Early Adoption of the Roth 401k - Summary: This paper examines plan and participant adoption of the Roth feature among Vanguard defined contribution recordkeeping clients during 2006, the first full year that the Roth 401k was available. The Roth 401k was adopted by 14% of Vanguard plans, and 5% of participants within these plans elected the option. Early Roth adopters included new plan enrollees, high savers, Web-registered participants, and high-income households. Located at: Vanguard Center for Retirement Research , April 2007. Click on headline for full article.

IRS Clarifies Nonspouse Beneficiary RMDs After Rollover - Summary: The PPA gave designated beneficiaries of deceased participants the ability to roll over retirement plan death distributions to an IRA. Previously, only surviving spouses had that right. In Notice 2007-7, the IRS gave preliminary guidance regarding the new rollover rules and their relation to the required minimum distribution (RMD) rules of Code Section 401(a)(9). Located at: Sungard/Relius, April 2007. Click on headline for full article.

DOL Wants Your Feedback on Retirement Plan Fees - Summary: DOL/EBSA is requesting you input and other information on fee and expense disclosures to participants in individual account plans. Located at: American Benefits Council , April 2007. Click on headline for full article.

Scale Effects in Mutual Fund Performance: The Role of Trading Costs - Summary: Mutual fund trading costs have been noted on as one of the many "hidden costs" related to mutual funds. This paper examines the role of trading costs as a source of "diseconomies" of scale for mutual funds and the authors find that they are comparable in magnitude to the funds expense ratio. Located at: Social Science Research Network, April 2007. Click on headline for full article.

Wal-Mart Hit with Class-Action Over 401k - Summary: The new nationwide class-action alleges that because Wal-Mart makes profit-sharing contributions to its 401k plan based on each employee's compensation, illegally "shaving" that compensation operated to reduce Wal-Mart's profit-sharing contributions. Plaintiffs allege that the 401k plan fiduciaries breached their duties under ERISA by participating in or failing to stop this reduction. Located at: Spencer Fane, April 2007. Click on headline for full article.

Retirement Focus on Downshifting - Summary: A new Vanguard study shows that the majority (61%) of American workers age 40 to 69 conceive of retirement as a period involving a "downshifting" from full-time employment to part-time employment rather than a period of full-time leisure. Workers' choices about retirement are driven primarily by financial resources, but also by other factors such as health and personal preferences. Located at: Financial Executives Research Foundation, April 2007. Click on headline for full article.

Labor Looks at Better 401k Fee Disclosure - Summary: The Labor Department's Employee Benefits Security Administration will start soliciting ideas from the public, industry and other interested parties aimed at improving the disclosure of these charges to millions of people with 401k retirement savings plans. Located at: Businessweek.com, April 2007. Click on headline for full article.

Automatic Enrollment: Taking It Up a Notch - Summary: With automatic enrollment becoming the norm, sponsors look to add existing workers and increase deferral rates. Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

Will the Roth 401ks New "Permanent" Status Make a Difference? - Summary: With the passage of the Pension Protection Act last year, some sponsors are looking anew at the idea of adding a Roth 401k option to their plans, but will it be enough to make a difference? Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

Managing the Managed Account - Summary: Assuming the DOL does give its seal of approval to the safe harbor, plan sponsors also will need to consider carefully costs inherent in a more pricey managed account approach utilized as a default option. Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

The Next Generation of Participant Advice Begins - Summary: In the lexicon of ERISA, perhaps only "404c" is more often misapplied and misunderstood than "advice." Still, in the decade since the DOL famously attempted to craft a workable line between education and advice, regulators, legislators, and the industry itself have done much to transform the ways in which participants are given help making decisions involving their retirement accounts. Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

Are 401k Plans Ready for ETFs? - Summary: ETFs have been slow to catch on among 401k plan sponsors principally because of the operational barriers that exist. Recordkeeping and fee issues still exist. Once those issues have been resolved, ETFs are certain to become popular investment vehicles in 401ks. Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

The Big Four of Certification and Assessment - Summary: Courts and regulators will evaluate your effectiveness as an investment adviser against a process standard — as opposed to a performance standard. It is not about whether you made money for your clients; it is about whether you can demonstrate the fiduciary process that you followed to manage your client's investment decisions prudently. Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

What They're Taking From Your 401k - Summary: Some experts challenge the industry's claim that costs are clear and complete. Trading costs auditing, legal and education fees can significantly increase the total amount investors pay, sometimes by 1 or more percentage points over and above a fund's basic charges. Located at: Washington Post (free registration may be required), April 2007. Click on headline for full article.

