Roth Conversions in 401k Plans
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General Items Roth Conversions in 401k Plans Summary: With an increasingly murky tax horizon, companies sponsoring 401k plans might be looking for ways to provide participants with more flexibility in managing their tax exposure when taking plan distributions. This article provides an overview of the differences between pre-tax and Roth contributions, and summarizes the main features of this new Roth conversion option. Source: Jenner.com How to Choose Between a Roth 401k and a Roth IRA Summary: If the prospect of tax-free retirement income cinches the argument for you, you might have two Roth options. To make your decision, it helps to get a handle on the differences between the two types of accounts. And there are several. Source: Investors.com A Step-by-Step Guide to Selecting Vendors Summary: Advising companies that sponsor a 401k plan has become a more popular business model, and though it is a model that can offer benefits and opportunities different from those of a typical advisory business, there are also distinct responsibilities and challenges that must be met. One of the major roles of a 401k plan financial adviser is vendor selection. Source: Investmentnews.com (free registration may be required)
Compliance and Regulatory Related 401k Plan Financial Statement Oversight: Start with the Low Hanging Fruit Summary: How can a fiduciary be "on top of their game"? The answer to this question should ultimately result in having a comprehensive and robust process at the plan to deal with the various fiduciary issues that face the plan. Notwithstanding this robust process, one easily implemented process is to identify "low hanging fruit," or obvious potential issues in a plan's financial statements, which could trigger challenges to the fiduciary with respect to their responsibilities over the plan. This paper provides three examples of such low hanging fruit, for which plan fiduciaries should be mindful, when reading their plan's publicly reported financial statements. Source: WithumSmith+Brown PC DC Disclosure Rules Do Little to Improve Participant Knowledge Summary: Fully half of defined contribution participants still do not know how much they pay in fees and expenses, even after the implementation of new fee-disclosure regulations last year, according to a new survey from Limra. Prior to the disclosure notices, 50% of participants in a survey did not know how much they paid in fees and expenses; the same percentage still does not know. There was some improvement elsewhere, however. Source: Financial-Planning.com Terminating a Retirement Plan - Part 1: Steps Involved Summary: There are several occasions when business owners consider terminating their retirement plan. But terminating a Plan is a drastic step. Take a couple of minutes to consider some of the alternatives outlined here that may prove to be easier and less expensive than moving forward with terminating your retirement plan. Source: Benefit-Resources.com
403(b) Plans Helping Your 403(b) Plan Stay Healthy Summary: 403(b) plan sponsors are again interested in reviewing their plan designs. This time it isn't because they have to; rather, plan sponsors are looking to further clean up the initial steps that were taken just a few years ago. This additional work is based on their own experience with compliance under the final regulations, as well as the administrative lessons they've learned. Source: Principal.com
Fiduciary Material and Insight How Does Your Investment Committee Stack Up? Summary: Despite the best efforts of investment committees, internal group dynamics can sometimes lead to questionable choices that hamper their fiduciary responsibility of ensuring that their organizations meet their financial obligations, according to a Vanguard survey. Source: Vanguard.com Symptoms That Your Retirement Plan Might Be in Trouble Summary: When it comes to being a retirement plan sponsor, there are issues that are symptoms of a greater harm. If you nip things in the bud, you can avoid liability later. So this article is about symptoms that can detect whether your plan may be suffering from a larger problem that can increase your potential liability as a plan sponsor. Source: The Rosenbaum Law Firm
