The Problem With Living Too Long - Summary: Longevity is one of the most serious issues facing workers today. When a person retires, his monthly paychecks stop, but most of his monthly expenses continue. As a practical matter, this effectively forces a retiree to turn his or her 401k account balance into a stream of monthly payments, taking into account life expectancy, withdrawal rates, investment returns and volatility, and inflation. The focus of this bulletin is on the first factor: life expectancy. Source: Drinker Biddle & Reath LLP , May 2011.

DOL to Make Fee Disclosure Rule Deadline Official - Summary: The DOL published an interim final 408(b)(2) regulation on July 16, 2010, requiring retirement plan service providers to disclose comprehensive information about their fees and potential conflicts of interest to plan fiduciaries. The DOL previously announced its intention to extend the deadline to Jan. 1, 2012. Today's proposal, when finalized, would make the extension official. Source: 401khelpcenter.com, May 2011.

Experts Dispute GAO Study That 401ks Only Benefit the Wealthy - Summary: Some high-profile observers of the retirement planning scene are taking issue with a recent Government Accountability Office (GAO) report which suggests that retirement plans like 401k's disproportionately benefit higher income workers. Source: AdvisorOne, May 2011.

Supreme Court Rules on Available ERISA Remedies for Misrepresentations About Benefit Plan Changes - Summary: On May 16, 2011, the U.S. Supreme Court issued an important decision in CIGNA Corp. v. Amara, holding: (a) that a summary plan description (SPD) is not a "plan" document under the Employee Retirement Income Security Act (ERISA); (b) that participants and beneficiaries may not sue under section 502(A)(1)(B) of ERISA to recover for a deficient SPD; and (c) that "appropriate equitable relief" under section 502(a)(3) of ERISA may be available to plan participants who are harmed by alleged misrepresentations made about upcoming changes to their pension plan benefits. Source: Littler Mendelson PC, May 2011.

Why You Need a Dynamic Investment Policy Statement - Summary: A Dynamic Investment Policy Statement (IPS) can derisk your pension plan without your investment committee spending a great deal of time and missing opportunities to lessen risk. It's as simple as that. Source: Vanguard, May 2011.

Borzi Provides an Update of Proposed Regulations - Summary: Secretary Borzi of the Employee Benefits Security Administration (EBSA) addressed the Departments's work with fee disclosures, lifetime income, electronic disclosure, and the definition of fiduciary at a meeting of the International Foundation. There are still changes to be made to 408(b)(2), she said. Source: Planadviser.com, May 2011.

Fight Heats Up Over DOL Definition of Fiduciary - Summary: As federal regulators put the finishing touches on a broader definition of fiduciaries, legislators and lobbyists are increasing their efforts to send it back to the drawing board. Opponents pushing for status quo on issue of who is called a fiduciary Source: Pensions & Investments (free registration may be required), May 2011.

BP Accused of Mismanaging Retirement Plans - Summary: BP Plc, BP's North American unit was accused in a lawsuit by its employees of mismanaging their retirement savings plans by investing heavily in its own stock before last year's Gulf of Mexico oil spill. Source: Benefitspro.com, May 2011.

Fourth Circuit Recognizes ERISA Fiduciary Exception to the Attorney-Client Privilege - Summary: Adopting the rule applied by several other appellate courts, the Fourth Circuit has recognized a fiduciary exception to the attorney-client privilege in the case of a DOL investigation of two multiemployer plans (collectively bargained plans, administered by a separate board of trustees, under which more than one employer contributes on behalf of its employees). Source: EBIA, May 2011.

Sixth Circuit Affirms Trustee's Conduct Was Within ERISA § 404(c) Safe Harbor - Summary: In this case, the participants chose their investment advisor, relied solely on the advisor for their investment decisions, directed the trustee to implement those investment decisions, and were unable to establish that the trustee had prevented them from exercising "independent control." Since they were unable to collect any of their losses from the investment advisor, they attempted this unsuccessful claim against the plan's trustee. It is notable that the participants also were ordered to pay the trustee's litigation costs. Source: EBIA, May 2011.

New Survey Findings on Investment Committee Leadership Styles - Summary: While leadership styles on investment committees may vary, the democratic style is most common, according to a new Vanguard survey. Source: Vanguard, May 2011.

Trends in Pension Plan Management: The Annuity Dilemma - Summary: This article examines some key issues facing late-career employees who are desperate for information about payout options from defined benefit and defined contribution plan assets. In particular, it assess the three key questions. Source: Mercer , May 2011.

The Evolving Role of TPAs in the Small- and Mid-Sized Retirement Plan Markets - Summary: Cerulli Associates has just released a report, "Evolving Role of TPAs in the Small- and Mid-Sized Retirement Plan Markets," that provides analysis of third-party administrators (TPAs) in the defined contribution (DC) marketplace that are focused on the small- to mid-sized plan segments ($1 million to $50 million in assets). Source: 401khelpcenter.com, May 2011.