COMMENTARY: Don't Kill Mutual Fund Watchdogs--Give Them a Longer Leash - Summary: The authors says, "A new study, published by the Washington D.C.-based think tanks American Enterprise Institute and Brookings Institute, is an example of how correctly recognizing the symptoms is no guarantee that you'll identify the right cure. In their study 'Competitive Equity: A Better Way to Organize Mutual Funds' argues that mutual fund fees are too high. However, the authors' proposed solution--doing away with mutual fund boards entirely--is dead wrong." Located at: Morningstar.com, April 2007. Click on headline for full article.

Poll: Early Retirement is Not Expected - Summary: Bankrate.com released a new poll which found that nearly one out of five individuals plan to work until death. Another key finding shows that 28% of those surveyed save less than 5 percent with 16 percent saving nothing at all for retirement. Located at: 401khelpcenter.com, April 2007. Click on headline for full article.

An Interview With Fred Reish - Summary: Fred Reish has been practicing law in the employee benefits area since the dawn of modern defined contribution plans. Now, the Los Angeles-based attorney — managing director of law firm Reish Luftman Reicher & Cohen — spends his time helping employers and advisers wade through the complicated 401k arena. Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

COMMENTARY: Put a Sticker on 401k Funds to Disclose Costs - Summary: John Wasik says, "Mutual funds within 401k-type programs need disclosure statements like price stickers on cars that detail most of the product's costs." Located at: Bloomberg.com, April 2007. Click on headline for full article.

DOLs 401k Changes Seen 'Significant' - Summary: New default options that the Department of Labor will likely approve for 401k investments will have a "significant" impact on the way mutual fund assets are invested, independent fund directors were told at a conference April 12th. Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

DOL Issues Final Regulations on Timing of QDROs - Summary: As required under the Pension Protection Act of 2006, the U.S. Department of Labor recently issued interim final regulations to clarify the qualified status of domestic relations orders (DROs). A qualified domestic relations order (QDRO) assigns all or part of a participant's retirement benefits to a spouse, former spouse, child or other dependent. Located at: Watson Wyatt Worldwide, April 2007. Click on headline for full article.

GM, Delphi 401k Changes Mean Fewer, but Cheaper Options - Summary: Planned overhauls of the 401k savings plans at General Motors and Delphi are part of a trend to offer employees and retirees more streamlined asset-allocation choices. But there's some debate as to whether or not that trend is best for 401k plan participants. Located at: MarketWatch, April 2007. Click on headline for full article.

IRS Recommends Early Submissions of Determination Letters - Summary: The IRS is looking for ways to encourage employers and practitioners to submit determination letter requests earlier in each cycle because mini-spikes toward the end of submission periods could result in a longer response time for the issuance of determination letters. Located at: CCH, April 2007. Click on headline for full article.

COMMENTARY: Fees for What? - Summary: The commentator says, "There has been a lot of conversation about the fees paid by retirement plans. Most of that attention has been paid to the level of the fees. The implication seems to be that a high fee is bad and a low fee is good. That would be true if the service being delivered was exactly the same, but that is rarely--dare I say--never, the case." Located at: Pension & Benefits Blog, April 2007. Click on headline for full article.

Money Managers Join in Jettisoning DB Plans - Summary: In an informal survey, Pensions & Investments found four big players in the investment management business that have closed, frozen or terminated their traditional defined benefit plans and shifted to cash balance or defined contribution plans. Located at: Pensions & Investments, April 2007. Click on headline for full article.

Rolling Those 401k Stones - Summary: Consolidating all of those balances in a rollover IRA is simple to do, and it can make your portfolio easier to manage while giving you many more options and preserving all of the tax-deferred benefits of your 401k. Located at: Motley Fool, April 2007. Click on headline for full article.

Husbands and Wives Approaching Retirement Have Different Understanding of Their Financial Plans - Summary: Fidelity Investments announced the results of new research that tested whether married couples heading toward retirement have the same level of knowledge about their finances and agree on basic retirement planning issues. Located at: 401khelpcenter.com, April 2007. Click on headline for full article.

Lawsuits Over 401k Plan Fees Continue to Grow - Summary: Litigation concerning fees paid by 401k plans is expanding, and plaintiff's lawsuits now number more than one dozen, according to Bridgit M. DePietto, an associate with Morgan, Lewis & Bockius LLP. Located at: CCH, April 2007. Click on headline for full article.

