DOL Issues Investment Advice FAB Clarifying Plan Sponsor Responsibilities - Summary: The DOL recently issued an important Field Assistance Bulletin, 2007-01, that addresses a number of issues with respect to the so-called "investment advice exemption" created by the Pension Protection Act of 2006. Importantly, plan sponsors need not monitor the specific investment advice given to any participant. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

COMMENTARY: What Kind of Provider and Adviser Should You Align Your Plan With? - Summary: It is a general premise of business management that, if something is important, a business will measure it. Stated inversely, if an activity is not measured, then the ­business probably doesn't think it's important. Elevate the importance of the success of your plan by measuring benefits, participation, deferrals, and investing. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Online Tools Can Help Participation - Summary: Automatic enrollment may solve the problem of how to get employees started participating in a 401k plan, but it does not ensure that they participate enough. Online tools increasingly tailored to different life stages can help increase 401k participation. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Ruling on 401k Fees a Relief to Plan Sponsors - Summary: Suit was one of a dozen similar class-action lawsuits filed by St. Louis-based law firm alleging companies violated pension laws by allowing 401k participants to be overcharged by the managers of the plans. Located at: Workforce.com (free registration may be required), March 2007. Click on headline for full article.

DOL Releases Guidance on PTE for Investment Advice - Summary: In Field Assistance Bulletin 2007-01, the DOL provides guidance on the statutory prohibited transaction exemption (PTE) for investment advice under the Pension Protection Act of 2006. The guidance primarily affects DC plan sponsors and those who provide investment advice to DC plan participants. Located at: Watson Wyatt Worldwide, March 2007. Click on headline for full article.

Summary of Litigation Claims Related to 401k Plan Fees - Summary: This is a summary prepared by Davis & Harman LLP of lawsuits involving define contribution plan sponsors and service providers related to 401k fees. Located at: American Benefits Council , March 2007. Click on headline for full article.

COMMENTARY: Are Corporate Retirement Plans a Bad Deal? - Summary: The author says, "This is my first post in a new series which will analyze the retirement planning industry.... My hope is to unravel to some extent the cost structure of these plans and help corporate executives, business developers, and plan participants to gain a stronger understanding of how their retirement funds are being handled." Located at: Financial Planning Blog, March 2007. Click on headline for full article.

Lifecycle Funds Better QDIA Bet Than Balanced Funds - Summary: Lifecycle funds came out ahead of balanced funds, according to a recent comparison of the two by Watson Wyatt Worldwide, because the lifecycle funds do a reasonable job of creating retirement wealth and a better job of mitigating the downside risk. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Projecting Behavioral Responses to the Next Generation of Retirement Policies - Summary: This paper examines retirement and related behavioral responses to policies that on average are actuarially neutral. Many conventional models predict that actuarially neutral policies will not affect retirement behavior. In contrast, our model allows those with high time preference rates to find that the promise of an actuarially fair increase in future rewards does not balance the loss from foregone current benefits. Located at: Michigan Retirement Research Center, March 2007. Click on headline for full article.

IRS on Participants' Rights to Diversify Investments - Summary: Affected plan sponsors need to determine what plan changes and administrative actions are required to eliminate any diversification restrictions and to meet other diversification requirements. Located at: Sibson Consulting , March 2007. Click on headline for full article.

Five 401k Mistakes That Will Haunt You - Summary: Plenty of us have seen older Americans enjoy a vibrant retirement funded in large part by a generous company pension. It's easy enough to get lulled into the sense that somehow our own distant retirement day will be similarly rosy. Located at: Marketwatch.com, March 2007. Click on headline for full article.

Choosing Between DB and DC Plans -- Decision Points - Summary: In this article, we examine the key decision points that should be addressed in considering which type of retirement benefit is right for your company. Located at: CCA Strategies, March 2007. Click on headline for full article.

Final Rules on Automatic Enrollment Will Address Commenters' Questions - Summary: Final regulations on automatic enrollment and default investment alternatives are expected to be released in April, Labor Department official Erin M. Sweeney said March 21 at a BNA sponsored conference. Located at: BNA.com, March 2007. Click on headline for full article.