Additional Expenses Qualify for Safe Harbor Hardship Withdrawals - Summary: Plan sponsors of 401k and 403(b) plans that use the 401k safe harbor hardship withdrawal rules for determining if an employee has an immediate and heavy financial need, will need to consider breast pumps and other lactation supplies as medical expenses that may be eligible for hardship withdrawal. In addition, amounts paid to repair damage to personal residences due to corrosive drywall building materials would be considered deductible costs for repairing a principal residence that also may qualify for hardship withdrawal. Source: Prudential , May 2011.

Compliance Checklist for Retirement Plans Subject to ERISA - Summary: This Checklist as a "quick glance" resource to help you meet plan reporting and disclosure requirements for plans subject to the reporting and disclosure requirements of ERISA. This easy-to-follow Checklist should help you provide timely and complete information to individuals and appropriate government agencies. Source: Prudential , May 2011.

Beneficiary Designation Forms Can Cause Headaches for Benefits Administrators - Summary: Benefit administrators, 401k vendors, recordkeepers and benefits professionals regularly recommend that participants in qualified retirement plans periodically review and update their beneficiary designation forms. What could be simpler that merely indicating to whom or to what entity a participant wishes their assets to be transferred in the event of death? Unfortunately, numerous issues arise in connection with the simple task of designating a beneficiary. Source: Employee Benefit News, May 2011.

Fiduciaries Required to Document Prudence of Retaining Unitized Stock Fund - Summary: Plan fiduciaries may have breached their fiduciary duties by failing to deliberate and make a documented reasonable decision regarding means of reducing investment and transactional costs associated with a unitized company stock fund, according to the U.S. Court of Appeals in Chicago (CA-7) in George v. Kraft Foods Global, Inc. Source: CCH, May 2011.

Workers Stashing Money in 401k Plans at Record Rates - Summary: Thanks to automatic enrollment and an improved stock market, employees are stashing money in employer-sponsored retirement plans at a record-high rate, according to a new Aon Hewitt study. Source: Foxbusiness.com, May 2011.

Retirement Plans Struggle With Annuity Issue - Summary: Helping retirees convert their own lifetime savings into a regular paycheck is proving a challenge for retirement-plan sponsors. One solution involves having the retiree buy some kind of annuity, but some plan sponsors fear that could create a legal liability for them. While they have held off, other sponsors have moved ahead, offering annuities that employees can invest in gradually as they build their 401k nest eggs. Source: Marketwatch.com, May 2011.

Due Diligence, Best Practices Tips for RIAs - Summary: While Congress, the SEC and individual states continue to work out the precise definition of a fiduciary and precisely what his or her requirements will be going forward, RIAs and other financial services professionals still need to take it upon themselves to implement best practices that will ensure they'll be in compliance whenever these new regulations are finalized. Source: Onwallstreet.com, May 2011.

Despite High Participation, Automatic Enrollment is Hindering Contribution Rates - Summary: Forty-one percent of participants who were automatically enrolled are not saving enough to receive the full match from their employers, compared to only 25 percent of participants who proactively enrolled. Source: 401khelpcenter.com, May 2011.

COMMENTARY: Target-Date Funds and Managed Accounts: Are They a Modern Day Fairy Tale? - Summary: Congress's belief that both TDFs and managed accounts are constructed using widely accepted and scientifically developed principles is nothing more than the modern version of Hans Christian Andersen's fairy tale, "The Emperor's New Clothes." In fact, little rigorous work has been done to answer how and why the equity-bond glide path should evolve throughout an investor's lifetime. Source: Investment Horizons , May 2011.

30% of Job Switchers Unaware of 401k Rollover Options - Summary: Many investors are unaware of the options available for their 401k account left with a previous employer. Nearly one-third (30%) who made a job transition are unsure of what to do with their workplace retirement savings. Source: Employee Benefit News, May 2011.

Automatic 401k Deferral Rates Could Be Higher - Summary: Automatic enrollment is a powerful tool to encourage better retirement savings behavior, but most plan sponsors tend to set their default at an insufficient level. By boosting the default rate, plan sponsors can help their participants improve savings rates without sacrificing participation. Source: Employee Benefit News, May 2011.

Restrictive IRS Guidance for 457(f) Plans Likely to be Issued in 2011 - Summary: After a lengthy period of silence, it appears that the IRS is getting ready to issue the long-anticipated regulations governing Internal Revenue Code (Code) Section 457(f) plans. Source: Drinker Biddle & Reath LLP , May 2011.

Outsourcing: SAS 70 Superseded for Service Provider Control Reporting By SSAE 16 - Summary: Prior to 2011, entities who engaged third-party service providers to perform functions and/or processes that impacted the user entities' internal control over financial reporting (ICFR) typically required Statement on Auditing Standards (SAS) No. 70 Type 2 reports from service organization auditors. Going forward, where the service organization's services affect the user entity's ICFR, user entities should require in their outsourcing services contracts that service organizations provide Service Organization Control 1 Type 2 reports under SSAE 16 rather than SAS 70 Type 2 reports. Source: Sutherland Asbill & Brennan LLP , May 2011.

