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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.


    
How to Maximize The Value of a DC Plan for Participants

Summary: Plan sponsors can only do so much with plan design to maximize the value of their defined contribution plans. If a plan sponsor offers the ultimate DC plan, the sponsor might expect that employees would join immediately and save at a high level. But that's not how things happen in reality.

Source: Plansponsor.com, September 2014

An Overview of ERISA Issues Related to "In-House" Plan Use of Proprietary Products and Services

Summary: The use of "proprietary" (also referred to as "affiliated") products and services raises a series of issues under ERISA's prohibited transaction rules and fiduciary standards. Compliance with these rules and standards is under increased scrutiny by the Department of Labor and the plaintiffs' class action bar, which has filed more than a dozen lawsuits against the fiduciaries of in-house plans.

Source: Groom.com, September 2014

IRS Notice Allows Splitting Pretax and After-Tax Amounts by Direct Rollover

Summary: The IRS has issued Notice 2014-54 providing revised guidance on allocating pretax and after-tax amounts that are paid in multiple simultaneous distributions from an IRC Sec. 401(a), 403(b) or 457(b) plan to more than one destination, such as other retirement plans or IRAs. This guidance authorizes the splitting of pretax and after-tax retirement plan assets through direct rollover, effective January 1, 2015.

Source: Ascensus.com, September 2014

401k Plan Recordkeeper Seen as Primary Advice Source

Summary: New research from Cerulli Associates finds that more than 25% of 401k participants consider the plan recordkeeper to be their primary source of retirement advice.

Source: 401khelpcenter.com, September 2014

New DC Thinking Based on DB Best Practices

Summary: Defined contribution plan sponsors are already adopting defined benefit best practices in plan design, but plans could benefit from more DB-like investing and communication.

Source: Plansponsor.com, September 2014

Expert Sees 'Totally Unexpected' Drop in 401k Account Balances

Summary: According to a new report from the Center for Retirement Research at Boston College, the 401k accounts of workers closest to retirement actually shrunk from 2010 to 2013. The study found that the average combined balance of the retirement accounts of a household headed by someone aged 55 to 64 was $111,000 in 2013. That was down from $120,000 in 2010.

Source: Fortune.com, September 2014

IRS Proposes Amendment to Regulations on Allocation of Roth Amounts Rolled to Multiple Accounts

Summary: The proposed amendments to the regulations would limit prospectively the applicability of the rule regarding the allocation of after-tax amounts when distributions are made to multiple destinations.

Source: Benefitsforward.com, September 2014

Bogle Says Make 401ks Better

Summary: "Little things mean a lot," Vanguard founder John Bogle emphasized Tuesday in testimony to the U.S. Senate Finance Committee on the future of 401k's and other defined contribution plans. He told the committee to do something about the cost of a 401k or other defined contribution plan because seemingly small differences in fees can make a big difference in how successful a saver is in preparing for retirement.

Source: Bankrate.com, September 2014

Most Assets Eligible for Distribution Remain In DC Plans, Cerulli

Summary: According to new research from global analytics firm Cerulli Associates, approximately $720 billion of defined contribution assets that were eligible for distribution remained in an employer-sponsored plan in 2013. That is nearly twice as large as the amount that rolled out.

Source: 401khelpcenter.com, September 2014

SEC's Uniform Fiduciary Rule Could "Haunt" Advisors

Summary: Creating a uniform fiduciary duty rule for brokers and advisors is a "deeply flawed" concept, and the Securities and Exchange Commission should instead create a "generalized obligation" for brokers that requires them to act in their clients' best interest, Robert Plaze, the former deputy director of the agency's Division of Investment Management, said recently. "A uniform fiduciary duty may come back to haunt the Advisers Act fiduciary duty," Plaze said.

Source: Thinkadvisor.com, September 2014

Your 401k: A 'To Do' List for the Rest of 2014

Summary: As a participant, reviewing your 401k annually is a must do, but this article covers a few more steps to take with your 401k plan yet this year.

