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Daily Article Digest - Updated Throughout the Day

This digest contains a wide variety of the freshest source material dealing with current trends, opinion, news, legislative action, investments, marketing, sales, consulting, and legal issues regarding 401k, 403(b) and other retirement plans. Each listing contains a headline (hyperlinked to the source document), description, source of the item, and the month and year posted to this digest.

Use the SEARCH feature to located specific items from this digest and from our ARCHIVE.


    
White-Labeling Investment Funds Is a Bad Idea

Summary: Recently, many plan sponsors were forced to make a decision about keeping the PIMCO Total Return Fund in their line-up that many participants feel is the anchor to their 401k plan investment strategy. Observers have used this situation to outline the benefits of white-labeling 401k plan investment funds. But does white-labeling makes sense?

Source: Lawtonrpc.com, January 2015

Can a Fiduciary Duty for Investment Advisers Co-Exist With Commissions?

Summary: Legislative and regulatory consultant Duane Thompson writes, "Given the premise that a fee arrangement is inextricably bound with the fiduciary standard, it would seem logical to assume that a salesperson working on commission cannot be a fiduciary. However -- spoiler alert -- you would be wrong. That is not to say that working on a commission basis and serving the client's best interest is an easy thing to do -- it's just far more difficult, at least in legal terms."

Source: Kitces.com, January 2015

"How-to" Guidelines to Follow When Creating 401k Plan Benchmarks

Summary: The 401k environment has evolved over the decades. One of the best examples lies in the focus of plan benchmarking. Oddly, though, for all the talk of benchmarking, no "benchmark" for benchmarking actually exists.

Source: Fiduciarynews.com, January 2015

DOL Feeling Heat on QPAM Exemptions

Summary: The DOL is under increasing pressure to get tough on money managers with U.S. retirement plan clients when their firm, or an affiliate, gets into legal trouble. That pressure could change what used to be a relatively straightforward matter of approving the firms as qualified professional asset managers.

Source: Pionline.com, January 2015

DOL Challenges Rochester Investment Adviser on Fees

Summary: The DOL filed a complaint against a Rochester, New York, investment adviser and plan administrator to recover losses suffered as result of alleged fiduciary breaches.

Source: Plansponsor.com, January 2015

West Virginia School Employees Suing DC Plan Provider

Summary: A group of current and former West Virginia public school employees has filed a lawsuit against a provider to the state's 403(b) retirement plan. The lawsuit claims VALIC misled the employees to invest retirement savings in investments that did not perform as well as promised.

Source: Plansponsor.com, January 2015

White House Memo Offers a Peek at DOL Fiduciary Strategy

Summary: The White House believes that many retirement plan participants aren't adequately protected from advisors with conflicts of interest. That's why President Barack Obama's chief economic advisor supports the DOL's effort to amend the definition of fiduciary in retirement plans.

Source: Thinkadvisor.com, January 2015*

2014 Plansponsor DC Survey: Plan Benchmarking

Summary: The retirement plan industry's reinvigorated focus on fees has been a positive development overall for plan participants, leading to better prices and greater transparency. Article looks at the big picture in plan fee benchmarking.

Source: Plansponsor.com, January 2015

Plain Advice to Retirement Plan Sponsors

Summary: The problem with advice given to plan sponsors is that it's often self-serving by the plan providers who want to maintain or get the business from plan sponsors. ERISA attorney Ary Rosenbaum has six pieces of "plain" advice to retirement plan sponsors.

Source: Jdsupra.com, January 2015

White House Takes Aim at Fiduciary Duty

Summary: One of President Barack Obama's top economic advisers said abusive trading practices are costing workers billions of dollars in retirement savings each year and called for stricter rules on Wall Street brokers.

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

Target Risk Funds: A Substitute for TDFs?

Summary: Target risk funds and target-date funds are two types of mutual funds that make the asset allocation decision for an investor. This article is the first comprehensive study of their characteristics and performance and how they compare to target-date funds as an investment vehicle.

Source: Ssrn.com, January 2015

As an RIA, Shouldn't You Be Offering 401k Plans?

Summary: Many RIAs weigh expanding deeper into the retirement plan business, but decide it might not be worth their while. Often they think that increasing the number of plans they service might take away from the productivity and profitability among core advisory clients; many also believe that it's not a profitable business. Those that do may be missing new business opportunities.

Source: Financial-Planning.com, January 2015

ERISA Advisory Council Report on Issues and Considerations Surrounding Facilitating Lifetime Plan Participation

Summary: The 2014 ERISA Advisory Council examined recent movement of participant assets out of DC and DB plans, and into retirement accounts not covered by ERISA, such as IRAs or other savings accounts, or as plan distributions. Based upon testimony received during two days of hearings, this report provides ideas for plan administrators and plan participants, including communications strategies and plan design options to facilitate lifetime retirement plan participation.