IRS Rules That Annuity Payouts With Automatic Increases Are Not "Substantially Equal Periodic Payments" - Summary: The IRS ruled that nonqualified annuity payouts that automatically increase by a fixed percentage are not within the "substantially equal periodic payment" (SEPP) exception to the IRC § 72(q) premature distribution 10% penalty tax. Although the ruling applies by its terms only to nonqualified annuities, its conclusions implicitly extend to the comparable exception under the § 72(t) premature distribution penalty for qualified retirement plans. Source: Sutherland Asbill & Brennan LLP , May 2011.

Door Closes on SPD-Based Benefits Claims, but Plaintiffs See New Hope for Relief - Summary: The U.S. Supreme Court this week issued a decision that closes the door on benefit claims based on the language of summary plan descriptions (SPDs), but opens up the possibility of a much less restrictive judicial approach to the type of equitable relief available under ERISA Section 502(a)(3). Source: Ballard Spahr LLP, May 2011.

New 403(b) Survey Shows Resilience of Sponsors and Participants - Summary: Despite a potentially crushing recession and a spate of complex new regulations, the 403(b) retirement plan system appears to be healthier than ever. That is the findings of the just-released 2010 403(b) Plan Survey from the Profit Sharing/401k Council of America. Survey highlights revealed. Source: 401khelpcenter.com, May 2011.

403(b) Plans Increase Use of Advisers and Online Communications - Summary: The latest 403(b) plan sponsor survey from the Profit Sharing/401k Council of America (PSCA) reveals sponsors are increasingly asking for help from investment advisers and their plan providers and are rolling out more online communications to participants. Source: Plansponsor.com, May 2011.

Court Tells Participants That Door to Monetary Awards Against Fiduciaries is Opening - Summary: The Supreme Court on May 16, 2011, issued a major ERISA remedies decision in CIGNA Corp. v. Amara holding that ERISA's authorization of suits by pension plan participants "to recover benefits due" or to "enforce [their] rights" under the terms of the plan is not authority for courts to enforce the terms of a summary plan description or to revise the plan to conform it to representations made in the SPD. More importantly, however, the Court appeared to use the case to signal that it has rethought the scope of "other appropriate equitable relief" available under ERISA's catch-all remedial provision. Source: Trucker Huss, May 2011.

Baby Boomers' Emotions Threaten Retirement Security - Summary: Near-retirees and retirees are feeling uncertain about the future, fearful of poverty, not confident in their investing abilities, and distrustful of unscrupulous financial services and insurance firms, according to a new white paper issued by Financial Engines. Source: 401khelpcenter.com, May 2011.

How the Changing Definition of Fiduciary Might Change Your Practice - Summary: If the proposed regulations were finalized in their current form, brokers currently advising 401k plan sponsors and participants in a non-fiduciary capacity would undoubtedly need to change their service model and redefine their role as plan advisers. To avoid fiduciary status, they would effectively be forced to furnish written disclaimers to plan clients stating that they are not providing impartial advice, as contemplated under the proposed DOL guidance. Source: The Wagner Law Group , May 2011.

COMMENTARY: Should Congress Limit 401k Access? - Summary: Sometimes Congress means well, but only manages to make matters worse. A few politicians will hear of a problem and swiftly respond with new legislation that may help in some ways, but causes harm in others. This is the case with a new bill, a portion of which seeks to limit Americans' ability to tap into their 401k plans prematurely. Source: The Atlantic, May 2011.

Supreme Court Ruling Impacts ERISA Class-Action Cases - Summary: On May 16, 2011, the Supreme Court clarified how much harm a participant must demonstrate in order to win damages on a lawsuit involving a Summary Plan Description (SPD) that conflicts with the terms of its underlying plan document. The Supreme Court explained that the requisite level of harm for a particular case will be dependent upon the applicable equitable theory of relief. Source: Employee Benefit News, May 2011.

Retirement Plan Trustee Not Responsible for Adviser Fraud - Summary: A federal appeals court has ruled that UMB Bank is not responsible for losses to retirement plan accounts from investments directed by participants' investment adviser. Source: Plansponsor.com, May 2011.

COMMENTARY: American Retirement Picture Not So Gloomy - Summary: The latest information from Fidelity Fund and the Investment Company Institute, combined with a dose of common sense and deductive reasoning, leads us to the conclusion that the Baby Boomers are financially prepared for retirement. We can forget the scare tactics perpetrated by the financial services industry which, naturally, thinks that everyone should save more money and hire them to manage it. Source: Mercurynews.com, May 2011.

Ten Reasons People Fail to Plan for Retirement - Summary: David Letterman has made "Top Ten Lists" very popular. Here is another one: Ten Reasons People Fail to Plan for Retirement. Source: NASDAQ, May 2011.

