Three of Four Retirement Plans Don't Review Compliance Regularly - Summary: Only 26% of defined contribution and defined benefit plan executives conduct regular operational and regulatory compliance reviews, according to a Towers Watson & Co. survey on retirement plan governance issues. Source: Businessinsurance.com, December 2011.

401k's Not Working for Gen Y - Summary: Putting the investment decisions in the hands of employees isn't working for Gen Y. When we read that 40% of Gen Y investors reportedly agree with the statement "I will never feel comfortable investing in the stock market," it sends a signal that they are making reactive investment decisions, and those are rarely good in the long run. It is certainly understandable, though, when you think about the timing of their first jobs and their first experiences with investing in their 401k plans. Source: Money.msn.com, December 2011.

Exemptions for 401k Investment Advice Become Final - Summary: U.S. Labor Department rules spelling out permissible scenarios for giving investment advice to 401k and IRA participants without violating prohibited transaction rules are now final. Source: Workforce.com (free registration may be required), December 2011.

The Art of the Corporate Resolution; Those 403(b) RMD Amendments - Summary: Though it may be too late in the year to be useful this year, there are a few thoughts that come to mind which you may hopefully find relevant the next time a plan amendment crosses your desk: Source: Businessofbenefits.com, December 2011.

401k Loan Defaults: Who Is at Risk and Why? - Summary: Many 401k retirement plans allow participants to take loans from their accounts before they retire. However, if they have not paid them off before leaving their jobs, they must pay them in full immediately. Based on a large dataset from Vanguard, this study is the first of its kind to quantify how many people take out loans and, of those, how many default. It proposes changes in retirement policy to reduce the financial risk posed by these loans, particularly for vulnerable groups. Source: The Financial Literacy Center , December 2011.

ERISA Preempted State Law Negligence and Fiduciary Breach Claims Against TPA - Summary: ERISA preempted a small business owner's claim that a pension third party administrator acted negligently and breached its fiduciary duty with respect to its administration of the owner's "412(i)" plan, the U.S. Court of Appeals in Atlanta (CA-11) has ruled. Source: CCH, December 2011.

Retirement Plan Changes Coming in 2012 - Summary: Even though lawmakers may shy away from passing major laws in an election year, 2012 will bring changes to 401ks and other retirement plans. Source: Marketwatch.com, December 2011.

How to Use Retirement Funds to Start a Business - Summary: With access to credit still tough, small-business owners sometimes need alternative sources to fund a business. Rolling over a qualified retirement plan is a good way to inject equity into your business without penalty. Source: Thestreet.com, December 2011.

COMMENTARY: Three 401k Reforms That Can Help Save America's Retirement - Summary: Since its introduction 30 years ago, the 401k has evolved in a lot of smart and innovative ways, but still faces many challenges. The author suggests three ideas that could dramatically improve the power of the 401k to help more Americans reach financial freedom by retirement age. Source: Forbes, December 2011.

2011 Year-end Employee Benefits Report - Summary: The closing of each year has always been a time for employers to revisit new legislation, regulations and other legal developments affecting their retirement plans and other employee benefit programs, and to otherwise begin preparing for the next plan year. This article summarizes a few of the key recent employee benefit developments in order to ensure that they are not inadvertently overlooked. Source: Schwabe, Williamson & Wyatt, December 2011.

Audit Requirements for Employee Benefit Plans - Summary: Retirement plans can increase employee retention, morale and job satisfaction and decrease turnover and the associated hiring and retraining costs, but these plans are governed by specific rules which should be followed carefully. Source: Savannahnow.com, December 2011.

Twelve Potential Regulatory Changes Every Small Business Needs to Know About in the New Year - Summary: Paychex released its top 12 potential regulatory changes that America's small businesses need to know about in 2012. Source: 401khelpcenter.com, December 2011.

COMMENTARY: Yesterday Explains Today's 401k - Summary: To understand today you have you know about yesterday. It is rarely recognized, but one of the great attributes of the 401k system is its flexibility and capacity for innovation. Source: The Plan Sponsor Council of America, December 2011.

Economic Analysis in ERISA Litigation Over Fiduciary Duties - Summary: The purpose of this paper is to discuss some of the important economic issues that arise in ERISA litigation, both in establishing liability and in calculating damages. Source: Harvard Law, December 2011.

DOL Technical Release on Electronic Media - Summary: With the December 8th publication of Technical Release 2011-03R, the Department of Labor has "clarified" its recently issued guidance on the use of electronic media to satisfy the final rule on participant-level fee disclosures under ERISA. Source: Retirementtownhall.com, December 2011.

Five Hidden Retirement Trends of 2011 - Summary: Here are some top retirement stories of 2011 on important emerging trends that might not have made the headlines, but they still require your attention in the months and years to come. Source: CBSnews.com, December 2011.

Understanding Nondiscrimination Testing - Summary: Nondiscrimination testing is the process of identifying when benefit limits are exceeded. Essentially, nondiscrimination regulations were created in order to prevent retirement plans from discriminating in favor of Highly Compensated Employees. This is a nine page review n nondiscrimination testing. Source: Pentegra.com , December 2011.

Plan Sponsors Gird for Sticker Shock With 401k Fee Disclosures - Summary: Companies that sponsor retirement plans for their employees are likely to get a rude shock next year when they finally get a look at the bill -- and don't seem all that keen to find out. Source: Investmentnews.com (free registration may be required), December 2011.

