Frequently Asked Questions About 401k Plans
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General Items Frequently Asked Questions About 401k Plans Summary: The Investment Company Institute has updated their Frequently Asked Questions page about 401k Plans. Answers questions like: How large is the 401k market? How many Americans have a 401k? How have 401k participants allocated their investments? And more. Source: Investment Company Institute How to Increase Employee 401k Participation Summary: It is the age old issue of how to increase employee participation in your 401k plan. We know how crucial it is to the overall success of the plan – particularly to the highly compensated employee group. High participation also helps in creating a positive attitude towards the company and helps greatly in employee retention. Here are some tips. Source: 401khelpcenter.com The Next Step to Increasing DC Plan Participation Summary: Automatic enrollment has helped lift participation in many DC plans. But how can plans take the next step toward 100% participation? A recent survey of plan participants shows that a well-designed lifetime income solution can change the minds of many employees who currently do not participate in their DC plan. Source: Alliancebernstein.com 401k Plan Provisions That Are Good Ideas Summary: This article is about 401k plan provisions that are good ideas and should possibly be added to help invigorate your workplace plan. The costs involved with adding these provisions is the cost of an amendment, none of these provisions will require further employer contributions. Source: Rosenbaum Law Firm Benefits Outsourcing: Focus on the Employee Experience Summary: As companies turn to business administration outsourcing (BAO) for more and varied functions, the vendors' presence becomes more apparent to the employee end-user. Companies that in the past may have partnered with BAO providers for behind-the-scenes functions—such as open enrollment support or summary plan description creation—are increasingly using the vendors as employees' major point of contact for all things benefits-related. Source: Society for Human Resource Management
Compliance and Regulatory Related When the Government Speaks: DOL Enforcement Priorities Summary: In this post author offers reflections from recent Tax Exempt/Government Entities meeting with IRS and DOL officials focusing on the areas the DOL officials identified as enforcement priorities and some of the specific items they highlighted. Source: Benefitsbryancave.com Proposed Revisions to IRS Circular 230 Set New Standards for 'Reasonable' Practices Summary: Under proposed “reasonableness” standards for Circular 230, employee benefit attorneys who provide written tax advice may not rely on information from benefit plan sponsors if the attorneys know or should know that the information is incorrect or incomplete, an Internal Revenue Service official said Feb. 13 during an agency-sponsored phone forum. Source: BNA.com IRS Employee Plans News, Issue 2013-1 for February 2013 Summary: Includes information on determination letters, audits and internal controls, forms and compliance, and much more. Source: IRS IRS Employee Plans Newsletter for February 2013 Summary: The IRS Employee Plans FY 2012 Annual Report and FY 2013 Workplan highlights of recent and upcoming guidance, examination projects and outreach efforts. Source: IRS IRS Releases 2012 Form 8955-SSA and Instructions Summary: The IRS has released the 2012 Form 8955-SSA (Annual Registration Statement Identifying Separated Participants With Deferred Vested Benefits) and Instructions. Form 8955-SSA is filed annually with the IRS to satisfy the reporting requirements of Code § 6057(a). Source: Thomson Reuters/EBIA
403(b) Plans Voluntary 403(b) Correction Program Submission Kit Summary: This kit was created to guide you through the steps in filing a submission for a VCP compliance statement. It includes instructions and a sample submission correctly completed. It is designed for use by eligible organizations that sponsor a 403(b) retirement plan but that failed to adopt written plan documents for the plan by December 31, 2009, as required. Source: IRS
Fiduciary Information and Insight A Plan Sponsor's Fiduciary Calling to Improve the Retirement Readiness of Plan Participants Summary: This white paper discusses the importance of helping plan participants pursue retirement readiness, and the relevant rules under ERISA. It will also include suggested best practices that should be considered by plan sponsors and other fiduciaries to assist plan participants prepare for their retirement years. Source: Wagnerlawgroup.com Providing Guaranteed Lifetime Income Benefits: Managing Fiduciary Responsibility Summary: There is a serious risk that 401k and 403(b) plan participants will outlive their retirement savings. Guaranteed retirement income can address this risk; but in offering such a solution, fiduciaries need to understand their legal responsibilities and their advisers need to help them. Source: Drinkerbiddle.com Are You Doing a Quarterly Plan Loan Checkup? Summary: With a down economy, many employers are seeing an increase in loan requests from retirement plan participants. With an increase in loan requests comes an increase in loan administrative concerns. One way to help head off administrative issues at the pass is to do a quarterly loan checkup. Source: Benefitsbryancave.com
Items of Special Interest to Advisors The "Stable Value" Guaranteed Separate Account Summary: Instead of the insurer standing up for the value of the guarantees, and how well the insolvency risk is managed and priced into the product, the risk is instead hidden and not discussed. Well, the National Association of Insurance Commissioners is taking a look at this practice, and coming down strongly on the side of making these types of separate accounts subject to the general creditors of the insurer. Source: Businessofbenefits.com More Plan Sponsors Sticking With Providers Summary: Win-loss survey data shows the proportion of plan sponsors remaining with the incumbent after conducting full 401k provider searches has continued to grow. Source: Planadviser.com How RIAs Can Rule the 401k Realm Summary: Article deals with how RIAs can lead the 401k marketplace by becoming advocates for plan sponsors and start by eliminating eight marketplace conflicts. Author writes, "As you get into the role and mindset of plan sponsor advocate, there are some recurring conflicts to be vigilant about." Source: RIAbiz.com
Insights: Studies, Research and White Papers Employers Prepare to Add Roth Features to 401k Plans Summary: An increasing number of U.S. employers are planning to add Roth options to their 401k, 403(b) or other defined contribution plans in 2013, a January 2013 survey by consultancy Aon Hewitt reveals. This comes on the heels of legislation that makes it easier for defined contribution investors to convert balances within their savings plan into Roth accounts. Source: Society for Human Resource Management US Mutual Fund Industry on Track to Eclipse $15 Trillion Summary: The US mutual fund industry is set to surpass $15 trillion in assets in February (open- and closed-end funds, and including ETFs), according to Strategic Insight. This new industry milestone is achieved by the combination of continued stock market appreciation and renewed investor demand for stock and bond funds. Source: 401khelpcenter.com Average 401k Balance Climbs to Record High Summary: Fidelity released its quarterly analysis of 401k plans, which showed the average balance had increased to another record high by the end of 2012. The average 401k balance hit $77,300 at the end of the year, up from $69,100 one year earlier, an increase of 12 percent. Source: 401khelpcenter.com
Court, Legislative and Washington DC Followup to Senate HELP Hearing on Retirement Saving Summary: The recent (January 31) Senate HELP committee hearing on Retirement Savings posed a lot of questions to the witnesses – many of which were not answered during the hearing itself. The Employee Benefit Research Institute submitted for the record these answers to questions raised by members of the Senate HELP Committee. Source: EBRI.org Jack Lew Dodges Retirement Saving Woes Questions Summary: If confirmed as Treasury Secretary, it doesn't look like Jack Lew will be helping find solutions to boost private retirement plans. When pressed in a nomination hearing Thursday, Lew wiggled out of giving any commitments on the problems facing Americans looking to save for retirement. Source: Wealthmanagement.com
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