Source: Dol.gov, January 2015

ERISA Advisory Council Report on Outsourcing Employee Benefit Plan Services

Summary: The 2014 ERISA Advisory Council examined the role that outsourcing plays in helping plan sponsors and other ERISA plan fiduciaries meet the increasingly complex task of managing and administering their employee benefit plans. This is their report with recommendations.

Source: Dol.gov, January 2015

Possible "Window" for Delivery of Participant Fee Disclosures

Summary: The DOL submitted change to their fee disclosure regulation to the Office of Management and Budget for review and approval. The change would provide a "window" period for delivering fee disclosures for participant-directed individual account retirement plans.

Source: Xerox.com , January 2015

Call to Limit 401k Contributions by "Wealthy" Is Contentious

Summary: President Barack Obama outlined his plans to reduce many tax deductions for those deemed to be "the wealthiest Americans" in order to fund his new spending proposals. Among the most controversial of these items, and one that's generating criticism from many in the employee benefits community, is the president's proposal to (as a White House fact sheet put it) "Prevent wealthy individuals from using loopholes to accumulate huge amounts of tax-favored retirement benefits."

Source: Shrm.org, January 2015

DOL Announces Changes for Form 5500 for 2014

Summary: Although the filing date for the DOL's Form 5500 is still several months away, 401k and 403(b) plan sponsors should take a few minutes to become familiar with the changes, which are outlined in this article, that have been made for the 2014 reporting year.

Source: Strategicbenefitservices.com, January 2015

Employer Retirement Plans Comparison Table for Small Businesses - 2015 Plan Year

Summary: This four page table provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners. Focus on the areas that are important to the business owner, so as to help ensure that the plan that is chosen is the plan that is most suitable for the business.

Source: Retirementdictionary.com , January 2015

Debt Stands in the Way of Retirement Readiness

Summary: Eighty-one percent of working age people surveyed by HSBC Bank said saving for retirement is not their main priority. Other priorities included paying off debts (24%), saving for children's education (8%), saving for a rainy day (8%) or a vacation (6%). The survey found major life events have affected more than three-quarters (76%) of pre-retirees' retirement saving.

Source: Planadviser.com, January 2015

Patent Infringement Lawsuit Reminds ERISA Fiduciaries to Monitor Service Providers

Summary: In August 2014, GRQ Investment Management sued Financial Engines on patent infringement issues. While the court dismissal with prejudice GRQ's claim, the lawsuit is an important reminder of the fiduciary duty to carefully select and periodically monitor ERISA plan service providers.

Source: Mcguirewoods.com, January 2015

Bracing for Battle Over Fiduciary Rule

Summary: If the Department of Labor releases a conflict of interest rule that is an echo of its original proposed expansion of the fiduciary standard, it will be met with "swift and strong legislative action." That was the prediction from Lee Covington, VP and general counsel for the Insured Retirement Institute, based on his reading of lawmakers' views in recent weeks.

Source: Benefitspro.com, January 2015

White House Unveils Sweeping Retirement Proposals

Summary: The Administration is touting a series of retirement tax reform proposals that they claim would give 30 million additional workers access to a workplace savings opportunity.

Source: Asppa.org, January 2015

President Obama Proposes Retirement Savings Changes

Summary: President Obama has released a fact sheet outlining several proposals for reform of retirement savings options for American workers.

Source: Ascensus.com, January 2015

Companies Improving Automatic Features in 401k Plans

Summary: To improve the long-term financial outlook for workers, a new survey from Aon Hewitt reveals that the majority of companies now offer automatic features in their 401k plans to ensure that workers are saving enough to receive full company matching contributions over time.

Source: 401khelpcenter.com, January 2015

IRS FAQs Clarify After-Tax Contribution Rollover Rules

Summary: Where a participant's account balance in a plan includes both pretax and after-tax amounts, the IRS has clarified that guidance provided in IRS Notice 2014-54 does not alter the requirement that each distribution from a plan must include a proportional share of the pretax and after-tax amounts in the account.

Source: Wolterskluwerlb.com, January 2015

Monitoring 401k Investments Doesn't End

Summary: The pivotal question under review by the Supreme Court is whether an imprudent fund selection decision by retirement plan fiduciaries constitutes a one-time breach or triggers a succession of breaches if the fiduciaries fail to address the imprudent position during investment-monitoring activities.

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

American Views on Defined Contribution Plan Saving

Summary: This 28 page Investment Company Institute survey polled respondents about their views on defined contribution retirement account saving and their confidence in 401k and other DC plan accounts. It reflects households' responses collected between November 2014 and December 2014.

Source: Ici.org , January 2015

Service Provider Anti-Fraud Controls

Summary: This 1:31 minute video reminds plan sponsors that your service provider's transactions are an extension of your plan's transactions. It suggests you ask your provider this question: What anti-fraud controls do they have in place to protect my plan?

