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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.

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Two-headed Nightmare: The Robos and the DOL

Summary: The robo-advice threat and the DOL conflict-of-interest threat are two parts of the same threat to traditional distribution. Both aim to make the distribution of financial products and services less expensive, more objective and more transparent, i.e., more consumer-friendly. Of the two, you should be more worried about the digital threat.

Source: Linkedin.com, May 2015

Is Conflict-Free Investment Advice More Expensive Than Conflicted Advice?

Summary: Critics of the DOL's proposed fiduciary rule argue that the rule will make investment advice too costly for many 401k plans. If the critics are right, this issue would be a compelling reason to scuttle the rule. But fiduciaries already complying with underlying standards compare favorably with industry averages for non-fiduciaries. Rule changes will allow more low-cost competition to flourish.

Source: Employeefiduciary.com, May 2015

Supreme Court: Fiduciaries Have Ongoing Duty to Monitor Investments

Summary: Plan fiduciaries for 401k plans have a continuing duty -- separate from the duty to exercise prudence in selecting investments -- to monitor and remove imprudent investments, the U.S. Supreme Court held on May 18, 2015. The decision may increase litigation and stresses the importance of procedural prudence in administering a plan.

Source: Shrm.org, May 2015

Tibble v. Edison: Actions Retirement Plan Fiduciaries Should Take

Summary: While many fiduciaries already actively monitor plan investment performance, the Supreme Court's decision is a reminder that plan fiduciaries may also be called upon to prove that they have done so. The Court's decision offers little guidance on what proof would be required, but article suggests several actions plan fiduciaries should take to help defend against any litigation and reduce the risk of liability.

Source: Quarles.com, May 2015

Best Practices for 401k Fees

Summary: Here are 10 steps designed to assist employer-fiduciaries in meeting their fee-related responsibilities, reducing the risk of fiduciary liability and increasing the value of the employer's 401k plan to participants.

Source: Poynerspruill.com , May 2015

How Will the DOL's Proposed Fiduciary Rule Change Affect the Plan Sponsor?

Summary: In order to understand how the DOL's proposed redefinition of the term fiduciary under ERISA will affect you as a plan sponsor, you must first understand the relationship you have with the current plan service providers. The reason it is important is the higher standard of care of prudence this causes them to be held to along with the limiting of liability for the plan sponsor or their retirement plan committee.

Source: Pension-Consultants.com, May 2015

What's Really Important About the Supreme Court's Tibble Decision

Summary: The U.S. Supreme Court released its long-awaited decision in Tibble v. Edison, holding that participants are not prevented from challenging a plan fiduciary's imprudent 401k investment choices if the investment was selected more than six years ago. Author discusses what the decision means for plan committees.

Source: Pensionsbenefitslaw.com, May 2015

DOL's Proposed Best Interest Contract Exemption Could Require Dramatic Changes for Financial Institutions

Summary: The requirements for satisfying the proposed BIC Exemption could result in dramatic changes in the practices and operations of many financial institutions. Financial institutions would need to examine, and some might need to modify, their compensation arrangements. Financial institutions that seek the protection of the BIC Exemption would need to satisfy significant new data collection, recordkeeping and disclosure requirements.

Source: Faegrebd.com, May 2015

ERISA Plan Sponsors -- Are You Monitoring Investments and Fees?

Summary: Because the duty to monitor plan investments is continuous, the Supreme Court held that the statute of limitations had not run on investment decisions made in 1999 by the Edison International plan sponsor. Although it remains to be seen how the Ninth Circuit will define the scope of a fiduciary's duty to monitor, plan sponsors should immediately review their investment monitoring practices to ensure that appropriate and reasonable procedures are in place.

Source: Dwt.com, May 2015

Recordkeepers Can Influence 401k Contributions

Summary: While the greatest single influence on participants in retirement plans to save is the employer match, recordkeepers' actions and influence, put together, can add up to a force just as powerful. That's according to a National Association of Retirement Plan Participants study.

Source: Benefitspro.com, May 2015

Qualified Retirement Plan Check-Up -- Affiliated Service Groups

Summary: This article reviews the affiliated service group rules as the rules pertain to the various qualification requirements applicable to retirement plans.

Source: Benefitslawinsider.com, May 2015

Analysis Reveals More Than 54,000 401k Plans Failed Nondiscrimination Testing

Summary: Judy Diamond Associates has released its annual study of corrective distributions required by 401k plans. This new research shows that 54,493 401k plans failed their most recent IRS nondiscrimination tests. Who were five companies issuing the largest amount of corrective distribution?

Source: 401khelpcenter.com, May 2015

How Revenue Sharing May Be the Real Victims of SCOTUS's Tibble v. Edison Ruling

Summary: Plan fiduciaries need to understand the amounts of payments that are being made from funds they select, who's paying them and who is receiving them. Some believe the unanimous decision just handed down by the Supreme Court in Tibble v. Edison could impact mutual fund selection by delivering a broadside to two mainstays of advisory cash flow: 12(b)-1 fees and revenue sharing.

