Daily News Digest - Updated Throughout the Day
This digest contains a wide variety of 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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Summary: The DOL has closely examined ERISA plan revenue-sharing account arrangements. In light of the DOL's continued focus on these activities, if your plan is contemplating or renewing such an arrangement, consider implementing these four best practices.
Source: Winston.com, December 2013
Summary: Retirement plans are not required to provide hardship distributions. However, many profit sharing plans, including 401k plans, do. If a participant in a plan with a hardship provision has an immediate and heavy financial need, and the need matches the plan’s definition of hardship, the participant may be eligible for a distribution. Here is an overview of the rules and some compliance tips.
Source: Unitedretirement.com 
, December 2013
Summary: Author writes, "There was a time when the words "fiduciary" and "best interests" and "trust" and "integrity" meant something truly special in America. With the grit and perseverance of bona fide fiduciary advisors, their clients, and the media, there will come another such time. In the interim, consumers must protect themselves, and advisors must voluntarily choose to act as true professionals."
Source: Scholarly Financial Planner Blog, December 2013
Summary: For many retirement plan participants, a beneficiary designation might just sound like another confusing piece of retirement plan jargon, but designating a beneficiary is a relatively simple step of setting up your retirement accounts that should not be overlooked.
Source: Retirementtownhall.com, December 2013
Summary: Because of the impact of the decision on beneficiary designations, we recommend that practitioners notify participants who are affected by the Supreme Court decision to review their beneficiary designations and make the appropriate changes.
Source: Relius.net, December 2013
Summary: This notice contains the 2013 Cumulative List of Changes in Plan Qualification Requirements described in section 4 of Rev. Proc. 2007-44, 2007-2 C.B. 54. The 2013 Cumulative List is to be used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning February 1, 2014 and ending January 31, 2015.
Source: Irs.gov , December 2013
Summary: This notice provides guidance on rollovers within a retirement plan to designated Roth accounts in the same plan. The guidance relates to the expansion of these rollovers under new section 402A(c)(4)(E) of the Internal Revenue Code. This notice also provides guidance that applies to all in-plan Roth rollovers described in section 402A(c)(4).
Source: Irs.gov , December 2013
Summary: Talk about the "limited scope" audit disclaimer. According to DOL statistics, approximately 70% of all plan financial statements filed with the DOL have limited scope auditor opinions. Generally speaking, for a limited scope engagement, the Plan administrator retains the auditor to perform the audit engagement, without performing audit procedures on investments and investment activity.
Source: Erisasunscreen.com, December 2013
Summary: Fee disclosure regulations went into effect in 2012 for 401k plans but, a year later, do plan sponsors and plan participants yet know what they are paying in fees? Survey says 50 percent of retirement plan participants don't.
Source: Benefitspro.com, December 2013
Summary: During the last two years, the challenging and ever-changing economic, regulatory and public policy environment has caused HR professionals and other corporate benefit plan leaders to review their workplace benefits -- be they retirement, health care or related resources offered to employees. Due in part to increased complexity in these areas, the majority (73 percent) of HR professionals report having to develop greater expertise across various retirement and health care-related topics in order to effectively do their jobs.
Source: 401khelpcenter.com, December 2013
Summary: A brief from the U.S. Solicitor General recommending that the U.S. Supreme Court hear a "stock-drop" class-action case could make it the most important ERISA litigation of the High Court's current term. Employee benefits attorneys watching the case's progress say a High Court decision could deter employers from offering employer stock as a 401k plan investment option.
Source: Thompson.com, December 2013
Summary: The IRS published final rules regarding the reduction or suspension of employer contributions to Safe Harbor Plans, including Qualified Automatic Contribution Arrangements. For sponsors that make matching contributions, these rules are somewhat more restrictive because the IRS chose to adopt a uniform set of rules for the two Safe Harbor Plan designs.
Source: Prudential.com , December 2013
Summary: In this era of fee disclosures, complex financial products and complex financial institutions, there are many ways an advisor can get drawn into litigation. ERISA fiduciary insurance doesn't just protect you; it also protects your clients in case something goes wrong. This article provides some key tips on what to look for.