Source: Thechicagofinancialplanner.com, September 2014

Treasury Official Discusses Options for Improving DC Plans

Summary: The U.S. retirement plan landscape has moved from defined benefit to defined contribution, and now to an undefined contribution system, Mark Iwry, senior advisor to the Secretary of the Treasury, contends.

Source: Plansponsor.com, September 2014

The Ambushed Fiduciary: Does Authority Over a Corporate Account Cross the Line?

Summary: Corporate officers can wear two hats under ERISA: the corporate officer hat or the ERISA fiduciary hat. Actions taken wearing the corporate officer hat are traditionally not fiduciary functions. However, a recent decision from Florida, Perez v. Geopharma, Inc., crafted an interesting but flawed argument that mere authorization to sign on a corporate bank account could make an officer a fiduciary.

Source: Pensionsbenefitslaw.com, September 2014

Is It Time for Checkup for Your 401k Plan?

Summary: As we approach the end of the plan year for most plans, now is a good time for plan administrators and plan sponsors to give their 401k plans a quick once over to see if everything is properly in place. The IRS even provides a 401k plan checklist with some suggested corrective mechanisms that can be taken to bring plans into compliance.

Source: Foxrothschild.com, September 2014

The 401k, Version 3.0

Summary: If you're a plan sponsor hoping for more guidance from the government on retirement issues, expect a surge real soon. New rules are coming on cash-balance pension plans, hybrid plans and lifetime income projections, according to Mark Iwry, Treasury's deputy assistant secretary on retirement and health policy.

Source: Benefitspro.com, September 2014

The Nasty Surprises Behind 401k Group Annuities

Summary: The retirement plan industry is changing and awareness of fees is at an all-time high. It won't be long before 401k plan participants begin taking a closer look at the cost of group annuities. For 401ks using a group annuity structure for their 401k plans, now is a good time to get informed about the cost of group annuities and the surprises waiting for you and your employees.

Source: Benefitnews.com, September 2014

American Retirement Policy Shifts to Tax Incentives

Summary: Despite great strides in retirement security, some lawmakers and benefit leaders see an opportunity to revisit tax policies that could help incentivize all Americans to save more as they plan their exits from the workforce. In turn, many in the employee retirement world fear that any politically motivated efforts to modify or eliminate tax advantages for worksite-sponsored retirement savings plans could seriously impair the success of the existing system.

Source: Benefitnews.com, September 2014

Shining a Light on ERISA Budget Accounts

Summary: This seven page paper discusses the historical practice of paying plan expenses from revenue sharing and the fiduciary and administrative considerations of using an ERISA budget account for managing recordkeeping revenue.

Source: Vanguard.com , September 2014

Fiduciaries Held to Higher Standard in Proving Plan Loss Was Not Caused by Procedural Imprudence

Summary: In determining whether fiduciaries who breached duties of procedural prudence in divesting a plan of company stock actually were liable for causing the resultant loss, courts must ascertain whether another fiduciary acting prudently would have made the same decision, the U.S. Court of Appeals in Richmond has held. Accordingly, a lower court erred in focusing on whether a prudent fiduciary could have made the same decision.

Source: Wolterskluwerlb.com, September 2014

Signature Authority Can Trigger ERISA Fiduciary Responsibility

Summary: One of the most sensitive, and often misunderstood, aspects of being an executive of a company with a retirement plan is knowing when senior leaders are fiduciaries for the plan. A recent federal case added some clarity when it determined that a chief executive with signature authority over the company's finances was indeed a fiduciary.

Source: Thompson.com, September 2014

401k/IRA Holdings in 2013: An Update

Summary: The release of the Federal Reserve's 2013 Survey of Consumer Finances is a great opportunity to see how the positive developments of the last few years -- a recovering economy, strong stock performance, and the continuing maturation of the 401k system -- have affected workers' retirement wealth. This 15 page white paper documents the trend in individual decisions regarding the accumulation of assets in 401k's and IRA's.

Source: Bc.edu , September 2014

Canadian Pension Reform: The Long View

Summary: Policymakers often worry that increasing government pension benefits won't necessarily help retirees, if the reforms cause workers to change their behavior in ways that counteract them. However, researchers examining Canada's pension reform over five decades confirm that they have materially improved the financial well-being of retirees there.