Source: Riabiz.com, May 2015

New Correction Methods for Missed Deferrals, Including Automatic Enrollment Failures

Summary: To encourage employers to adopt and/or to retain automatic enrollment features, and to encourage the early correction of missed deferrals, the IRS recently issued Revenue Procedure 2015-28. It provides new correction methods (and modifies an existing correction method) for certain failures related to automatic enrollment and/or for brief periods of missed deferrals. This is a summary of the Revenue Procedure.

Source: Trsretirementservices.com , May 2015

DOL's Proposed Fiduciary Definition Would Bring Many Service Providers Into Scope

Summary: This white paper examines the reproposed changes to the definition of an "investment advice fiduciary" for purposes of ERISA standards of fiduciary conduct and the prohibited transaction rules under ERISA and section 4975 of the Internal Revenue Code. It also covers the DOL's six proposed "carve-outs" from fiduciary status.

Source: Morganlewis.com , May 2015

Institutionally Priced Retirement Income Solutions Deliver More Income

Summary: This article examines three retirement income generators that can be offered in employer-sponsored DC plans: systematic withdrawals, immediate annuities, and guaranteed lifetime withdrawal benefits. It compares how each RIG performs assuming institutional pricing typically available within a DC plan relative to retail pricing typically available outside a DC plan.

Source: Ctctcdn.com , May 2015

Poll: Investment Committees Hot Topics

Summary: This survey of retirement plan investment advisers, investment analysts, and platform managers habitually involved in quarterly investment reviews found that the market outlook for US Fixed Income Securities tops the list of topics foremost on plan sponsors' mind in first quarter 2015 investment review meetings taking place right now and since March 31, 2015.

Source: 401konvergence.com, May 2015

The 401k Lineup: Successful Planning With a Focused Lineup

Summary: Over the past decade, the number of options available to 401k participants has been expanding. Although plan sponsors may think that offering more choices is beneficial to plan participants, structuring a tiered approach, each tier targeted to specific participant types, as well as a more focused lineup, may provide participants with the best chance of success.

Source: Porteval.com , May 2015

Considering and Evaluating Target-Date Glide Paths

Summary: The majority of U.S. workers will look to their DC plan to replace 30% or more of their pre-retirement income. The likelihood of achieving this goal should be the measure by which plan fiduciaries select and evaluate QDIAs. The Objective-Aligned Glide Path has the potential to improve the probability of a participant having the real retirement income they need.

Source: Pimco.com, May 2015

Supreme Court Decides Tibble v. Edison International

Summary: The United States Supreme Court decided Tibble v. Edison International, No. 13-550, holding that under ERISA, a plaintiff may timely commence a claim for breach of fiduciary duty within six years of the breach of a continuing duty of prudence in selecting investments.

Source: Faegrebd.com, May 2015

Tips for Preparing for Your Employee Benefit Plan Audit

Summary: How do you tackle an employee benefit plan audit? Here are some planning tips that will make the process easier and more efficient.

Source: Dgccpa.com, May 2015

Supreme Court Rules on Tibble v. Edison

Summary: The Supreme Court held that "ERISA's fiduciary duty is 'derived from the common law of trusts,'... which provides that a trustee has a continuing duty -- separate and apart from the duty to exercise prudence in selecting investments at the outset -- to monitor, and remove imprudent trust investments." Article notes two things plan sponsors should take from the ruling.

Source: Captrustadvisors.com, May 2015

It's Unanimous: The Fiduciary Duty to Monitor Has Teeth

Summary: The Supreme Court held in Tibble v. Edison that ERISA fiduciaries have a "continuing duty" to monitor investment options, and that plan participants have six years from the date of an alleged violation of that duty to file a lawsuit against the plan's fiduciaries. This ruling significantly undercuts the utility of a statute of limitations defense that had been successfully deployed by plan fiduciaries in previous cases, and creates fertile ground for more litigation.

Source: Benefitsinbrief.com, May 2015

Tibble v. Edison International

Summary: The Supreme Court announced a much-anticipated ERISA plan decision in the case of Tibble v. Edison. ERISA practitioners and plan administrators have been watching Tibble with interest because the Supreme Court granted certiorari to consider a very broad question, namely, whether ERISA's six-year limitations period barred imprudent investment claims where the initial investment decision was more than six years prior to suit.

Source: Benefitslawadvisor.com, May 2015

Supreme Court Decision Opens Door to More 401k Lawsuits

Summary: The Supreme Court issued a decision in Tibble v. Edison that could have far-reaching implications for how long a retirement plan participant has to sue an employer for breach of fiduciary duty in a 401k plan. Experts think the ruling is likely to result in additional litigation.