Five Retirement Blunders of 2011 - Summary: There were plenty of media missteps, lawmaker oversights, and plan misjudgments in 2011. Here are five. Source: Benefitspro.com, December 2011.

VIDEO: ASPPA Washington Update: 2012 Retirement Forecast - Summary: ASPPA's Executive Director Brian Graff offers a preview to key retirement issues on the legislative and regulatory agenda and how they will impact retirement plan professionals. Source: Youtube.com, December 2011.

New Form 5500 Guidance - Summary: The IRS and DOL have released some important items and information regarding the Form 5500. This article discusses these new items and information. Source: Sungard/Relius, December 2011.

VIDEO: Towers Watson on Social Media for Powering Performance - Summary: Social media is emerging as the next frontier of innovative communication and can deliver a unique employee and community experience. Effective employee communication is a key driver of employee engagement and a leading indicator of financial performance. Watch this video, containing highlights from a recent Towers Watson event in Singapore, to discover what businesses must do today to leverage social media for powering performance. Source: Youtube.com, December 2011.

401k Disclosure Is Coming - What to Do in January - Summary: Reviews some practical recommendations for fiduciaries seeking to change their investments and fees before the disclosures become mandatory. Source: Pensionsbenefitslaw.com, December 2011.

Measuring Damages is Tricky in Fiduciary Breach Cases - Summary: Picking plan investments can be a difficult task. Chances are your investment strategy will not maximize returns to a plan because, statistically, in any given time frame, there was some investment option that outperformed your investment choices. Of course this leads to problems for plan sponsors faced with claims of breach of fiduciary duty under ERISA 404, particularly in light of the obligation to sufficiently diversify plan assets and to try to maximize returns to participants. Source: Fox Rothschild LLP, December 2011.

COMMENTARY: Wal-Mart Settlement a Lesson in Prudent Practices - Summary: A federal court in Missouri granted preliminary approval of a settlement in the Braden v. Wal-Mart case. The settlement will serve as an important reminder that process and substance are both important when fulfilling one's duties of prudence and loyalty under ERISA and fiduciary laws in general. Source: Fi360.com, December 2011.

IRS Extends Deadline for Opinion and Advisory Letter Applications - Summary: The Internal Revenue Service has extended the application deadline for opinion and advisory letters for pre-approved defined contribution plan documents. Source: Plansponsor.com, December 2011.

Five Issues Facing the Retirement Market in 2012 - Summary: From 401k matches to the definition of fiduciary, 2011 was a busy year in the retirement industry. Experts reflect on the biggest developments and what's ahead for 2012. Source: Employee Benefit News, December 2011.

Younger Generations - X and Y - Saving More Diligently Than Elders - Summary: For once, it's the whippersnappers who are behaving more wisely. At least when it comes to saving, Generation X and Generation Y workers are more diligent than their peers. Source: Employee Benefit News, December 2011.

More DC Sponsors See Benefits in Investment Tiering - Summary: Two important strategies that DC sponsors are adopting to help simplify their participants' investment selection process. The first is the move toward expanding the number of index options in plan lineups and the second is the increased popularity of tiering. In a tiered plan lineup, sponsors structure the plan's investment options into logical groupings to make fund selection easier for participants based on their level of investment knowledge. Source: Vanguard, December 2011.

Preliminary Settlement Reached in High-Profile 401k Fee Lawsuit - Summary: Fiduciaries would have to remove retail funds from a 401k plan's investment lineup, under a proposed settlement of the Braden v. Wal-Mart excessive fee litigation. As preliminarily approved Dec. 5 by a federal court in Missouri, the settlement also calls for a $13.5 million cash payment to defray legal fees and plan expenses. This lawsuit contrasts with other recent appellate cases where fiduciaries prevailed on excessive fee claims involving retail funds. Source: Mercer, December 2011.

How Will Upcoming Changes to Retirement Plans Affect You? - Summary: Some recent changes may not appear significant, but have an impact on retirement planning. Here is a snapshot of some recent updates that impact retirement planning. Source: Forbes, December 2011.

Last Minute Retirement Plans for 2011 - Summary: Business owners with employees can still set up a qualified plan for 2011, such as a 401k, a profit sharing plan, or a defined benefit plan. And it might be worth trying to do so. Why not wait until 2012 to set up a plan? Source: Stamfordadvocate.com, December 2011.

Employers Restoring 401k Plan Contributions While Modifying Investment Lineups - Summary: A recent survey of 401k and profit-sharing plan sponsors indicates that one-half of companies that suspended their matching contributions since January 1, 2008 have fully restored the payments. "401k and Profit-Sharing Plan Response to Current Conditions," a survey released by the Plan Sponsor Council of America, further notes that nearly 64% of plans changed their investment lineups in 2011, up from 56% in 2010 and only 19.7% in 2009. Source: CCH, December 2011.

EBRI Releases Latest 401k Plan Asset Allocation, Account Balances, and Loan Activity Study - Summary: After a decade marked by two severe bear markets, 401k plan participants have adopted a more balanced approach to their portfolios, according to a report released today by the ICI and EBRI. Fears that younger participants in 401k plans would abandon stock investing are not borne out by the data, which suggest that greater use of target-date funds is helping workers keep their investing on track. Source: 401khelpcenter.com, December 2011.