Common Mistakes in Voluntary Correction Program Submissions - Summary: The IRS's Employee Plans Compliance Resolution System provides correction programs to keep your retirement plans compliant. One of these is the Voluntary Correction Program. On this page the IRS outlines some of the common mistakes made in VCP submissions. Source: IRS, May 2011.

Failure to Act Triggers ERISA Liability - Summary: Instituting prudent procedures in the ongoing operation of 401k and other retirement plans is paramount in managing not only investment and expense risks, but also fiduciary and organization reputational risk as shown in a recent decision by a federal appeals court that underscores that retirement plan fiduciaries must address financial issues brought to their attention. Source: CFO.com, May 2011.

How to Locate a Missing Plan Participant - Summary: Many employers discover that finding missing participants can be next to impossible. However, plan sponsors are required to take all reasonable means to locate a participant. One option available to a sponsor is the IRS's Letter Forwarding Program. Another option is the National Registry. Source: 401khelpcenter.com, May 2011.

Study Finds No Evidence Young Investors Are Shunning Equities Within 401k Plans - Summary: In contrast to a prevailing notion that most young investors are eschewing the stock market because of the global financial crisis and a decade of weak stock market returns, new Vanguard research shows that this age group in defined contribution retirement plans actually has higher equity allocations than prior generations had at the same age. Source: 401khelpcenter.com, May 2011.

12th Annual Transamerica Retirement Survey - Summary: This survey -- conducted among 4,080 American workers -- found that for many Americans, the foundation of their retirement strategy is simply to not retire or to work considerably longer than the traditional retirement age of 65. Overall, American workers' confidence in their ability to achieve a financially secure retirement is low. Source: Transamerica Center for Retirement Studies , May 2011.

Asset Allocation Fund Usage Rising in 401k Plans - Summary: In research recently completed by Spectrem Group with defined contribution plan participants about 72% of investors had some form of asset allocation fund offered within their plan. While some had Lifestyle Funds, many had Target Date Funds, but the largest percentage (34%) had both types of funds available in the plan. Source: The Spectrem Group, May 2011.

Plan Participants Double the Investment Funds They Use - Summary: Individuals participating in 401k and other defined contribution plans generally invest in an average of 5.3 funds in 2011. This compares to investing in only 2.7 plans in 1996. Source: The Spectrem Group, May 2011.

How DB plans became DC plans: An introduction - Summary: At some point the popularity of defined benefit (DB) pension plans gave way to defined contribution (DC) plans. This is perhaps best exemplified by the numbers of 401k plans, which so many employees are now contributing to on a regular basis. This article looks into some of the factors behind this shift. Source: Milliman, May 2011.

New Data From Shows Impact of Automatic Enrollment in 401k Plans - Summary: Client data from The Principal shows that plans with an automatic enrollment feature defaulting at 3 percent produce an average deferral of 6.3 percent. This is lower than the average deferral of 6.8 percent for plans without an automatic enrollment feature. In contrast, the average deferral is 7.1 percent for plans that have a 6 percent default automatic enrollment feature. Source: Principal Group, May 2011.

Leakage of Participants' DC Assets: How Loans, Withdrawals, and Cashouts Are Eroding Retirement Income - Summary: Savings leak out of the retirement system before participants retire further eroding retirement readiness. More than 1.8 million employees were examined across over 110 large defined contribution plans to explores the magnitude of the problem, the impact to participant savings and ideas to curb these behaviors. Source: Aon Hewitt , May 2011.

The SEAL Act: A Senate Bill Designed to Reduce 401k "Leakage" - Summary: Bill is designed to help stop "leakage" in the retirement system. Among other things, bill would allow for a greater period of time for a plan loan to be paid back after an employee terminates employment thereby helping families pay back the loan and allowing the funds to be put back into their retirement savings and avoid the tax penalty. Source: 401khelpcenter.com, May 2011.

Actual Text of the SEAL Act - Summary: Text of the Savings Enhancement by Alleviating Leakage in 401k Savings Act (SEAL Act) which would amend the Internal Revenue Code to modify the rules relating to loans made from a qualified employer plan, and for other purposes. Source: Spark Institute , May 2011.

Ensuring Adequate Income in Retirement: Immediate vs. Longevity Annuities - Summary: New research by the nonpartisan Employee Benefit Research Institute finds that, generally, either type would be effective at reaching desired income adequacy targets-especially for lower-income retirees. Source: 401khelpcenter.com, May 2011.

Is Your Investment Policy Statement Still Using Outdated Language? - Summary: If you're a 401k Plan Sponsor, take another look at your IPS. Are your investment goals updated to reflect the language of the modern investment environment, or is your IPS just a travel agent with no clue about Tahiti? Source: Fiduciarynews.com, May 2011.

Workers Lack Understanding of Options for Assets in Old Workplace Savings Plans - Summary: Fidelity found in a recent study that nearly one-third (30 percent) of plan participants who made a job transition are unsure of what to do with their workplace retirement savings. Based on this, Fidelity provides a side-by-side comparison of available options so investors can make a more informed decision. Source: 401khelpcenter.com, May 2011.