Source: Bc.edu, September 2014

401k Investments: A Plan for Disengaged Sponsors

Summary: New models and solutions for less than fully engaged plan sponsors and participants that leverage the investment manager role outlined in ERISA Section 3(38) represent a significant step forward in the evolution of DC plans and their chances of providing meaningful retirement outcomes for participants and beneficiaries.

Source: Captrustadvisors.com , September 2014

An Inside Look at the CAPTRUST Acquisition of DCAdvisors

Summary: How uncomfortable questions from prospects led a 'small' $12-billion 401k advisory RIA to finally say yes after eight years of rebuking overtures from a $120-billion AUA RIA.

Source: Riabiz.com, September 2014

Advice Industry Adapts to Changing Concept of Retirement

Summary: Sharp increases in longevity are changing the very concept of retirement, and the financial advice industry must adapt. And, as people live longer, the distribution phase becomes more critical.

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

Oregon Task Force Recommends Creation of State-Sponsored Retirement Plan

Summary: Oregon's Retirement Security Task Force issued a report that recommends a structure for a state-sponsored retirement plan.

Source: 401khelpcenter.com, September 2014

The Top Ten Things to Do If Your 401k Plan Fails Nondiscrimination Testing

Summary: Plan sponsors generally do not relish the annual call from their 401k consultant with their plan's nondiscrimination testing results. If your plan regularly passes testing, that's great news. However, if you are not so fortunate or your plan is on the cusp, there are steps you can take to greatly increase your plan's chances of success. This article discusses those choices.

Source: Tri-ad.com, September 2014

Best Practices White Paper: Rolling Out a Social Media Policy

Summary: Financial services firms can learn how to develop a social media policy with comprehensive steps and strategies in the newly released white paper.

Source: Shoefitts.com, September 2014

How Safe Is Your Retirement Nest Egg From Creditors?

Summary: You've transferred your 401k retirement nest egg into an IRA. This gives you more control over management and distribution of IRA assets. But, you may have concerns about creditors and their ability to attack your retirement assets, which are now conveniently consolidated from several employer plans into one convenient IRA. Article answers the question, "Will those IRA assets be protected from creditors regardless of what happens to you?"

Source: Retirementplanblog.com, September 2014

Fiduciary Advocates Push for Best Practices

Summary: Supporters of a broader and more rigorously enforced fiduciary standard are rallying behind a set of best practices they would like to see advisors and brokers incorporate into their practices.

Source: Onwallstreet.com (free registration may be required), September 2014

Attorneys Reflect on 40 Years of ERISA's Biggest Court Rulings

Summary: BNA invited attorneys who represent plan participants, plan sponsors and industry groups to reflect on some of the most significant court decisions decided under ERISA over the past 40 years. Each was asked, "How did this case change the landscape of ERISA litigation, plan design or plan administration?"

Source: Bna.com, September 2014

Are Your Retirement Investment Options Independent?

Summary: You may have selected a bundled provider for the simplicity of the option, however, the author notes that this model may not be in the best interests of your employees. The fund options could be biased in favor of the provider and not your employees.

Source: 401kadvisor.us, September 2014

Top IRS and DOL Audit Issues for Retirement Plans

Summary: Due to the myriad IRS and DOL compliance requirements for retirement plans, employers need to prioritize their efforts in establishing and maintaining internal controls related to them. The law firm of McDermott Will & Emery assembled the IRS and DOL data requests in audit letters sent during the past five years. They then catalogued each request by topic and frequency of recurrence, and also reviewed issues the agencies have identified as areas of recent focus. In this article they have compiled the results to create a checklist of retirement plan compliance issues that were the most often cited by the IRS and DOL.

Source: Mwe.com , September 2014

Key Principles for Fiduciary Best Practices and an Emerging Profession

Summary: Fiduciary law is complex in its nuances and structures; fiduciary principles are not so complex. This nine page white paper about fiduciary best practices, puts an emphasis on addressing conflicts of interest, the reasonableness and transparency of fees and expenses, and communications that are clear, complete and truthful.