Source: Erisasunscreen.com, January 2015

Six Things 401k Plan Sponsors Need to Do Now

Summary: January may be flying by, but the New Year is still fresh. This is still a great time to make sure that the qualified 401k plan you offer your employees helps them effectively save for retirement and remains qualified. Not sure where to start? Here are six ways to get the most out of your 401k plan.

Source: Deardrebit.com, January 2015

401k Automation May Have Peaked

Summary: Automation is a hot topic in defined-contribution plans, but while there has been a steady increase in the adoption of features such as automatic re-enrollment and other automatic plan features, they still haven't reached ubiquity and might never get there. That is one conclusion that can be found in the Callan Investment Institute's "2015 Defined Contribution Trends" study.

Source: Benefitspro.com, January 2015

Illinois Introduces Mandatory Retirement Plan Law

Summary: Illinois became the first State to enact legislation that requires private-sector employers who do not offer qualified retirement plans to enroll their employees in individual retirement accounts. The Act, which will become effective with enrollment occurring sometime in the next 24 months, has a broad reach. This article provides a high-level summary of the applicability and requirements of the Act.

Source: Benefitsbryancave.com, January 2015

ICI Survey Finds Americans Oppose Changing Tax Incentives for 401k Saving

Summary: A strong majority of U.S. households, including those with and those without retirement plan accounts, disagree with proposals to remove or reduce tax incentives for retirement saving in defined contribution (DC) accounts, including 401k accounts, according to new survey findings by the Investment Company Institute.

Source: 401khelpcenter.com, January 2015

GAO Recommends New Destinations for Forced 401k Transfers

Summary: Distributing abandoned small accounts in the 401k plans of participants who have left the company is a necessary evil for plan sponsors, to keep the plan focused on managing larger, active holdings and controlling costs. Despite the benefits for the plan that this form of housekeeping provides, results from these "forced transfers" may be less beneficial for participants.

Source: Thompson.com, January 2015

PIMCO Faces Excessive Compensation Lawsuit

Summary: A PIMCO Total Return Fund investor lawsuit calls into question compensation paid to former co-chief investment officers and co-chief executive officers Mohamed El-Erian and Bill Gross.

Source: Planadviser.com, January 2015

Consumer Groups, Unions Push for DOL Fiduciary Rule

Summary: A new coalition of labor unions and consumer advocates has formed to help generate support for the Department of Labor's anticipated new fiduciary standard, which would make broker-dealers beholden to the high standards of care established under the Employee Retirement Income Security Act.

Source: Benefitspro.com, January 2015

What You Should Know About DOL & IRS Plan Audits

Summary: For plan fiduciaries, the prospect of a government audit has as much appeal as a visit to the dentist for a root canal. But what can plan sponsors do to avoid an audit by the U.S. Department of Labor or the Internal Revenue Service?

Source: Vanguard.com, January 2015

IRS Updates Safe Harbor Rollover Notices

Summary: Recently released Notice 2014-74 provides updated safe harbor explanations that incorporate the IRS's guidance in Notice 2014-54 and reflect other tax law changes enacted after the explanations were last updated back in September of 2009.

Source: Towerswatson.com, January 2015

Oregon Task Force Recommends Creation of Retirement Plan

Summary: The Retirement Savings Task Force in Oregon has recommended to the Oregon legislature that a retirement security program be created to address the lack of plan access or lack of savings for private-sector workers in the state.

Source: Plansponsor.com, January 2015

Managing Defined Contribution Plan Investment Policy Statements

Summary: While ERISA does not explicitly require that retirement plan fiduciaries adopt an investment policy statement, there are important reasons to do so. Learn why adopting and monitoring an investment policy statement is a crucial part of any good fiduciary process.

Source: Jpmorganfunds.com, January 2015

Identifying the Fiduciaries

Summary: Fiduciary duty is determined by facts and circumstances and it is not uncommon for fiduciaries to be unaware of their status. One of the first issues that will arise in breach of fiduciary duty litigation is determination of whether the defendant, in fact, owed a fiduciary duty. So what makes a person a fiduciary?

Source: Fi360.com, January 2015

Legal Compliance Considerations for 2015

Summary: The new year presents an excellent opportunity to consider your retirement plan's legal compliance (past, present, and future). This article is a short list of issues and questions aimed at limiting your exposure in 2015.

Source: Erisalawgroup.com , January 2015

DOL Investigations: A Shift in Focus

Summary: During a recent Department of Labor investigation, Drinker Biddle attorneys are seeing an increased focus on plan expenses. They see this as the beginning of a trend and one that employers need to be aware of and take measures to be prepared.

Source: Drinkerbiddle.com, January 2015

Canadians Without a Pension Aren't Saving More

Summary: Families without registered pension plans (RPPs) aren't fully compensating for their lack of RPP coverage through increased savings in other assets, says Statistics Canada.

Source: Benefitscanada.com, January 2015

The 1-Hour Annual Retirement Plan Review Meeting

Summary: In this article you'll find the four items an adviser should cover with their 401k plans to keep the annual plan review meeting to under an hour.

