What Will 2013 Bring to the World of 401k?
|
Newsletter Sponsor 401k Averages Book 12th Edition - Fee Benchmarking Book 408(b)(2) notices have been delivered, now what? Use the 401k Averages Book to compare and educate your clients about their 401k fees. The Averages Book is the leading source available for non-biased, comparative 401k fee information. It is designed to provide professionals with the essential fee information they need to determine if their plan costs are above or below average. Click here for more information.
General Items What Will 2013 Bring to the World of 401k? Summary: The last few years have appeared to offer more talk than action. Will 2013 merely repeat this incessant idle chatter? Or will the new year usher in a new era of confidence, rigor and compliance? Fiduciarynews.com talked with some 401k fiduciary specialists for their thoughts. Source: Fiduciarynews.com Eight Ways to Make Your Participation Education Plan Rock Summary: Since retirement plans are designed to give participants a vehicle that helps them save and prepare for retirement, they need to be accompanied by an education plan that compels them to take action and make decisions – not collect dust. This article provides some participant education best practices. Source: Principal.com Success in a DC Plan: What Is It and Do You Know Whether You Are Succeeding? Summary: The answer should be simple: if you know what your objectives are, you can test whether you are on track to meet those objectives. However, while clear objectives may have been defined for individual fund managers, the reality is that most defined contribution plans do not have clear objectives. Source: Mercer.com Do Smaller DC Plans Need Advisors? Summary: Many smaller US defined contribution (DC) plans rely on guidance from advisors, and the majority of these DC plan sponsors are happy they do so. But how do plans gauge whether they really need advisors, and assess the benefits against the cost of advice? Source: Alliancebernstein.com
Compliance and Regulatory Related Summary: This chart provides an explanation of key plan events for Section 401(a) and 401k defined contribution plans and the deadline for each. The chart is intended as a tool to assist employers with monitoring the key annual plan requirements. Source: ING Benefits of Fee Disclosure Cannot Be Ignored Summary: It's been just a few months since the U.S. Department of Labor's new fee disclosure regulations took effect, and already their impact on participants has been called into question. If this is an accurate reflection of participant reaction to the disclosures, should plan sponsors, who face a fiduciary duty with the fee disclosure requirements, be overly concerned? Source: Vanguard.com Puerto Rico Treasury Announces Key Benefit Plan Limits for 2013 Summary: Puerto Rico's Secretary of Treasury has issued Circular 12-08 announcing the Puerto Rico qualified retirement plan limits for 2013. This table lists the key 2013 limits, the corresponding 2012 limits, and the US Internal Revenue Code sections that specify analogous limits. For purposes of these elective deferral limits, dual-qualified plans are plans that meet the requirements of both Section 1081.01(d) of the Puerto Rico Internal Revenue Code and 401k of the US Code. Source: Buckconsultants.com Plan Correction: Correcting an Automatic Enrollment Failure Summary: After Congress enacted a robust framework for automatic enrollment provisions as part of the Pension Protection Act, automatic enrollment features have become more popular. The automatic enrollment feature, however, places more responsibility on the employer. This article explains the correction for a failure to implement an automatic deferral provision. Source: Relius.net Age of Reason: How to Evaluate Adviser Compensation Under 408(b)(2) Summary: After investments, the second-highest cost for a 401k plan is usually the recordkeeper or bundled provider. As a result, once the 408(b)(2) disclosures are received, the new focus for many plan committees will be to evaluate that provider's compensation. Fred Reish shares some thoughts on the process. Source: Drinkerbiddle.com Frequently Asked Questions About Service Provider Disclosure Summary: The new service provider disclosure regulation (408b-2) provides that a contract will not be considered "reasonable" under ERISA unless certain information is disclosed by the service provider to the plan fiduciary regarding their services and the compensation they received or are expected to receive. The ICI has prepared this FAQ on the topic. Source: Investment Company Institute Frequently Asked Questions About 401k Participant Disclosure Summary: DOL's 404a-5 participant disclosure regulation