Source: Thefiduciaryinstitute.org , September 2014*

Implementing an Effective Benefits Communication Campaign

Summary: Simply defined, a communication campaign is a structured, timed rollout of important information in advance of a critical date. Not only will a campaign increase appreciation and use of the plan, a good communications campaign can help determine whether the dollars the company invests in benefit plans is a good return on investment. Lead article in this newsletter lays out detailed steps on how to plan and produce an effective campaign.

Source: Wellsfargomedia.com , September 2014

Acquisition Best Practices Can Boost ROI

Summary: Financial advisers looking to purchase or merge with another practice must implement some key best practices to ensure the acquisition is successful, according to NFP Advisor Services.

Source: Planadviser.com, September 2014

How Bundled Services in Retirement Plans Are Like Fast Food Value Meals

Summary: Author writes, "Very few plans take advantage of everything they pay for when it comes to bundled services. As a plan fiduciary, you should be asking your plan's vendors to break out its fees for each desired and necessary service, so you can then make a determination of reasonableness."

Source: Pension-consultants.com, September 2014

How 3(38) Investment Managers Can Lessen Plan Sponsor Risk

Summary: One way employers should consider mitigating risk is by delegating investment decisions, such as selecting, monitoring and replacing the plan's investments, to a 3(38) fiduciary.

Source: Pension-consultants.com, September 2014

New Money Market Fund Rules Require Review by Retirement Plan Sponsors

Summary: The SEC recently amended the rules governing money market funds in an effort to increase the stability and liquidity of these funds in times of economic stress. Retirement plan fiduciaries have an obligation to consider whether to continue utilizing money market funds in light of the likely increases in expenses, potential limitations on liquidity and administrative challenges under the new money market rules.

Source: Mwe.com, September 2014

Video: Is 3% Enough for a Default 401k Enrollment Rate?

Summary: Russell's Josh Cohen and Mike Barry, President of Plan Advisory Services Group, discuss three critical issues facing DC plan sponsors, workers and policymakers. Improvements to 401k plans are needed, but they insist that plan sponsors are still in the best position to make necessary changes.

Source: Russell.com, September 2014

Retirement Plan Leakage and Retirement Readiness

Summary: There is no clear answer to the retirement plan "leakage" problem. A good plan design can greatly influence the behavior of its participants. It has to include and encourage regular employer and employee contributions to help build retirement accounts. Withdrawal provisions and loans in plans don't signify poor plan design, but tighter administrative controls around the plan provisions helps keep money in the plan.

Source: Retirementtownhall.com, September 2014

DOL Revises Guidance on Missing Plan Participants

Summary: The DOL recently updated its guidance concerning plan sponsors' and fiduciaries' responsibilities in locating missing retirement plan participants. In Field Assistance Bulletin 2014-01, DOL updated its guidance from 2004 to reflect the availability and improvement of internet search technologies, as well as the discontinuance of both the Internal Revenue Service's and Social Security Administration's letter forwarding services.

Source: Eisneramper.com, September 2014

ERISA's Rich History: A Conversation With Phyllis Borzi

Summary: Phyllis C. Borzi, assistant secretary of labor of the Employee Benefits Security Administration, sat down with Kristen Ricaurte Knebel of Bloomberg BNA recently to discuss where ERISA was, how far it has and hasn't come and what might need to be done to bring the law into the future.

Source: Bna.com, September 2014

More Canadians Expect to Delay Retirement

Summary: More employees expect to retire later than originally planned, according to a survey. The Canadian Payroll Association's sixth annual National Payroll Week Research Survey finds that 79% of employees expect to delay retirement until age 60 or older, up from 70% over the past three years. The number one reason cited for retiring later in life is that employees are not able to save enough money.

Source: Benefitscanada.com, September 2014

The New Era of Fee Transparency: Making Sense of the Details

Summary: Assessing the reasonableness of fees as a result of 408(b)(2) regulations has put an increased burden on the already busy shoulders of retirement plan sponsors. Yet one of the most important fiduciary responsibilities of plan sponsors is to understand the services being provided and ensure that the fees charged to the plan are reasonable. This paper will help you build best practices for evaluating plan fees and determine whether you are striking a balance between the fees you pay and services you receive.