More Light Sought On Investment Fees - Summary: In an era of do-it-yourself retirement planning, workers often are hobbled by a lack of clear information about their investments and the fees they are charged to manage them. Those fees can eat away tens of thousands of dollars over time. Now federal regulators are seeking to toughen disclosure rules and devise a single standard for a variety of investments and retirement plans. Located at: Sun Sentinel, April 2007. Click on headline for full article.

New 401k Options Need Careful Evaluation - Summary: Investment firms are pitching employers on more exchange-traded funds, target-maturity funds, annuities and index funds based on new benchmarks as competitors vie for the $2.4 trillion 401k market. Employees need to keep an eye on new options, and studying which ones make sense. Located at: Sun Sentinel, April 2007. Click on headline for full article.

What is a Reasonable Rate of Interest for Participant Loans? - Summary: The reasonableness of the interest rate is a plan qualification requirement because of Code §401(a)(13), yet the DOL or IRS do not agree on the same rules. Plan sponsors should use caution. Located at: McKay Hochman, April 2007. Click on headline for full article.

PPA Plan Termination Amendment - Summary: The enactment of the Pension Protection Act during the current EGTRRA remedial amendment period for restating qualified plans raises many questions for interim compliance. These are discussed in this article. Located at: McKay Hochman, April 2007. Click on headline for full article.

American Adults Still Expect to Retire With a Pension - Summary: Nearly half (48 percent) of all non-retired adult Americans expect to retire with a pension, according to a new poll conducted by Harris Interactive for the American Institute of Certified Public Accountants. Located at: 401khelpcenter.com, April 2007. Click on headline for full article.

ERISA Plan Must Consider Mailbox Rule - Summary: ERISA does not impose particular procedures for determining the timeliness of required paperwork. Nevertheless, it is crucial that plan procedures hold up in court, and, as a result, this court's observations about basic mail-handling procedures and recordkeeping should be required reading for plans and service providers. Located at: Employee Benefits Institute of America, April 2007. Click on headline for full article.

Final 415 Regulations Include Modifications to Post-Severance Rules - Summary: Plan sponsors will need to review their documents to determine if amendments are needed to comply with these new rules and also to review payroll systems to determine if system adjustments will be required. The definition of compensation under Code Section 415(c)(3) determines not only what items of compensation are available for elective deferrals but also what items are included in the definition of compensation for ADP testing, ADP safe harbors, HCE determinations, tax deduction limits, and top-heavy determinations. Located at: Employee Benefits Institute of America, April 2007. Click on headline for full article.

Employees Take Investment Advice With a Grain of Salt - Summary: More than half of workers indicate that they would be likely to take advantage of professional investment advice offered by their employers, but two-thirds say they would probably implement only some of their recommendations. Located at: Workforce.com, April 2007. Click on headline for full article.

Sexy Hedge Funds Make Their Way Into Retirement Plans - Summary: A number of mutual fund companies have launched hedge-like mutual funds, sparking employers' interest in adding the investments to their 401k plans. But employers need to do their homework first, experts say. Located at: Workforce.com, April 2007. Click on headline for full article.

Final 415 Regulations Make Significant Defined Contribution Changes - Summary: The Treasury has released the final 415 regulations, providing a much needed update to the 1981 regulations. This article focuses on those changes applicable to qualified defined contribution plans, and then briefly highlight some of the defined benefit plan changes. Located at: Sungard/Relius, April 2007. Click on headline for full article.

Many American Workers See—But Ignore—Retirement System Changes - Summary: A large percentage of American workers see that the U.S. retirement system is going through major changes, but many are not taking steps that are likely to leave them well-positioned for a comfortable retirement, according to the 17th annual Retirement Confidence Survey (RCS). Located at: 401khelpcenter.com, April 2007. Click on headline for full article.

SEC May Require Funds to Disclose Fees in Dollar Amounts - Summary: The Securities and Exchange Commission is considering forcing mutual funds to disclose fees and performance as simple numbers, SEC Chairman Christopher Cox told the Los Angeles Times in an interview. Located at: Financial-planning.com, April 2007. Click on headline for full article.

Employers Need to be Mindful of 401k - Summary: Many business owners may be drifting into 401k lawsuit territory and not even know it. Located at: The Wichita Eagle, April 2007. Click on headline for full article.

The 2007 Retirement Confidence Survey - Summary: The A large percentage of American workers see that the U.S. retirement system is going through major changes, but many are not taking steps that are likely to leave them well-positioned for a comfortable retirement, according to the 17th annual Retirement Confidence Survey (RCS). Located at: Employee Benefit Research Institute , April 2007. Click on headline for full article.

