciary obligations with respect to a plan, each fiduciary should understand how to evaluate the myriad of plan fees, including unraveling those associated with various plan investments and plan services. This article provides guidance.

Source: Drinkerbiddle.com , December 2014

Target-Date Glide Paths: Balancing Plan Sponsor Goals

Summary: The challenge of target-date glide path selection lies in striking a balance between two goals: the ability to replace pre-retirement income over the course of retirement, and the ability to limit the risk of capital loss close to retirement. Because no one glide path can simultaneously satisfy both goals optimally, a compromise is required, and thus the selection process must be informed by the subjective horizon and risk preferences of the sponsor acting as an agent for plan participants. This eight page paper provides detailed analysis.

Source: Troweprice.com , December 2014

2014 Plan Year-End Compliance Reminders for DC Plans Subject to ERISA

Summary: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This publication identifies the materials you need to review and will help you prepare for year-end. This information applies to qualified defined contribution plans and 403(b) plans that are subject to Title I of ERISA.

Source: Prudential.com , December 2014

Plenty of Regulatory Action Ahead for Retirement Industry

Summary: Experts from Drinker Biddle & Reath LLP had no shortage of topics to cover in a recent discussion about potential regulatory and legislative actions related to employer-sponsored retirement plans. Upcoming actions from the DOL, SEC, and FINRA are all expected to have a direct impact on the way retirement plans are administered under ERISA and other legislation.

Source: Planadviser.com, December 2014

Cerulli Sees Consolidated, High Tech Future

Summary: A limited group of strategic acquirers will continue to gain influence in the financial advisory industry, according to new research from analytics firm Cerulli Associates. Helping to fuel the trend is the relative aging of financial advisers and the lack of succession planning and engagement of younger generations of advisers.

Source: Planadviser.com, December 2014

Hiring a Quality Auditor to Perform Your Employee Benefit Plan Audit

Summary: The AICPA Employee Benefit Plan Audit Quality Center prepared this 24 page advisory to provide plan sponsors, administrators, and trustees with an understanding of the importance of hiring a quality auditor to perform their employee benefit plan financial statement audit, and information to help select a quality auditor.

Source: Aicpa.org , December 2014

When Will the Fiduciary Reproposal Surface?

Summary: The revised guidance plan provided for the first time an expected release date for final regulations regarding a new required "guide" to accompany the disclosures that must be provided to responsible plan fiduciaries under the 408(b)(2) regulations. The final regulations are projected to be out in September 2015.

Source: Napa-net.org, December 2014

Roadmap to a Successful Tiered Investment Menu Design and Communication Program

Summary: Plan fiduciaries have an important task of managing fiduciary responsibility and, at the same time, designing an investment menu that is easily understood by participants and addresses the needs of a diverse participant base. Thoughtful investment design can help lead to better participant outcomes. This paper suggests that a first step is to shift the focus of menu design to a tiered structure, based on a plan's unique needs and the level of participant involvement.

Source: Manning-napier.com , December 2014

How to Evaluate Your 401k Plan Investment Advisor

Summary: Many plan sponsors use an investment adviser to help them manage their 401k plan. "This is a smart decision since most advisers are able to save plan sponsors at least as much as they charge," writes the author. But how can you tell if you are working with a good investment adviser? Six suggestions are given.

Source: Lawtonrpc.com, December 2014

Are Annuities a Good Fit for Target-Date Funds?

Summary: New regulatory guidance allowing plan sponsors to include annuities in QDIA-ready target-date funds is a watershed moment for the retirement industry. But cost and complexity may warrant a look at other reliable income options, writes Glenn Dial.

Source: Allianzgi.com, December 2014

PSCA Releases 57th Annual Survey of the 401k System

Summary: The survey finds that plan sponsors are spending more time and effort to educate, promote, and encourage saving for the long-term. They are making great strides in adopting new plan design features, investments, and financial wellness programs that are making a positive impact on participant outcomes. This year, 613 plans with eight million participants and $832 billion in plan assets were surveyed.

Source: 401khelpcenter.com, December 2014

DOL Issues New Guidance on Locating Missing Participants

Summary: Reviews DOL guidance on locating missing participants. While FAB 2014-01 specifically applies to locating missing participants in connection with a DC plan termination, it may provide useful guidance in other similar circumstances involving missing participants, such as un-cashed checks and required minimum distributions.

Source: Wagnerlawgroup.blogspot.com, December 2014

NTSA 403(b) Plan Compliance Calendar

Summary: This 403(b) Plan Compliance Calendar is a listing of the critical compliance deadline dates for 403(b) plans. Some of the deadlines only apply to particular plan types (such as ERISA plans) and are noted accordingly. This year's calendar is not significantly different from the 2014 calendar, which should be good news for all of those who work with 403(b) plans.

Source: Ntsa-net.org, December 2014

Why it's up to the Industry to Solve the Fiduciary Standard Issue

Summary: In this 1:43 minute video, HighTower Advisors CEO Elliot Weissbluth discusses how financial advisers and clients will ultimately be the ones to navigate through this key transition.