Source: Benefitnews.com, May 2015

Forget Fiduciary: Real Battle Coming Over Harmonization

Summary: MarketCounsel's chief says the DOL fiduciary plan is an end run around the SEC, but the real battle is the ongoing push to harmonize BD and RIA rules.

Source: Thinkadvisor.com, May 2015

Who Is Responsible for Service Provider Mistakes?

Summary: This case reflects the real world in that the plan sponsor is almost always the Plan Administrator with ultimate responsibility for plan operations. It follows that plan sponsors, as fiduciaries, could be saddled with liability for the conduct of non-fiduciary plan service providers.

Source: Retirementplanblog.com, May 2015

A Plan Sponsor's Foolproof Way to Getting in Trouble

Summary: Whatever the problem is, there is a certain foolproof method to get that problem. The same can be said about a retirement plan and the employer that sponsors it. There is a sure foolproof method for a retirement plan sponsor to get their plan and themselves in trouble, this article will let you know what that method is.

Source: Jdsupra.com, May 2015

Tax Credit for Small Business Retirement Plan

Summary: When small business employers are deciding whether to establish a retirement plan, one hurdle they face is the expense involved with implementing the plan and educating the employees. But, there is a tax credit available to small business employers, which can be used to offset a portion of those expenses.

Source: Consultrms.com, May 2015

Supreme Court Hands Win to Employees in Edison International 401k Dispute

Summary: The U.S. Supreme Court revived claims made by Edison International employees who accused the utility of favoring higher-cost mutual funds over lower-cost ones in its retirement plan.

Source: Reuters.com, May 2015

Experts Say Hardship Self-Certification Was Never Allowed

Summary: The Internal Revenue Service recently issued a publication about appropriate documentation retirement plan sponsors should keep for participant hardship and loan requests. Some industry groups and providers say a recent IRS publication goes against prior guidance, but experts at the ASPPA Virtual Conference disagree.

Source: Plansponsor.com, May 2015*

Bipartisan Legislation Supports Lifetime Income Disclosures

Summary: Lawmakers in the U.S. Senate this week introduced legislation that would mandate lifetime income demonstrations and other disclosures in defined contribution retirement plans.

Source: Planadviser.com, May 2015

New Study Confirms 401k Limits Not Constraining

Summary: A recent study shows that raising the contribution limit would do little to increase retirement saving. Researchers looked at the impact of changes that Congress enacted in 2001, which increased 401k limits for all ages and established a new catch-up provision for workers age 50 or older, allowing them to contribute much more.

Source: Marketwatch.com, May 2015

Internal Controls for Catch-Up Contributions

Summary: For 401k plans evaluating whether participants are eligible to make a catch-up contribution, 1965 is an important year.

Source: Erisasunscreen.com, May 2015

Navigating Retirement Risks: Creating Sustainable Retirement Income

Summary: This is the second article in our series on navigating retirement risks, based on the white paper, Creating Sustainable Retirement Income in 401k Plans Using Managed Risk Funds. This article discusses the importance of investing retirement savings properly.

Source: Drinkerbiddle.com, May 2015

B.C. Finally Gets Its New Pension Benefits Standards Act

Summary: At long last, many of the recommendations of the Joint Expert Panel on Pension Standards (JEPPS) included in its November 2008 final report entitled Getting Our Acts Together will see the light of day in British Columbia.

Source: Benefitscanada.com, May 2015

Latest 403(b) Market Stats

Summary: This chart illustrates the distribution of investments in the 403(b) market as of December 31st of each year. The numbers represent billions of dollars invested. The data was provided by the Spectrem Group.

Source: 403bwise.com, May 2015

DOL Extends Comment Period on Fiduciary Duty Proposal

Summary: The Labor Department has extended by 15 days the comment period for a controversial proposal that would raise investment advice standards for brokers working with retirement accounts, acquiescing to demands from members from both parties in Congress for more time to respond.

Source: Investmentnews.com (registration may be required), May 2015

DC Retirement Income Solutions

Summary: Today, defined contribution plans are the main source of retirement savings for many individuals. As many plans experience a maturing of their participant population, there's more discussion about encouraging ex-employees to stay in the plan, and about offering retirement income solutions to support retirees. However, action on these issues is slow in coming.

Source: Russell.com , May 2015

Former Employee Plan Participants: What Is in Their Best Interest?

Summary: Given the large impact excessive fees can have on former participant IRA rollovers, sponsors are beginning to evaluate potential solutions to address these issues and to assist their former employees. Regardless of employment status, companies and their retirement committees want current and former employees to be able to stay on a path toward a successful retirement. Article discusses of what some sponsors are currently doing and a few ideas concerning future changes within the industry that should help protect former employees' retirement savings.