Employers Struggle With Lack of Employee 401k Participation - 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 Watson Wyatt Worldwide, a leading global consulting firm. Located at: CCH, April 2007. Click on headline for full article.

PPA Amendments for Ongoing Plans Can Wait - Summary: Many practitioners are uncertain about the deadline for adopting amendments relating to the Pension Protection Act of 2006. Some PPA provisions went into effect in 2006 and many others became effective this year. Practitioners are concerned, in light of Rev. Proc. 2005-66, that the IRS will require good faith amendments in 2007. Located at: Sungard/Relius, April 2007. Click on headline for full article.

National Savings Rate Guidelines for Individuals - Summary: This study creates savings guidelines for typical individuals with different ages, income levels, and initial accumulated wealth so the public can more easily determine how much to save for retirement. It also creates benchmarks for how much capital an individual would have accumulated based on their income and age, with the presumption that they started saving at age 35. Additionally, it shows targets for how much an individual should have accumulated at age 65, prior to retiring. The authors recommend that their findings be adopted as national savings guidelines. Located at: Journal of Financial Planning, April 2007. Click on headline for full article.

On-Site Advisors Would Boost 401k Employee Participation - Summary: Analysis finds that only 40 percent of 401k plans allow advisors in the workplace, presenting them a prime opportunity because of the confusing nature of annuities. Located at: Workforce.com, April 2007. Click on headline for full article.

Law Firm Takes Corporations to Task for High 401k Fees - Summary: Companies, which have been blasé about their 401k fiduciary duties, should be sweating. The legal skirmishes should only grow more fierce when trial attorneys begin seeing successes. Located at: San Diego Union Tribune, April 2007. Click on headline for full article.

VA-related Costs Exorbitant, According to Critics - Summary: Many Americans are paying high fees in their 401k plans for insurance they don't need, and their employers often are unaware, some observers say. The culprit, the observers say, is a fee for mortality-and-expense risk that is part of the variable annuities often offered to 401k plan participants. Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

Terminating a Defined Contribution Plan in 2006 or 2007: Do I Need to Amend for PPA? - Summary: The general rule is that a qualified plan must be qualified both in form and in operation. When a law change occurs, Congress usually provides an extended period of time during which to amend a plan for the law change. However, to remain qualified, a plan that terminates before the extended amendment date must be updated, at the time of termination, for all law changes that are effective as of the plan's termination. Located at: Sungard/Relius, April 2007. Click on headline for full article.

IRS Releases Final Section 415 Regulations - Summary: The IRS has released final regulations under Internal Revenue Code Section 415, which contains limitations on benefits and contributions under qualified retirement plans. Located at: American Benefits Council , April 2007. Click on headline for full article.

401k Plan Fees Litigation: Is The Dam Breaking? - Summary: As the lawsuits continue to pop up, the U.S. House of Representatives Committee on Education and Labor held widely-publicized hearings on the issue of 401k plan fees on March 7, 2007. Employers should be on guard as the issue turns white-hot. This article explores how the 401k industry got to this point, how employers are in the cross-hairs, and what you need to do now. Located at: Littler Mendelson, P.C., April 2007. Click on headline for full article.

Competition Heats Up For Retirement Accounts - Summary: The 401k market at large companies has become saturated. But now small businesses are more interested than ever in beefing up their retirement plans, providing banks (and others) fertile new ground to tread. Located at: U.S. Banker, April 2007. Click on headline for full article.

Meet One Dissenter From Roth 401k Rah-Rah Chorus - Summary: While many experts praise the benefits of Roth 401ks, there's a lone wolf out there with a contrary point of view, penning articles under such headlines as "Roth 401k: Dumb and Dumber" and "Roth 401k: Still Dumber." Located at: Marketwatch.com, April 2007. Click on headline for full article.

Retirement Planning Balancing Act - Summary: Being an advisor who focuses on selling and servicing corporate 401k plans is a matter of balance. You have to balance at least three different constituents: participants; plan sponsors; and the advisors themselves who must be able to make a living from the plans. Located at: Investment Advisor Magazine, April 2007. Click on headline for full article.

How Some Target Date Fund Designs Are Missing the Mark - Summary: This paper presents the results of our comprehensive research on the changing obligations of plan sponsors, the savings and investment behavior and responsibilities of participants, and the expanding role of default investment programs, in particular target date retirement funds. Located at: Treasury and Risk Magazine , April 2007. Click on headline for full article.

