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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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IRS Opened Three New Projects Based on Form 5500 Errors

Summary: The IRS's Employee Plans Compliance Unit has opened three new projects based on Form 5500 errors and issued a summary report on the diversification requirement for publicly traded employer stock. Article highlights of the new projects and the summary report.

Source: Ebia.com, March 2015

Posting SPD on Intranet Insufficient Without Notice to Participants

Summary: The crux of this case involves satisfying ERISA's electronic disclosure rules when posting SPDs on a company intranet. The takeaway is that merely placing SPDs on a website, without notifying participants of their availability and significance (and the right to a paper copy), does not satisfy ERISA's requirement.

Source: Ebia.com, March 2015

DOL Makes Hay on Bad Plans

Summary: The DOL reports that it received 1,643 Voluntary Fiduciary Correction Program applications and 25,060 applications under the Delinquent Filer Voluntary Compliance Program. It is not a bad idea to take a serious look at the plans we sponsor and see if there are errors that we should self-correct -- which is better than having mistakes pointed out by a DOL auditing team.

Source: Foxrothschild.com, March 2015

Plaintiffs Fail to Float Claim Past District Court

Summary: The U.S. District Court for the District of Massachusetts in In re Fidelity ERISA Float Litigation has determined that float income is not a plan asset. This case is just another example of why retirement practitioners should keep a close watch on case law that impacts fiduciary governance obligations.

Source: Fraplantools.com, March 2015

Designing a Retirement Plan for Phased Retirement

Summary: Article reviews a number of plan design features employers, which have employees who are entering into a phased retirement, may want to consider.

Source: Consultrms.com, March 2015

Questions to Ask a Plan Recordkeeper

Summary: The decision to move a company's retirement plan to a new recordkeeper involves careful analysis and is not something that should be approached lightly. Article provides questions one should ask when evaluating a potential new recordkeeper.

Source: Consultrms.com, March 2015

DOL Chief Perez Says New Fiduciary Rule Will Distinguish Between Education and Advice

Summary: Department of Labor Secretary Thomas Perez tried to temper backlash by the financial industry about a pending rule to raise standards for retirement advice, saying Wednesday he is listening to all parties' concerns.

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

Are Your Investment Reviews Truly Independent?

Summary: Author writes, "Many investment professionals have some kind of bias. If that bias is based on a conflict of interest between increasing their compensation and lowering the returns of your participants that puts you in danger if discovered."

Source: 401kadvisor.us, March 2015

Settlement Achieved in Ameriprise 401k Excessive Fee Case

Summary: Schlichter, Bogard & Denton announced that it reached a $27.5 million settlement on behalf of Ameriprise employees and retirees in the 401k excessive fee case, Krueger v. Ameriprise Financial.

Source: 401khelpcenter.com, March 2015

Paper Shares Insights for Alternative Fund Managers Looking to DC Plans

Summary: According to the paper, the retirement market may be the next frontier for the growth of liquid alternatives and underscores the critical role that education will play in the adoption of liquid alternatives among DC plan fiduciaries, advisors and participants.

Source: 401khelpcenter.com, March 2015

Mindless Pitfalls: Don't Leave 401k Automatic Enrollment Plans Alone

Summary: The biggest advantage (and disadvantage) of automatic enrollment is that employees don't have to do anything. It's the essence of automatic enrollment. But it also makes people less responsible for their own retirement decisions. Punam Anand Keller, PhD, Tuck School of Business at Dartmouth discusses barriers to automatic enrollment plans and the solutions to overcome them.

Source: Invesco.com , March 2015

White Labeling: Is Simpler Better?

Summary: Many plan sponsors have struggled with the dilemma of how to diversify or expand the menu of core asset classes offered in their plans without making it more complicated and confusing for participants. One potential remedy is white labeling, which simply means packaging the core lineup in a way that makes it easier for participants to understand and use.

Source: Invesco.com , March 2015

District Court Rules That Float Income Is Not a Plan Asset

Summary: Plaintiffs argued that if float was a plan asset, then Fidelity breached its fiduciary duties and committed a prohibited transaction by keeping this float income for its own benefit. Applying ordinary notions of property rights, the District Court held that float income was not a plan asset.

Source: Erisapracticecenter.com, March 2015

How Much Needs to Be Saved for Retirement After Factoring In Post-Retirement Risks

Summary: This paper helps answer one of the most important questions that many defined contribution participant's face before retirement: How much do I need to save each year for a "successful" retirement? It includes three of the major post-retirement risks (longevity, investment, and long-term care).

Source: Ebri.org , March 2015

Defined Contribution Retirement Plan Benchmarks

Summary: This 36 page paper catalogues a summary of statistics and trends related to common features of retirement plans. The information and benchmarks included provide a useful comparison for evaluating the current status of your retirement plan program and may help you identify potential changes to consider, including automatic features that make saving easy for employees.

Source: Bmogamviewpoints.com , March 2015

Study Finds Hispanics Optimistic About Financial Future, Despite Challenges

Summary: Hispanics are feeling positive about their financial situation, according to new research commissioned by MassMutual, despite the slow growth in wages and still rebounding economy. The study examined the perceptions Hispanics have of their finances today as compared to the past, and how prepared they are for emergencies.