Source: Milliman.com, May 2015

Proposed Fiduciary Definition Regulations Will Impact Investment Adviser Practices

Summary: One result of the proposed regulations and accompanying prohibited transaction exemptions is the "ERISAfication" of IRAs. Because of the significant changes in operation that might be required for investment advisers and other plan consultants, it is important to anticipate how these proposals could impact current practices.

Source: Faegrebd.com, May 2015

What's the Difference Between "Sole" Interests and "Best" Interests?

Summary: So what is the difference between "sole" interest and "best" interest? And why does it matter? Fi360 CEO Blaine Aikin looks at this distinction and asks whether some conflicts are what's "best" for investors.

Source: Fi360.com, May 2015

DC Plan Success Factors: Framework for Plans With an Objective of Retirement Income Adequacy

Summary: DCIIA has developed a best practices framework to outline actions that plan sponsors and fiduciaries can take to build plans that have the greatest potential to help participants achieve retirement readiness. The framework also addresses specific factors related to plan design, investment structure, and plan monitoring. Framework is laid out in this 10 page paper.

Source: Dciia.org , May 2015

Data Finds Increase in Both Employer and Employee 401k Contributions

Summary: Judy Diamond Associates has completed a comparative analysis of 401k plan contributions among both employers and employees in 2012 and 2013, the most recent year for which data is available. This research shows that together, employers and employees contributed a total of $13 billion more in 2013 than in 2012.

Source: 401khelpcenter.com, May 2015

Mega 401k Plans Triple Use of Managed Accounts

Summary: Mega plan sponsors are pushing the envelope yet again by offering more personalization to their plan participants through managed account vehicles. The proportion of Mega plans offering these customized allocation solutions as their 401k plan default investment option has increased from 5% in 2014 to 18% in 2015 according to a Cogent Reports study by Market Strategies International.

Source: 401khelpcenter.com, May 2015

DOL Seeks Extended Authority to Use Form 5500

Summary: The Form 5500 is part of the bread and butter of the federal government's information gathering concerning employers and employee benefit plans. But authority to use it is not eternal. The DOL's Employee Benefit Security Administration has asked the Office of Management and Budget to extend for more three years authorization to gather information through the form.

Source: Asppa.org, May 2015

Grading Target-Date Funds From a Fiduciary Perspective

Summary: Author writes, "Default investments (QDIAs) should be selected for their prudence rather than their high risk, even though high risk might provide high returns."

Source: Targetdatesolutions.com , May 2015

Retirement Confidence Is Slowly Recovering, EBRI Survey Finds

Summary: Americans' confidence in their ability to afford a comfortable retirement has recovered somewhat from the record lows of the past five years, but appears to be based on the increasing optimism of those who have a retirement plan, according to the 25th annual Retirement Confidence Survey conducted by the EBRI and Greenwald & Associates.

Source: Wolterskluwerlb.com, May 2015

Principal's Financial Well-Being Index: May 2015

Summary: This 11 page report is the results of a survey was conducted online within the United States on by Harris Poll between February 9 and February 17, 2015 among 1,111 employees. This is one in a series of quarterly studies to identify and track changes in the financial well-being of American workers.

Source: Principal.com , May 2015

Sleeper Supreme Court Case Is Worth Watching Carefully

Summary: On April 20, 2015, over the objection of the Solicitor General, the Supreme Court agreed to decide, in Spokeo, Inc. v. Robbins, No. 13-1339, whether Article III of the Constitution allows Congress to permit lawsuits over a statutory violation where the violation does not necessarily result in a plausible claim of concrete injury. If the Supreme Court finds that private plaintiffs cannot sue to enforce statutory obligations, which would mean that an ERISA plan participant would have no access to the federal courts to enforce the myriad of ERISA reporting, disclosure, vesting and funding rules.

Source: Erisa-employeebenefitslitigationblog.com, May 2015

Automation, Mobility and Advice Increase Employee Participation, Survey

Summary: In 2014, 78 percent of active 401k participants who made a change to their plan made a positive one, by either starting or increasing their contributions. Compared to 2013, the number of participants who contributed to their 401k account increased by 18 percent, according to the latest Bank of America Merrill Lynch 401k Wellness Scorecard. This growth can be attributed in part to millennials' increasing focus on savings, as 64 percent more employees in this generation started contributing to a 401k account in 2014 compared to 2013.

Source: 401khelpcenter.com, May 2015

Americans Likely Leaving $24 Billion in Company Match on the Table

Summary: A new research report, issued by Financial Engines, estimates that Americans leave $24 billion in unclaimed 401k company matches on the table each year. The company examined the saving records of 4.4 million retirement plan participants at 553 companies, and found that one-in-four employees (25 percent) miss out on receiving the full company 401k match by not saving enough.