Beneficiary Designations Under Qualified Plans - Summary: The designation of beneficiaries under qualified plans, both a primary beneficiary and a secondary beneficiary, is an important part of a participant's retirement planning and estate planning, but the rules relating to beneficiary designations for plans are often complicated and confusing. Source: Foster Swift Collins & Smith PC, May 2011.

Alternative Retirement Plan Designs - Hybrid Plans - Summary: Over the last decade, economic, demographic, and political pressures have led state and local governments to consider alternatives to their traditional defined benefit (DB) pension plans. While a few have switched to defined contribution (DC) plans, others have turned to hybrid approaches that combine DB and DC plan features. Hybrid plans can help governments reallocate retirement costs and risks while continuing to provide sustainable lifetime retirement benefits. They are also of interest to corporate plan sponsors. Source: Gabriel, Roeder, Smith , May 2011.

Solo 401k Lets Self-Employed Shelter More Income - Summary: Rules for the solo 401k allow you to play the roles of both employer and employee, allowing you to contribute more to the plan than you could to a SEP-IRA. Source: Los Angeles Times, May 2011.

Special Research Report on Employee Financial Stress Released - Summary: "This is the most noticeable improvement we've seen in financial stress since the recession began," says Liz Davidson, CEO and Founder of Financial Finesse. "We're not surprised to see employees' financial stress decreasing. We believe, in fact, that it is a direct result of employees taking control of their finances and developing better financial habits." Source: Financial Finesse, May 2011.

Practical ERISA 408(b)(2) Guidance for Service Agreements - Summary: The Department of Labor has now given us all a little more time to prepare, with the new effective date of January 1, 2012, for 408(b)(2) disclosure and service agreement requirements. While you have been given a slight reprieve, the job of updating your service agreements still exists – so let's take a practical approach to help you get that accomplished. What exactly do you, as a TPA and/or recordkeeper, need to consider when drafting your new service agreements in order to disclose all of the information that will be required? Source: Centre for Fiduciary Excellence , May 2011.

Middle-Income Boomers, Financial Security and the New Retirement - Summary: Two-thirds of middle-income Boomers say their retirement will be different from that of previous generations. This new study from Bankers Life and Casualty Company Center for a Secure Retirement reports findings on Boomers' view of retirement and the impact the economic downturn on their retirement financial security. Source: Bankers Life and Casualty Company , May 2011.

Recordkeeping Conversions - Summary: Three things every adviser (and provider) wishes plan sponsors understood about recordkeeping conversions: 1) Everybody wants to change providers on January 1. Everybody can't. 2) Your provider search will take longer than you think. 3) A big part of the reason your provider search will take longer than you think…is you. Source: Plansponsor Institute Blog, May 2011.

401k Plan Assets Hit Record $3.1 Trillion - Summary: Assets held in 401k plans hit a record $3.1 trillion at the end of 2010, due in large part to the strong equities market, according to an industry trade group report. Source: Businessinsurance.com, May 2011.

Annuities in 401k Plans: What a Plan Sponsor Should Keep in Mind - Summary: Few 401k plans provide for annuities and plan sponsors have been reluctant to expand their menus of plan investments to cover annuities primarily because there has not been significant interest by participants, there are additional administrative issues and because employers are uncomfortable with the possibility of fiduciary risk. In particular, employers and fiduciaries are concerned that they may be sued if the annuity carrier is unable to satisfy its obligations over extended periods of time. As a result, plan sponsors must consider many factors and ask many questions before and after deciding whether to offer annuities. Here is a detail review of the issues. Source: 401khelpcenter.com, May 2011.

Congressional Democrats Want Agencies to Revise Fiduciary Rule - Summary: A group of nearly 30 congressional Democrats has written to the leaders of the Labor Department, the Securities and Exchange Commission, and the U.S. Commodity Futures Trading Commission expressing concern over a recent proposed rule redefining the meaning of the term "fiduciary," saying it would have a negative impact on people with Individual Retirement Accounts and other retirement and savings plans. Source: AccountingToday.com, May 2011.

DOL Considers Changes to Electronic Disclosure Rules - Summary: The Department of Labor has finally determined that it may be time to update the rules regarding electronic disclosures (the current rules were published back in 2002). Accordingly, they have issued a Request for Information soliciting views, suggestions, and comments to determine whether to expand or modify the rules regarding electronic distribution of employee benefit plan information under ERISA. Source: Verrill Dana LLP, May 2011.

Five Key Facts 401k Plan Sponsors Might Have Missed at the fi360 Conference - Summary: This article lays out five key points every 401k plan sponsor should know about their adviser as articulated by several session speakers at the recent fi360 annual conference. Source: Fiduciarynews.com, May 2011.