Source: Baml.com , September 2014

The QDIA Decision

Summary: This is a white paper co-authored by Manning & Napier and Drinker Biddle on the importance of helping plan fiduciaries to better understand appropriate QDIA selection and best practices for their plans.

Source: Manning-napier.com (free registration may be required), September 2014

SEC Money Market Reform: An Analysis of Fund Director Responsibilities

Summary: In July 2014, the SEC adopted long-awaited rule amendments to regulations that govern money market funds. The Rules will require action on the part of every board of a registered money market fund to some degree. Some of the more important and more immediate considerations are highlighted in this piece.

Source: Drinkerbiddle.com, September 2014

Brokerage Windows in 401k Plans: Nope. Not Even If They Say 'Pretty Please'

Summary: Author writes, "I know the argument for brokerage accounts in retirement plans. Sophisticated investors want the choice to invest in whatever they want, whenever they want. By eliminating the brokerage option we are punishing the knowledgeable investor. Good philosophy, but poor logic. Allow me to retort."

Source: Employeefiduciary.com, September 2014

Retirement Reform Bills Seek More 'Open' Plans

Summary: Retirement reform bills in Congress loosen restrictions around multiple-employer benefit plans, making it easier for employers to transfer many of the fiduciary responsibilities and liabilities associated with such plans.

Source: Insurancenewsnet.com, September 2014

Fee Equality: Leveling the Playing Field for Participants

Summary: Employers don't usually intend to charge fees unfairly, but may be surprised to know that fees are often inadvertently structured inequitably. Fee equalization can eliminate fee imbalances across the participant base to help plan sponsors embed fundamental fairness into the plan. This paper examines the ways in which traditional fee structures create imbalances among participants and consider ways to equalize fees.

Source: Am-a.com , September 2014

Bob Reynolds and the 'Great West' Brand

Summary: Bob Reynolds has done the easy part. With the stroke of a pen the president and chief executive of Great-West purchased the 401k business of J.P. Morgan, thus gaining traction on an otherwise impossible foothold in the mega-plan business. Now comes the awkward part, but the chief executive sees upside opportunities in bringing all three retirement divisions under one banner.

Source: Riabiz.com, September 2014

The Case of the Accidental Fiduciary: When a Signature is More Than Just a Name

Summary: The issue of fiduciary status is often cumbersome, because while a fiduciary can be directly named by a plan, someone can also be deemed to be a fiduciary by virtue of just having some discretionary authority. Perez v. Geopharma seems to suggest that at least some argument can be made that even company officers could be liable for fiduciary breaches.

Source: Foxrothschild.com, September 2014

Have You Seen This 'Vanity Paper' Purporting to Solve 401k Fiduciary Issues?

Summary: Two investment professionals recently had a paper published on the Social Science Research Network that has received much attention in both the industry media and the mass media. The two authors use the paper to explain why the current American retirement environment needs to be fixed and then, based in part what they see as advantages of retirement policies in other countries, make six recommendations regarding our nation's retirement policy. The reaction among industry veterans has been blunt and pointed.

Source: Fiduciarynews.com, September 2014

How Much for the 401k? Depends

Summary: How much must 30-somethings save in their 401ks to prevent a decline in their living standard after they retire? No two people are alike, but the Center for Retirement Research estimates the typical 35 year old who hopes to retire at 65 should sock away 15 percent of his earnings, starting now.

Source: Bc.edu, September 2014

Job-Hopping Millennials Are Losing Big on Retirement Savings

Summary: One in four workers who left their job last year lost out on this valuable retirement savings. On average, they left behind $1,710 in savings, according to a recent analysis, which looked at 485,000 401k savers who left their jobs. Younger workers were by far the most frequent losers.

Source: Cnn.com, September 2014

Finding the Right 401k Match

Summary: Matching employee contributions to a 401k plan can yield a number of benefits for employers including higher plan participation, employee good will and engagement, and an easier time when it comes to regulatory compliance. However, matching contributions can also be a significant cost to the employer. How does one find the right 401k match?

