Help for 401k plan sponsors, retirement professionals, small business, employee and 401k rules

Subscribe RSS Feed

Free Weekly 401k eNewsletter

Click for

Glossary of Terms
Retirement Industry Acronyms and Abbreviations

Got News

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.

What's Next for ETFs and the 401k Business?

Summary: There's lots of talk about the growth of assets in ETFs outpacing that of other financial products. While that storyline is mostly true, ETFs have low penetration in the multi-trillion retirement plan marketplace, where they're a virtual no-show.

Source:, September 2014

New DOL Guidance on Missing Participants

Summary: According to the DOL guidance, a fiduciary must make a reasonable effort to locate missing participants so that the fiduciary can implement directions regarding plan distributions from the participant or beneficiary. Reasonable expenses incurred in the search may be charged to missing participants' accounts. The guidance provides four search steps that should always be taken.

Source:, September 2014

Demystifying RMDs

Summary: Once you reach a certain age, the IRS requires you to withdraw a minimum amount of money, called a required minimum distribution, from many retirement accounts, including traditional IRAs, SIMPLE IRAs and most employer-sponsored retirement plans. The rules around RMDs are complex, but this short article reviews the basics.

Source:, September 2014

The Shift From Defined Benefit Plans to Defined Contribution Plans

Summary: Article explains the shift in private-sector employer-provided retirement plans from defined benefit plans to defined contribution plans. This article also examines the reasons for the proliferation of Section 401k plans and outlines the consequences of the shift on the retirement readiness of American workers.

Source:, September 2014

Nondiscrimination Rules for 403(b) Plans

Summary: Suppose an employer provides 100% vesting in its 403(b) plan. There is a 60-day wait for the employer match (100%, up to 4%), and an employee needs to work 20 hours per week to qualify for the match. The employer has no highly compensated employees. What type of plan setup could the employer pursue, and what are the possible ramifications at Form 5500 filing time?

Source:, September 2014

Understanding ADP and ACP Testing

Summary: The IRS requires plan sponsors to perform various tests each year to ensure that 401(k) plans are not discriminating in favor of business owners or other high paid employees. Two of the required tests are the Actual Deferral Percentage and Actual Contribution Percentage (ADP/ACP) tests. These tests are often administered by an independent party due to the complicated nature of the testing, and to ensure neutrality.

Source:, September 2014

Would've, Could've, Should've: Tatum v. RJR Nabisco Investment Committee

Summary: Had the RJR fiduciaries simply (i) performed a thorough investigation of the alternatives, (ii) made a reasoned decision based on their investigation, and (iii) documented the basis for their decision, no breach of duty would have occurred in the first place even though, with hindsight, the decision may have been different.

Source:, September 2014

Women Showing Greater Commitment to Retirement Savings

Summary: Women have long trailed men when it comes to retirement savings but new data from MassMutual Retirement Services shows that women are responding to the challenge and are closing the gap.

Source:, September 2014

You Might Have a Problem With Your Retirement Plan When...

Summary: You just saw your plan provider is on TV and it's not for an interview or a commercial. There are quite a few instances when you should know when your retirement plan is in trouble. In this article, Ary Rosenbaum talks about those instances and gives examples.

Source:, August 2014*

DOL Offers Some 'Friendly' Advice to Supremes on 401k Fee Case

Summary: The DOL has offered some "friendly" advice to the U.S. Supreme Court as it considers a review of a high-profile 401k fee case. In a "friend of the Court" amicus brief filing, the DOL said it thinks that the high court should weigh in on the statute of limitations issue presented in Tibble v. Edison, but not on the issue of reviewing an alleged breach of duty in administering the plan in accordance with its terms.

Source:, August 2014

Unhappy 40th Birthday, ERISA: So Much for Retirement Security

Summary: The enactment of ERISA in 1974 was inspired by the 1963 collapse of the Studebaker Corporation, whose pension was so poorly funded that even workers with 10 years of service got a tiny pension and about a third of the workers got nothing. The bill was sponsored by the late Senator Jake Javits, who saw it as just one step towards a more satisfactory private retirement system. Author writes, "Let's make sure Senator Javits' efforts weren't in vain. We need to put pressure on Congress to move on [pension reform]."

Source:, August 2014

Industry Leaders Share Thoughts About ERISA

Summary: Forty years ago on September 2nd, in response to failing companies resulting in workers losing pensions, sweeping legislation designed to protect workers from losing their earned retirement income was signed into law.

Source:, August 2014

Company Owner Pleads Guilty to Falsifying ERISA Disclosures

Summary: The owner of a Maryland electrical contracting company pleaded guilty to falsifying plan documents to avoid making contributions to several employee benefits plans.

Source:, August 2014

Court Blocks DC Plan Participant Claims Against Madoff Trustee

Summary: A federal bankruptcy judge has affirmed the denial of recovery claims from retirement plan participants who indirectly invested in the now-infamous Bernie Madoff Ponzi scheme.