COMMENTARY: GAO Should Redo Its Recent Retirement Plan Study - Summary: The Government Accountability Office recently reported its study "Private Pensions: Some Key Features Lead to an Uneven Distribution of Benefits." Unfortunately, the study relied heavily on the Federal Reserve System's 2007 Survey of Consumer Finances to identify characteristics of individuals participating in DC plans. The GAO could have and should have used data from federal income tax filings which is far more accurate. Source: Profit Sharing/401k Council of America, May 2011.

CFA Asks for Proof of Fiduciary Standard Costs - Summary: The Consumer Federation of America says opponents of a uniform fiduciary standard have provided no evidence that a uniform standard would increase the cost of investment services and urge House Financial Services Committee to let the SEC proceed with making a rule that would apply a fiduciary standard on brokers as well as financial advisors. Source: Benefitspro.com, May 2011.

Few Plan Providers Manage to Satisfy Affluent Participants - Summary: According to a new report released by Cogent Research, less than half of affluent investors are satisfied with their current employer-sponsored retirement plan provider. Source: 401khelpcenter.com, May 2011.

Federal Register on Exemptions From Certain Prohibited Transaction Restrictions - Summary: This document contains exemptions issued by the Department of Labor from certain of the prohibited transaction restrictions of ERISA, including those related to Wachovia Corporation, Robert W. Baird and Co., Security Benefit Mutual Holding Company and Security Benefit Life Insurance Company, and The Parvin Nahvi, M.D. Inc. 401k Profit Sharing Trust. Source: U.S. Department of Labor , May 2011.

Defined Contribution Plan Participants' Activities - Summary: DC plan assets are a significant component of Americans' retirement assets, representing more than one-quarter of the total retirement market and almost one-tenth of U.S. households' aggregate financial assets at year-end 2010. To measure participant-directed changes in DC plans, ICI has been tracking participant activity through recordkeeper surveys since 2008. This report updates results from ICI's survey of a cross section of recordkeeping firms representing a broad range of DC plans. Source: Investment Company Institute , May 2011.

Q&A About the New Roth Rollovers in 403(b) Plans - Summary: Here are some things you need to help your clients understand the statutory provisions, explanations, and IRS guidance governing the new in-plan Roth rollovers. Source: 403b-advisor.net, May 2011.

Benchmarking of Retirement Plan Expenses - Summary: This paper is provided to help plan sponsors, service providers and professional advisors understand how expense data may be collected, collated and analyzed to help plan fiduciaries to make better decisions and reduce fiduciary risk. The data reflected in this analysis is not from a survey - what a service provider might charge a client, but instead actually identifies what a service provider has charged a client for the categories of services listed. Source: PlanTools LLC , May 2011.

ERISA Litigation Newsletter - May 2011 - Summary: In this newsletter two articles highlight the unique limitations contained in ERISA's civil enforcement mechanism. First, article discusses the evolution of case law addressing the ability of ERISA plans to recover mistaken payments from participants pursuant to a plan's reimbursement or offset provisions, or in circumstances involving errors or participant wrongdoing. A second article examines the viability of a different category of claims under 502(a)(3) – those seeking monetary relief where a participant claims to have incurred expenses due to mistaken advice from plan representatives. Source: Proskauer Rose LLP, May 2011.

AUDIO: Recordkeeping and TPA Services: A Conversation with Steve Cronin from Ascensus - Summary: A conversation with Steve Cronin from Ascensus about recordkeeping/TPA in today's changing 401k landscape. Source: Advisorsaccess.com, May 2011.

Don't Trip Over Basic 401k Hurdles - Summary: The hurdles races are some of the most interesting events to watch at a track meet. Highly trained sprinters not only have to run fast but also must jump over the obstacles at set distances to win the race. The athletes could stumble at any time and never finish close to their goal. The challenges are similar for defined contribution plan participants. Source: Forbes, May 2011.

Cheers for 401k Tiered Investment Strategies - Summary: There is a relatively new way of helping employees invest in their retirements. Called tiered investment strategies, the approach aligns particular types of investments with the investing appetite and inclinations of plan participants. If you're someone who likes to call the shots on your investments, there is a tier for that. If you're at the other end of the spectrum and want nothing to do with how your money is invested, there's a tier for that, too. Source: Treasury and Risk Management, May 2011.

Five Characteristics of a Good 401k Plan - Summary: The 401k has become the main retirement savings plan for many Americans. As such, it is important to both employees and the sponsoring organization that they have access to a solid plan that offers participants the opportunity to amass the money they need for a comfortable retirement. With that in mind, here are five characteristics of a good 401k plan. Source: U.S.News & World Report, May 2011.

Autopilot Helps Participation, but Saving Rates May Still be Running Low - Summary: Three-quarters of the Vanguard-recordkept DC plans using auto enrollment continue to default participants at contribution levels of 3% of pay or less. In the last five years, plans most commonly defaulted at the 3% deferral rate (50% to 60% of auto enrollment plans). The result: employee-employer savings rates that are potentially too low to meet the needs of participants in retirement. Source: Vanguard, May 2011.