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

Fixing Common Plan Mistakes -- Failure to Obtain Spousal Consent

Summary: A common plan mistake is the distribution to a participant of a benefit approved automatically via an electronic distribution request, and the plan sponsor not realizing that it is responsible for securing the spousal consent. Article provides more detail and how to correct such errors.

Source: Belfint.com, December 2014

Differentiate Yourself in the 401k Market

Summary: If you want to stop competing on fees (and funds and fiduciary status), Sharon Pivirotto, CEO of 401kbestpractices.com, suggests five things you can do to identify the value you actually bring to the table and clearly articulate in a way that helps plan sponsors understand why they would want to hire you (as opposed to a product or vendor you might be able to represent).

Source: The401ksgblog.com, December 2014

IRS and DOL Provide Additional Electronic Filing Guidance

Summary: In late September, both the IRS and DOL issued regulations regarding certain electronic filings related to employee benefit plans. The IRS guidance is final and effective September 29, 2014, but generally not applicable until 2015. The DOL guidance is proposed and open for comment but may be followed immediately.

Source: Prudential.com , December 2014

IRS Changes Safe Harbor Explanations for Recipients of Rollover Distributions From Qualified Retirement Plans

Summary: Internal Revenue Service Notice 2014-74 amends the two safe harbor explanations in Notice 2009-68 for notices that must be sent to recipients of eligible rollover distributions from qualified retirement plans as required under Section 402(f) of the Internal Revenue Code.

Source: Practicallaw.com, December 2014

Updated Model Eligible Rollover Distribution Notices

Summary: IRS has updated the model notice for Sponsors of 401(a), 403(a), 403(b) and governmental 457(b) plans to notify participants of rollover options for their distributions from Roth and non-Roth accounts, including the right to direct pre-tax and after-tax amounts to separate destinations (Notice 2014-74)

Source: IRS , December 2014

Tenth Circuit Finds Plan Administrator Has No Duty to Inquire Into Authenticity of Beneficiary Designation

Summary: The Tenth Circuit affirmed and further noted that Kristopher's allegations that the forms were forged failed to state a claim under ERISA because a plan administrator has no duty to inquire into the authenticity of the forms if it had "no reason to suspect that anything was amiss."

Source: Erisapracticecenter.com, December 2014

Eligible Rollover Distributions -- Safe Harbor Notices Revised

Summary: In Notice 2014-74, the IRS issued amendments to the safe harbor eligible rollover distribution notices, one of which describes the rollover options available to distributions from non-Roth accounts and the other of which describes the rollover options that apply to distributions from designated Roth accounts, for changes in the law and other clarifying changes. Several of the changes in the non-Roth account notice address the tax effects of in-plan Roth rollovers.

Source: Benefitsbryancave.com, December 2014

After-Tax Contributions Eligible for Rollover to Roth Account

Summary: After the recent IRS Notice 2014-54, people are asking about converting after-tax funds to Roth IRAs. In practice, there are very few plans that still have after-tax contributions available since most were written out of plans after the Tax Reform Act of 1986. But with the renewed interest, offering after-tax contributions may come back, however, plan sponsors should beware of the pitfalls.

Source: Benefit-resources.com, December 2014

New Safe Harbor Explanations for Eligible Rollover Distributions

Summary: The IRS issued guidance amending the safe harbor explanations for notices that plans must provide to recipients of eligible rollover distributions. These amendments reflect recent updates to the rules governing the allocation of pretax and after-tax amounts and distributions in the form of in-plan Roth rollovers. They also remove redundant and out-of-date language and make other clarifications. Employers can use the updated explanations to satisfy their 402(f) notice obligations.

Source: Xerox.com , December 2014

2015 Compliance Calendar for Defined Contribution Plans

Summary: This 2015 compliance calendar for defined contribution plans shows recurring compliance and notice requirements for qualified defined contribution plans. The deadlines are for plans with calendar-year plan years and is intended to provide plan sponsors with a list of notable deadlines.

Source: Vanguard.com , December 2014

IRS Issues Guidance on Distribution Allocation Rules and Updated 402(f) Notice

Summary: The IRS recently released guidance on the allocation of pre-tax and post-tax amounts distributed from certain tax-qualified plans. In connection with this change, the IRS issued revised safe harbor rollover notices to satisfy the notice requirements under Code Section 402(f). The guidance accompanying the notices also describes changes that should be made to the existing model notices to reflect tax law changes since 2009. On and after December 8, 2014, plan administrators who rely on the safe harbor rollover notices must use the revised notices.

Source: Troutmansanders.com, December 2014

401k Nondiscrimination Tests Explained

Summary: With acronyms like ADP, ACP, NHCEs, and HCEs, the technicality of 401k plan nondiscrimination testing may seem overwhelming. Even though nondiscrimination testing is likely performed by a plan's recordkeeper or third-party administrator, plan sponsors need to understand the basics of the tests, including the types of contributions that are tested, the methods used and the consequences of failing.

Source: Plansponsor.com, December 2014

Auto Features Gain Ground With 401k Plan Sponsors

Summary: Employers are taking a more engaging and firm approach to making sure employees take retirement saving seriously, making use of automatic enrollment and escalation, as well as personalized tools. And both employers and retirement plan providers are noting changes in the savings attitudes of employees.

Source: Benefitnews.com, December 2014


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