Source:, August 2014

DOL Pronouncements regarding Missing Participants and Brokerage Windows

Summary: In the last month, the DOL has issued two significant regulatory pronouncements. In FAB 2014-01, DOL provides updated guidance on the fiduciary duties that apply to locating and distributing assets attributable to missing participants in a terminating plan. Second, a RFI provides DOL's opening volley in what could amount to regulatory action addressing fiduciary and other standards that apply to open brokerage windows offered in participant-directed defined contribution plans. Article summarizes both pieces of DOL guidance.

Source: , August 2014

The Power of the "All-In" 401k Fee

Summary: Under an all-in fee approach, all administrative, recordkeeping and investment expenses are summed into a single, total amount. This approach "normalizes" the numerous fee arrangements used by 401k service providers, including compensation paid to providers from plan investments, making it easier for the sponsor to compare fees provider by provider. It does matter if fees are paid directly by an employer or deducted from participant accounts or paid indirectly from revenue sharing or wrap fees. Regardless of the compensation's origin, it should be included in the all-in fee total.

Source:, August 2014

DOL Opens the Door to Questioning Brokerage Windows Under 401k Plans

Summary: This RFI could signal an effort on the part of the DOL to promulgate additional regulatory requirements or other guidance applicable to the use of brokerage windows, with possible impact on plan sponsors that may offer windows under their plans and also on financial institutions that provide or facilitate the windows.

Source:, August 2014

Saving Retirement, Without the Fiduciary Risk

Summary: Imagine a world where employers provide retirement security for their employees through a uniform, standardized defined contribution platform, and in the process, assume absolutely no fiduciary risk. None whatsoever. Sound like fantasy? Not to Russell 'Rusty' Olson.

Source:, August 2014

IRS Issues Retirement Plan Group Investment Trust Guidance

Summary: The IRS has issued Revenue Ruling 2014-24, providing additional guidance on the ability of certain retirement plans qualified under Puerto Rico tax laws to participate in group trusts for investment purposes. The guidance also addresses insurance contracts in the retirement plan group trust context.

Source:, August 2014

Generation X Workers' Retirement Collision Course Can Still Be Corrected

Summary: Transamerica Center for Retirement Studies released a this report, Generation X: Retirement Reality Bites Unless Answers Are Implemented, revealing the current lack of retirement preparedness among Generation X workers (born between 1965 and1978) that identifies opportunities for improving their long-term outcomes.

Source: , August 2014

Why 'Unretirement' Might Be Your Best Retirement Strategy

Summary: Chris Farrell argues that developing skills that can help you earn income well past traditional retirement age offers a better return on investment than any financial instrument. Article is a Q&A with Farrell.

Source:, August 2014

Automatic Rollovers Not Just for Active Plan Cleanup

Summary: Implementing an automatic rollover program can help retirement plan sponsors establish safe harbor individual retirement accounts for missing or non-responsive participants.

Source:, August 2014

401k Fiduciary Breach Lawsuit Heads to the Supreme Court

Summary: A classic 401k lawsuit centered on whether an employer violated its fiduciary duty when choosing retail funds over cheaper institutional share classes has been green-lighted for review by the Supreme Court.

Source: (free registration may be required), August 2014

What Top 401k Plans Do Differently

Summary: When it comes to getting workers, particularly lower-earning workers, to save more of their money, the effort goes beyond plan design. Advisers find that it makes sense to talk to them about the saver's credit, a tax credit for employees that can be as high as 50% of their contribution, depending on their adjusted gross income.

Source: (free registration may be required), August 2014

Employees Are Falling for Roth 401k's

Summary: Employees saving for retirement in workplace 401k plans are increasingly choosing the Roth option, according to a recent Aon report. When the Roth option is available, 11% of participants contribute to a Roth, up from 9.6% in 2012 and 8.1% in 2011. The report sheds some light into the decision-making process of employees and suggests that more employers should offer the Roth option.

Source:, August 2014

Professional Retirement Plan Advisors Have Significant Impact on Retirement Plan Performance

Summary: Transamerica Retirement Solutions released a research report highlighting the benefits of partnering with a professional retirement plan advisor. This study demonstrates that professional retirement plan advisors are central to the strategic direction, administration, and overall performance of the retirement plans they manage. The study defines professional retirement plan advisors as those who work primarily or exclusively with retirement plans.

Source:, August 2014

DOL Provides Much Needed Guidance on "Orphan Accounts"

Summary: It is estimated that in 2010, there was $1 trillion in orphaned retirement accounts. As individuals continue to have more and more jobs during their careers, the number of accounts and dollars within these accounts can be expected to grow. DOL Field Assistance Bulletin No. 2014-01 lays out some required steps plan fiduciaries should take to find missing participants.

Source:, August 2014

Speakers Tell Council DOL Guidance Needed to Boost Savers' Lifetime Income Options

Summary: A combination of guidance and online tools from the DOL on lifetime income would help retirement plan participants make good decisions about their retirement funds and investments, speakers told the ERISA Advisory Council.