401k Fee Disclosures: What They Mean and What's at Stake - Summary: The DOL issued final regulations that will soon require investment companies to disclose the hidden fees they are charging investors participating in 401k plans and other defined contribution plans. This new regulation will require plan providers to report to investors, typically the employees of plan sponsors, the direct and indirect compensation received in connection with account services and will take effect July 16, 2011. What do these regulations mean and what's at stake for the investor, the plan sponsor and the investment company? Source: Benefitspro.com, May 2011.

COMMENTARY: The Fiduciary Exemption That Swallows the Rule - Summary: In proposing to jettison the current five-part rule, the EBSA would replace it with a new rule that defines a "fiduciary" as anyone who provides "investment advice," which is defined as either (1) "recommendations on investing in, purchasing, holding, or selling securities;" or (2) "recommendations as to the management of securities or other property." But, the proposed EBSA rule doesn't appear to be much better than the current rule in helping rein in the bad conduct it's aimed at curbing. Source: Morningstar, May 2011.

IRS Reduce User Fees for Enrolled Retirement Plan Agents - Summary: The IRS has issued final amendments to regulations relating to enrolled agent and enrolled retirement plan agent user fees. The final regulations separate the enrolled retirement plan agent user fees from the enrolled agent user fees and lower the initial enrollment and renewal of enrollment fees for both enrolled agents and enrolled retirement plan agents. Source: CCH, May 2011.

Target-Date Funds: Some Pros and Cons - Summary: TDFs are well suited to be a default investment for participants who are automatically enrolled in a plan and who do not assume control over their account. All in all, the Department of Labor acted wisely in identifying TDFs as a QDIA for 401k plans. However, plan fiduciaries and participants should consider several factors outlined in this article when moving into TDFs. Source: Warner Norcross & Judd LLP, May 2011.

Court Rejects 404(c) Defense in Certifying Stock Drop Suit Class - Summary: A U.S. District Court has certified as a class action a suit against YRC Worldwide that claims it offered company stock as a 401k investment option when it was no longer prudent. Source: Planadviser.com, May 2011.

Defined Contribution Pension Participation and Contributions by Earnings Levels - Summary: Many observers question how the shift from defined benefit to defined contribution retirement plans affects workers with different compensation levels. To advance the empirical basis for understanding pension outcomes, this study estimates DC plan participation and contribution rates both by the worker's current earnings and by the annual average of real earnings over the 10-year period 1997-2006. Source: U.S. Social Security Administration , May 2011.

The Five Biggest Myths About 401k Plans - Summary: The biggest crisis that's not talked about is that the inadequate employer contribution to 401k accounts, typically equal to 3% of pay, makes it impossible for most Americans to retire. But there are other myths as well: that 401k participants need investment advice, that fee disclosure would enable them to "shop" for lower-fee investments, that 401k plans benefit the wealthy and that Americans would be better off with regular pensions. Source: Retirement Solutions, May 2011.

How Business Officers Use Expanded Fiduciary Responsibilities to Improve Benefits - Summary: Even sophisticated school business officers can feel unpleasantly surprised to learn that insurance companies and mutual funds do not accept fiduciary responsibility for 403(b) plan investments. As for executing that responsibility themselves, business officers may not be confident about exercising necessary control over plan investments and fees. With the right type of support, however, a school can efficiently satisfy its fiduciary responsibility and act appropriately in the best interests of the plan and its participants. Source: 403bwise.com , May 2011.

Nothing is Simple Regarding Beneficiary Designation Forms - Summary: In the area of employee benefits, we have learned that nothing is simple. Even beneficiary designation forms can create significant issues. Some practitioners have taken the approach that beneficiary designation forms should automatically become void upon divorce. This article is a review of court rulings and provides some practical advice. Source: Employee Benefit News, May 2011.

Five Things You Must Be Aware of as a Plan Fiduciary - Summary: A fiduciary is someone who is managing the financial assets of another person, and within a company, there can be more than one fiduciary. If you are offering your employees a 401k plan, then most likely you are a fiduciary, and if you are, you have certain responsibilities by law. Here are five things you should be aware of. Source: 401khelpcenter.com, May 2011.

VIDEO: Your Fees Are to High - Summary: An all too familiar conversation between a pension administrator and her client discussing the client's 401k plan. Don't miss the punch line at the end. The video is just over four minutes in length. Source: 401khelpcenter.com, May 2011.

Setting Retirement Savings Goals Leads to Increased Engagement and Savings - Summary: According to a new Diversified survey, when people set a goal for their retirement savings, they tend to be more engaged in actively planning for their retirement. This includes increasing the amount they actually save and staying on top of news associated with their specific retirement plans. Source: 401khelpcenter.com, May 2011.