Items of Special Interest to Advisors SEC Seeking More Data on Uniform Fiduciary Standard Summary: The Securities and Exchange Commission on Friday called for more information from industry members and other stakeholders about the potential impact of its proposal to apply a uniform fiduciary standard of care to broker-dealers and investment advisors who provide advice to retail customers. Source: Onwallstreet.com Summary: To help advisors bring clarity to their clients' retirement plans, reporter talked to several of the main players on the retirement stage to get their thoughts on the big challenges of modern retirement. Here are the five. Source: Advisorone.com The Building Blocks of a Successful Retirement Plan Practice Summary: Too many retirement plan providers such as financial advisors and third party administrators suffer in their business because they don't know the good building blocks in assembling a retirement plan practice. This article is all about the good fundamentals and building blocks in assembling a retirement plan provider practice. Source: Rosenbaum Law Firm Retirement Plan Advisers Undercharging Summary: When it comes to retirement plans, reps need to start getting paid what they're worth. That's the consensus a group of broker-dealer executives reached on a panel at the American Society of Pension Professionals & Actuaries' 401k Summit. Source: Investmentnews.com (free registration may be required)
Insights: Studies, Research and White Papers Service Provider Reviews Don't Lead to Greater Turnover Summary: Through requests for proposals, comparative benchmarking and renewed scrutiny of current providers, plan committees and sponsors are endeavoring to learn if they are paying too much for administrative services. Yet one report finds that, due in part to commoditization of 401k product and service offerings, more sponsors than ever are staying with their current providers, especially after participating in a final presentation with an existing TPA under review. Source: Thompson.com 2012 Year in Review, Trends in Employee Financial Issues Summary: After starting the year with a significant backslide in financial wellness, employees regained some of their financial footing and closed out the year slightly behind 2011, though still ahead of 2009 and 2010. The most substantial decline occurred in the area of cash management. Source: Financialfinesse.com 401k Plan Fees Declined -- Slightly -- in 2012 Summary: The average total plan cost and average investment expenses for 401k retirement plans fell slightly in 2012, according to the newly published 13th edition of the 401k Averages Book, an annual overview of plan benchmarks. Source: Society for Human Resource Management Every Woman Needs Her Own Retirement Strategy Summary: The Transamerica Center for Retirement Studies has uncovered the fact that nearly half of women (48 percent) do not have any retirement strategy at all, despite the fact that 56 percent of women expect to self-fund their retirement through 401ks, retirement accounts, or other savings and investments. The Center's latest study, "Juggling Current Priorities and Long-Term Security: Every Woman Needs Her Own Retirement Strategy," sheds light on women's attitudes and behaviors related to saving and planning for retirement, and offers details about how they compare to their male counterparts. Source: 401khelpcenter.com Summary: The latest 401k Wellness Scorecard reveals quarter-over-quarter and year-over-year trends in plan participant behaviors along with employers' adoption of 401k design features in plans serviced by Bank of America Merrill Lynch. Source: Bank of America
Court, Legislative and Washington DC Tax Reform Still Very Much Alive Summary: If you think Washington's struggle with the fiscal cliff back in December and the sequester brouhaha in recent weeks has derailed efforts on Capitol Hill to tackle tax reform, think again Brian Graff warns. Source: Napa-Net.org No Fiduciary Liability for Failing to Pay Required Employer Contributions to Plan Summary: A recent Federal Appeals Court decision out of Florida confirmed prior court decisions that plan fiduciaries are not subject to fiduciary liability for failing to make employer required contributions to the plan. Source: Bcgbenefits.com Fidelity Faces More Complaints About Float Income Summary: Three Massachusetts residents accused Boston-based Fidelity on Thursday of using income generated from retirement fund assets to offset Fidelity's own operating expenses. Their lawsuit, filed in U.S. District Court in Massachusetts, seeks class-action status for participants in 401k plans sponsored by EMC Corp, Bank of America Corp and Safety Insurance Company. Fidelity denied any wrongdoing. Source: Reuters.com Prime ERISA Areas for Supreme Court's ReviewSummary: This article focuses on four distinct areas of ERISA litigation that are in need of clarification by the Supreme Court during the current or upcoming terms. This includes the evidence to be considered in a benefits denial claim under the de novo standard of review; the standard of review in a breach of fiduciary case where a profit sharing plan invests in employer stock that is declining in value (i.e., "stock drop" cases). Source: Benefitslink.com
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