Source: Groom.com , December 2013
Summary: ERISA defendants have long maintained that there is no statutory or constitutional right to a jury trial in ERISA cases. Almost always, the courts have agreed, citing ERISA's trust law origins and the Seventh Amendment's application only to suits seeking legal, not equitable, relief. The reasoning goes that because under ERISA you may obtain only relief that was traditionally available in courts of equity, the right to a jury trial does not exist.
Source: Erisa-employeebenefitslitigationblog.com, December 2013
Summary: Last week three industry lobby groups jointly published a research paper that was very supportive of the continuing use of 401k plans by Americans saving for retirement. In this article author writes that the research paper is "an opinion/spin piece."
Source: Employeefiduciary.com, December 2013
Summary: Considering DC plans' importance to participants' financial futures, provider firms need to make sure their clients can easily find key information and manage their accounts through their preferred channel. One aspect is the relationship between retirement plan participants and their provider website. While most survey participants expressed satisfaction with their provider's website, only 21% said they were "extremely satisfied," indicating that there is still room for improvement.
Source: Corporateinsight.com, December 2013
Summary: Even as the SEC is contemplating an expansion of fiduciary rules to include broker-dealers who operate in the retail space, some advocates argue that the regulatory interpretation of the responsibilities under a fiduciary standard has strayed from common-law precedent and become dangerously diluted.
Source: Financial-Planning.com, December 2013
Summary: Most employer plan sponsors use an investment adviser to help them with their 401k plans. This is a smart decision since most advisers are able to save plan sponsors at least as much as they charge in fees each year. How can you tell if you are working with a good investment adviser?
Source: Benefitnews.com, December 2013
Summary: China is getting ready to revamp its antiquated pension system with a 401k-style tax-deferred corporate annuity system. On Jan. 1, corporate and employee contributions to the pension fund will be partly exempted from income tax based on each individual's paycheck. The tax will be deferred until the fund is withdrawn upon retirement, and it will not be imposed on fund investment returns.
Source: Ibtimes.com, December 2013
Summary: Financial advisors have an opportunity to enter the 401k market through small businesses, according to a financial services executive. "There is a huge opportunity for financial professionals to help at this end of the market and business owners need their help," says Steve Davis, national sales manager for Guardian Retirement Solutions.
Source: Fa-mag.com, December 2013
Summary: Around 70 percent of pre-retirees plan to work longer in retirement, while only 37 percent of retirees took this approach to address retirement risks. These findings are one of several retirement planning issues covered in the Society of Actuaries (SOA) new research report, "2013 Risks and Process of Retirement Survey." The report provides insights on how Americans decide to retire and how they manage resources in retirement.
Source: Russell.com, December 2013
Summary: There is confusion about reporting the existing variety of Roth conversion transactions on Form 1099-R. This article shows some fact sets and examples of Form 1099-R reporting.
Source: Mhco.com, December 2013
Summary: In 2012, the Department of Labor issued final regulations requiring the disclosure of fee and expense information to defined contribution plan participants and sponsors. The intent was to provide greater transparency and awareness to the costs of providing and participating in an employer-sponsored retirement plan. Across the retirement industry there is consensus that fee disclosure is important and government regulation was the most effective means of delivering widespread transparency. So where are we a year later?
Source: Limra.com, December 2013
Summary: There's a tax trap for retirement savings that is catching many smart people unaware. This trap has nothing to do with IRS rules. It boils down to a basic misunderstanding about how the tax incentives for 401k's and similar retirement plans work. The trap is the notion that the tax treatment of 401k's benefits only the wealthy -- or, more broadly, that the benefits are driven by a saver's tax bracket.
Source: Ici.org, December 2013
Summary: Are you doing enough these days to prepare for retirement? The most common solution out there that doesn't always require a financial guru to point out is pretty easy to identify. Save more. The real work begins when we take the time to run a basic retirement calculator to figure out how much is needed. The next step is to figure out where to save.
Source: Financialfinesse.com, December 2013
Summary: Nearly every retirement adviser, financial planner and tax consultant faithfully follows the rule. Some may question it, only to return to it as a convenient proxy. What is it? Where is it used? How has it been justified? And why could it be the single most critical data element that will stand between a comfortable retirement and working longer? We're talking about the "80% Salary Replacement Rule."