COMMENTARY: Exploring the New Retirement Road Map - Summary: The commentator says, "Both leisure and work play an important role, especially in the early years of retirement. In the future, this period will mean more downshifting, self-employment or part-time work. As new retirees weigh the tradeoffs in this phase, advisors will need to develop creative planning solutions for these clients. And that's all in the hopes of ensuring a clear path to retirement." Located at: OnWallStreet.com, March 2007. Click on headline for full article.

Poor 401k Plan Participation Not Limited to Low-Paid Workers - Summary: According to a study recently conducted by Watson Wyatt Worldwide, 10% of workers earning more than $100,000 per year do not participate in their employers' 401k plans. Located at: CCH.com, March 2007. Click on headline for full article.

Pick the Right Target-Date Fund or Risk Missing Goals - Summary: Billed as one-stop investments to help people meet retirement goals, so-called target-date mutual-funds have become extremely popular in a short time. But investors' low contribution rates to 401k plans, coupled with a lack of understanding about the inner workings of target-date funds, puts them in danger of falling short in retirement. Located at: Marketwatch.com, March 2007. Click on headline for full article.

PPA Good News for 401k Sponsors - Summary: Much of the attention in the popular press has been focused on the aspects of the law related to the funding of defined benefit pension plans. But employers and employees in small to medium sized companies are starting to realize that the most far-reaching impacts will be on profit sharing and 401k plans. And for the most part, the PPA will be highly favorable to both. Located at: Retirement Plan Blog , March 2007. Click on headline for full article.

The Total View: 2006 Retirement Plan Trends - Summary: One of the most comprehensive reports of its kind, The Total View provides insight on the changing retirement landscape based on an analysis of proprietary data of the Principal Financial Group. Located at: Principal Financial Group, March 2007. Click on headline for full article.

Court Finds Adviser to Retirement Plan is a Fiduciary - Summary: The U.S. District Court for the Western District of Michigan ruled that a brokerage firm that gave investment advice to a profit sharing plan for a fee is considered a fiduciary under the Employee Retirement Income Security Act. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Hackers Swiping Retirement Accounts - Summary: If you travel – or you have participants who do - and access retirement accounts online while on the road, those accounts may have been targeted by hackers, according to a news report. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

House Hearing Highlights "Hidden" 401k Fees - Summary: The fee information presented at the hearing (and subsequent hearings) will help the Committee to determine if the DOL is adequately overseeing the 401k industry and protecting the retirement security of American workers. Located at: CCH.com, March 2007. Click on headline for full article.

Life-Cycle 401ks Overly Optimistic - Summary: A study examines the returns associated with different asset-allocation approaches and suggests that using alternative investments in target-date funds can help retirees improve their returns. Located at: Workforce.com (free registration may be required), March 2007. Click on headline for full article.

Default Investment Options in Defined Contribution Plans: A Simple Comparison - Summary: Will plan participants be better off or worse off by selecting or defaulting into one investment strategy versus another? The DOL proposed three types of "qualified default investment alternatives." This article compares the investment performance of two of them — a balanced fund and a lifecycle fund, using average asset allocations observed on the market. Located at: Watson Wyatt Worldwide, March 2007. Click on headline for full article.

COMMENTARY: 401k Fee Disclosure - Summary: Fiduciaries shouldn't lose sight of the fact that the key is the return participants are getting net of fees, so fees shouldn't be the only consideration. However, compared on a net basis, lower fees will often result in better performance. Located at: Pensions & Benefits Blog, March 2007. Click on headline for full article.

ASPPA Comments on Diversification Requirements - Summary: On March 16, 2007, ASPPA filed comments on Notice2006-107, diversification requirements for qualified DC plans holding publicly traded employer securities. ASPPA requested clarification on several issues, including the definition of an "established securities market" and the definition of "readily tradable." Located at: ASPPA (Word Document), March 2007. Click on headline for full article.

The Recent Trend Towards Later Retirement - Summary: A dramatic decline in work at older ages persisted over most of the twentieth century. Recently, however, retirement ages stabilized, prompting debate as to whether the early retirement trend had stopped or simply paused. This article shows that the trend towards earlier retirement has not just leveled off but has apparently reversed, with especially large increases in labor supply of women in late middle age. Located at: Center for Retirement Research at Boston College, March 2007. Click on headline for full article.