Source: , August 2014

Oregon's Auto IRA Mandate Takes Shape

Summary: With the official report not due until September, a draft report released by the Oregon legislature's Task Force on Oregon Retirement Savings offers a blueprint of a proposed new mandatory auto IRA program for the state.

Source:, August 2014

Increasing Participation Rates in 403(b) Plans

Summary: Employers are increasingly concerned about low participation rates in 403(b) plans, in particular plans in the public education K-12 market segment where there are most often no matching contributions. Article reviews some strategies for increasing participation.

Source:, August 2014

Fiduciary Guarantees -- There's Tinsel on the Tinsel

Summary: Sometimes called the fiduciary promise, industry messaging misleadingly overstates its value to plan sponsors. Words such as "guarantee" and "warranty" connote protection and security -- that sense that I can't be harmed if things go wrong because someone else has promised to protect me. In the 401k context, this generally means its "my provider -- not me-- who will be liable." But these promises fall far short of delivering plan sponsors meaningful protection from fiduciary liability.

Source:, August 2014

The Fiduciary Quicksand of Acquiring, Holding and Selling Employer Stock

Summary: Congress knew that holding large amounts of employer stock in a company's pension plan created significant tension between the intrinsically high risk of a single stock and the demands of a fiduciary's standard of conduct. Five page article gets into detail on the legal and fiduciary foundation of holding employer stock in a plan.

Source:, August 2014

Supreme Court Urged to Hear Fiduciary Case

Summary: The U.S. Solicitor General has produced a brief at the request of the U.S. Supreme Court that recommends the justices hear part of the original claims in Tibble v. Edison International. The Solicitor General's brief was split on the two questions the plaintiffs are asking the court to review.

Source:, August 2014

Help Your Retiring DC Members

Summary: The fear of increased fiduciary responsibility has kept most Canadian plan sponsors away from helping members past the accumulation phase of their group retirement and savings arrangements. Yet we are seeing more and more sponsors dip their toes in the water and get involved.

Source:, August 2014

DOL Requests Comments on Brokerage Windows in 401k Plans

Summary: On August 20, 2014, the DOL published a request for information on the use of these brokerage windows 401k plans. The DOL's goal in issuing the request for information is to assist the DOL in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows may be necessary to protect plan participants.

Source:, August 2014

Retirement Savings: A Tale of Decisions and Defaults

Summary: This paper examines the default behavior of the members of an industry-wide pension fund to assess both the prevalence of defaults and their impact on retirement accumulation using Australian pension fund. Paper shows that the default structure, which specifies individual's outcomes when no choices are made, strongly influences wealth accumulation.

Source:, August 2014

Why Plan Sponsors Are Buying 401k Liability Insurance

Summary: As legal shake-ups rattle more plan sponsor windows, warranties and fiduciary insurance policies in the 401k arena are making a comeback, despite the long memories of some prominent skeptics who recall how rotten such policies were the first time around.

Source:, August 2014

A 401k Rollover Checklist

Summary: Old 401ks are a little like the old clothes in the back of your closet. You know you should do something about them. So is deciding what to do with an old 401k on your to-do list? Here are seven steps for getting it done.

Source:, August 2014

401k Plans Work in a Balanced Approach to Retirement Security

Summary: Author writes, "[T]aken as part of a broader retirement system, 401ks work for working Americans. Retirees do face legitimate risks -- but the decline of private-sector defined benefit plans and the rise of defined contribution plans, such as 401k plans, isn't one of them. This shift isn't unlikely to reduce retirement preparedness."

Source:, August 2014

Inside the Structure of DC/401k Plan Fees

Summary: As part of an ongoing comprehensive research program, the Investment Company Institute and Deloitte Consulting have prepared this third edition of the Defined Contribution/401k Fee Study. Specifically, this report addresses and updates: The mechanics of defined contribution plan fee structures; Components of plan fees; and Factors that impact fees ("fee drivers").

Source: , August 2014

Interview With CFDD's Phil Chiricotti (Part 4)

Summary: Chiricotti talks about proposed legislation that might actually help 401k plan sponsors and participants, especially those from smaller companies. He suggests that Multiple Employer Plans are a suitable vehicle to help broaden retirement plan coverage as well as to outsource complex compliance and administrative issues.

Source:, August 2014

Looking for earlier information? Go to our Archive., LLC is not the author of the material referenced in this digest unless specifically noted. The material referenced was created, published, maintained, or otherwise posted by institutions or organizations independent of, LLC., LLC does not endorse, approve, certify, or control this material and does not guarantee or assume responsibility for the accuracy, completeness, efficacy, or timeliness of the material. Use of any information obtained from this material is voluntary, and reliance on it should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Reference to any specific commercial product, process, or service by trade name, trademark, service mark, manufacturer, or otherwise does not constitute or imply endorsement, recommendation, or favoring by, LLC.


Press Center | Glossary | Privacy Policy | Terms of Use | Contact Us

Creative Commons License
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.