Source: Fiduciarynews.com, December 2013
Summary: We have a retirement problem. A very serious one that shouldn't be discounted. But it is nothing new. The notion that these challenges are new -- that there was some golden era when Americans were prepared to kick up their feet and enjoy retirement in financial -- is a myth. By some measures, retirees are in a better position today than at any other time in modern history. Let's start with something simple. The entire concept of retirement is unique to the late-20th century.
Source: Businessinsider.com, December 2013
Summary: Managing volatility is a way to enhance investors' experience by modifying the impact on participants when the risk of extreme losses is elevated. But DC plan sponsors sometimes have three "perception hurdles" when seeking to incorporate an approach to managing volatility in their plans' QDIAs: concerns over potentially higher costs, fiduciary liability and implementation issues. But these are perceived hurdles -- not substantial ones.
Source: Alliancebernstein.com, December 2013
Summary: A new report calculates the severity of the U.S. retirement security racial divide. The analysis finds that every racial group faces significant risks, but people of color face particularly severe challenges in preparing for retirement. Americans of color are significantly less likely than whites to have an employer-sponsored retirement plan or an individual retirement account (IRA), which substantially drives down the level of retirement savings.
Source: 401khelpcenter.com, December 2013
Summary: A new report calculates the severity of the U.S. retirement security racial divide. The analysis finds that every racial group faces significant risks, but people of color face particularly severe challenges in preparing for retirement. Americans of color are significantly less likely than whites to have an employer-sponsored retirement plan or an individual retirement account (IRA), which substantially drives down the level of retirement savings.
Source: 401khelpcenter.com, December 2013
Summary: The calendar provided in this article will help you set up your own schedule of activities to address as the year progresses so that you do not miss important deadlines for your qualified plans . As you evaluate the various tasks, you can confirm suitable deadlines with your vendors for getting them done.
Source: Buckconsultants.com , December 2013
Summary: When considering employee well-being employers often wonder whether employees have adequate savings for retirement. While the assessment needs to be holistic, employers generally have no way of knowing about retirement savings and benefits workers have accumulated in previous jobs or from other sources. But this brief analysis shows many workers have amassed substantial savings outside of their current employer's plans, suggesting that workers' retirement prospects might be brighter than it appears from their current-job savings.
Source: Towerswatson.com, December 2013
Summary: The Voluntary Fiduciary Correction Program, commonly referred to as the VFCP, is a program that is designed to encourage the voluntary and timely correction of possible fiduciary breaches by allowing the avoidance of potential ERISA civil actions initiated by the DOL and the assessment of civil penalties under ERISA.
Source: Schneiderdowns.com, December 2013
Summary: This plan sponsor to-do list focuses on year-end qualified plan issues. It is broken into five categories: All qualified plans, 401k plans, defined contribution plans other than 401k's, defined benefit plans, and 403(b) plans.
Source: Swlaw.com, December 2013
Summary: This article article provides a summary of required Puerto Rico qualified retirement plan amendments that must be adopted generally by April 15, 2014, under the Puerto Rico Internal Revenue Code of 2011 and an overview of the requirements for applying for a determination letter under the PR Code.
Source: Groom.com , December 2013
Summary: How can an employer truly be considered to be acting in the best interests of plan participants and beneficiaries in terminating a defined benefit plan or in freezing benefits under such a plan?
Source: Fiduciaryplangovernance.com, December 2013
Summary: As 2013 draws to a close, there is no shortage of benefit plan administrative challenges with which employers must contend. While the Patient Protection and Affordable Care Act of 2010 remains very much at the forefront of these challenges, retirement plan and deferred compensation plan administration also require attention. This is a non-exhaustive summary of key legal compliance matters to keep in mind while closing out this year and planning for next year.
Source: Employeebenefitsupdate.com, December 2013
Summary: The U.S. Supreme Court must soon decide whether to grant Fifth Third Bancorp's petition for writ of certiorari, and review the Sixth Circuit's 2012 decision in Dudenhoefer v. Fifth Third Bancorp. The petition presents two significant issues in the realm of ERISA litigation: (1) whether the "presumption of prudence" regarding employer stock is a proper legal standard for evaluating breach of fiduciary duty claims; and (2) whether SEC filings become actionable ERISA fiduciary communications merely by incorporating them by reference into plan documents.