Survey Data Reveal Stunning Lack of Awareness of "Saver's Credit" - Summary: According to recent survey data, very few American adults are aware of an existing tax credit designed to help low- to middle-income Americans build their retirement nest eggs. Located at: 401khelpcenter.com, March 2007. Click on headline for full article.

Michigan Democrats Pitch 401k Plan - Summary: A plan to help small businesses participate in 401k programs with the help of the state was outlined by Michigan House Democrats. Located at: BusinessWeek, March 2007. Click on headline for full article.

An Interview with Matthew D. Hutcheson, Recent Congressional Witness on 401k Fees - Summary: On March 6th of this year, Mr. Hutcheson appeared before the Committee on Education and Labor, United States House of Representatives, to provide input and insight into fees charged to 401k plans. We decided that it would be helpful to get a better understanding of his viewpoint, so we arranged this exclusive interview. Located at: 401khelpcenter.com, March 2007. Click on headline for full article.

Stopping Employer Matching Contributions - Summary: Is an employer required to inform employees before the plan year begins if the employer is going to stop a discretionary match that has been given on an annual basis, each year for a number of years? Located at: McKay Hochman, March 2007. Click on headline for full article.

DOL Provides Guidance for Retirement Plan Statements - Summary: The DOL has indicated that, until further guidance is issued, plan administrators must make a good faith effort to comply with the new requirements. It has issued Field Assistance Bulletin (FAB) 2006-03 in order to provide its views as to what constitutes good faith compliance. Located at: McDermott Will & Emery, March 2007. Click on headline for full article.

Plan Sponsor's Guide to Retirement Plan Fees - Summary: The Standard has recently created this guide to help educate plan sponsors on all of the key issues around 401k plan fees. Located at: The Standard , March 2007. Click on headline for full article.

Clash of the Titans - The Battle Over the QDIA Regulations - Summary: Plan sponsors, earnestly trying to restructure their plans to comply with the new PPA, will have to wait a bit longer before clarity over automotive enrollment provisions arrives in the form of the DOL Qualified Default Investment Alternative (QDIA) regulations. The hold-up, according to the Wall Street Journal, is a veritable clash of financial titans, both vying for billions of dollars of non-elected 401k money. Located at: MJM Financial, March 2007. Click on headline for full article.

IRS Add to Guidance Priorities Various Rules, Notices Implementing PPA - Summary: In a March 12 update to the 2006-2007 Priority Guidance Plan, the Treasury Department and Internal Revenue Service included what officials described as "substantial guidance implementing the Pension Protection Act of 2006." Located at: The Bureau of National Affairs, March 2007. Click on headline for full article.

IRS: No Transitional Relief for Rollover to Non-spouse - Summary: The Internal Revenue Service made the decision not to provide transitional relief under Section 829 of the Pension Protection Act for years prior to 2006 regarding non-spouse beneficiary rollovers, an Internal Revenue Service official said. Located at: The Bureau of National Affairs, March 2007. Click on headline for full article.

ASPPA Comments on EPCRS - Summary: On March 12, 2007, ASPPA submitted comments to the IRS on updating the EPCRS, proposing two modifications to the program: (1) an extension of the EPCRS self-correction period pursuant to PPA; and (2) a proposal to add an EPCRS notice filing procedure, along with a sample notice. Located at: ASPPA (Word Document), March 2007. Click on headline for full article.

Know Employer's Duty Under Retirement Plan - Summary: Workers feeling uneasy about their retirement safety net will find little comfort from a new government watchdog report that is critical of the Labor Department's enforcement of employer retirement-plan laws. Located at: The Hartford Courant, March 2007. Click on headline for full article.

Working Americans on Track to Replace Only 58% of Income in Retirement - Summary: The Fidelity Research Institute announced the findings of its 2007 Retirement Index, which showed the typical working American household is on track to replace 58 percent of their income in retirement – a slight increase from last year's Index level of 57 percent. Located at: 401khelpcenter.com, March 2007. Click on headline for full article.

Avoiding a Tax Bite on Inherited IRAs and 401ks - Summary: When the IRS in January clarified their guidance on the new rules that will apply to a rollover of a workplace account by a non-spouse beneficiary, some financial advisors were surprised. The law does not apply retroactively and only applies when the employer's plan allows the transfer to a beneficiary IRA. Located at: Accountingweb.com, March 2007. Click on headline for full article.