Source: 401khelpcenter.com, March 2015

ERISA Civil and Criminal Enforcement Activity by DOL Is Trending Upward

Summary: The Fact Sheet recently published by the Department of Labor documenting Fiscal Year 2014 civil and criminal enforcement activity under ERISA showed a continuing increase in the number of investigations conducted by DOL. Article reviews and charts this recent increase.

Source: Sutherland.com, March 2015

What a New Fiduciary Standard Means to Plan Sponsors

Summary: It is anticipated that the Department of Labor will publish its recommendation on a uniform fiduciary standard this year, but there are very few plan sponsors that will be impacted by a change in this criterion.

Source: Lawtonrpc.com, March 2015

Mary Jo White's Support Nudges Fiduciary Standard Forward

Summary: The SEC Chief says she favors a standard that covers all retirement plan advisers. Plan sponsors are hopeful, despite the difficult politics.

Source: Institutionalinvestor.com, March 2015

Startup Sees 401k Industry Ripe for Disruption

Summary: The 401k industry may be the next slice of the financial services industry to be targeted by technology disruptors. New financial tech firm Dream Forward Financial is positioning itself as a low-cost 401k provider, which its founder says will offer better digital services and operational transparency than traditional providers.

Source: Financial-Planning.com, March 2015

Loans From Solo 401k Plans Holding Steady

Summary: Even as the economy improves, the pace of loans taken from Solo 401k plans is holding steady.

Source: Benefitspro.com, March 2015

Examining Risk Management in TDFs

Summary: One long-time portfolio designer says addressing risk in TDFs is a bit like playing a game of whack-a-mole: Focusing too much on one risk lets the others run rampant.

Source: Plansponsor.com, March 2015

DC Plan Participants Need More Than Just Retirement Advice

Summary: Employers, take note. Your employees are stressed and distracted by their finances, and it's affecting their jobs. According to the March 2015 State Street Global Advisors Biannual DC Investor Survey report, more than 3 in 5 defined contribution plan participants experience a moderate to high level of financial stress.

Source: Thinkadvisor.com, March 2015

12b-1 Fees/Revenue Sharing Add to 401k Plan Sponsor Fiduciary Liability Woes

Summary: The SEC is going after 12b-1 fees. The DOL is questioning revenue sharing. Jerry Schlichter and other class action attorneys are winning cases against plan sponsors on these payments. Could it be, after years of warnings, we are finally about to witness the fall of the house of 12b-1?

Source: Fiduciarynews.com, March 2015

30 Most Generous Companies With the Best 401k Plans

Summary: BrightScope announced the second annual list of the 30 Most Generous Companies ranked by their 401k plans, showcasing companies that are placing an emphasis on helping employees prepare for their financial futures.

Source: 401khelpcenter.com, March 2015

How to Unearth Hidden Fees in 401k Plans

Summary: Opaque fee structures lurk among the complexities of 401k plans, meaning that sponsors might be leaving money on the table. Awareness of the inherent costs can help streamline management of defined contribution plans while keeping within regulatory guidelines.

Source: Institutionalinvestor.com, March 2015

401k Lump Sums: What You Need to Know

Summary: When you're ready to change jobs or retire, should you take your 401k in a lump sum? In many cases, taking a lump sum is the worst thing you can do. You may not be able to manage the money effectively, pay huge taxes or spend it. Article reviews ways to avoid trouble.

Source: Forbes.com, March 2015

DOL Provides Flexibility in Fee Disclosure Timing

Summary: Effective immediately, plan administrators of individual account plans that permit participants to direct investments have additional time to provide annual participant fee disclosure documents. They no longer need to target distribution timing to a precise 12-month deadline to avoid "deadline creep." Disclosures will be timely if provided within 14 months of the prior year's disclosure.

Source: Xerox.com , March 2015

Fiduciary Roundtable: Where Is the Industry Heading?

Summary: The issue of advisors' fiduciary duty is top-of-mind these days, following announcements by both the Department of Labor and the Securities and Exchange Commission that they plan to move forward with rule making efforts requiring advisors to act in the best interests of their clients. Knut Rostad and Brian Hamburger discuss the recent regulatory shifts and the impact of expanding the fiduciary standard.

Source: Wealthmanagement.com, March 2015

Clarifying the Rules on Distributions From Qualified Plans

Summary: The IRS has provided clarification on the rules governing after-tax rollovers from a 401k plan to a Roth IRA, providing taxpayers great flexibility in managing rollovers. This two pager provides a good overview with examples.

Source: Vanguard.com , March 2015

401k Bond Funds Get a Makeover

Summary: Amid increased regulatory attention to fund selection, the threat of rising rates and last year's drama surrounding Bill Gross' departure from Pimco, 401k bond fund lineups are undergoing a face-lift.

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

New Areas for 401k Lawsuits Emerge

Summary: New areas ripe for suits include failure to promptly follow fee disclosure regulations, arrangements where plan service providers have discretion over fund menus and employee stock ownership plans. Even smaller, $20 million to $50 million, plans aren't safe from suits.

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

Understanding the Conservative Options for DC Plans

Summary: This six page paper, produced by Fidelity Investments, reviews the conservative options available to DC plans, discuss the potential advantages/disadvantages of each type of fund offering, and highlight the investment and plan considerations associated with them.