Source: Alston.com , December 2013
Summary: For those plans that intend to rely on the statutory prohibited transaction exemption under ERISA Section 408(b)(2) in order to enter into the contract with the service provider, this is a non-exhaustive list of exemption-related contract considerations plan fiduciaries should consider.
Source: Winston.com, December 2013*
Summary: More than a year after DOL rules took effect requiring 401k service providers to report their fees to plan sponsors using standardized tables, employers have new opportunities to look more closely at their existing fee structures. This has allowed sponsors to identify new ways to reduce plan costs and ensure that their plans are getting the level of service that participants need, especially from the recordkeeping firm that oversees plan transactions and any vendor that might provide sponsors with investment management advice.
Source: Shrm.org, December 2013
Summary: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This publication identifies the materials you need to review and will help you prepare for year-end. This information applies to qualified defined contribution plans and 403(b) plans that are subject to Title I of ERISA.
Source: Prudential.com , December 2013
Summary: Typically, an ERISA plan is written with a procedure for beneficiary designation. The terms of the plan are supposed to govern. A typical plan provides that a participant designates a beneficiary for his/her plan balance. Any new beneficiary designation would override prior designations. Service providers often solicit these beneficiary designations. This could cause a great deal of confusion if a participant designates different beneficiaries with different providers, and then these have to be reconciled to the terms of the plan.
Source: Principal.com, December 2013
Summary: "The trend of customizing target-date funds to the needs of plans and participants seems to be gaining steam," says Marek Pfeil, managing director of investment research for SageView Advisory Group. "However, with customization options, as well as glide paths and the choice of products, you need to determine whether the benefits of going with a new set of target-dates funds outweigh the benefits of your current setup."
Source: Planadviser.com, December 2013
Summary: Issues for plan sponsors to consider when it comes to beneficiary designations are very broad. There is no "one-size fits all" answer when designing a retirement plan to deal with beneficiary designations. The right approach for your plan will be based on a number of facts and circumstances. Article covers some issues plan sponsors should consider when administering beneficiary designations.
Source: Multnomahgroup.com, December 2013
Summary: Recent lawsuit raises questions about a company providing its own products and services to its own employees in its own qualified retirement plans.
Source: Morningstar.com, December 2013
Summary: Effective for 2013 and later tax years, Section 1411 of the Internal Revenue Code imposes a 3.8 percent net investment income tax on the net investment income of individuals, estates and trusts. The definition of NII is complex, but generally NII does not include any distribution from a qualified retirement plan under Code Section 401(a), or from a Code Section 403(b) or 457(b) plan or an individual retirement account.
Source: Mcguirewoods.com, December 2013
Summary: As target-date funds become more sophisticated and build a history of performance, plan sponsors are gaining confidence in their target-date funds and other qualified default investment alternative offerings. However, with this confidence, there seems to be less concern regarding fiduciary risk, according to a 2013 survey of DC plan sponsors.
Source: Janus.com , December 2013
Summary: The U.S. Department of Labor clarified that a deferred prosecution agreement entered by an affiliate of a QPAM will not in itself jeopardize the QPAM's status under DOL's QPAM exemption, PTE 84-14.
Source: Groom.com , December 2013
Summary: There are two primary methods for making this reasonableness determination: 1) a request for proposals (RFP) process, or 2) utilizing a benchmarking service. The RFP process is more formal and results in numerous proposals that are consistent in how the information is provided. This allows for a straight forward, apples to apples comparison of fees and services that are available to the plan. However, it is also time consuming and expensive. Benchmarking is an acceptable and less formal alternative that, for many, is a more practical approach; primarily because it saves time and money.
Source: Fi360.com, December 2013
Summary: Physical location appears to have an effect on participation in an employment-based retirement plan, according to a new report from the nonpartisan Employee Benefit Research Institute. The report explains that while various demographic factors affect the probability of workers participating in an employment-based retirement plan, their geographic location also has an impact.