New and Improved 401ks - Summary: There may be more change happening now in 401k plans than at any time in the 25 years since their inception. In the past year or so, there have been several legislative initiatives to encourage worker participation in plans and to help improve the outcome of savings and investment. And two recent studies indicate that other changes are in the works that may help further boost participation. Located at: Washington Post (free registration may be required), March 2007. Click on headline for full article.

Even High-Wage Earners Pass Up 401k Plans - Summary: The challenge that employers face in getting workers to participate in 401k plans isn't limited to young and lower-paid employees. At many large companies, even some older and high-earning workers fail to enroll in the prevalent retirement savings program, according to an analysis conducted by consulting firm Watson Wyatt Worldwide. Located at: SmartPros.com, March 2007. Click on headline for full article.

Lawmakers Consider More 401k Fee Disclosure - Summary: Fees and charges eat up a good chunk of Americans' 401k retirement savings, but more disclosure could spur competition that would hold down those costs, Congress was told in hearings on the issue. Located at: Marketwatch.com, March 2007. Click on headline for full article.

COMMENTARY: Some Tips for Lawmakers - Summary: Lawmakers in Washington this week met to discuss whether fees for 401k plans are too high or aren't transparent enough. The nation's 401k plan participants would have been better served had lawmakers discussed what the appropriate default investment options should be for those who will have their nest egg contributions automatically invested into a target-date or target-risk retirement fund. Located at: Marketwatch.com, March 2007. Click on headline for full article.

PPA Compliance Alert for Sponsors of DC Plans - Summary: Reviews a number of requires of the PPA including quarterly benefit statements and accelerated vesting schedules. Located at: Morgan, Lewis & Bockius LLP , March 2007. Click on headline for full article.

AUDIO: 401k Fees Get Congressional Attention - Summary: According to this Morning Edition news piece, if you have a 401k retirement account, you may be paying more in fees than you think. So say pension experts who spoke on Capitol Hill this week. Over time, the fees paid can personal retirement savings by tens of thousands of dollars. Located at: National Public Radio, March 2007. Click on headline for full article.

The Behavioral Economics of Retirement Savings Behavior - Summary: Saving for retirement is a difficult and challenging task, and workers need all the help they can get. Fortunately, many effective ways to help participants are also the least costly interventions, namely, small changes in plan design, sensible default options and opportunities to automatically increase savings rates and rebalance portfolios. These design features help less sophisticated investors while maintaining flexibility for more sophisticated types. Located at: AARP , March 2007. Click on headline for full article.

Few Company CEOs are Knowledgeable About the Pension Reform Act - Summary: According to PricewaterhouseCoopers, few CEOs of fast-growth private companies, 27 percent, are knowledgeable about the new 2006 Pension Reform Act guidelines that took effect on January 1, 2007; only four percent were rated very knowledgeable and 23 percent somewhat knowledgeable. Most CEOs, 61 percent, admitted they are not knowledgeable at all, while three percent were uncertain and nine percent did not report. Located at: PricewaterhouseCoopers, March 2007. Click on headline for full article.

COMMENTARY: Hearings On 401k Fees Didn't Go Far Enough - Summary: After watching the hearings, Randy Cloud AIFA®, President of Cloud, Neff Management LLC, observed, "I am disappointed that there were not a few more pointed examples of direct industry abuses that require immediate remediation." Located at: 401khelpcenter.com, March 2007. Click on headline for full article.

Higher Earners also Among 401k Non-Participants - Summary: A new Watson Wyatt analysis has found that younger, lower-paid workers are not the only ones dragging their feet about getting into their employer's 401k plan. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

CIGNA Latest Target of 401k Fee Suit - Summary: The St. Louis law firm that made national news by filing a batch of lawsuits over "excessive" retirement plan fees has now turned its legal sights to the CIGNA Corporation and its 401k plan. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Congressional Committee Hears 401k Fee Disclosure Testimony - Summary: A Congressional hearing addressed Tuesday whether fees paid by 401k participants take too big a chunk out of workers' retirement savings and whether those fees should be more completely disclosed to individual investors, the Associated Press reported. Located at: Plansponsor.com (free registration may be required), March 2007. Click on headline for full article.