401k Plan Asset Allocation, Account Balances, and Loan Activity - Summary: This report is an update of EBRI and ICI's ongoing research into 401k plan participants' activity through year-end 2010. The report is divided into four sections: the first describes the EBRI/ICI 401k database; the second presents a snapshot of participant account balances at year-end 2010; the third looks at participants' asset allocations, including analysis of 401k participants' use of target date, or lifecycle, funds; and the fourth focuses on participants' 401k loan activity. Source: Investment Company Institute , December 2011.

DOL Releases Advance Copies of 2011 Form 5500 - Summary: The U.S. Department of Labor's Employee Benefits Security Administration, the Internal Revenue Service and the Pension Benefit Guaranty Corp. released advance informational copies of the 2011 Form 5500 annual return/report and related instructions. Source: 401khelpcenter.com, December 2011.

An Effective Strategy for Plan Sponsors in a New Regulatory Age - Summary: Roland|Criss publishes part two of their three-part white paper series on the new fee disclosure rules and their impact on plan sponsors. In this paper, they reveal the strategies plan sponsors can adopt in order to be compliant with the new fee disclosure regulations, while maximizing stewardship. Source: Roland|Criss , December 2011.

The Automatic Stabilizing Effects of Social Security and 401k Plans - Summary: As the first-ever comparative study of how large pension institutions impact the long-term business cycle, the study compares the effects of Social Security against market-based retirement vehicles such as 401k plans. It finds that 401k plans magnify the effects of the recession by de-stabilizing the economy. In fact, they significantly undermine the benefits of other stabilizing programs by 15%, including the federal income tax, unemployment insurance, and Medicare and disability insurance. Source: SCEPA, December 2011.

ASPPA & CIkR Request Fee Disclosure Extension - Summary: Letter from Craig P. Hoffman, General Counsel and Director of Regulatory Affairs of The American Society of Pension Professionals & Actuaries and the Council of Independent Recordkeepers responding to the U.S. Department of Labor's ongoing delay in the issuance of the 408(b)(2) final regulation. Source: ASPPA, December 2011.

Handy US Calendars: 2012 Benefit Basics and Reporting & Disclosure Requirements - Summary: These pieces provide a handy listing of updated statutory limits, disclosure requirements and deadlines, and related 2012 information for retirement and health and welfare plans in the United States. Source: Towers Watson, December 2011.

IRS Eliminates Determination Letters for Pre-approved Plans Without Modifications - Summary: Effective May 1, 2012 the IRS will no longer accept form 5307 Determination Letter applications for prototype plans per IRS Announcement 2011-82. Volume Submitter plans can continue to use form 5307 Determination Letter applications but only for plans that contain a minor modification to the pre-approved document language. Source: Ftwilliam.com, December 2011.

New Survey Reveals How 401k Plan Sponsors Rank Eight Hot Topics - Summary: Deloitte Consulting has just issued the 2011 Edition of its Annual 401k Benchmarking Survey. The comprehensive study explores a multitude of areas 401k plan sponsors will no doubt have great interest in – from investments to fees, from plan policies to service providers. Source: Fiduciarynews.com, December 2011.

Deloitte's Annual 401k Benchmarking Survey - 2011 Edition - Summary: More than 430 U.S. plan sponsors participated in the survey. Closing the gap on retirement readiness tops the concerns. New fee disclosure regulations trigger both confidence and uncertainty. Source: International Society of Certified Employee Benefit Specialists , December 2011.

IRS Employee Plans News for December 20, 2011 - Summary: The Employee Plans News is a periodic IRS newsletter with retirement plan information for retirement plan practitioners. Source: IRS , December 2011.

IRS Employee Plans News for December 16, 2011 - Summary: Covers the following issues: Significant changes to the Employee Plans Determination Letter Program - Announcement 2011-82; Relief for IRA owners who have certain agreements with their brokers or financial institutions - Announcement 2011-81; and, 2011 Cumulative List of Changes in Plan Qualification Requirements - Notice 2011-97. Source: IRS , December 2011.

IRS Saver's Credit Helps Workers Save for Retirement - Summary: The Internal Revenue Service has issued a reminder for taxpayers to take advantage of the saver's credit for 2011. Source: Planadviser.com, December 2011.

Charles Schwab CEO on the Future of the 401k - Summary: In this December 8th interview, Charles Schwab CEO Walt Bettinger weighed in on all things concerning the American investor in this landscape-including 401ks, Social Security, and just who should and shouldn't invest in stocks. Source: CNN, December 2011.

Phyllis Borzi: Her Fiduciary Fight Is Far From Over - Summary: The financial services industry may have thought it notched a win when Assistant Labor Secretary Phyllis Borzi pulled a proposed regulation that would have expanded the definition of "fiduciary" when giving advice to a retirement plan, but she was just getting warmed up. Source: Investmentnews.com (free registration may be required), December 2011.

Sample Glossary of Investment-Related Terms for Disclosures to Retirement Plan Participants - Summary: This sample glossary was developed by The SPARK Institute and the Investment Company Institute as sample language that can be used or adapted in complying with the requirement in new DOL regulations that participant-directed retirement plans provide participants access to a glossary of investment-related terms. Source: The Spark Institute , December 2011.