Source: 401khelpcenter.com, May 2015

Wisdom for Qualified Retirement Plan Sponsors: Focus on Your Five "T's"

Summary: Recent history has shown that conflicts of interest in the employee benefit context are not well understood and, as a result, oftentimes remain unidentified. Unfortunately, these latent conflicts can lead to enterprise-risks that can otherwise be easily avoided with just a bit of work up front. Focusing on the five "T's" -- Time, Talent, Tools, Trust, and Terms -- is an approach that should be applied when evaluating any service provider.

Source: 401khelpcenter.com, May 2015

401k Record Retention Guidelines

Summary: A quick record retention guideline overview of what 401k documents should be retained and for how long.

Source: Tristarpension.com, May 2015

Lawmakers Ask DOL's Perez to Extend Fiduciary Comment Period

Summary: Lawmakers asked Labor Secretary Thomas Perez in two separate letters this week to extend by another 45 days the comment period on the Department's redraft of its rule to amend the definition of fiduciary under ERISA. Fiduciary advocates tell Perez to rebuff requests.

Source: Thinkadvisor.com, May 2015

AICPA Asks Congress for Retirement Plan Simplification

Summary: The AICPA recently sent a comment letter to the Senate Finance Committee Tax Reform Working Group on Savings and Investment regarding simplification of employer-sponsored retirement plans and individual retirement accounts. The letter contained key requests as a result of the current issues and limitations facing both the plan sponsor and the plan participant.

Source: Schneiderdowns.com, May 2015

Litigation Is a Poor Way to Regulate the Investment Industry

Summary: The question of fiduciary responsibility, and specifically minimization of the risk of lawsuits, has been a growing concern for many retirement plan sponsors in recent years. It has reached the point where the specter of potential litigation is weighing too heavy in too many decisions that are being made to the detriment not only of plan sponsors, but also of participants.

Source: Russell.com, May 2015

DOL's Proposed Prohibited Transaction Exemption: Best Interest Contracts

Summary: This article focuses on a new proposed prohibited transaction exemption published with the DOL's proposed fiduciary rule that would allow persons who are deemed to be "investment advice fiduciaries" receive compensation for investment advice if certain conditions are met.

Source: Pillsburylaw.com, May 2015

Take Two: DOL Reproposes Changes to Definition of Fiduciary for ERISA Plans and IRAs

Summary: This is the first in a series of advisories regarding the DOL's re-proposed regulation on the definition of fiduciary under ERISA Section 3(21) and related proposed new and amended prohibited transaction class exemptions. It summarizes the proposed rule's new definition of fiduciary by reason of providing investment advice to an ERISA-covered plan or an IRA.

Source: Pillsburylaw.com, May 2015

Five Key Risks to Your Retirement Nest Egg

Summary: You know how much is at stake as you set aside money for your future. You understand that retirements don't just happen, and you are willing to make small sacrifices now so you can enjoy a more fulfilling retirement later. The problem is, unless your action plan includes strategies to address five key risks, that nest egg you're working so hard to build up may not be enough.

Source: Pension-consultants.com, May 2015

Reforming K-12 403(b) Plans

Summary: Interview with one Steve Schullo, who "has a unique perspective on the nature of the investment options typically offered by insurance companies to participants in the 403(b) plans established and maintained by K-12 school districts.

Source: Morningstar.com, May 2015

Retirement in America: The Fiduciary Definition in Context

Summary: The DOL recently proposed new regulations to address the changing times and to help eliminate conflicts of interest in retirement planning and investing. This 13 page white paper take a look at the bigger retirement picture, and consider how the DOL's proposal may affect retirement preparation in the United States.

Source: Mtrustcompany.com , May 2015

How an Employer "Juice Up" Their 401k Plan

Summary: Ary Rosenbaum offers some suggestions on how a plan sponsor can improve their 401k plan at very little or no cost.

Source: Jdsupra.com, May 2015

New Investment Opportunity for DC Plans - Qualifying Longevity Annuity Contracts Are Here

Summary: In an effort to help prevent retirees from outliving their retirement savings, the IRS and the Treasury Department finalized new rules that allow participants in defined contribution plans to invest in "longevity annuities" that do not violate the complex minimum required distribution requirements, which otherwise mandate that participants start taking plan distributions upon reaching age 70 1/2. These complex new rules are summarized in this article.

Source: Groom.com , May 2015

Employees Favor Companies Playing More Active Role in Their Retirement Plans

Summary: Employees overwhelmingly favor their employers playing a more active role in their defined contribution (DC) retirement plans, but plan sponsors voice reluctance to doing so, a new study from Northern Trust shows.

Source: 401khelpcenter.com, May 2015

Warning: RIAs Could Get Snagged by Fiduciary Reproposal

Summary: Registered investment advisors may be thinking that the Department of Labor's proposed conflict of interest regulation doesn't have an impact on them. After all, they are already fiduciaries acting in the best interest of their client. However, when it comes to retirement savings, there's a new sheriff in town: the DOL.