Source: Shrm.org, September 2014

Business Continuity Plan, Including Succession Plan

Summary: The North American Securities Administrators Association proposed a model rule requiring investment advisers to create and implement written procedures to address business continuity and succession planning in the event of the owner's and other key personnel's untimely departure or a natural disaster. With this proposal NASAA has caught up with the SEC requirements for federally registered investment advisers to establish business continuity and disaster recovery plans.

Source: Ria-compliance-consultants.com, September 2014

SEC Urged to Move on Uniform Fiduciary Rule

Summary: Advocates for stronger fiduciary rules are calling on the head of the SEC to move forward with a proposal to impose a uniform standard of care for brokers and investment advisors, even if that means pushing the rules through a divided commission.

Source: Onwallstreet.com (free registration may be required), September 2014

Retirement Plan Reporting and Disclosure

Summary: Retirement plans must file certain forms and reports with the IRS and the DOL and send out notices to plan participants and certain others. Different reporting and disclosure requirements apply depending on the type of plan and the plan's circumstances. This is an information page prepared by the IRS.

Source: Irs.gov, September 2014

Locating Missing Participants: FAB 2014-01

Summary: Over the past few years, the IRS and Social Security Administration have discontinued their letter forwarding service and internet search technologies have improved greatly. While this FAB is specifically for finding participants in terminated defined contribution plans, it will probably affirm many of the practices already in use by plan sponsors. Article covers some key compliance points.

Source: Erisadiagnostics.com, September 2014

Reviewing Retirement Plan Tablet Apps

Summary: This short article primarily focuses on tablet apps that allow participants to view a variety of retirement plan information, such as account balance, transaction history and asset allocation. It also looks at applications that do not provide specific plan details, but offer general retirement plan educational content, such as videos, quizzes and articles.

Source: Corporateinsight.com, September 2014

Signature Authority Can Trigger ERISA Fiduciary Responsibility

Summary: Although the ERISA discretion requirement is still in limbo, CEOs and other company officers responsible for ERISA-governed plans who do not want to be plan fiduciaries should consider segregating plan assets and having only plan fiduciaries serve as signatories on the plan's bank accounts to avoid potential fiduciary liability under ERISA.

Source: Benefitsbryancave.com, September 2014

Target-Date Funds Reveal Shift in Retirement Adviser Value Proposition

Summary: Traditionally, advisers' value proposition was solely around stock selection and market rotation. The Internet, transparency and benchmarking have changed the value proposition of advisers. It is now much more focused toward that of a financial steward.

Source: Benefitnews.com, September 2014

Sorry, ERISA Is Hardly a Failure

Summary: Not everyone has a 401k at work, but that is irrelevant. ERISA safeguards the retirement plans that are in place for workers. Author therefore writes, "I'm seeing all of these 40th anniversary stories about ERISA and how the system has failed Americans, and it's burning me up."

Source: Workforce.com, September 2014

The Changing Nature of Retirement

Summary: The trend to later retirements and increased work for pay during retirement have been explained by longer life expectancies, better health at older ages, and declining pension coverage. Retirement surveys show current workers continue to push back retirement plans and increasing numbers plan to work for pay in retirement. Yet the fraction or retirees working for pay is substantially lower, and the age of retirement notably younger, than suggested by surveys. This paper explores the issue.

Source: Pensionresearchcouncil.org, September 2014

Retirement Plans and Prospects for Retirement Income Adequacy

Summary: Will Americans have enough to live on in retirement? This paper attempts to address that question for the Baby Boomer and Gen Xer generations. While it is widely accepted that employment-based retirement plans have played a significant role in providing retirement income to American workers, this paper quantifies the impact that those programs have in the determination of retirement income adequacy.

Source: Pensionresearchcouncil.org, September 2014

Are Retirees Falling Short? Reconciling the Conflicting Evidence

Summary: A fundamental question in the retirement area is whether people will have adequate retirement income to maintain their pre-retirement standard of living. Existing studies offer conflicting assessments; some indicate a serious problem while others present an optimistic view. This paper attempts to explain why the assessments differ.