Source: Fidelity.com , March 2015

Obama, the 401k Game Changer?

Summary: President Obama has thrown his hat into the ring by suggesting brokers and independent advisors adhere to a higher "Fiduciary Standard." President Obama not only mentioned fees, but poor performing funds.

Source: Brightscope.com, March 2015

NAPA's Deep Reservations About DOL's Broker Rules

Summary: NAPA has expressed some measure of reservation about the proposed rule before now. But it went further at its 401k Summit on Sunday, adamantly expressing its opposition to any provisions in the coming regulation that might in any way hamper advisors' ability to offer retiring clients help when they shift savings out of their employer plans to an IRA.

Source: Benefitspro.com, March 2015

Improving Plan Selection Through Demographics

Summary: Fiduciaries who select investment menu options have many factors to consider. Such factors increasingly include plan participant demographics, which today means far more than participant ages and retirement timeframe. Article reviews some other demographic factors to consider.

Source: Benefitnews.com, March 2015

NAPA Adopts Proactive Stance Against Fiduciary Standard

Summary: Brian Graff, executive director and CEO of NAPA, says that the retirement business has at long last come onto Washington's radar, but the increased scrutiny is exposing a series of long-standing biases against retirement advisers that he fears will ultimately make it difficult for them to provide assistance to employees who need it the most.

Source: Benefitnews.com, March 2015

The Opportunity of Coordinating Health and Retirement Benefits

Summary: Today, employers have limited benefit dollars and they must decide how to allocate those dollars among health plans, retirement plans, and other benefit plans to meet their objectives. By identifying a coordinated objective for the benefit package, the plan sponsor will be able to spend dollars in an efficient and beneficial way.

Source: Axiaadvisory.com, March 2015

Auto Enrollment - Unforeseen Admin Costs Attributable to Small Account Balances

Summary: An experience many plan sponsors encounter following the rollout of a 401k auto enrollment campaign is an increase in the number of non-participating individuals with relatively small account balances. These small accounts can significantly impact the costs of plan administration. With sufficient planning, auto enroll can be implemented without drastically altering costs, but what can be done when it's too late and the growth of small account balances begin costing you money?

Source: 5500audit.com, March 2015

From Committees to Costs: Five Key Areas of Fiduciary Focus

Summary: Because retirement plan fiduciaries are held to an exceptional level of duty and care under ERISA, the fiduciary standards that plan sponsors, investment committee members, and others in fiduciary roles must abide by can be summarized by a single phrase: "doing the right thing." When considering what plan sponsors can do to most effectively satisfy this, the five best practices outlined here rise to the top of the list.

Source: Vanguard.com, March 2015*

There's $27 Trillion in the Retirement Savings System: Don't Expect Legislators to Leave It Alone

Summary: Federal budgetary considerations, a growing focus on coverage, questions of efficiency, and several other pressure points are leading to a growing likelihood of change in the retirement system. A number of proposals are circulating at the Federal and the States level. A lot is in play: a system that has grown to $27 trillion cannot expect to avoid legislative attention.

Source: Russell.com, March 2015

Nine Hot Trends for DC Retirement Plan Sponsors

Summary: Looking back on the defined contribution industry and the U.S. retirement system in 2014, article has highlighted nine trends that plan sponsors, committee members and plan participants can expect in 2015.

Source: Cammackretirement.com , March 2015

Survey Finds Most Employees Stressed and Distracted by Financial Worries

Summary: State Street Global Advisors released the findings of its semi-annual employee retirement survey, which targeted approximately 1,000 employees between the ages of 20 and 69. Overall, the survey found that the stressors having greatest impact to workers include student loans and mortgages, health care costs and an unsettled feeling that one has not done enough to prepare for retirement.

Source: 401khelpcenter.com, March 2015

DOL Reaches $84 Million Settlement With BNY Mellon Over ERISA Violation

Summary: The Bank of New York Mellon has agreed to repay $84 million to employee benefit plan customers who were victimized through the bank's "standing instruction" foreign exchange trading program.

Source: 401khelpcenter.com, March 2015

What Makes an Average DC Plan?

Summary: There may not really be an "average" defined contribution plan. But there are certain consistencies that seem to make up a typical defined contribution plan, and certain typical considerations that plan sponsors consider when forming and administering their plans.

Source: Foxrothschild.com, March 2015

SEC Aligns With White House on Need to Address Fiduciary Standards

Summary: SEC Chair Mary Jo White confirmed March 17 that the Commission will "implement a uniform fiduciary duty for broker-dealers and investment advisors where the standard is to act in the best interest of the investor."

Source: Asppa.org, March 2015

DOL Extends Deadline on Annual 401k Investment Notices

Summary: DOL has announced a direct final rule that provides a two-month grace period for participant-directed individual account plans to provide annual investment and plan-related information to participants.

Source: Asppa.org, March 2015

Retirement Plan Assets Grow

Summary: According to Spectrem report, the total assets held in employer-sponsored retirement plans were $11.3 trillion at the end of 2014.

Source: Spectrem.com, March 2015

DOL Announces New Flexibility for Annual 401k Fee Disclosure

Summary: The DOL has announced a proposed final rule that provides a two-month grace period for 401k plans to provide annual investment and plan-related information to participants. This change is effective June 17, 2015.