Source: Napa-net.org, May 2015

The Hidden Provision in the DOL's Proposed Fiduciary Rule

Summary: In its proposed rule requiring that all advisors to retirement plans act as "fiduciaries," the U.S. Department of Labor includes a "best interest contract exemption." In the authors view, this exemption is as significant -- if not more so -- than the proposed rule itself. It has profound ramifications for retirement plan participants.

Source: Usnews.com, May 2015

The Essence of the Fiduciary Proposal . . . for Advisors

Summary: By now, you've probably read about some of the details of the Department of Labor's fiduciary proposal. This article isn't about the details; it's about the essence. Fred Reish looks at the big picture.

Source: Fredreish.com, May 2015

401k Plan Fees: Three Fundamental Questions Every Advisor Should Be Prepared to Answer

Summary: Before 408(b)(2) regulations went into effect in 2012, much of this expense information was hard for the plan sponsor to even find. While more readily available today, that doesn't mean your plan clients necessarily understand it. Article notes three typical 401k plan fee questions you may encounter and some thoughts on how you might want to answer them.

Source: Fi360.com, May 2015

New Compliance Questions on Form 5500 Filing

Summary: The IRS recently announced that it will be collecting additional compliance information on qualified plans. The additional information gathered will be used by the IRS to monitor tax compliance, encourage plan sponsor development and use of internal controls, compile data to use for future Employee Plans Compliance Unit (EPCU) projects, and check plans for potential disqualification errors.

Source: Consultrms.com, May 2015

Five Fast Facts Regarding the New DOL Proposed Fiduciary Rule

Summary: The proposed rule is controversial, replacing a 2010 proposed rule that was withdrawn due to feedback from concerned industry groups. At 120 pages, much of which can be interpreted in various ways, the proposed rule is anything but light reading. However, some simple observations can be of benefit in determining the impact of the proposed rule on plan sponsors and the entities with whom they work.

Source: Cammackretirement.com, May 2015

Infographic: Improving Retirement Readiness

Summary: Given the expanding number of workers that will rely on their defined contribution plans in retirement, employers can benefit from improving the retirement readiness of their employees. To improve their DC retirement plans and engage employees in building and protecting their retirement savings, employers can look to four primary areas.

Source: Towerswatson.com, May 2015

Money Market Fund Reform Likely Warrants 401k Plan Changes

Summary: The recent money market fund reforms adopted by the SEC, which take effect in October 2016, will require retirement plan advisers to review the money market funds in their plan sponsor clients' lineups and possibly recommend changes, experts say. Some believe more 401k plans will switch to government money market funds.

Source: Planadviser.com, May 2015

Schwab CEO: Better That DOL Goes First on Fiduciary Rule

Summary: Like most financial industry officials, Charles Schwab Corp. president and chief executive Walter Bettinger II wants the DOL and the SEC to coordinate their efforts on raising investment advice standards for brokers. But, he's afraid that DOL and SEC could end up with two different standards, and that would confuse the public.

Source: Investmentnews.com (registration may be required), May 2015

Is the 401k Market Finally Ready for ETFs?

Summary: The explosion in ETF's popularity has yet to influence the DC market, but increasing scrutiny of fees may make ETFs naturally attractive to advisors and investors. Some believe the wider adoption of ETFs in 401k plans could be in the offing.

Source: Benefitspro.com, May 2015

Today's Employees Concede Working Longer Will Help Fund Their Retirement

Summary: Younger workers have begun to recognize that working well into their traditional retirement age will likely be the new normal, as Social Security and even workplace savings plans may not support their lifestyles

Source: Benefitnews.com, May 2015

Cybersecurity: SEC Outlines Steps You Can Take

Summary: SEC guidance points out that the use of technology makes it necessary to protect confidential and sensitive information from third parties. Its suggestions include the following steps, which track a time-tested solution process: (1) assess; (2) develop an appropriate strategy; and (3) implement that strategy.

Source: Asppa.org, May 2015

The New Fiduciary Advice Regulation and Its Likely Impact on Advisors

Summary: The proposed fiduciary definition changes are so great that advisors should be aware of them now and perhaps begin adapting their practices to the anticipated changes. This article discusses the DOL proposal and the exemption for commissions (and, possibly, rollovers) and their likely impact on advisors.

Source: Hartfordfunds.com, May 2015

Retirement Plan Termination Options

Summary: With any 401k plan termination, the participant will often have an opportunity to decide what to do with the assets currently in the plan. When this occurs, employees typically have three broad choices for their former retirement plan assets -- roll the assets into an IRA, transfer the assets to the new employer-sponsored plan, or take a lump sum distribution. Each of these choices has benefits and restrictions worth considering.

Source: Clearygull.com , May 2015

Seven Critical Tips for Employers to Minimize ERISA Fiduciary Risk

Summary: Article sets forth seven critical tips that employers can act upon to reduce their potential ERISA fiduciary exposure.