Source: 401kbestpractices.com, January 2015

Automatic Enrollment: The Power of the Default

Summary: Sponsors can use the inertia inherent in participant retirement savings decisions to improve retirement outcomes in defined contribution plans. This 16 page report provides updated statistics drawn from Vanguard recordkeeping data of the effects of automatic enrollment on participants' saving and investing behaviors.

Source: Vanguard.com , January 2015

Video: What Is a Stable Value Fund?

Summary: Short one minute video designed to educate investors and plan sponsors about the stable value asset class.

Source: Youtube.com, January 2015

Custom Target-Date Funds Gaining in DC Plans

Summary: Defined contribution plans are sharply cutting back on target-date funds offered by recordkeepers and also expanding use of custom target-date funds, according to a survey by Callan Associates.

Source: Pionline.com, January 2015

DC Plans Wary of Auto Re-Mapping Participant Assets

Summary: Large defined contribution plan sponsors do not appear to be buying into some plan design opportunities promoted as a means of assuring superior retirement outcomes for plan participants. At least that's one conclusion that can be drawn from the Callan Investment Institute's just-released 2015 Defined Contribution Trend report.

Source: Benefitnews.com, January 2015

2015 Annual DC Plan Deadlines

Summary: There are many important requirements for defined contribution plans that occur either during the calendar year or during the plan year. This 11 page chart (although not intended to be exhaustive) includes the key annual events which must occur within a specific deadline.

Source: Voya.com , January 2015

Employers Offering More Retirement Planning Tools and Reducing DC Plan Costs

Summary: Aon Hewitt survey shows employers are offering more tools and resources to improve financial outcomes for workers. Companies are also taking steps to reduce defined contribution plan costs to improve returns.

Source: 401khelpcenter.com, January 2015

SEC Puts Emphasis on Retirement Savers in 2015 Exam Priorities

Summary: The SEC will be watching out for investors saving for retirement this year as it examines investment advisers and brokers, the agency said in its annual priority list. Agency will look at whether investments, IRA rollovers are suitable or in clients' best interest.

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

Add "Consolidation" to the Script for Improving Plan Metrics

Summary: Initiatives by employers to drive up savings and enrollment in their retirement plans over the past decade have generally followed the same three-pronged approach: participate, save, and diversify. By adding a fourth component -- consolidate -- to the script, plan sponsors can improve their success metrics.

Source: Benefitnews.com, January 2015

Sponsors Should See the Big Picture of Retiree Income

Summary: As plan sponsors consider retirement income services in their defined contribution plans, an approach that segments plan participants into different retiree groups can help direct portfolio assistance and advice. It's important not to think of participants as one group, all needing the same type of retirement income services at retirement.

Source: Vanguard.com, January 2015

What Should We Make of Illinois' New Retirement Savings Plan?

Summary: The Illinois Secure Choice Savings Program Act was signed into law, to be effective June 1 and fully implemented by 2017. This is the first such piece of legislation to get across the finish line. Article examines at this piece of legislation from four different perspectives.

Source: Russell.com, January 2015

ERISA Fee Litigation: Is My Plan at Risk?

Summary: In light of these recent court settlements, plan sponsors may have wondered if their plan could be susceptible to an ERISA case over excessive fees. Here are a few things to consider.

Source: Retirementtownhall.com, January 2015

Phased Retirement Can Benefit Workers and Employers

Summary: Don't look for a specific plan or product, and it may not work for all companies, but phased retirement is a coming trend, AARP says. Several reasons have contributed to the growing idea that retirement may be a phase that stretches over several months or helps people prepare for a second act.

Source: Plansponsor.com, January 2015

Ontario Retirement Pension Plan: Implications for Employers

Summary: The Ontario government is continuing to move forward with its plan to implement an Ontario Retirement Pension Plan (ORPP) for Ontario workers. If implemented, the ORPP could have significant implications for Ontario employers who currently sponsor retirement plans deemed to be non-comparable. In particular, based on the preferences indicated in the December Paper, it would appear that the Ontario government will not consider DC plans comparable workplace pension plans under the ORPP regime.

Source: Pensionsbenefitslaw.com, January 2015

Six Things 401k Participants Need to Know

Summary: The 401k industry spends a lot of time and money educating workers about the advantages and mechanics of saving for retirement. But here are six things I think too often go unsaid.

Source: Napa-net.org, January 2015

A Spring Opening for "Window" Participant Notice?

Summary: A regulation that would allow for a "window" period for giving out the annual notice required in most 401k plans appears to be heading for a spring 2015 publication date, and that could be good news for your plan sponsor clients.

Source: Napa-net.org, January 2015

The 401k Plan Loan Dilemma

Summary: If you have wondered whether to allow participants to take loans from their retirement plans, you're likely not alone. On the face of it, allowing loans is a good thing because it encourages younger employees to participate in the plan. But the reality of plan loans is very different.