Source: 401khelpcenter.com, March 2015

SEC to Develop Stricter Fiduciary Rules for Advisers

Summary: SEC Chair Mary Jo White said the agency will develop stricter rules for advisers, wading into a battle between Wall Street and the White House.

Source: Benefitnews.com, March 2015

IRS Encourages Use of Reference Checklists in Determination Letter Applications

Summary: The IRS has posted Reference Lists of Changes in Qualification Requirements for Retirement Plans on its website. To speed up its review of determination letter applications, the IRS is encouraging plan sponsors to include Reference Lists in their applications.

Source: Towerswatson.com, March 2015

Employers Must Send Notice of Pension Transfers Related to Takeovers

Summary: Even if those administering your plan are familiar with the ERISA notice and disclosure requirements, it's worth remembering the importance of notification during the series of benefits transfers that can occur from corporate takeovers.

Source: Thompson.com, March 2015

Picking Winners? Investment Consultants' Recommendations of Fund Managers

Summary: Investment consultants advise institutional investors on their choice of fund manager. Focusing on U.S. actively managed equity funds, paper analyzes the factors that drive consultant recommendations, what impact these recommendations have on flows, and how well the recommended funds perform.

Source: Ssrn.com, March 2015

Have Plans Get Rid of Those Forfeitures

Summary: There is no reason that an employer should have thousands of dollars growing each year in forfeitures, they should be allocated annually. Otherwise, the plan may run into compliance issues.

Source: Jdsupra.com, March 2015

IRS Updates 403(b) Listing of Required Modifications Package

Summary: The Internal Revenue Service has updated its Section 403(b) plan listing of required modifications. Also updated was a redlined version showing changes to 403(b) plan LRM from 2013. The package contains sample plan provisions that satisfy certain specific Internal Revenue Code requirements applicable to Internal Revenue Code Section 403(b) plans.

Source: IRS.gov, March 2015

SIFMA Claims White House Figures on DOL Rule Flawed

Summary: The White House is using flawed methodology to assert that abusive trading practices are costing U.S. investors up to $17 billion a year in retirement savings, according to a report released by a Wall Street group that opposes toughening rules on brokers.

Source: Investmentnews.com, March 2015

How to Button up Benefits in M&A Deals

Summary: When one business buys another, employee benefits are often overlooked. However, carefully analyzing them as part of due diligence and incorporating benefits in the rollout and implementation of the deal can impact the transaction's ultimate success. Such preparation can also mitigate significant risks and exposure.

Source: Cfo.com, March 2015

Eight Trends for Retirement Plan Sponsors

Summary: According to Invesco, eight trends materialized during 2014 that it says will be hot for retirement plan sponsors in 2015. Article reviews what they say you should be watching for.

Source: Benefitspro.com, March 2015

Fee Range Wide for Small 401k Plans

Summary: The wide range of all 401k plan fees paid by small plan sponsors and participants might be indicative of the opportunity many such sponsors have to trim those expenses.

Source: Benefitnews.com, March 2015

Are Retirees Falling Short? Reconciling the Conflicting Evidence

Summary: A fundamental question for retirement security is whether today's working-age households will have adequate income to maintain their pre-retirement standard of living. Existing studies offer conflicting assessments. This paper addresses why the different approaches yield such different answers.

Source: Bc.edu, March 2015

ERISA Revenue Sharing Arrangements: Avoiding Plan Asset Status, Complying With Due Diligence Requirements

Summary: PowerPoint slides from presentation on ERISA Revenue Sharing Arrangements. Topics include: Brief Overview of Revenue Sharing Arrangements, When are Revenue Sharing Payments "Plan Assets," and Considerations for Revenue Sharing Payments that Constitute "Plan Assets."

Source: Wagnerlawgroup.com, March 2015

Retirement Planning Among Middle-Aged and Older Hispanics

Summary: The goal of this study is to deepen the understanding of how middle age and older Hispanics plan for retirement. It finds that most participants, whether they were already retired or not, are not well prepared for retirement since they have been unable to save for retirement and have not made specific retirement plans.

Source: Ssrn.com, March 2015

A Checklist for IRA Rollovers

Summary: Remember to account for after tax money in the plan, plan loans, life insurance, spousal consent, and more as part of the transaction considerations. Here is a checklist for those who have decided to do a rollover from a company plan to an IRA.

Source: Morningstar.com, March 2015

Quick Guide to Retirement Plans for Small Business Owners

Summary: As a business owner, you may be surprised to find that offering the right retirement plan may significantly benefit both you and your employees. Here's an overview of all the major features of each kind of retirement plan, including SIMPLE, SEP, 401k, defined-benefit, and profit-sharing plans.

Source: Horsesmouth.com , March 2015

The Fiduciary Exemption for Commissions

Summary: While some of the attention is on that standard of conduct, most of the opposition has been to the prohibited transaction rules that apply to fiduciaries. In other words, the greatest controversy isn't over the fiduciary standard, but instead it is about the fiduciary prohibitions of certain conflicts of interest that apply to fiduciaries.

