Lost and Missing Participant Issues
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Compliance and Regulatory Related Lost and Missing Participant Issues Summary: Presentation material from a webinar that discussed issues that frequently arise with lost and missing participants, including determining whether and when to forfeit benefits, escheating benefits, claiming uncashed checks, and determining the required beginning date. Source: Morganlewis.com DOL Intends to Require Added Information on 401k Statements Summary: The DOL has indicated it will propose a new rule that requires qualified participant 401k retirement plan statements to show the monthly income the participant can expect to receive over his/her life expectancy. Source: Carltonfields.com DOL Proposes Temporary Relief for "Related Account" Indemnifications Summary: The DOL has proposed an amendment to PTE 80-26 to provide temporary relief for certain "related account" indemnifications typically found in brokerage or other investment agreements. The proposed amendment would apply to ERISA plans and to plans described in Code § 4975(e)(1), which include IRAs and HSAs. Written comments or requests for a public hearing on the proposed amendment must be submitted by July 23, 2013. Source: Thomson Reuters/EBIA IRS Waives 60-Day Deadline for IRA Rollover Summary: In a private letter ruling, the Internal Revenue Service waived the 60- day deadline for rolling over amounts into an individual retirement account (IRA), since the IRA owner did not receive the 402(f) rollover notice. Source: Erisalawyerblog.com In-Plan Roth Rollovers Under the American Taxpayer Relief Act of 2012 Summary: The American Taxpayer Relief Act expanded the internal Roth conversion/transfer option to include all contribution sources and eliminated the requirement that the transferred funds be otherwise eligible for distribution. The ATRA provisions have raised several administrative issues that must be resolved before most employers will adopt and implement the new rules. This letter is a summary of ASPPA's recommendations. Source: ASPPA Notice of Proposed Amendment to Prohibited Transaction Exemption 80-26 Summary: This document contains a notice of a proposed amendment to PTE 80-26. PTE 80-26 is a class exemption that permits parties in interest with respect to employee benefit plans to make certain interest free loans and extensions of credit to such plans, provided the conditions of the exemption are met. The proposed amendment, if adopted, would give retroactive and temporary exemptive relief for certain guarantees of the payment of debits to plan investment accounts (including IRAs) by parties in interest to such plans as well as certain loans and loan repayments made pursuant to such guarantees. Source: Federalregister.gov 2013 IRS Examinations to Focus on 401k Plans Summary: The Internal Revenue Service continues to focus much of its 2013 examination activity on 401k plan compliance, according to Monika Templeman, IRS director of Employee Plans Examinations. 401k plan compliance is a key priority for the IRS because the 401k is the most prevalent type of retirement plan, Templeman said. Here are some of the potential problem areas discovered or suggested by the compliance check. Source: ASPPA
General Items Self-Employed? How You Can Save More for Retirement Summary: Most Americans work as employees and can save for retirement through a combination of their own personal IRAs and any retirement plan their employer happens to provide. But if you're self-employed, you have many more options for your retirement savings, and depending on which one you choose, you might be able to put quite a bit more money into tax-favored accounts. Source: Motley Fool 401k Plan Sponsors: These Four Steps Will Change the Retirement Lives of Your Employees Summary: The path to retirement success is surprisingly short. It only contains four steps. What are these four steps, why are they so important and how do we know they are the four steps that will change your life? They are briefly describing them here. Source: Fiduciarynews.com The Next Big Thing for 401k Plans? Summary: One new 401k feature that's starting to take off is being driven by the small plan market. It's In-Plan Life-Time Income Guarantees that are part of a 401k plan. They work like this: participants have the opportunity while they are still working to use some of their plan assets to provide future lifetime guaranteed retirement income. Source: Benefitnews.com
403(b) Plans 403(b)s Becoming More Like 401k's, With One Big Exception Summary: What is the difference between a 401k and a 403(b) retirement plan? The answer: In 403(b) plans, the focus on annuities can inflate plan costs and complicate planning for participants. Source: Morningstar.com
Fiduciary Material and Insight Summary: It is common for companies to have both defined contribution and defined benefit plans, but inconsistencies between them can lead to poor investment results and fiduciary risk. Source: Planadviser.com
Insights: Studies, Research and White Papers Frequently Asked Questions About 401k Plans Summary: This 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 For Performance, 401k Plans Can't Touch Pensions Summary: Pension plans have almost always outperformed 401k plans, but the gap in 2011 was the greatest it's been since the mid-1990s, according to a new report from consulting firm Towers Watson. Towers Watson's analysis of more than 2,000 employer-sponsored retirement plans found that DB plans had median investment returns of 2.74 percent in 2011, compared to 0.22 percent loss for DC plans. Source: CFO.com Achieving a Higher Safe Withdrawal Rate with the Target Percentage Adjustment Summary: Previous studies have evaluated portfolio withdrawal rates assuming a fixed initial withdrawal rate with inflation-adjusted increases thereafter. This study evaluates withdrawal increases zero or greater but not more than inflation. Future increases are contingent upon portfolio performance. A much higher initial withdrawal rate than previously thought possible can be achieved without increasing the probability of failure. Source: Journal of Financial Planning New Bells and Whistles for 401k Plans Summary: Retirement-plan providers, along with a few financial-planning services, are adding new online tools to help people saving for retirement better manage the more than $5.1 trillion in defined-contribution assets, and to help plan participants get their nest eggs ready to generate income when they finally quit working. In some cases, the tools are even prodding workers to increase the portion of each paycheck that they save, diversify their investments, scrutinize fees or consider future health costs. Source: Wall Street Journal
Items of Special Interest to Advisors New 401k Rules Highlights Fiduciary Duty for Advisors Summary: Over the years, many advisors in the bank channel have discovered that marketing and advising on 401k plans to small and midsize employers can be an excellent way not just to pick up business. However, recent changes in the ERISA section 404(a)(1)(A) and (B) rules regarding those tax-advantaged retirement savings plans by the Department of Labor, which oversees ERISA standards, are turning that business growth strategy into a dangerous minefield for advisors. Source: Bankinvestmentconsultant.com When the Tide Turns: Building Next Generation Fixed Income Managers Summary: Both fixed income investors and managers have benefited from a secular bull market over the past thirty years. However, the current low-rate environment and fears over rising rates have changed the landscape of fixed income. This paper highlights shifting investor demand for fixed income strategies and describes four strategic initiatives that asset managers must employ to remain successful. Source: Caseyquirk.com
Court, Legislative and Washington DC Senate Finance Committee Staff Report Suggests Changes in Tax Treatment of Employee Benefits Summary: On May 23, the staff of the Senate Finance Committee issued the seventh in a series of reports outlining alternatives for the members of the committee to consider as they begin work on tax reform legislation. The most recent report, Economic Security, discusses potential goals that could be achieved by modifying tax rules in the areas of retirement income, healthcare benefits, executive compensation, life insurance and annuities and employee fringe benefits. The report also summarizes a wide range of modifications that have been proposed in each of these areas. Source: Mcguirewoods.com House Panel Weighs Bill to Slow SEC's Fiduciary Rule Summary: A House subcommittee took up consideration of a measure that would slow the SEC's work to establish a uniform fiduciary standard that would apply to investment advisors and broker-dealers. The measure was just one in a set of legislative proposals that would roll back provisions of the Dodd-Frank Act. Source: Onwallstreet.com
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