Source: Benefitslawadvisor.com, May 2015

Strategies to Help DC Plan Participants Improve Financial Wellness and Achieve a Secure Retirement

Summary: The time has come to adopt and implement proven features and solutions to help defined contribution plan participants achieve improved financial wellness and enjoy greater financial security in their retirement years. Paper outlines three strategies employers can adopt to accomplish this.

Source: Xerox.com , May 2015

16th Annual Transamerica Retirement Survey

Summary: The 16th Annual Transamerica Retirement Survey finds American workers are continuing to recover from the Great Recession and its aftereffects. While the economy is recovering, the U.S. retirement landscape is also continuing to evolve, with increases in life expectancies, the need for Social Security reform, and an even greater need for individuals and families to plan and save for their future financial security. Most workers are rising to the challenge by savings, but are they saving enough? Are they properly planning?

Source: Transamericacenter.org, May 2015

Company Stock in Defined Contribution Plans

Summary: The findings of this survey of 160 employers with company stock in their DC plans show that companies are paying close attention to the Fifth Third decision. A majority of responding companies have reviewed or are planning to review their procedures for monitoring company stock, investment policy statements and plan documents. In addition, more than one-third already have or are considering retaining a third party as an independent fiduciary, and slightly more than one-fourth have initiated or are considering the elimination of company stock.

Source: Towerswatson.com , May 2015

Economists Say 401k Plan Loan Policy Shapes Borrowing

Summary: Decades into reviewing the pluses and minuses of 401k plans, most employer plan sponsors have chosen to offer plan loans, which on the one hand give participants early partial access to their retirement funds but also threaten to erode those savings. A new paper suggests that plans' loan policy can shape participant borrowing, which may give sponsors a greater sense of control as a 401k lender.

Source: Thompson.com, May 2015

Retirement Plan Coverage by Firm Size: An Update

Summary: This article builds on previous work and provides an update of the relationship between pension plan coverage and firm size among private-sector workers, using data from the Survey of Income and Program Participation for 3 years: 2006, 2009, and 2012.

Source: Ssa.gov, May 2015

Is Adding After-tax Contributions in Your 401k Plan a Good Idea?

Summary: Since the IRS loosened the distribution restrictions on after-tax and pre-tax amounts when rolling over funds from a 401k plan, many advisors and consultants are encouraging participants to consider making additional traditional after-tax contributions to their 401k plans. This sounds fantastic for the participant, but it feels too good to be true. What is missing? What isn't being considered? How do these potentially large contributions affect the plan?

Source: Retirementtownhall.com, May 2015

When a Committee of One Runs a 401k

Summary: According to professionals in the retirement field, most new sponsors of small or micro plans are unaware of the critical duties of prudence, loyalty and diversification of investments that a fiduciary to a plan assumes under ERISA. Many are also unclear that the individual making plan-level decisions for a micro plan in essence becomes that plan's management committee -- meaning they must perform many of the same responsibilities as the more robust and experienced committee of a mega plan.

Source: Planadviser.com, May 2015

Why You Should Rebalance Your Investment Portfolio

Summary: The asset classes in your portfolio may not move in the same direction at the same time or by the same amounts. Over a period of time the amount of "eggs" in each "basket" may look drastically different then how it started; these shifts can impact how your portfolio behaves and the risk that you are taking, which could impact your retirement plan. Rebalancing can help keep your portfolio inline by moving the "eggs" between the "baskets" back to your original allocation.

Source: Pension-consultants.com, May 2015

Impact of Updated Fiduciary Investment Advice Definition on Large Plans

Summary: The proposed DOL fiduciary regulations are expected to have a transformational impact on the retirement landscape. The most fundamental effects of the proposed regulations will be on small plans and IRAs, as well as their investment advisers, consultants or other service providers. However, the proposed regulations will also impact the landscape for large retirement plans in various ways as outlined here.

Source: Kilpatricktownsend.com, May 2015

401k Savings Rates of 3% Not Doing the Job for Workers

Summary: When companies with 401k retirement savings plans enroll new hires automatically, many set a default contribution rate of 3% of salary. Level used in a government example has become the norm as some companies move to 4, 5 or 6% while retirement experts say 15% is really what's needed.

Source: Investmentnews.com (registration may be required), May 2015

What Does Retirement Plan "Best Interests" Really Mean

Summary: The DOL asserts the new fiduciary rule will require brokers to act in the "best interest" of the clients they serve, whether they be institutional or individual. But the DOL never really defines exactly what "best interest" means. Author canvassed retirement plan service providers from coast to coast to see if he could discover the phrase means.

Source: Fiduciarynews.com, May 2015

Of Advisers and Fiduciary Escape Hatches

Summary: Discusses the formidable compliance burden that awaits 401k plan sponsors if the Department of Labor's recently re-proposed rule on fiduciary advice becomes final.