Source: Ebri.org , December 2013
Summary: While the new fee disclosure rules are a step in the right direction, placing the onus of enforcement on plan sponsors just causes a new paradox. Although it might be reasonable for an inexperienced plan sponsor to engage an independent expert, now that inexperienced plan sponsor must identify a second expert to ensure the first expert is expertly performing their responsibilities. In other words, despite the panacea of 408(b)(2), plan sponsors and their employees acting in a fiduciary capacity, the touchstone is still caveat emptor.
Source: Dalbar.com , December 2013
Summary: The Department of Labor's Employee Benefits Security Administration projected that its rule on the redefinition of the term "fiduciary," also known as its conflict-of-interest rule, will be re-proposed in August 2014, and also indicated its intentions to start on a project related to brokerage windows, according to the DOL's fall 2013 regulatory agenda.
Source: Bna.com, December 2013
Summary: More defined contribution plan sponsors are looking at a variety of ways to help their participants manage volatility -- and the accompanying anxiety and doubts that can often push participants to abandon their long-term investing goals. Large plans have led the way with incorporating ways for participants to manage volatility, but the search has also picked up in midsized plans.
Source: Alliancebernstein.com, December 2013
Summary: The DOL expanded the definition of 'spouse' in ERISA-covered employee benefit plans to include legally married, same-gender spouses in the wake of the Supreme Court's Windsor decision this summer, and promised further guidance addressing specific provisions of ERISA and its regulations at a later date. In a letter to the DOL submitted December 3, 2013, ASPPA made six recommendations that it feels will mitigate uncertainty for plan sponsors and plan administrators related to participants with legally married, same-gender spouses.
Source: 401khelpcenter.com, December 2013
Summary: Now that 401k fee disclosure regulations under ERISA 408(b)(2) have been fully implemented, fee deflation appears to be the new norm. Although Plan Sponsors and participants will ultimately benefit from this fee deflation, Plan Sponsors need to be more sophisticated in the selection and monitoring of service providers so as to not land themselves in hot water, or find themselves stuck with a retirement program that fails to meet their objectives.
Source: 401kfeedisclosure.com, December 2013
Summary: There are many mistakes that retirement plan providers make that are essentially deadly sins because they threaten the existence of that provider. This article is about seven deadly sins that plan providers should avoid if they want to stay in business.
Source: Jdsupra.com, December 2013
Summary: To help manage the ongoing compliance process, registered investment advisers should consider developing a compliance calendar that can serve as an effective and proactive tool to assist the investment adviser with meeting its ongoing compliance requirements. Developing a compliance calendar can help strengthen an investment adviser's written compliance policies and procedures that must be developed pursuant to Rule 206(4)-7 of the Investment Advisers Act and similar state rules to detect, prevent, and correct possible regulatory violations that can occur throughout the year.
Source: Ria-compliance-consultants.com, December 2013
Summary: It's important that advisors to select DCIO partners that have the commitment, experienced staff, support and value added services that can really help advisors to build, grow and service their business. NAPA Net's DC Investment Only list is provided here, updated in December 2013. There have been some significant changes in the industry since the list was last updated in May.
Source: Napa-net.org, December 2013
Summary: What's better? Having an investment policy statement and not following it or not having an investment policy statement? Watch this quick video to find out.
Source: Erisasunscreen.com, December 2013
Summary: The U.S. Department of Labor's Employee Benefits Security Administration, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation today released advance informational copies of the 2013 Form 5500 annual return/report and related instructions. Modifications to the Form 5500 and Form 5500-SF and their schedules and instructions for plan year 2013 are described under "Changes to Note" in the 2013 instructions
Source: Dol.gov, December 2013
Summary: A new study by the LIMRA Secure Retirement Institute (SRI) reveals that 9 in 10 U.S. workers find retirement income projections somewhat or very helpful. The study also uncovered workers' concerns about the validity of and calculations behind the projections.
Source: 401khelpcenter.com, December 2013
Summary: Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit this year and in the years ahead, according to the Internal Revenue Service.