Source: Fredreish.com, March 2015

State Auto-IRAs and Federal Law

Summary: The ERISA issues related to state-auto-IRAs are well recognized, which are similar to the issues related to 403(b) plans: how do you established a payroll based auto-IRA without causing the arrangement to be governed by ERISA?

Source: Businessofbenefits.com, March 2015

IRS Releases New LRMs for Pre-approved 403(b) Plans

Summary: The IRS has issued the previously promised revisions to its IRC Section 403(b) plan Sample Plan Provisions and Information Package, better known as the "listing of required modifications" (LRMs). LRMs are used in drafting pre-approved plan documents.

Source: Ascensus.com, March 2015

DOL Head Says Fiduciary Standard Will Happen

Summary: Department of Labor Secretary Thomas Perez expressed confidence Friday that his agency will be able to complete work on a rule to strengthen investment-advice standards for retirement accounts before the end of the Obama administration.

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

Boosting Plan Participation Without Auto-Enrollment

Summary: Automatic enrollment is touted as a must-use feature for defined contribution retirement plan sponsors to increase plan participation, but many plan sponsors cannot use this feature.

Source: Planadviser.com, March 2015

The Continuing Retirement Savings Crisis

Summary: This report, an update of a previous NIRS report published in 2013, examines the readiness of working-age households. The study analyzes workplace retirement plan coverage, retirement account ownership, and household retirement savings as a percentage of income, and estimates the share of working families that meet financial industry recommended benchmarks for retirement savings.

Source: Nirsonline.org , March 2015

Rethinking Participant Education - Creating Independent Investors

Summary: An advisor's bottom line or sales strategy should never be the driving force behind participant education; the needs of the participant should always take the main stage. Participant education should empower participants and give them the tools and information they need to successfully plan and save for retirement, but how?

Source: Ekonbenefits.com , March 2015

403(b) Plan Participant Group Exclusions

Summary: If a 403(b) plan excludes these groups without written provision or excludes other eligible participants, the mistake can be very costly, possibly leading to the loss of the plan's tax deferred status. The Universal Availability Rule also contains an effective opportunity requirement meaning that employees must be provided with an opportunity to make or change their elective deferral at least once each Plan year.

Source: Ekonbenefits.com , March 2015

The Effects of Automatic Enrollment - A Comprehensive View

Summary: Automatic enrollment is an optional plan feature in which participants are enrolled into their employer's plan as soon as they are eligible, with the option to opt out. Various studies have shown that automatic enrollment increases plan participation dramatically with very few participants choosing to opt out, but its effect on the plan overall is often overlooked.

Source: Ekonbenefits.com , March 2015

Current U.S. Retirement Savings Deficit is $4.13 Trillion

Summary: EBRI releases data showing that the aggregate national retirement savings deficit is about $4.13 trillion for all U.S. households where the head of the household is between 25 and 64, inclusive.

Source: Ebri.org , March 2015

Fiduciary Standard May Leave Some Investors Out of Luck

Summary: Advisors have decided, like it or not, that the fiduciary standard is coming. And they are getting ready, re-shaping their businesses to be prepared for the inevitable. Financial professionals can adjust to the new reality in positive ways, but what about investors?

Source: Thinkadvisor.com, March 2015

Audit Survival Tips for Retirement Plans

Summary: Although only a small fraction of retirement plans are audited each year, over time it's almost certain that you and your plan will be audited by either the IRS or the DOL. Your preparation for an audit and your approach to an audit will save your organization thousands of dollars in productive time, penalties, and interest. Here are some tips.

Source: Wellsfargomedia.com , March 2015

401k Participant Behavior in a Volatile Economy

Summary: The booms and busts of the late 1990s and 2000s have taken 401k plan participants on a rollercoaster ride. Paper examines how participants responded to these periods of economic expansions and contractions by documenting changes in 401k participation, contributions, and contribution rates from 1990 to 2009.

Source: Urban.org, March 2015

A Closer Look at the "Top" 401k Mutual Funds

Summary: Most "Top" fund lists simply identifies the top mutual funds used by 401k plans based on a fund's assets under management. This article points out that "top" or "best" lists of investments should not be blindly relied on by investment fiduciaries and investors. It suggests some meaningful scrutiny that can performed to get a better analysis of the "top" funds.

Source: Prudent Investment Adviser, March 2015

How to Maximize an ERISA 403(b) Plan With Participant-Controlled Assets

Summary: Many service providers issue 403(b) contracts where participants have control over the contract, regardless of the plan's ERISA status. This may be appropriate in the non-ERISA environment, but it's grossly inappropriate in ERISA plans where fiduciaries are supposed to control the plan assets.

Source: Principal.com, March 2015

Supreme Court Could Consider RJR Stock Drop Case

Summary: The U.S. Supreme Court may take up important fiduciary liability questions related to a "reverse stock-drop" case leveled against a major tobacco producer.

Source: Planadviser.com, March 2015

What Happens if I Don't Restate My Retirement Plan?

Summary: The IRS requires the periodic restatement of a qualified retirement plan so the document will contain the latest required provisions. Without these required provisions, the document could cause the plan to become disqualified and lose its tax advantages.

Source: Nyhart.com, March 2015

Record Sales of Income Annuities May Reflect Larger Retirement Savings Trend

Summary: When LIMRA Secure Retirement Institute released its 2014 annuity sales figures, income annuities -- fixed immediate and deferred income -- both achieved record sales despite a decrease in interest rates during the year. The record sales may reflect a larger savings trend among retirees and pre-retirees.