Source: Erisafiduciaryadministrators.com, May 2015

Latest Trends in Target-Date Funds

Summary: BrightScope announced recent findings in target-date funds as a result of their examination of the lowest cost institutional share class for all target-date funds through February 2015. This includes 59 target-date series, composed of 561 distinct target-date funds from 40 different asset managers.

Source: Brightscope.com, May 2015

Are You My Fiduciary?

Summary: When the DOL's proposed fiduciary regulation becomes effective, plan sponsors, IRA owners and plan participants should be asking, "Are You My Fiduciary"? Understanding whether or not the protective wing of a fiduciary pertains to the plan or IRA will require an analysis of both the proposed expansion of the rule and its complex exceptions.

Source: Benefitsbryancave.com, May 2015

Plan Sponsors Get Serious About TDF Selection

Summary: As target-date fund assets continue to skyrocket and as more 401k plans adopt auto-enrollment, plan sponsors are taking a taking a more measured approach to choosing the TDFs for their plans.

Source: Benefitnews.com, May 2015

ASPPA Makes Recommendations on IRS Priority Guidance Plan

Summary: ASPPA took the IRS up on its invitation to comment on the 2015-2016 Priority Guidance Plan and in a comment letter filed on April 30 has made suggestions to the IRS regarding projects and guidance it should pursue during the period covered by the plan.

Source: Asppa.org, May 2015

Relief for Some Small Retirement Plans That File Late Returns

Summary: All is not lost for some small retirement plans that were late in filing certain required retirement plan returns. The IRS on May 1 issued a reminder in news release IR-2015-74 that eligible small businesses can file the returns by June 2 and not suffer the penalties they would otherwise face.

Source: Asppa.org, May 2015

Finding Lost Participants: Best Practices From the DOL Guidance

Summary: Plan fiduciaries must make reasonable efforts to locate missing participants in order to receive directions on making plan distributions to the participants or beneficiaries. Article lays out four steps that, at a minimum, a fiduciary must do to locate a lost participant.

Source: Wellsfargomedia.com , May 2015

DC Plans Are Institutional Programs -- Start Treating Them That Way

Summary: Since many workers look to DC plan sponsors to invest for them, Russell's Josh Cohen argues that sponsors should consider adopting defined benefit (DB) strategies, including asset class diversification, a smart mix of active and passive, and open architecture, multi-manager investing. He believes this improves the odds of positive outcomes rather than just achieving investment simplicity.

Source: Russell.com, May 2015

Employees Winning 401k Lawsuits Over High Fees

Summary: Employees have been fighting back against high 401k fees, and recent lawsuits have proven that the courts are siding with them.

Source: Mainstreet.com, May 2015

For Retirement Plan Providers, It's All About Making A Connection

Summary: Ary Rosenbaum writes, "Whether it's movies or selling your services or recruiting members for your civic/religious group, it's all about making connections with the audience. So this article is about how retirement plan providers can make connections with current and potential clients."

Source: Jdsupra.com, May 2015

What the DOL Fiduciary Proposal Means for Banks

Summary: The DOL issued a draft proposal earlier this month that would require financial advisers to provide retirement savings advice that is in a customer's "best interest" in an effort to minimize conflicts of interest. This article lays out some frequently asked questions about the rule, including why it's important for bankers.

Source: Financial-Planning.com, May 2015

DOL Proposed Fiduciary Definition and Hardship/Loan Documentation

Summary: The Labor Department published a comprehensive proposal package for changes in the definition of an investment-advice fiduciary under ERISA. The package would expand the range of advice relationships that are treated as fiduciary relationships, substantially revising rules that have been in existence for 40 years. Plan sponsors and advisers must now examine their practices and consider how to adjust their behaviors and their agreements to conform to the new rules.

Source: Erisapedia.com, May 2015

Employers Plan to Bump Up 401k Contributions

Summary: More than half (57%) of the roughly 90 multinational companies responding to Vanguard's survey expect the level of company contributions to their DC plans to increase "somewhat," and 14% expect them to increase "dramatically."

Source: Cfo.com, May 2015

Should Company Officers Run Retirement and Other Benefit Plans?

Summary: In the end, litigation teaches that it isn't so much the question of whether directors should ever be a plan fiduciary -- accidentally or deliberately -- that is important, but rather the act of thinking logically in advance about who best in a company should have what roles with regard to a plan. Doing the latter not only protects against unanticipated litigation exposures, but also decreases the likelihood of litigation by increasing the probability that the plan will be in the hands of the executives best placed to run it well.

Source: Bostonerisalaw.com, May 2015

Will DC Plans See More Robo Advice?

Summary: Defined contribution plans are not likely to use robo advisers in the near future, but may begin to if the innovation develops, sources say.

Source: Plansponsor.com, May 2015


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