IRS Announcement 2011-82: Notice of Upcoming Changes in Determination Letter Procedures - Summary: This announcement describes several important changes to the Employee Plans determination letter program that will take effect in 2012. These changes eliminate features of the determination letter program that are of limited utility to plan sponsors in comparison with the burdens they impose. The changes also are expected to improve IRS efficiency by reducing the time it takes the Service to process determination letter applications. Under these modified procedures, many employers will no longer apply for determination letters. Source: Benefitslink.com , December 2011.

COMMENTARY: Time for Balance - Summary: It's time for balance in the discussion about whether or not defined contribution plans can provide "adequate" retirement benefits. Source: Plan Sponsor Council of America, December 2011.

2012 Key Administrative Dates and Deadlines for Calendar-Year DC Retirement Plans - Summary: The Milliman 2012 DC calendar contains general information on key administrative dates and deadlines for calendar-year defined contribution retirement plans. Source: Milliman , December 2011.

Majority of Retirement Plan Sponsors Do Not Feel Prepared for New Fee Disclosure Rules - Summary: Sixty-five percent of middle market executives say benefits costs are the leading factor impacting compensation decisions, largely outweighing a mere four percent of survey respondents who say economic conditions/financial performance is the leading factor, according to the Verisight and McGladrey 2011/2012 Compensation, Retirement and Benefits Trends Survey. The survey also found that the vast majority (61%) of retirement plan sponsors do not feel prepared for new fee disclosure rules. Source: 401khelpcenter.com, December 2011.

Annual Compensation, Retirement and Benefits Trends Survey - Summary: The annual Compensation, Retirement and Benefits Trends Survey conducted by Verisight and RSM McGladrey is designed to uncover key trends across the broad spectrum of retirement, benefits, and employee reward programs. More than 850 organizations participated in the survey. The majority of participants are mid-sized, private and not-for-profit companies. Source: Verisight , December 2011.

The 408(b)(2) Burden on Fiduciaries - Summary: In evaluating service providers, plan fiduciaries should not limit their analysis to cost. Instead, fiduciaries must take into account other factors that are relevant to making a prudent decision, such as conflicts of interest, the results being produced by the service provider, references, and the needs of the plan and its participants. Source: Plansponsor.com, December 2011.

Why You Should Care About the Labor Department's Redefining "Fiduciary" Guidelines - Summary: Many plan sponsors have not paid much attention to the DOL's current effort to substantially broaden the definition of a plan fiduciary, agrees Lynn Dudley, Senior Vice President, Policy, at the Washington-based American Benefits Council. They do it at their peril, she suggests. "Because there are so many lawsuits based on investment menus and investment choices, this is not something to take lightly," she says. Source: Plansponsor.com, December 2011.

Been There, Done That. Now What: The Road Ahead for Plan Sponsors - Summary: By some accounts, this was supposed to be a year of change-which wound up being another year of waiting for that change. Regulations promised were proposed, re-proposed, and/or deferred for further consideration. There was, however, plenty for plan sponsors to deal with in 2011. Here is a look at the trends that were on our mind this past year-and those just over the horizon. Source: Plansponsor.com, December 2011.

Expected Retirement Age Six Years Later for Today's Pre-Retirees - Summary: According to the 11th quarterly Allstate-National Journal Heartland Monitor Poll, near-retirees (Baby Boomers ages 50+ who are not yet retired) expect to retire, on average, at the age of 66. Current retirees retired at 60 on average, which is about when younger Americans (the Millennial generation, ages 18-29) expect to retire. Source: Plansponsor.com, December 2011.

DC Plan Account Accumulation Remained Positive Through Recession - Summary: During the period of 2005-2010 the typical DC plan participant earned an average annual return of 3.76%. The same participant also earned a cumulative return of just over 20%. These are some of the findings in a study released by Vanguard titled, "Participants During the Financial Crisis: Total Returns 2005-2010." Source: Planadviser.com, December 2011.

Fourth Circuit Rules on Duty to Investigate and Diversify Investments - Summary: A very recent decision by the Fourth Circuit Court of Appeals clarifies an important point with respect to the duty of ERISA trustees to investigate investment alternatives and to diversify the portfolio in which the plan funds are invested. In vacating the judgment of the United States District Court, the Fourth Circuit held that a breach of the fiduciary duty to investigate investment alternatives or breach of the duty to diversify does not necessarily mean the actual investments were imprudent. Therefore, such a finding, in and of itself, is insufficient to impose liability on the trustees. Source: Nixon Peabody LLP , December 2011.

DOL Slightly Expands E-Delivery Options for Participant Fee Disclosures - Summary: At present, on or before May 31, 2012, many participant-directed defined contribution plans must deliver the first annual disclosures to participants under the new fee disclosure rules. The DOL just released Technical Release 2011-03R, which gives plans additional options for delivery of required information. Source: Sungard/Relius, December 2011.

Puerto Rico Qualified Retirement Plan Provisions Are Finally Amended - Summary: On December 10, 2011, Governor Luis Fortuño signed into law Act No. 232-2011 (formerly, House Bill No. 3410), a technical amendments bill to the Internal Revenue Code for Puerto Rico. The Act brings a number of major changes to Puerto Rico qualified retirement plans, which are outlined in this article. Source: McConnell Valdes LLC , December 2011.