Source: Limra.com, March 2015

Obama Starts Addressing the Retirement Crisis by Getting Wall Street Out of Our Wallets

Summary: Author writes, "President Obama should be commended for taking on the brokerage industry for ripping off multitudes of 401k participants. Last month he announced support for a Labor Department proposed regulation that would subject those advising 401k participants to a fiduciary standard."

Source: Huffingtonpost.com, March 2015

DOL Enforcement Update: Advisers Are an Enforcement Priority

Summary: DOL enforcement activity targeting investment advisers, broker dealers, and other financial services companies has increased over the years. The purpose of this article is to raise awareness of EBSA's examination authority and update readers regarding recent trends in DOL enforcement activity including joint enforcement efforts by the EBSA and the SEC.

Source: Groom.com , March 2015

Fiduciary Requirements for Selecting an Insurance Guarantee for Your Participants

Summary: Insurance guarantees for retirement benefits are increasing in popularity because they guarantee that the money lasts for a lifetime. However, there is not much guidance about the fiduciary process for selecting a particular annuity or GMWB product to provide those guaranteed benefits. Article reviews some key points.

Source: Drinkerbiddle.com, March 2015

Video: Best Practices in Pension Administration

Summary: This 17 minute video is for plan administrators to help with the company retirement plan throughout the year. You'll learn about plan documents, enrollment, late deposits, distributions and more.

Source: Benefit-Resources.com, March 2015

Wall Street Seeks Wedge in Fight Against 401k Rules

Summary: There's a gap between the White House and Wall Street's main regulator over a push to tighten broker rules. To the investment industry, it's an opening to exploit.

Source: Benefitspro.com, March 2015

Bill Would Require DOL to Defer Release of Fiduciary Definition

Summary: Rep. Ann Wagner has introduced the Retail Investors Protection Act which would require the DOL to defer release of new fiduciary regulations until the SEC issues fiduciary regulations first.

Source: Ascensus.com, March 2015

Four Things You Need to Know About Default Funds

Summary: A growing number of retirement plan participants, and retirement plan assets, are being invested in the default option selected for the plan. The existence of default funds isn't exactly a new phenomenon. Arguably it's as old as that first participant enrollment form returned without the investment election section completed. Here are four things you should know about default funds.

Source: Napa-net.org, March 2015

Should Low-Cost Funds Be Mandated in 401k's?

Summary: Author doesn't believe in forcing DC plans to use low-cost mutual funds, but does think it would be great to mandate their availability in employer-sponsored plans.

Source: Wsj.com, March 2015

Supreme Court Could Take on Case Involving Fiduciary Burden of Proof, Damages

Summary: The Supreme Court signaled its interest in taking a case questioning whether fiduciaries bear the burden of proof and whether they can be liable for monetary damages. In orders issued Monday, the Supreme Court asked for the solicitor general's opinion before deciding whether to grant the petition for review.

Source: Pionline.com, March 2015

Why Rolling Over Your Old 401k Is a Good Move

Summary: If you've left your previous employer, there is little reason to keep your cash in your old 401k. Article outlines four reasons it may make sense to roll it into an IRA.

Source: Mainstreet.com, March 2015

Fred Reish Unravels Washington Regs and Explains 401k Plan Sponsor Fiduciary Liability

Summary: While this big Wall Street firms are busy arguing how many angels can dance on the head of their business model, the real advantage of the DOL's pending fiduciary rule goes unreported. What's lost in this debate is the potential impact the fiduciary rule can have on plan sponsor fiduciary liability.

Source: Fiduciarynews.com, March 2015

Most Employers Auto-Enroll 401k Participants

Summary: Most employers now offer automatic features in their 401k plans to ensure that workers are saving enough to receive full company matching contributions over time, according to a survey by the benefits consulting firm Aon Hewitt.

Source: Businessmanagementdaily.com, March 2015

Infographic: Understanding Target-Date Fund Glide Paths

Summary: Target-Date funds play a critical role in most workplace retirement savings plans, with four out of five plans using a TDF as their default investment. But different TDFs may take very different paths, some planning "to" the anticipated retirement date, and some "through" retirement. This infographic offers a brief primer on how "through" TDFs compare with "to" TDFs, and why the difference is so important.

Source: Fidelity.com, March 2015

American Women Face Saving for Retirement "Gender Gap"

Summary: Fewer American women have started saving for retirement than American men -- a savings "gender gap" with a significant impact right up to the full retirement age, according to the annual Global Investor Pulse Survey from BlackRock, which polled 27,500 investors including 4,000 Americans.

Source: 401khelpcenter.com, March 2015

How Do You Define Success for Your Defined Contribution Plan?

Summary: This five page paper presents an overview of common measures of DC plan success and other, less well-known contributing factors before describing a systematic approach to measuring a DC plan's effectiveness and determining what actions to take to make ongoing improvements. It also puts forth a process under which the plan can achieve success.

Source: Sibson.com , March 2015

How Do You Know When It's Time for a New Retirement Plan Adviser?