requires plan administrators to make specific disclosures to individuals participating in 401k, 403(b), and other defined contribution plans that allocate investment responsibility to participants. The ICI has prepared this FAQ on the topic. Source: Investment Company Institute IRS Updates Qualified Plan Correction Guidance Summary: The IRS published Revenue Procedure 2013-12, which updates the Employee Plans Compliance Resolution System. EPCRS is the IRS correction program that allows employers and other organizations that sponsor retirement plans to correct compliance failures that may adversely affect the tax-qualified status of a plan. Key changes to the program are listed here. Source: Seyfarth.com
403(b) Plans IRS Correction Program Expanded for 403(b) Plans Summary: The IRS finally issued its long anticipated 403(b) plan updates to its qualified retirement plan correction program known as the Employee Plans Compliance Resolution System (EPCRS). Here are updates that impact 403(b) plan sponsors. Source: McKenna Long & Aldridge LLP The New 403(b) EPCRS Rules: It's, Um, Complicated Summary: Be prepared to work hard when you need to take a 403(b) plan through the new EPCRS process under Rev Proc 2013-12 especially if you have to use the VCP process, or are defending an audit under CAP. It is going to be complicated. Quite frankly, a separate 403(b) guide to the VCP program will need to be utilized. Source: Businessofbenefits.com
Some Items of Interest to Advisors Recordkeeper Search Activity Expected to Increase Within Next Two Years Summary: Boston-based global research firm Cerulli Associates' latest research study reports that recordkeeper search activity is expected to increase; however, most requests for proposals (RFPs) will only serve to benchmark pricing. Source: 401khelpcenter.com The Top Four Trends Guiding 401k Pros Summary: What services are the very best 401k advisers and advisory firms delivering to their clients? Author lays out the four most important and effective things he sees the very best advisers doing. Source: Marketwatch.com Retirement Advisors Are Beginning to Embrace Social Media Summary: Financial companies are finally starting to leap on the social media bandwagon, and retirement advisors are beginning to follow suit. Many weren't comfortable with the medium until they saw other, larger companies jumping in over the past couple of years. Source: Benefitspro.com
Insights: Studies, Research and White Papers DC Plan Sponsors Focused on Compliance in 2012 Summary: Results of Callan's "2013 DC Trends Survey" indicates in 2012, defined contribution plan sponsors spent their time on compliance matters. Plan sponsors also say compliance will be their top area of focus over the next year. Source: Plansponsor.com 401k Plans' Cost-effectiveness Becomes Clearer as Use Increases Summary: Contrary to the popular belief that defined benefit retirement plans are more costly for employers to administer, data from the U.S. Bureau of Labor Statistics indicates that private-industry employers now spend more per employee hour worked for defined contribution plans. Source: Thompson.com How Do Employers' 401k Mutual Fund Selections Affect Performance? Summary: While considerable research has examined 401k participant decisions in isolation, surprisingly little attention has been focused on the choices made by plan administrators. The administrator's role is clearly influential. This white paper addresses this research gap by focusing on the fund choices of 401k plan administrators and participants' reactions to these choices. Source: Center for Retirement Research More Investors Using Target-Date Funds, but Proceeding With Caution Summary: According to a joint study released in December by the Employee Benefit Research Institute and the Investment Company Institute, 72% of 401k plans offered target-date funds in their investment lineup at year-end 2011, compared with 70% at year-end 2010 and 57% at year-end 2006. Source: Benefitnews.com
Court, Legislative and Washington DC Court: Employer Contributions Owed to Plan Not Plan Assets Summary: A federal appellate court ruled employer contributions owed to a 401k plan are not plan assets, so an employer did not breach its fiduciary duties by not contributing. Source: Plansponsor.com Time to Expand DB and DC Plan Audits Summary: Congress should turn its attention to strengthening the integrity of both defined benefit and defined contribution retirement plans. One issue needing attention is the use of limited-scope audits of retirement programs, which has long been a concern among some in government and in private practice. Source: Pension and Investments (free registration may be required)
Marketplace News
|