Investment Statistics: A Reference Guide - Summary: The purpose of PerTrac's Investment Statistics: A Reference Guide is to provide investors with best practices for measuring performance and analyzing risk using investment statistics. The guide explains a number of key concepts. Source: PerTrac , December 2011.

403(b) Plans Progressing Despite Shaky Economy - Summary: In the face of prolonged economic instability, 403(b) plan sponsors are forging ahead with a variety of plan improvements—such as increased use of automatic enrollment, greater participant education, refined investment lineups and more. Consequently, many plans also reported higher participation rates. These and other insights are revealed in this 403(b) plan sponsor survey. Source: Plan Sponsor Council of America , December 2011.

Sample Certification of Reasonableness of Plan Services - Summary: This is a sample certification that illustrates the type of documentation that plan sponsors need to establish compliance with 408(b)(2) requirements. Source: Dalbar , December 2011.

Electronic Disclosure for ERISA 404(a)(5) Participant Fee Disclosure - Summary: A paper that describes the Department of Labor Technical Release No. 2011-03 which relaxes the requirements for electronic delivery of the disclosures required by the ERISA 404(a)(5) Fee Disclosure regulations. Source: Dalbar , December 2011.

Target Benefit Plans: On the Edge of Extinction - Summary: One of the more interesting effects caused by the IRS' elimination of the National Sponsor category in Rev. Proc. 2011-49 may be the projected elimination of pre-approved target benefit prototype and volume submitter plans. While some of you may be thinking "who cares" and others may be thinking "this will never happen," author shares some analysis that may change your mind. Think of target benefit plans as the canaries in our coal mine of a plan document system. Source: Pension Protection Act Blog, December 2011.

Advisers Who Are Asset Fee-Based Feel Handcuffed - Summary: After another disappointing year in the markets, many financial advisers who base their fees on assets under management are thinking that there has to be a better way. But few have the stomach to make any changes right now — and that may be the wisest course. Source: Investmentnews.com (free registration may be required), December 2011.

Companies Shake Up 401k Plans, Cut Fees - Summary: Companies are shaking up their 401k retirement plans, trimming lists of mutual fund offerings and shaving the fees workers pay as they prepare for new federal rules that will put more plan information in front of employees. "This is dramatic. I have not seen anything like this in 25 years of working with plan sponsors," said David Wray, president of the PSCA. Source: Employee Benefit News, December 2011.

Three in Four African American Small Business Owners: Retirement Preparedness Crisis Looms - Summary: A new small business survey by Nationwide Financial finds that seventy eight percent of African American small business owners say the number of workers financially unprepared for retirement is at "crisis levels." Source: 401khelpcenter.com, December 2011.

Investors Will Scream When They See 401k Fees - Summary: The new Department of Labor 401k fee disclosure rules that go into effect on April 1st will radically shake up the industry, according to Tom Gonnella, senior vice president of corporate development at Lincoln Trust, who gave six predictions for the defined contribution industry in 2102. Source: Onwallstreet.com, December 2011.

Benchmarking Target-Date Funds: Two Simple Choices for Fiduciaries - Summary: Much debate and controversy surround the benchmarking of target-date funds (TDFs). The challenge revolves around the fact that the asset allocation, and therefore risk, of TDFs changes through time. But if fiduciaries will take a step back to look at the big picture, there are really only two choices: Procedural Prudence or Substantive Prudence. Source: Targetdatesolutions.com , December 2011.

December ERISA Litigation Newsletter - Summary: Reviews the following: Third circuit finds "inequitable" the enforceability of a clear ERISA welfare plan reimbursement provision that deprived a participant of a full recovery; District court dismisses ERISA § 502(a)(2) claim based on plaintiffs' failure to make pre-suit demand - and DOL takes notice; and, Application of ERISA section 510 to internal workplace complaints: a review of circuit court decisions. Source: Proskauer Rose LLP, December 2011.

Morningstar Changes the Way It Classifies Fixed-Income Funds - Summary: Morningstar is drilling down deeper than ever before when it looks at fixed-income funds, the investment research firm said, announcing the launch of a new fixed-income classification system. Source: Financial-planning.com, December 2011.

Do Low-Income Workers Benefit from 401k Plans? - Summary: Economists frequently assume that employees "pay for" employer-provided fringe benefits, such as contributions to retirement plans, in the form of reduced wages. This paper challenges these assumptions. Because low-income employees receive little tax benefit from saving in qualified retirement plans, they may not be willing to accept a one dollar reduction in their wage in return for an additional dollar contributed to their 401k plan. Source: Urban Institute, December 2011.

Four Regulatory Hot Spots and What They Mean for You - Summary: What will be the top four regulatory items for financial advisers to deal with in 2012? Josh Cohen and Ben Jones of Russell Investments shared their thoughts. Source: Planadviser.com, December 2011.

Overview of the Small Business Pension Promotion Act (H.R. 3561) - Summary: To amend the Internal Revenue Code of 1986 and the Employee Retirement Income Security Act of 1974 to reduce administrative burdens and encourage retirement plan formation and retention. Source: American Benefits Council , December 2011.

2011 Northern California 401k Plan Survey Report - Summary: The survey offers a regional perspective of 401k plans, and recent trends. The survey was conducted with over 90 Northern California plan sponsors and benefit plan managers participating. The participants were asked about their current plan offerings and structure, and recent and expected changes. Source: Mohler, Nixon & Williams , December 2011.