Source: Pensionresearchcouncil.org, September 2014

Fewer Fortune 500 Companies Shifting DB Plans to 401k's

Summary: The retirement plan landscape is stabilizing as fewer U.S. companies last year moved from DB plans to offering only a DC plan to new salaried employees than in any other year over the past decade, according to a new analysis by Towers Watson. The analysis also found that a few industry sectors -- insurance and utilities -- are bucking the trend from DB to DC plans. More than half the companies in these sectors still offer DB and DC retirement plans to new salaried employees.

Source: Towerswatson.com, September 2014

More Retirement Plans May Invest in CITs

Summary: Revenue Ruling 2014-24 modifies the rules regarding 81-100 group trusts by stating that certain retirement plans qualified under the Puerto Rico Code may invest in 81-100 group trusts even if the plan is not also qualified under the Internal Revenue Code. It also clarifies that assets held by insurance company separate accounts may be invested in 81-100 group trusts under some circumstances.

Source: Plansponsor.com, September 2014

RIA M&A Activity Solid So Far in 2014

Summary: Merger and acquisition activity remained healthy in the registered investment adviser industry during the first half of 2014, according to research from Schwab Advisor Services. Schwab says the first half of 2014 saw 29 completed M&A deals totaling $32.6 billion in assets under management.

Source: Planadviser.com, September 2014

Tatum v. RJR Tobacco: Circuit Court Reverses District, Holds for Plaintiffs

Summary: On August 4, 2014, the 4th Circuit handed down its decision in Tatum v. R.J. Reynolds Tobacco Company. The court reversed the district court's decision in favor of defendant-fiduciaries and remanded the case for further proceedings. The case is interesting in several respects covered in this article.

Source: Octoberthree.com, September 2014

Fed Report Finds Participation Flat, Retirement Balances Up "Substantially"

Summary: A new report from the Federal Reserve finds that while retirement plan participation remained relatively flat over the past three years, the median and average value of those retirement plan accounts rose "substantially," according to the report. Article reviews the trends noted in the report.

Source: Napa-net.org, September 2014

DOL Request for Information on Brokerage Windows in Participant-Directed Accounts

Summary: On August 21, 2014, the DOL issued a 'Request for Information' to learn more about the standards it should impose on fiduciaries who offer brokerage windows in participant-directed retirement accounts. The RFI signals a potential shift in the DOL's position on brokerage windows and suggests that it may begin to more heavily regulate these less commonly used retirement account investment arrangements.

Source: Troutmansanders.com, September 2014

Automatic Features in Defined Contribution Plans

Summary: Offered in conjunction with automatic escalation, automatic enrollment can positively impact participant behavior and improve retirement readiness. This article examines some best practices to be considered when implementing automatic features in DC plans that can produce greater results per dollar of employer cost.

Source: Strategicbenefitservices.com, September 2014

Many DC Plan Sponsors Must Annually "Notice" Their Participants

Summary: Sponsors of DC plans with certain features are required to provide annual notices to participants. Generally, these annual notices are in addition to any initial notices the plan sponsor may be required to provide on or before an employee's eligibility date for the plan feature. This publication provides a summary of the annual notice requirements for those notices, including timing, recipients, contents, and method of delivery.

Source: Prudential.com , September 2014

In-Plan Retirement Income Solutions: Landscape Overview and Obstacles to Adoption

Summary: As an increasing number of participants are planning for retirement in a DC plan framework, without the guaranteed retirement benefit payouts that were provided by DB plans, it can be argued that the solutions that would be most beneficial to DC plan participants are those that offer a lifetime income guarantee. However, many plan fiduciaries perceive that there may be a fiduciary risk to offering guaranteed income products within their plan. This eight page article provides an overview of available product types and risks.

Source: Porteval.com , September 2014

Redefining 'Choice' in Retirement Plans

Summary: Choice in the context of a retirement plan means something quite different to providers that aren't fiduciaries to a plan than to fiduciary plan providers. Non-fiduciary plan providers care little about what any given participant invests in, because they just want to sell product. Which is why they give plan participants lots of 'choices.' Defining choice in this way, however, means that plan participants have a much greater risk of investing in portfolios that are sub-optimal in diversification.