Five Tips for Hospitals to Create the Ideal 401k Plan - Summary: Hospital leaders are constantly faced with the daunting task of remaining competitive and offering attractive benefit packages to employees. Among those packages is typically a 401k plan for employees to save for their retirements. Here are five key elements that effective 401k plans offer, with core characteristics and processes built around the needs of your hospital, management team and employees. Source: Becker's Hospital Review, May 2011.

ERISA and KISS: Strange Bedfellows or Marriage Made in Heaven? - Summary: Simplicity should be a key goal in plan design, plan objectives and participant communications. Regulations make this challenging, but the benefits of simplicity are many. Source: Employee Benefit News, May 2011.

Coming to Terms With When You Are, Aren't a Fiduciary - Summary: The author writes, "Our clients often ask us to define who in their organizations are fiduciaries to their retirement plans and exactly what it means to be a fiduciary. Many times, our clients are surprised by the answers that they get. You may be as well." Source: Employee Benefit News, May 2011.

COMMENTARY: Time to Update ERISA Fiduciary Rule - Summary: An Op-ed by Phyllis C. Borzi, Assistant Secretary of Labor of the Employee Benefits Security Administration, on the need to update ERISA fiduciary rule. Source: U.S. Department of Labor, May 2011.

New IRS Review of Higher Ed's 403(b) Plans: An Expensive and Serious Matter - Summary: The IRS's Employer Plans Compliance Unit is in the process of issuing a 21 question questionnaire, Form 866a, to a sampling of colleges and universities, aimed at testing whether or not there is compliance with 403(b)'s "universal eligibility rule." Source: Business of Benefits, May 2011.

Safe Savings Rates: A New Approach to Retirement Planning over the Life Cycle - Summary: Focusing on a "safe withdrawal rate" and then deriving a "wealth accumulation target" to achieve by the retirement date may not be the best way to approach retirement planning. Such a formulation isolates the working (accumulation) and retirement (decumulation) phases. The focus of retirement planning should be on the savings rate rather than the withdrawal rate. Source: Journal of Financial Planning, May 2011.

Helping Employees Save More - Summary: Of those participants who are not contributing the maximum to their 401k, nearly nine in ten admitted that they could afford to increase their annual contribution by 1% of their salary. Here are some practical tip for the employees who often say, "I know I could save more, but...." Source: Milliman Blog, May 2011.

Basic Questions and Answers About Lump-Sum Distributions - Summary: The ins and outs of lump sum distributions, and whether to take them or not, are among the most common conundrums facing new retirees. Here are a few questions about the basics that are heard frequently and the answers. Source: Milliman Blog, May 2011.

Criteria to Consider Before Hiring an ERISA Attorney - Summary: With many changes looming from Washington regulators -- from mandatory fee disclosure to redefining fiduciary liability -- 401k plan sponsors will likely need to turn to independent experts for advice. Among those most likely to be called are ERISA attorneys. What criteria should the plan sponsor and fiduciary use to select an ERISA attorney? Source: Fiduciarynews.com, May 2011.

Fifth Annual Study of Employee Benefits - Summary: Two factors figured prominently in this year's trends-the slowly recovering economy, and the passing of a landmark health care reform bill in March. As a result, not only are employers offering fewer benefits, but they are shifting more of the associated costs to employees. This trend may slow once the economy recovers, but study findings indicate that it is unlikely employers will revert to a "pre-recession" benefits model, where employers paid most or all benefits costs. Source: Prudential , May 2011.

BrightScope Sticks to its Guns as it Responds to Outspoken Critics of its Advisor Pages - Summary: BrightScope executives say they will stay the course in their plan to make data about 450,000 financial advisors accessible, even though the company's publication of the data and plans to profit from it are angering some advisors and industry observers. Source: RIAbiz.com, May 2011.

Companies That Cut 401k Match Are Rethinking Move - Summary: History suggests that CFOs will again confront difficult decisions about rescinding and restoring company 401k contributions. In each recession that occurred after IRS Rule 401k took effect in 1980, some companies put their matches on hold. But did CFOs learn anything this time around that will help them decide what to do next time? Source: CFO.com, May 2011.

New 401k Rules Pose a Challenge for Small and Midsize Companies - Summary: CFOs at small and midsize companies should monitor new 401k plan disclosure requirements. There are several new or forthcoming rules, and one in particular -- ERISA Section 404(a)(5) -- could cause headaches. Plan fiduciaries have new obligations that carry substantial penalties and are likely to impose new costs. Source: CFO.com, May 2011.

Top 25 DC Fund Managers - Summary: The 25 defined-contribution money managers with the most mutual fund assets reported a combined total of $1.606 trillion as of Dec. 31, up 17% from a year earlier. Who's on top? Source: Investmentnews.com (free registration may be required), May 2011.

Tougher 401k Rules Seen as 'Full Employment Act' for RIAs - Summary: As the Labor Department prepares to issue stricter rules for the retirement fund industry, financial advisers at RIA firms are licking their chops over the prospect of poaching business from broker-dealers and insurance agents. Source: Investmentnews.com (free registration may be required), May 2011.

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