The Fiduciary Duty to Ask for Help - Summary: Fiduciaries are held to the highest legal standard. Where they are unsure of their expertise, fiduciaries must seek the advice of experts and carefully evaluate the advice given. Source: Mohler, Nixon & Williams , December 2011.

Qualified Retirement Plan Year-End Reminders - Summary: Before year-end, sponsors of tax qualified pension, profit sharing, 401k or 403(b) plans should take time to ensure that each plan is compliant with a variety of statutory and regulatory requirements. To determine what, if any, action is needed to maintain compliance, plan sponsors should review, at a minimum, this short checklist. Source: Schulte Roth & Zabel LLP, December 2011.

The Small Market 401k Opportunity - Summary: Craig Howell, who heads up Business Development for The Online 401k, talks about the business opportunity for advisors in the small plan space and how they're trying to make 401k's more compelling for the 90% of businesses that don't have one. Source: Retiremaphq.com, December 2011.

A Look at Private-Sector Retirement Plan Income After ERISA - Summary: The movement away from employer-managed DB plans toward employee-directed DC plans has raised concerns among some in the public policy community. To help provide context for retirement policy discussions, this paper examines the role that private-sector pensions historically have played in providing retirement income. Source: Investment Company Institute , December 2011.

Where Congress's Goals and Fiduciary Conduct Conflict - Summary: In adopting auto-pilot and QDIA programs, all too many fiduciaries have inadvertently made themselves easy targets for 401k fiduciary lawsuits. However, it is easy for fiduciaries to correct their mistakes. Source: Investment Horizons , December 2011.

DOL Issues Final Participant Advice Regulations - Summary: After several detours on the road to implementation, the U.S. Department of Labor has released its final regulation on participant investment advice. The final regulation, effective December 27, 2011, makes it clear that the DOL recognizes the benefits of participant advice programs, and is good news for both participants and plan sponsors. Source: Vanguard , December 2011.

Be Prepared for an Audit (Even if you Don't Want One) - Summary: Rumors continue to swirl that the DOL is increasing its audits of 401k plans. A diligent plan sponsor would want to be prepared for an audit. So while we all hope we are not audited, the best practices are to be prepared that one might occur. Look over your documentation and practices now and make sure you have everything in place just in case. Source: Fox Rothschild LLP, December 2011.

Technical Release No. 2011-03R - Revised Interim Policy on Electronic Disclosure - Summary: On December 8, 2011, the DOL issued Technical Release 2011-03R, which revises the department's interim policy regarding the use of electronic media to satisfy the disclosure requirements under the department's final participant-level fee disclosure regulation. Source: U.S. Department of Labor, December 2011.

Older Americans Expect to Work Longer and Many Expect Never to Retire - Summary: Not only are older American workers (age 50 and over) expecting to work longer, but many now say they expect to never retire, according to the nonpartisan Employee Benefit Research Institute. Data suggest the trend may be tied to the recent economic recession. Source: Employee Benefit Research Institute , December 2011.

Fiduciary Investment Advice for Participants - Summary: There is a growing concern about the quality of participant investing in 401k and 403(b) plans... since that is one of the critical factors in determining whether participants will accumulate adequate benefits at retirement. For example, industry studies show that many participants are invested too aggressively or too conservatively, rather than having balanced portfolios that lie between those extremes. If a participant is invested too conservatively, then his or her account will probably not grow at a rate needed to provide adequate benefits. On the other hand, if a participant is invested too aggressively, the account may suffer severe losses in the years preceding retirement. Source: Drinker Biddle & Reath LLP , December 2011.

Best 401k Mutual Funds for 2012 - Summary: As Americans look back at 2011 and look ahead to 2012, many are wondering what to do about their 401k retirement accounts and mutual fund investments. After a year like this one — with lots of short-term fireworks but little overall gains for the market — it seems harder than ever to plot a way to get ahead with your 401k mutual funds. There are still opportunities even in a choppy stock market. You just have to know where to look. Source: Investorplace.com, December 2011.

Companies Trim Investment Choices in 401ks - Summary: While the trend over the past decade has been for companies to increase the number of investment options in their 401ks — the median number of investments companies offer is now 18, up from 10 in 2001, according to consulting firm Aon Hewitt — some companies are switching gears and reducing the number of options, or at least streamlining and simplifying their investment menus. Source: Marketwatch.com, December 2011.

401k Plans Add Lifetime-Income Options - Summary: Some companies are now letting workers invest in annuities, so that their 401k savings will eventually yield an income stream, but there are advantages and pitfalls to this new retirement option. Source: Marketwatch.com, December 2011.

Employee Benefit Plan Year End Action Items - Summary: This article contains important action items plan administrators may need to process prior to year end. The items include amendments, notices and other compliance matters for tax-qualified retirement plans, 403(b) plans, nonqualified deferred compensation and welfare plans. These items do not represent an exhaustive list, but is intended to provide a reminder of the general issues that may need to be reviewed and considered. Source: O'Connor Davies Munns & Dobbins LLP, December 2011.