The DB-ing of the 401k - Summary: Employers who decide to offer automatic enrollment in their 401k plans will be doing a huge service for employees who otherwise will do nothing to plan for a secure retirement. Those employees may be lucky enough to "wake up" at retirement with a sizable nest egg. Located at: K&L Gates LLP , April 2007. Click on headline for full article.

Bridging the Gap Between DB and DC Plans - Summary: As defined benefit plans fall by the wayside—frozen or converted to a less desirable cash balance account—employers are coming to the realization that their employees may be left with too little money to stretch across the expanding retirement horizon. The solution is clear: The 401k has to become more than a supplement. It has to begin to walk and talk like a pension plan—just not cost so much or be as volatile. Located at: Treasury and Risk Magazine, April 2007. Click on headline for full article.

401k Disclosure: Show Us the Fees - Summary: There are two good reasons why the odds are in favor of better disclosure of 401k fees: one, a mounting number of lawsuits by participants against plan sponsors over excessive fees; and two, Congress is now getting involved. Located at: Treasury and Risk Magazine, April 2007. Click on headline for full article.

Domestic Partners' Rights Expand Under PPA Distribution Provisions - Summary: The Pension Protection Act of 2006 enacted two provisions that are beneficial to employees who are currently in a domestic partnership or similar relationship. This article will analyze these two sections of the PPA and their effect on domestic partnerships. Located at: McDermott Will & Emery , April 2007. Click on headline for full article.

COMMENTARY: The Implications of Vacating the Broker-Dealer Exemption - Summary: Don Trone states, "To clearly state my position: The FPA deserves a standing ovation for its courage and tenacity in challenging the SEC. The exemption was not in the public's best interest or the investment industry's best interest. The exemption has been particularly harmful to the broker-consultants who have wanted to do the right thing for their clients, but have been prevented from doing so." Located at: Fiduciary360 , April 2007. Click on headline for full article.

Stock Drop Triggers ERISA-Oriented "Investigation" - Summary: Troubles in the sub-prime mortgage lender sector have pummeled the stock price of those providers. Therefore, it should come as no surprise that those firms that have stock in their 401k plans are drawing the attention of litigators. Located at: Plansponsor.com (free registration may be required), April 2007. Click on headline for full article.

SEC Revisiting 12(b)-1 Fees - Summary: The author writes, "The Securities and Exchange Commission is taking another look at 12(b)-1 fees, and 27 years after the commission first authorized them, that, no doubt, is appropriate. One might even say that it is about time." Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

Expanded 401k Fee Disclosures 'Likely' - Summary: Congress is likely to pass legislation to expand 401k fee disclosures later this year, said James M. Delaplane, Jr., a partner with Davis and Harman LLP. Located at: Investmentnews.com (free registration may be required), April 2007. Click on headline for full article.

'Free' 401k Advice May Pose Conflict of Interest - Summary: Retiree advocates who opposed the investment advice piece of the PPA continue to worry that advice coming from an investment firm providing a retirement plan will be full of conflicts of interest. The advice, they fear, will steer workers toward that company's funds, at a minimum. Located at: Baltimore Sun, April 2007. Click on headline for full article.

With PPA, Companies Are Key in Keeping Employee Retirement Savings on Track - Summary: Since the launch of the 401k, participants have been required to make most of the major decisions about funding and managing their plans themselves. Twenty years of evidence shows they nearly always do it badly, but until now the law prohibited plan sponsors from offering all but the most cursory advice. No more. Located at: CFO.com, April 2007. Click on headline for full article.

Interim Final Rule Relating to QDROs - Summary: In response to this Congressional directive, the DOL has issued an interim final rule, which primarily consists of examples intended to "provide interpretive guidance by explaining how the statutory language would apply to particular facts." The examples address "subsequent DROs," "timing," and "requirements and protections." Located at: Trucker Huss, April 2007. Click on headline for full article.

COMMENTARY: Another One Bites the Dust? - Summary: Nevin Adams observes, "When Fidelity announced this last week that it was dropping its pension plan, it drew my attention. Not so much because it was taking that step.... [But because of] concerns about paying for health care in retirement." Located at: Plan Sponsor Institute Blog, April 2007. Click on headline for full article.

DOL Reg to Clarify Sponsors' Fiduciary Duties - Summary: A planned clarification by the Department of Labor to its regulation that involves qualified default investment alternatives (QDIAs) will make life a bit easier for plan sponsors and offer opportunities to plan providers, observers say. Located at: MJMfinancial.com, April 2007. Click on headline for full article.

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