Lawmaker Hints at 401k Legislation - Summary: After an initial hearing on 401k fees, the chairman of a House committee says he is inclined to offer legislation that would require plan sponsors to provide greater disclosure about charges related to the retirement products. Located at: Workforce.com (free registration may be required), March 2007. Click on headline for full article.

Reducing the Complexity Costs of 401k Participation Through Quick Enrollment - Summary: This study found that, through a simplified enrollment process, participation increased by 10 to 20 percentage points among the affected employees. Since the participant asset allocation decisions were also expedited the same percent of employees enjoyed the benefits of quality asset allocation. Located at: Boettner Center for Pensions and Retirement Research , March 2007. Click on headline for full article.

DOL Interim Final Rule Clarifies Issues of QDRO Timing and Order - Summary: The Department of Labor's Employee Benefits Security Administration released March 6 an interim final rule clarifying issues relating to the timing and order of qualified domestic relations orders. Located at: BNA.com, March 2007. Click on headline for full article.

Lawmaker Urges Disclosure on 401k Fees - Summary: A key House lawmaker said Tuesday that Congress needs to consider making companies that manage 401k plans give clearer and more complete information on fees, which can drain thousands of dollars from a worker's retirement savings. Located at: Jordon Falls News, March 2007. Click on headline for full article.

COMMENTARY: State of the Retirement Industry: Death of a Salesman or Birth of a Profession? - Summary: According to the author, "a seismic shift is coming in terms of not only product structure and compensation, but also how advisors position themselves. There will always be more than one model, but as automation and formalization of process increase, some advisors will operate less in the trenches and more in the boardroom. As always, the future belongs to those who adapt." Located at: The McHenry Group, March 2007. Click on headline for full article.

COMMENTARY: Trends Affecting Retirement Plan Service-Providers - Summary: Years from now, industry professionals will look back on 2006 and see that it was a transitional year that started a restructuring the likes of which we have not seen since the early ‘90s when 401k plans began to emerge as the primary retirement benefit offered by most companies. Here are some of the changes causing this upheaval. Located at: The McHenry Group, March 2007. Click on headline for full article.

Auto 401ks May Turn More Volatile - Summary: The shift to professional investment management, like that used in defined-benefit pension plans, could add volatility to 401k returns in the short run but should improve them in the end. Located at: Workforce.com (free registration may be required), March 2007. Click on headline for full article.

Disclosure of Conflicting Revenues - Summary: It is clear that, by the end of this year, plan expenses and revenue sharing will be on everybody's radar screen and the requirements for reporting and disclosure will be much greater than they are today. That is because of the recent rash of lawsuits against plan sponsors and providers and because of two or three pieces of guidance that the Department of Labor will issue this year. Located at: Reish Luftman Reicher & Cohen, March 2007. Click on headline for full article.

Congressional Testimony on 401k Fees (Update 2) - Summary: On March 6, 2007, the U.S. House Education and Labor Committee, chaired by Rep. George Miller (D-CA), held hearings on "Hidden 401k Fees Undermining Retirement Security?" Here is the testimony of the witnesses that appeared before the committee. Located at: 401khelpcenter.com, March 2007. Click on headline for full article.

Hidden Fees Seen Eroding 401k Retirement Plans - Summary: The U.S. government should require clearer disclosure of hidden fees that erode the investment returns of millions of Americans' 401k retirement plans, said a senior lawmaker and pension experts on March 6th. Located at: Reuters, March 2007. Click on headline for full article.

COMMENTARY: Fixing the 401k—Before It's Too Late - Summary: The author states that he believes "major changes in 401k plan structure and management are necessary to address these challenges and change must start at the top—with responsible, forward-thinking corporate owners and executives who view a 401k plan not as a competitive necessity to attract and retain employees, but as an important retirement benefit that rewards employees for loyal service and serves as a legacy of the company's ethics and values. Located at: TAM Asset Management , March 2007. Click on headline for full article.

401k Hearings May Set Tone For Dems' Oversight - Summary: Congressional review won't just apply to government agencies. It also will hit the private sector, and the retirement finance industry will be one of the first under the microscope. Located at: Workforce.com (free registration may be required), March 2007. Click on headline for full article.

Roth 401k Gaining Traction - Summary: Congress and the IRS have broken down some key barriers to Roth 401k features over the last year or so, and employers apparently are taking notice. Located at: Benefitslink.com, March 2007. Click on headline for full article.

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