Supreme Court Declines to Apply Fiduciary Exception to Attorney-Client Privilege: What Implications for ERISA Plans? - Summary: The U.S. Supreme Court considered the "fiduciary exception" for the first time in a non-ERISA setting and found that the United States, as trustee of tribal property, was entitled to confidential communications with its legal counsel despite its fiduciary status. The Supreme Court's rejection of the "fiduciary exception" in this context has raised hope that ERISA fiduciaries may be entitled to greater confidentiality in obtaining legal advice regarding plan administration. Source: McGuireWoods, December 2011.

MetLife White Paper Finds Employee Financial Wellness a Growing Global Concern for Employers - Summary: In recognizing that employees need assistance in managing their financial future and understanding the value of employee benefits aimed at building financial wellness, employers are, in increasing numbers, providing employees with the financial education they need, according to a new white paper released today by MetLife. Source: 401khelpcenter.com, December 2011.

Should 401k Plan Sponsors Sell Their Souls for One-Stop-Shopping? - Summary: From banks to insurance companies, from payroll processors to mutual fund families, the appeal of convenience often lures the 401k plan sponsor to these bundled service providers. But are the purported lower fees of bundling real, or are they a figment of some marketing department's imagination? Worse, do bundled providers act as a fiduciary trap given the very real conflicts-of-interest embedded within them? Source: Fiduciarynews.com, December 2011.

House GOP Presses DOL's Solis on Fiduciary Re-Proposal Rule - Summary: Fifty-five House Republicans, led by Rep. Judy Biggert, R-Ill., sent a letter to Department of Labor Secretary Hilda Solis on Monday detailing what criteria should be met when the DOL re-proposes its rule amending the definition of fiduciary under ERISA early next year. Source: Advisorone.com, December 2011.

Presumption of Prudence Shields Fiduciaries From Liability Following Decline in Value Of Employer Stock - Summary: Adopting the presumption of prudence that applies when a 401k plan requires stock of the sponsoring employer to be offered as an investment option, the Court of Appeals in New York City (CA-2) ruled that plan fiduciaries did not breach their ERISA duties by retaining company stock as an investment option despite a significant drop in value that may have been foreseeable because of the company's deep exposure to subprime mortgage securities. Source: CCH, December 2011.

Wal-Mart, Merrill Lynch Settle 401k Fiduciary Lawsuit - Summary: Wal-Mart and Merrill Lynch have agreed to pay a total of $13.5 million to settle a long-running class-action lawsuit alleging the world's largest private employer and its retirement plan administrator breached their fiduciary duty toward nearly 2 million past and present Walmart workers in the company's 401k plan. Source: Forbes, December 2011.

401k Fee Disclosure to Change DC Game - Summary: Plans are headed for another fundamental shift in 2012. In April, all 401k providers will begin disclosing fees to sponsors and investors-putting fees and services under a white-hot spotlight. Source: Financial-planning.com, December 2011.

Plan Administrator Not Required to Look Behind Sham Divorce - Summary: A recent federal appellate court ruling held that a pension plan administrator could not recover benefits distributed to alternate payees under QDROs, despite evidence that the underlying divorces were orchestrated by participants and their spouses solely to enable them to receive lump-sum, in-service distributions not otherwise permitted under the plan. Source: Benefit Consultants Group, December 2011.

Offering a 401k Plan: Easier Than You Think - Summary: The smaller the company, the less chance of a retirement plan being offered--and that includes sole proprietor businesses. As most businesses evaluate their benefits around the end of the year, now is a good time to address four common myths about 401k and to set the facts straight. Source: Foxbusiness.com, December 2011.

DOL Finalizes Regulation Aimed at Improving Access to Investment Advice for 401k Plan Participants - Summary: Because of the onerous conditions imposed on the investment advice arrangements sanctioned by the Regulations, there appears to be little incentive for third-party service providers to establish these arrangements and for plan sponsors to engage these service providers to provide investment advice. Further reform is needed to encourage the proliferation of investment advice arrangements. The Regulations are effective December 27, 2011. Source: Orrick, Herrington & Sutcliffe LLP, December 2011.

A Closer Look at Fiduciary Status Under ERISA - Summary: Get the details on plan sponsors as default fiduciaries and how ERISA fiduciary status is determined. Article provides advisors with some essential information about the meaning of fiduciary status under ERISA. Source: Morningstar.com, December 2011.

DOL Raises the Stakes for the Audit Quality Initiative - Summary: The DOL initiative to review the quality of employee benefit plan financial audits has been in place for many years, but there are signs that it has recently intensified. Some have heard that the DOL is starting to dig deeper into the financial audits that are filed with the Form 5500 and in some cases have rejected the audits and imposed penalties. Source: Kilpatrick Townsend & Stockton LLP, December 2011.

DC Participants Total Returns 2005 -- 2010 - Summary: Recent Vanguard research shows that the typical defined contribution plan participant earned an average annual return of 3.76% and a cumulative return of more than 20% on their plan account over the five-year period ended 2010, despite the market decline of 2008–2009. These results are related only to investment returns and do not consider the additional benefit of ongoing contributions. Source: Vanguard, December 2011.

Small Business Retirement Plan Market Largely Untapped - Summary: According to the U.S. Small Business Administration, there are about 28 million small businesses in the United States. With only 20 percent of small businesses offering retirement plans, financial advisors are missing out on a lucrative opportunity. Source: Benefitspro.com, December 2011.