Summary: Commentary: "As a benefits professional, the relationship you have with your retirement adviser is an important one. Their role is to help you navigate some of the most complicated aspects of your job. Listed [here] are some of the phrases we hear employers use to justify sticking it out with their current adviser, even if the relationship isn't working."

Source: Benefitnews.com, March 2015

Are Errors on Your Form 5500 Sending Red Flags to the IRS?

Summary: The IRS recently released an article citing errors on Form 5500 filings that are used by the IRS to select cases for compliance audits. The IRS states, "Entering incorrect information on the return or report or leaving a field blank when there would be an entry increases the likelihood that you'll be selected for an EPCU compliance check."

Source: Schneiderdowns.com, March 2015

Fiduciary Outsourcing Options

Summary: Fiduciary outsourcing is growing increasingly appealing to plan sponsors. But, the complexity of fiduciary outsourcing requires careful attention, or sponsors risk future trouble. Article reviews three areas where you need to know exactly what you are getting.

Source: Plansponsor.com, March 2015

Canada Bucks Global Shift to DC Pensions

Summary: Canada's pension assets still overwhelmingly in DB plans. Defined contribution pension plans still account for a tiny minority of all pension assets in Canada even though they have emerged as the dominant pension vehicle in the United States.

Source: Pensionpulse.blogspot.com, March 2015

Maryland Assembly Contemplates Retirement Plan Mandate

Summary: Legislation that would require Maryland employers to adopt payroll deduction savings plans for their employees got a full bicameral at a Feb. 25 hearing in the Maryland General Assembly.

Source: Ntsa-net.org, March 2015

IRS Issues Its Annual Lineup of Legal Changes for Qualified Plans

Summary: A summary of the key new items on the 2014 Cumulative List. Notably, the 2014 Cumulative List deletes all items that were reviewed by the IRS during the prior Cycle E submission period. Notably, a newly established plan that does not have a prior determination letter will need to satisfy all tax-qualification requirements, even if not listed on the 2014 Cumulative List.

Source: Groom.com, March 2015

What DC Plan Sponsors Need to Know About the ORPP

Summary: Employers with DC plans, and collectively bargained DC plans in particular, should continue to monitor the outcome of the Ontario government's consultation process and should consider carefully the implications for their current retirement arrangements. They should also consider any actions they need to take and the time table necessary to respond to the introduction of the ORPP.

Source: Benefitscanada.com, March 2015

Complying With the Allocation Rules for Distributions From Qualified Plans With After-Tax Accounts

Summary: Compliance starts with understanding. Understanding the rules set forth in Notice 2014-54, assisted us with the application of the rules in a situation in which a participant was entitled to take a distribution from his after-tax account only, in a qualified plan that provides and separately accounts for: a) elective deferrals, b) after-tax contributions, and c) matching contributions.

Source: Belfint.com, March 2015

Why Investment Monitoring Is As Important As Investment Selection

Summary: The US Supreme Court heard oral arguments in Tibble v. Edison, a 401k fiduciary breach lawsuit that had garnered a lot of attention even before the hearing. The issue that the court has to decide is whether a claim may proceed for a breach of the fiduciary duty to monitor investments when a claim based on the initial imprudent selection of the investments is barred based on statutory limitation grounds because the initial selection occurred more than six years earlier.

Source: Fi360.com, March 2015

Tax Credit for Small Employer Start-Up Plans

Summary: Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan. This article is intended to familiarize readers with this tax credit so that they can attempt to evaluate its application to their (or their client's) situation.

Source: Legacyrsllc.com, March 2015

Funds Cut Expenses by Shifting Billions to CIT's

Summary: Mutual fund companies have slashed fees on their most popular funds by shifting billions of dollars into collective investment trusts not regulated by the SEC. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products.

Source: Reuters.com, March 2015

Supreme Court Ponders Continuing Duty of Prudence Limits in Tibble

Summary: The first retirement plan "excessive fee" case was heard by the U.S. Supreme Court. It raises the question of how long a fiduciary must monitor its employer-sponsored plan's investments -- or whether that duty can instead be measured at a single point in time.

Source: Thompson.com, March 2015

Researchers Find Little Cost Difference From Auto-Enrollment

Summary: Automatic enrollment is often expected to increase employer compensation costs as previously unenrolled workers start to receive matching retirement plan contributions, but researchers have found this not to be true.

Source: Planadviser.com, March 2015

Distribution of Small Accounts Not Easy for 403(b) Plans

Summary: Perhaps the most persistent of the regs' shortcomings is the failure to adequately recognize, and deal with, the fact that individuals -- and not plan sponsors -- control vast aspects of 403(b) plan operations under individually owned annuity contracts and custodial accounts. This results in circumstances which offer no easy solutions, such as small amounts in former employee's 403(b) annuity contracts.

Source: Ntsa-net.org, March 2015

Retirement Security 2015: Roadmap for Policy Makers

Summary: The National Institute on Retirement Security commissioned its fourth nationwide public opinion research project monitor how Americans feel about their financial security in retirement and to assess their views on policies that could improve their retirement outlook. This research is intended to serve as a tool for policymakers, thought leaders and retirement service providers as they work to stem the retirement crisis and re-fortify the U.S. retirement infrastructure.