Source: Frenkelbenefits.com, January 2015

$140 Million Settlement: What it Means to Your Retirement Plan Practice

Summary: In December 2014, two parties in a high-profile ERISA fiduciary breach case filed a motion for the court to approve a settlement worth $140,000,000. This settlement is nearly 10-times greater than some other recent high-profile settlements. This article suggests that advisors that sells and services retirement plans need to consider adopting seven recommendations.

Source: Fraplantools.com, January 2015

Fiduciary Alert: Conflicts-of-Interest More Important Than Mutual Fund Expense Ratios

Summary: Conflicts-of-Interest can be a terrible thing. Worse, they are often hidden or, at the very least, obscured. It's often difficult for even trained professionals to quickly discern their existence. So plan sponsors, as they conduct due diligence on candidates for their plan's menu of investment options, might want to also pay attention to why the fund is being recommended.

Source: Fiduciarynews.com, January 2015

2015 Compliance Calendar for 403(b) Plans

Summary: Published by Fidelity, this is an interactive 2015 403(b) plan fiduciary and administrative support calendar with key compliance dates.

Source: Fidelityinvestments.com, January 2015

2015 Compliance Calendar for 401k Plans

Summary: Published by Fidelity, this is an interactive 2015 401k plan fiduciary and administrative support calendar with key compliance dates.

Source: Fidelityinvestments.com, January 2015

Service Provider Not a Fiduciary in Negotiating Its Contract

Summary: A federal district court in Iowa dismissed a putative class action complaint brought by several 401k plan sponsors who alleged that Principal Life Insurance Company breached its fiduciary duties to the plans by charging excessive fees in connection with certain investment options and services provided to plan participants.

Source: Erisapracticecenter.com, January 2015

Investment Strategies for the Three Stages of Retirement

Summary: To help your clients plan for retirement, you have to think like a coach devising a strategy for a sporting event that will last a long time. With that in mind, article examines the "periods" of retirement, the types of anticipated expenditures in each period, and an example of an investment strategy clients can implement as their retirement years progress.

Source: Cpa2biz.com, January 2015

How Not-for-Profits Are Taking Responsibility to Encourage Positive Savings Behaviors

Summary: Although most not-for-profit organizations believe they have a responsibility to encourage their employees to save for retirement, only 10.6% those organizations are able to measure potential participant outcomes as part of their retirement plans, according to a new survey of 403(b) plan sponsors from the Plan Sponsor Council of America.

Source: Wolterskluwerlb.com, January 2015

De-branding the 401k Fund Menu

Summary: DC plan sponsors face several problems when they make a significant commitment to a brand name fund, especially when it is the only investment option for a specific asset class. This raises the question: What is gained by having a brand name fund in the 401k plan's fund menu?

Source: Russell.com , January 2015

IRS What Plan Sponsors Need to Know About Bonding Requirements for ERISA Plans

Summary: If you are working with ERISA plans, you will need to respond to questions from your employer clients about meeting the mandatory bonding requirements which must cover any employee handling assets of the plan. Here are answers to several key questions.

Source: Ntsa-net.org, January 2015

IRS Provides Guidance on Correcting a Roth Contribution Failure

Summary: A common mistake encountered in the operation of a Roth feature is that the employer doesn't follow the employee's election as to the type of elective deferral. The employee elects a Roth contribution, but the employer treats it as a pre-tax deferral. The IRS has provided guidance on correcting a Roth contribution failure.

Source: Erisalawyerblog.com, January 2015

Dealing With Small Amount 403(b) Annuities of Former Participants

Summary: A problem in 403(b) plans arises for plans with balances less than $5,000 of former participants which cannot be excluded from plans under DOL FAB 2009-2 and Rev Proc 2007-71. 401k plans can easily distribute these small amounts, but 403(b) plans have a challenge.

Source: Businessofbenefits.com, January 2015

Is an Individually Directed Account Program Right for Your Firm?

Summary: Current best practice is to maintain a relatively tight fund menu of nine or fewer diversified mutual funds, including a family of target retirement date funds as the default option. In contrast, this approach may not address the preferences of plan participants who are also sophisticated investors, such as high-status partners with large 401k balances. What you want to do is to keep the core investment menu in your plan intact while providing your key employees with added options.

Source: Bmogamviewpoints.com , January 2015

Simple Is the New Black in Participant Engagement

Summary: Make it simple. Avoid jargon and complex graphics. And remind participants of the benefit they'll receive, or give up, by participating in a workplace-based retirement plan.

Source: Planadviser.com, January 2015

GAO Finds Fault With Forced Transfers of 401k's to IRAs

Summary: The U.S. Government Accountability Office found that due to high account fees and low-yielding investments, account balances in most forced-transfer IRAs tended to decrease over time until all value dwindled away.