Report Examines Growth of Investment Options in DC Plans - Summary: Record-setting levels of defined contribution assets will continue to grow, yet mutual funds will not be the sole beneficiary. Celent, a financial research and consulting firm, examines the current retirement landscape in the U.S. in its report, "Developments in the Defined Contribution Market: New Funds and New Investment Vehicles in the U.S. Market." Source: Planadviser.com, December 2011.

The 401k Regulatory Tsunami - Summary: A regulatory tsunami is headed toward companies sponsoring 401k plans. It will arrive next year when new federal rules take effect, creating an unprecedented burden of accountability for employers. Source: Smart Business, December 2011.

Form 8955-SSA Reporting and 403(b) Plans - Summary: Commencing with the 2009 plan year, the world turned upside down for 403(b) plans - a new set of regulations, a written plan requirement, and a requirement to include schedules and the audit with the Form 5500 filing. As if those requirements were not enough, with the elimination of the limited exemption regarding the Form 5500, an ERISA 403(b) plan must now file a Form 8955-SSA. This FAQs address these and other issues. Source: Sungard/Relius, December 2011.

DOL Staff Members Provide Informal Views on Form 5500 Record Retention, Fund Prospectuses, and QDIA Notices - Summary: The Joint Committee on Employee Benefits of the American Bar Association has reported on its May 2011 Q&A session with DOL staff members. Highlights include unofficial, nonbinding remarks about the several issues affecting Form 5500 and 401k plans. Source: Thomson Reuters/EBIA, December 2011.

How to Avoid the Pitfalls of a Top-Heavy 401k Plan - Summary: While 401k plans offer tremendous advantages to employees and plan sponsors, they must also comply with several annual IRS testing requirements. One of those annual testing requirements is a top-heavy test. How can a plan sponsor avoid the pitfalls of a top-heavy 401k plan? Source: Smart Business, December 2011.

Lifting the Lid on 401k Fees - Summary: Making fees more transparent is expected to produce changes in the types of investments within 401k plans and greater competition among providers. Experts also expect to see less bundling of fees and more fees based on discrete services. Another likely impact is a reduction in the number of funds available in a typical plan. Source: CFO.com, December 2011.

The Tyranny of Compounding Fees: Are Mutual Funds Bleeding Retirement Accounts Dry? - Summary: The author examines how mutual fund returns are shared between investors and the financial services industry, and how underperformance affects their respective portions over time. Source: Journal of Financial Planning, December 2011.

Do Managed Accounts and Target-Date Funds Provide Genuine Value or Just a Feel-Good Solution? - Summary: It's counter-intuitive to question the value of professional investment management, but article points out questions fiduciaries must be able to answer when dealing with target-date funds and managed accounts. Source: Investment Horizons , December 2011.

Rethinking 401k Litigation Risk Management - Summary: There are several realities that fiduciaries and sponsors must recognize in order to create effective 401k risk management programs, including a few that are discussed in this article. Source: Investment Horizons , December 2011.

Target-Date Funds: On the Mark After All? - Summary: Target-Date Funds aren't just getting bigger, they also seem to be getting better. An analysis by Morningstar in August found that losses during the summer market meltdown were far less severe for 2010 and 2015 TDF series than losses were for those funds in 2008. Source: Registeredrep.com, December 2011.

COMMENTARY: Lowering Retirement System Barriers for Women - Summary: An overlooked and much needed area of concern is the plight of women and minorities, and their ability to retire. It makes a difference economically because if they cannot support themselves in retirement, their families or the government likely will be footing the majority of the bill. It makes a difference to employers because it has a significant impact on workforce planning. Source: Employee Benefit News, December 2011.

Reforms Equal Smaller 401k's - Summary: Two recent proposals to change the existing tax treatment of 401k retirement plans, if enacted, are likely to result in lower account balances for many 401k participants, according to a new analysis by the Employee Benefit Research Institute. Source: Employee Benefit News, December 2011.

Retirement Plans in a Quandary - Summary: "What we've got here is a failure to communicate." That famous line, from the 1967 movie "Cool Hand Luke," summarizes the reason that retirement plans collectively - but unwillingly - hold billions of dollars that plan sponsors have unsuccessfully tried to distribute to former participants. Source: Employee Benefit News, December 2011.

An Elite Group of Advisors Driving 401k Business - Summary: While just over half (52%) of the estimated 315,000 retail investment advisors in the United States currently support at least one 401k plan, only 7% of advisors are Heavy plan producers with $25 million or more in 401k AUM. This elite group supports almost as many plans as all other 401k producers combined. Source: 401khelpcenter.com, December 2011.

Three-Quarters of Employers Have Restored 401k Matches - Summary: The vast majority of U.S. employers that suspended their 401k plan matching contributions during the recent economic downturn have since restored them, according to new analysis by Towers Watson. Source: CCH, December 2011.

COMMENTARY: The Realities of Plan Fees - Or Why They Are Not Excessive Just Because They Exist - Summary: Amidst all the commentary and lawsuits over excessive fees – or allegedly excessive fees – on 401k investment options comes an article pointing out all that advisors do to earn that money, and raising questions, at least implicitly, as to whether courts and critics are asking the wrong question when they inquire into the reasonableness of fees. Source: Boston ERISA Law Blog, December 2011.

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