Source: 401khelpcenter.com, December 2013
Summary: Transamerica Retirement Solutions announced the results of a year-long analysis on the effectiveness of custom, target-date investment structures for participants in employer-sponsored retirement plans. The analysis focused on participants' personalized rates of investment return versus their investment risk, and examined the actual account performance for over one million plan participants during the course of 2012.
Source: 401khelpcenter.com, December 2013
Summary: Don't look now, but some of the same folks who have been spreading fear about the woeful lack of retirement readiness among American workers have something new to say on the subject: a financial industry study that asserts that we're doing a lot better than we think.
Source: Reuters.com, December 2013
Summary: The U.S. retirement system has many components: Social Security provides a strong base, complemented by employer -- sponsored retirement plans, IRAs, annuities, and other savings. A growing component of that system is employer -- sponsored defined contribution arrangements, such as 401k plans. These plans are popular and successful with employees and employers. With consistent contributions over time, defined contribution plans can generate substantial retirement benefits, especially when combined with Social Security. This report brings to bear the most recent statistical data and the results of rigorous academic research.
Source: Acli.com , December 2013
Summary: As Americans live longer, end-of-life expenses -- health care and, especially, long-term care -- are becoming a bigger part of the "adequacy equation." Working longer doesn't reduce those costs, unless you work until you die.
Source: Octoberthree.com, December 2013
Summary: Determined to help employees improve their financial security at retirement, a growing number of employers are placing greater emphasis on improving and institutionalizing their 401k investment lineups to boost participant returns and increase savings levels, according to a new survey by Aon Hewitt.
Source: 401khelpcenter.com, December 2013
Summary: The latest analysis by the CRR indicates that, despite a strong rebound in the stock market and a modest rebound in housing, Americans' retirement prospects have not meaningfully improved. Recent research sponsored by Prudential found that employers share the concern. Sixty-five percent of finance executives believe that a significant portion of employees will have to delay retirement due to inadequate savings.
Source: Prudential.com , December 2013
Summary: US employees who save for retirement through their employers' 401k plans are not planning to save more for retirement over the next year as compared to last year. And those closest to retirement are decreasing their planned savings, despite increasing concern about health care costs in retirement. So says the 2013 Mercer Workplace Survey.
Source: Mercer.com, December 2013
Summary: Neither the provisions of ERISA or interpreting regulations require fiduciary training, but that doesn't mean a plan sponsor shouldn't. Author thinks it is a best practice to offer training routinely (at least annually) and when internal fiduciaries are appointed.
Source: Fiduciaryplangovernance.com, December 2013
Summary: Employers can help new and current participants make the best choices by giving their 401k plans a thorough checkup. To help them with this task, author asked experts on defined-contribution plans for their advice on plan goals, fund mix, automatic enrollment, fees and more. Here are their suggestions.
Source: Cfo.com, December 2013
Summary: The U.S. Supreme Court should strike down the pro-fiduciary presumption of prudence that some federal courts have used to shield fiduciaries of employer stock plans from liability for declining share value, the U.S. solicitor general said in a brief filed with the high court (Fifth Third Bancorp v. Dudenhoeffer, U.S., No. 12-751, brief filed 11/12/13).
Source: Bna.com, December 2013
Summary: Plan sponsors are interested in actual deferral percentage (ADP) and actual contribution percentage (ACP) safe harbor designs primarily because they can eliminate the need for ADP and/or ACP testing and ensure that highly compensated employees can maximize deferrals under the plan. There are many nuances to ADP/ACP safe harbor requirements that present traps for the unwary, which can render them unsafe, but the same complexity that creates these traps also creates planning opportunities.
Source: Aon.com , December 2013
Summary: The Securities and Exchange Commission is pursuing a rule that would raise investment-advice standards for brokers -- just not in the near future. The SEC put the rule on a 2014 regulatory agenda that included 43 items. It was slated for "long-term action" without a specific timetable.
Source: Investmentnews.com (free registration may be required), December 2013
Summary: With the emergence of a market for ERISA Section 3(16) fiduciary services, one might well ask a few questions. Do ERISA's standards of fiduciary responsibility mean what they say? Are plan sponsors and service providers committed to the shared vision of fiduciary responsibility allocated among persons who are qualified and unconflicted?