Source: Shrm.org, January 2015

What's Your Fee Policy? Going Beyond 408(b)(2)

Summary: As fiduciaries, plan sponsors are responsible for making decisions related to selecting an appropriate fee structure. Establishing a comprehensive fee policy is a crucial step in making those decisions. It shows procedural discipline with regard to reviewing plan fees. Much like an investment policy, it also helps to maintain consistency of its policies by future committee members.

Source: Plantemoran.com , January 2015

Revisiting K-12 School District 403(b) Agreements

Summary: Author analyzes a series of agreements between a large insurance company and a K-12 school district. He states that, "Once an individual retail investor signs an account application agreement with a provider of investment products and services such as a stockbrokerage firm, that person enters into a world in which the deck is largely stacked against him."

Source: Morningstar.com, January 2015

Seventh Circuit Again Considers Partial Terminations of Retirement Plans

Summary: The Seventh Circuit revisited the topic of partial termination in a class action that had been litigated for almost 19 years and involved five appeals. In Matz v. Household Int'l, the court affirmed the lower court's dismissal of the case, and in doing so it reiterated its views on various issues relating to partial terminations.

Source: Mcguirewoods.com, January 2015

ICI Comment Letter on DOL's Proposed 408(b)(2) Focus Group Study

Summary: In this 18 page comment letter, the Investment Company Institute expresses concern regarding the timing of the focus groups, the ICR design, and specific issues relating to the proposed focus group script.

Source: Ici.org , January 2015

Post-Dudenhoeffer Company Stock Litigation

Summary: Not surprisingly, stock drop litigation is on the rise. Plaintiffs are now challenging fiduciaries of defined contribution plans that were maintained by employers whose prospects were allegedly so bleak as to have rendered the investment in the companies' stocks by the plans imprudent. Reviews the Kodak and RadioShack cases that demonstrate the plaintiffs' bar is willing to test the post-Dudenhoeffer waters.

Source: Groom.com , January 2015

The Fiduciary Requirements for Selecting a Lifetime Income Provider

Summary: Little has been written about how a plan fiduciary should prudently select insurance companies and guaranteed retirement income for participants. There's a DOL "safe harbor" regulation, but it doesn't give fiduciaries a checklist for compliance.

Source: Drinkerbiddle.com , January 2015

IRS Updates Procedures for Letter Rulings, Determination Letters, and Other Guidance

Summary: These revenue procedures are an important resource for anyone seeking plan-specific guidance from the IRS. They specify current procedures, describe how the 2015 procedures differ from their 2014 counterparts, and provide practical tools such as sample formats and checklists for letter ruling requests, definitions of basic terms, and user fee schedules.

Source: Ebia.com, January 2015

IRS Announces Changes to Determination Letter Processing for 2015

Summary: The announcement sends two important messages to plan sponsors and their advisors. First, be sure each determination letter filing is complete and satisfies all procedural requirements in Revenue Procedure 2015-6. Second, file applications early and respond promptly to any IRS requests, both to prevent application files from being closed and, more importantly, to avoid running out the clock on the remedial amendment cycle.

Source: Ebia.com, January 2015

Safe Harbor 401k Plans Becoming Mainstream

Summary: With a clear understanding of how a safe harbor 401k plan works, smaller employers can enjoy the many advantages of adopting a 401k plan, while avoiding many the arduous nondiscrimination requirements.

Source: Linkedin.com, January 2015

How to Avoid DOL Audit Heartburn

Summary: A DOL audit of an employee benefit plan can cause heartburn for plan sponsors if they are unaware of the seriousness, scope, or intention of the audit. This white paper shows plan sponsors how to prepare for a potential audit with a seven-point prescriptive framework.

Source: Retirementandbenefitpartners.com (free registration may be required), January 2015

Actuaries Grade Retirement Systems and Reform Proposals

Summary: The American Academy of Actuaries evaluated how well public and private retirement systems, and proposals to reform them, meet the needs of participants, sponsors and other stakeholders.

Source: Planadviser.com, January 2015

The Routine 401k Move That Sabotages Your Savings

Summary: Every year, millions of people leave their jobs--and fail to tell their former employers what to do with their 401k retirement savings accounts. Enter the forced rollover, also known as a "forced transfer." According to a new report from the Government Accountability Office, forced rollovers are almost always a financial disaster for the account holder.

Source: Morningstar.com, January 2015

In-Plan Roth Rollovers and After-Tax Contributions: Maximizing Deferrals with Limited Future Tax Liability

Summary: Plan sponsors seeking to provide employees with the ability to make after-tax contributions to a 401k plan may be interested in adding, along with the common Roth contribution feature, non-Roth after-tax contribution and in-plan Roth rollover features to their 401k plans. These additional features would allow plan participants to save up to $53,000 annually with limited future tax liability.

Source: Erisapracticecenter.com, January 2015

A "News-Utility" Theory for Inattention and Delegation in Portfolio Choice

Summary: Recent evidence suggests that investors either are inattentive to their portfolios or undertake puzzling rebalancing efforts. This paper provides a comprehensive analysis of the portfolio implications of "news utility," a recent theoretical advance in behavioral economics.