Source: Nirsonline.org , March 2015

Top Ten Reasons to Have an ERISA Litigator on Speed Dial

Summary: Nearly every large US company, whether public or private, offers pension and welfare benefits to its employees. In the 40 years since ERISA was enacted, the courts and the DOL have generated a morass of confusing and inconsistent rules that companies, benefit plans and plan fiduciaries must follow. Trying to stay on top of these rules and opinions can be daunting, and failure to do so can be expensive. Here are 10 reasons to regularly consult an ERISA litigator.

Source: Mayerbrown.com , March 2015

Brokerage Windows in Retirement Plans

Summary: If the DOL does issue further guidance with respect to brokerage windows, such regulations or guidance could have a wide-ranging effect. This article reviews the regulator history and the effect of brokerage windows on fiduciary duties.

Source: Lawjournalnewsletters.com, March 2015

Engaging the Next Generations in Retirement Savings

Summary: The challenge in addressing the savings deficit is complicated by the fact that employee education and communications strategies used by plan sponsors and consultants in the past to draw employees into the plan are not likely to resonate with Gen X and Gen Y. This white paper identifies some distinguishing characteristics of Gen X and Gen Y and suggests strategies that plan sponsors may want to adopt to engage younger workers in retirement savings today so they can achieve retirement readiness in the years to come.

Source: Calamos.com , March 2015

Canada: Remembering Why DC Makes Sense

Summary: DC plans are always going to produce more stable and predictable costs for employers than DB plans, but there was also a very significant employee-centric reason in favor of DC that we've forgotten. What happened in Saskatchewan Canada nearly 40 years ago can serve as a reminder.

Source: Benefitscanada.com, March 2015

Employee Demographics Play Role in QDIA Selection

Summary: Companies that sponsor 401k plans need to consider employee demographics when deciding which types of qualified default investment alternative to offer, according to research by Manning & Napier.

Source: Benefitnews.com, March 2015

Should 401k Plans Include Index Funds Only?

Summary: Plan sponsors who have eliminated actively managed funds from their 401k plans believe that they have forever addressed the problems of investment fund cost, performance and fiduciary liability.

Source: Benefitnews.com, March 2015

The Average Retirement Age -- An Update

Summary: Labor force activity among older Americans began rising in the mid-1980s due to changing Social Security incentives, the shift to 401k plans, and improving health, longevity, and education. Updated data, however, suggest that these factors may have played themselves out. As a result, the average retirement age has increased only slightly in the last 10 years: to 64 for men and 62 for women.

Source: Bc.edu , March 2015

DC Execs Expecting Big Changes From Obama Push on Fiduciary Standard

Summary: With President Barack Obama now leading the charge, a multi year battle to update a fiduciary standard for anyone giving retirement investment advice has defined contribution plan executives and service providers bracing for big changes.

Source: Pionline.com, March 2015

How to Create a Sustainable Retirement Spending Plan

Summary: As you get ready for retirement, your focus will likely start to shift from saving to spending. For many making this transition, a crucial question is: How do you set up a spending plan that lets you hang on to as much of your nest egg as possible even as you regularly tap your investments to support upcoming spending needs? Here are some suggestions.

Source: Schwab.com, March 2015

15 Considerations for Your DC Plan in 2015

Summary: A list of 15 considerations for defined contribution plan sponsors to contemplate over the course of 2015. Some topics are potentially time-sensitive items that could be addressed this year, while others are longer-term suggestions.

Source: Rocaton.com , March 2015

Washington State Bill Would Create Retirement Plan Product Clearinghouse

Summary: Add Washington to the list of states that are considering legislation affecting the marketplace for private retirement plan products. Washington State Rep. Larry Springer (D-Kirkland) has introduced a bill to create a "small business retirement plan marketplace" with the goal of "removing barriers to entry into the retirement market for small businesses."

Source: Ntsa-net.org, March 2015

What Retirement Plan Sponsors Have to Fear

Summary: If you think you have nothing to fear and do something wrong as a plan sponsor, you may land in a lot of trouble. This article is about what plan sponsors have to fear and it's certainly more than fear itself.

Source: Markleyactuarial.com, March 2015

Five Secrets to a Successful Retirement

Summary: Once, retirement meant hitting the golf course or sitting by the pool. The new retirement? Whatever you want it to be.

Source: Kiplinger.com, March 2015

Video: Maintaining Opt Out Reports

Summary: For plans that have an auto-enrollment feature, maintaining a paper trail of those employees who choose to "opt-out" of the plan can require some focus by the plan sponsor. This video offers a few best practices.

Source: Erisasunscreen.com, March 2015

Captrust's February 2015 Fiduciary Update

Summary: Highlights several important court cases with ERISA retirement plan implications plus topics such as deferred annuities in target date funds and Washington's focus on small employer retirement plans.

Source: Captrustadvisors.com, March 2015

2015 Defined Contribution Trends

Summary: This is an Executive Summary of Callan's Defined Contribution Trends survey. Survey results incorporate responses from 144 plan sponsors, primarily large and mega 401k plans.

Source: Callan.com , March 2015

User Fee and Change of Address Information for Pre-approved 403(b)s

Summary: Revenue Procedure 2015-22 provides updated address information and user fees for submission of pre-approved Section 403(b) arrangements.

Source: Benefitsforward.com, March 2015


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