Source: Morningstar.com, September 2014

Limitations on Mid-Plan Year Amendments to Safe Harbor 401k Plans

Summary: There are currently very few amendments that can confidently be made to a safe harbor 401k without potentially running afoul of this restrictive IRS position. This article briefly discusses the limited, formally documented exceptions to the general "do not amend" rule otherwise espoused by the IRS.

Source: Legacyrsllc.com, September 2014

Planning Proper Fee Payments

Summary: Every plan sponsor should understand what can and cannot be paid from plan assets. If you make these kinds of decisions and do not know how to differentiate between things that can and things that cannot be paid for by the plan, you need to get educated.

Source: Ferenczypaul.com , September 2014

SEC Adopts Amendments to Address Runs on Money Market Funds

Summary: Designed to supplement the money market fund reforms the SEC had previously adopted in 2010, the amendments to Rule 2a-7 attempt to address the susceptibility of certain money market funds to heavy redemptions, improve their ability to manage such redemptions, and increase the transparency of the risks in money market funds, while preserving their benefits for investors and issuers alike. This article is a lengthy and comprehensive review of the proposed rule changes.

Source: Sidley.com, September 2014

White Labeling DC Plan Investments May Offer Advantages

Summary: Among approximately 75 large employers, nearly one-quarter (24%) are currently using a white label approach to naming defined contribution plan investment options, Aon Hewitt finds.

Source: Planadviser.com, September 2014

A Price War That Could Help 401k Savers

Summary: Over the past decade, financial services firms have added new bells and whistles to their "managed accounts," which offer direction on 401k accounts and IRAs on behalf of people who want investment help. Now, a small player is introducing another innovation, offering to make that help a lot cheaper.

Source: Marketwatch.com, September 2014

These Four Quick Fixes for ERISA Can Reduce 401k Fiduciary Stress

Summary: For all the structural problems of ERISA and its attendant IRS and DOL regulations, there are opportunities to address some issues. Article relays the views from retirement specialists across the nation on some fixes that could be made with little or no effort.

Source: Fiduciarynews.com, September 2014

Tatum v. RJR Pension Investment Committee: What it Teaches About Fiduciary Obligations

Summary: In the guise of a Fourth Circuit decision over breaches of fiduciary duty involving company stock funds, RJR Nabisco has become a touchstone for ERISA litigators as well. There are a number of takeaways and points of interest in the decision which have some interesting things to say, and to teach.

Source: Bostonerisalaw.com, September 2014

Can Retirees Still Use a 4% Withdrawal Rate?

Summary: This Procedure & Checklist is meant to assist a plan fiduciary in meeting its fiduciary obligations under the Employee Retirement Income Security Act with respect to missing participants of a terminated defined contribution plan.

Source: Advisorperspectives.com, September 2014

Procedure & Checklist for Missing Participants in Terminated DC Plan

Summary: This Procedure & Checklist is meant to assist a plan fiduciary in meeting its fiduciary obligations under the Employee Retirement Income Security Act with respect to missing participants of a terminated defined contribution plan.

Source: Quarles.com, September 2014

Five Changes Ushered in by ERISA

Summary: There's no shortage of debate about whether ERISA is meeting the retirement challenges now facing baby boomers and generations to follow. But there's no debating that the law ushered in some monumental changes, enhancing, if not revolutionizing, the concept of retirement as the country knows it today. Here are the top five changes ERISA has brought us.

Source: Lifehealthpro.com, September 2014

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: Thinkadvisor.com, 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: Seyfarth.com, 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: Schwab.com, 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: Practicallaw.com, 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: Ntsa-net.org, September 2014

Understanding ADP and ACP Testing

Summary: The IRS requires plan sponsors to perform various tests each year to ensure that 401k 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: Consultrms.com, 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: Benefitsbryancave.com, 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: 401khelpcenter.com, 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: Jdsupra.com, 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: Napa-net.org, 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: Huffingtonpost.com, 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: Plansponsor.com, 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: Plansponsor.com, 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: Planadviser.com, 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: Groom.com , August 2014


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