Source: Columbia.edu , January 2015

What Does Spano v. Boeing Foretell About the Future of Excessive Fee Litigation

Summary: Author write, "From my perspective, the most interesting aspects of the [court's] decision relate to the impact on the theory of liability and on the defendants' theories of the plaintiffs' precision, at this point, in presenting their case."

Source: Bostonerisalaw.com, January 2015

EBSA Recovers Nearly $600 Million

Summary: The Employee Benefits Security Administration recovered almost $600 million in plan reimbursements and fines in fiscal 2014. That figure, while significant, was less than half the $1.7 billion paid in 2013 to settle Employee Retirement Income Security Act criminal cases and civil violations.

Source: Benefitspro.com, January 2015

How to Improve DC Communications

Summary: When it comes to DC communications, the data is pretty clear: same old, same old isn't working. Judged by a number of factors, engagement levels have barely budged in recent years. New thinking suggests a behavior-based, outcomes-focused communication strategy that works with basic human tendencies can have better outcomes.

Source: Benefitscanada.com, January 2015

Gender-Specific Retirement Education Fills Void

Summary: Employers have a critical role to play in helping women save for retirement, and research suggests women are open to receiving information from their employers and more likely to take advantage of investment tools, programs and education when they're offered.

Source: Benefitnews.com, January 2015

What Are the Top 401k Asset Investments?

Summary: Target-date funds also continue to gain in popularity, with a majority (71%) of 401k plans now including target-date funds in their investment lineup. Compared with years past, however, 401k participants have begun to seek more diversification of their investments.

Source: Benefitnews.com, January 2015

Did the Great Recession Lock in Higher 401k Loan Volumes?

Summary: Participants' 401k loan activity in 2013 was little-changed from year-end 2012, but it remained noticeably higher than before the Great Recession, according to a new report.

Source: Napa-net.org, January 2015

ERISA Lawsuit Filed Against Avon Products

Summary: A lawsuit claims fiduciaries to Avon Products defined contribution plan violated their duties to participants by keeping company stock as an open plan investment.

Source: Planadviser.com, January 2015

IRS Implements Changes to Employee Plans Determination Letter Program

Summary: The Internal Revenue Service (IRS) issued Revenue Procedures 2015-6 and 2015-8, updating the employee plans determination letter program and user fees.

Source: Practicallaw.com, January 2015

Allocating Pretax and After-tax Amounts to Multiple Destinations

Summary: For years, it wasn't clear whether plan participants with after-tax money in their 401k accounts could roll over the after-tax portion of an eligible distribution to a Roth IRA and the pretax portion to another employer's plan or a traditional IRA (or a combination). The IRS has provided the answer.

Source: Pentegra.com , January 2015

Another Cautionary Tale About Explaining Your Plan Amendments

Summary: Second Circuit Court of Appeals provided a reminder of the potential consequences of inaccurate plan communications. This came on December 23, 2014 in the form of a decision upholding class relief to participants who challenged CIGNA's conversion of its defined benefit pension plan to a cash balance plan.

Source: Pensionsbenefitslaw.com, January 2015

How California Insurance Rules Apply to 403(b) Investments

Summary: How does California Insurance Code Section 770.3 apply to 403b investments? Ellie Lowder provides an answer regarding the rules in the most populous state.

Source: Ntsa-net.org, January 2015

Plan Sponsors Need to Take Advantage of Regulators' IRA Rollover Scrutiny

Summary: While financial institutions will bear the brunt of expanded regulatory scrutiny of 401k to IRA rollovers, it is important that employer plan sponsors be aware of financial institution practices regarding these accounts. Having knowledge of current guidance about IRAs also can be of use when highly compensated employees in the plan seek direction from the benefits office on decisions about their outside retirement savings.

Source: Erisadiagnostics.com , January 2015

FINRA Pushes Fiduciary Agenda

Summary: FINRA released its regulatory and exam priorities for the new year with an emphasis on fiduciary duty. This caught some by surprise in a document by the industry-funded broker-dealer regulator, because brokers must only adhere to a suitability standard.

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

Finding "Best Fit" in a Retirement Plan Provider Through the RFP Process

Summary: Rather than relying upon purely quantitative comparisons of data from competing proposals, plan sponsors should base their final decision on a more balanced set of factors that can help them achieve "best fit" with a prospective provider. Article discusses three areas of fit that are essential to a successful sponsor-provider relationship.

Source: 401khelpcenter.com, January 2015

DOL Urged to Hold Off on Proposed Fee Guide

Summary: A group of business organizations turned up the heat this week in its campaign against a proposed DOL fee disclosure guide. The group, which includes the American Benefits Council, wrote a letter to the DOL complaining that the comment period was too brief and that they have concerns about the very way the need for the guide is being determined.