Source: Erisafiduciaryadministrators.com, December 2013
Summary: For plan sponsors that manage multiple retirement plans -- whether two or more defined contribution plans, a mix of defined benefit and defined contribution plans, or defined contribution and non-qualified deferred compensation plans -- industry experts agree that total retirement outsourcing (TRO) may offer benefits in terms of services and user experience for both those sponsors and plan participants. Although the decision to move all retirement plans may not be fraught with the same fiduciary responsibilities as selecting retirement plan investments, it still requires care.
Source: Plansponsor.com, December 2013
Summary: Offering a brokerage window investment option in a defined contribution (DC) retirement plan allows plan participants to set up retail accounts with investment brokers of their choice and they can access a wide variety of investment vehicles. The idea is to give plan participants ultimate investment control. Concerns have arisen though, because, under ERISA, all retirement plan investment options must be monitored and evaluated. Therefore, how do plan fiduciaries monitor and evaluate all the investments selected by participants who use these accounts?
Source: Plansponsor.com, December 2013
Summary: Traditionally, benefit plan committees oversaw administration and investments -- everything to do with maintaining an employer-sponsored plan. However, as financial responsibilities have changed, so have committee dynamics, according to Nancy Gerrie, partner at McDermott Will & Emery LLP. She added that now it is best to have one committee for administration oversight and a separate committee for investment selection and oversight.
Source: Plansponsor.com, December 2013
Summary: In the investment field, there are two primary parties who are able to offer investment advice to plan sponsors. These parties are investment advisors and investment brokers who work for brokers-dealers. Many clients may consider the advice they receive from each party as similar, but there is a key difference that may not be completely understood. The difference pertains to two competing standards that advisors and brokers must adhere to, and the distinction has important.
Source: Investopedia.com, December 2013
Summary: In light of all the PPACA disclosure requirements, and with the year-distributions required for retirement plans, employers tend to want to distribute benefit plan notices electronically. Maybe companies want to post them on a company website or e-mail them to employees, but there is no question that mailing paper notices to employees is the least preferred method for employers. Unfortunately, it is the preferred method for plan communications from a regulatory perspective. ERISA does permit the electronic disclosure of certain plan communications under certain circumstances. But employers should be very careful to follow these rules.
Source: Foxrothschild.com, December 2013
Summary: Target-date funds are supposed to provide simple solutions for people seeking an all-in-one fund that is diversified. Yet, a tremendous amount of confusion surrounds these seemingly basic asset allocation tools. Furthermore, not all target-date funds are created equal so it's essential to first look under the hood if target-date funds are a part of your investment plan for retirement.
Source: Financialfinesse.com, December 2013
Summary: Transamerica Retirement Solutions announced the results of a year-long analysis on the effectiveness of custom, target-date investment structures for participants in employer-sponsored retirement plans. The analysis focused on participants' personalized rates of investment return versus their investment risk, and examined the actual account performance for over one million plan participants during the course of 2012.
Source: 401khelpcenter.com, December 2013
Summary: On November 26, 2013, the Seventh Circuit Court of Appeals rejected the Boeing Company's request to appeal the order of Chief Judge David R. Herndon of the United States District Court for the Southern District of Illinois, which granted class certification to participants in Boeing's 401k Plan for their claims that Boeing personnel responsible for managing the plan breached their fiduciary duties under ERISA.
Source: Prweb.com, December 2013
Summary: Plan sponsors treats reviews of their plan like a trip to the dentist and it doesn't have to be that way. A plan review can help root out issues that could be problems later down the line. This article is about why retirement plan sponsors shouldn't treat their plan reviews like a trip to the dentist.
Source: Jdsupra.com, December 2013
Summary: For multinational companies, growing a business means leveraging the right talent in the right place. In the world of "global nomads" -- expatriates and third country nationals who spend much of their working lives away from their home country -- the provision of future financial security becomes ever more important. To attract and retain the right talent willing to move across borders, whether on a temporary or permanent basis, employers need to provide competitive compensation packages that include a retirement savings component. This paper details how to address retirement security for a mobile workforce.
Source: 401khelpcenter.com, December 2013
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