Source: Benefitspro.com, January 2015

Mandatory Retirement Plans in Illinois

Summary: Illinois has become the first state to require that private-sector employers offer their employees retirement benefits. Is Illinois the precursor to mandatory retirement savings programs across the country the way that Massachusetts was for mandatory health care?

Source: Ogletreedeakins.com, January 2015

Change In Average 401k Account Balances

Summary: This is a one page chart of the change in average account balances (by age and tenure) from January 1, 2014 - January 1, 2015 among consistent 401k participants with account balances on December 31, 2013.

Source: Ebri.org , January 2015

Why All 401k Employee Education Will Soon Be Online

Summary: Many experts believe that 401k employee education, in its current form, does not work. Writer believes that it is just a matter of time until all employee education migrates to the Internet and provides eight reasons.

Source: Benefitnews.com, January 2015

401k Service Providers and Cybersecurity: Questions to Ask

Summary: 401k plan fiduciaries have an obligation to secure and keep private the personal identifiable information of plan participants and beneficiaries. Part of this essential task is ensuring that plan service providers take cybersecurity preparedness and plan data protection seriously. Here are some questions you should be asking.

Source: 401khelpcenter.com, January 2015

How to Choose a 401k Plan for Yourself and Your Employees

Summary: No longer just for large companies, 401k plans now can fit into the scope and budgets of small firms. So how do you go about choosing a 401k plan? Article provides some tips and pointers.

Source: Paychex.com, January 2015

Treasury Softly Launches myRA Program

Summary: In December 2014, the Treasury Department opened the myRA (my Retirement Account) program to employers and employees. President Obama announced the myRA program in his 2014 State of the Union Address. The program is intended as an introductory retirement savings program for employees who do not have access to a worksite retirement plan.

Source: Sutherland.com, January 2015

Illinois Establishes Retirement Plan for Private-Sector Workers

Summary: Illinois Governor Pat Quinn signed legislation establishing an individual retirement plan for private-sector employees who currently do not have access to a retirement plan at work.

Source: Planadviser.com, January 2015

Court in Boeing Excessive Fee Case Rules for Plaintiffs, Sets Trial Date

Summary: The Spano case was filed over eight years ago on September 27, 2006, one of the very first excessive fee cases filed against the largest of American employers. On December 30, 2014, the district court denied the defendants' motion for summary judgment on the merits and partially denied their motion for summary judgment based on ERISA's statute of limitations.

Source: Fraplantools.com, January 2015

2015 Determination Letter Procedures: IRB 2015-1

Summary: This revenue procedure sets forth the procedures of the IRS for issuing determination letters on the qualified status of pension, profit-sharing, stock bonus, annuity, and employee stock ownership plans. This revenue procedure is a general update of Rev. Proc. 2014-6, 2014-1 I.R.B 198, which contains the Service's general procedures for employee plans determination letter requests.

Source: Irs.gov, January 2015

Five Critical Findings About Saving for Retirement

Summary: A recently released retirement survey from Vanguard details in depth who is and isn't saving within America. Article provides an overview of the five most critical findings about saving for retirement to come out of Vanguard's report.

Source: Fool.com, January 2015

Benchmark Your 401k Plan - 2015

Summary: Many plan sponsors want to know how their 401k plan stacks up to the typical or average plan. This is often the first question asked when attempting to determine whether an effort should be made to upgrade the features and benefits of the plan. To help you answer this question, we have identified some of the common performance characteristics and features offered by many 401k plans and compiled the statistics that will allow you to benchmark your plan.

Source: 401khelpcenter.com, January 2015

2015 New Year's Resolutions for Plan Sponsors

Summary: Plan sponsors who intend to make New Year's resolutions need to be careful, their broken promises can get themselves in a whole lot of hot water and financial liability. This article is about what New Year's resolutions plan sponsors should make and keep in helping them minimize their fiduciary liability.

Source: Jdsupra.com, January 2015

Four Critical Steps In Selecting an Advisor

Summary: Following best practices in selecting an advisor is not only prudent from a fiduciary perspective, but should help you choose an advisor with the right experience and expertise to meet your particular goals. Here are the four crucial steps to doing it right.

Source: Benefitspro.com, January 2015

MyRAs, an ERISA Free Zone

Summary: Now that the federal government has officially rolled out the myRA retirement savings program, has it also left participating employers open to possible fiduciary liability? The answer is no. Employers who decide to help enroll workers in these new accounts need not fear marauding bands of fiduciary-violation-seeking plaintiffs' attorneys.

Source: Benefitspro.com, January 2015

2015's Top Ten List for Fiduciaries

Summary: As part of their annual tradition in helping retirement plan fiduciaries get started down the right path in the new year, Bryan Cave lays out a top ten list for plan fiduciaries.

Source: Benefitsbryancave.com, January 2015

Six Trends That Will Define Retirees

Summary: This is not your father's retirement. If you're retired or moving quickly in that direction, here are some trends that will shape the rest of your life.

Source: Bankrate.com, January 2015


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