To Build a Larger 401k Balance, What Factors Matter Most?
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General Items To Build a Larger 401k Balance, What Factors Matter Most? Summary: We are told that we face a retirement crisis, with 401k plans being a big part of the problem. Article looks at eight factors to determine which of the eight has the greatest impact on a participants 401k plan balance and who has control over them. Source: Morningstar.com Reinventing Retirement Education in the Workplace Summary: Retirement education in the workplace is entering a new stage where smart automatic features play a prominent role and where every aspect of communications is being transformed by the web and mobile devices. As a result, retirement education is becoming more focused on helping workers take action and make wise decisions at key points in their lives. Source: Vanguard.com PepsiCo Uses Data-driven Approach to Retirement Education Summary: Educating employees about opportunities through an employer-sponsored retirement plan still proves a difficult task. Chad Ryan, director of retirement plans for PepsiCo, has taken a committed and data-driven approach to helping PepsiCo's 100,000 U.S. employees retire securely. Source: Benefitnews.com Plan Sponsors Beware: Newsletters Encourage Participant Trading in 401k Accounts Summary: Last week the Wall Street Journal reported on the emergence of a 401k trading account newsletter industry. This is not a welcome development for plan sponsors. Here's why. Source: Benefitnews.com October 1 Deadline Approaches for New Safe Harbor 401k Plan Summary: Back in the day, calendar year taxpayers could wait until year end to set up a new plan. This is not the case, however, for an employer wanting to set up a new Safe Harbor 401k plan. Timing matters is one theme that consistently runs throughout ERISA, and one of those matters is the October 1 deadline to set up a new Safe Harbor 401k plan. Source: Retirementplanblog.com
Compliance and Regulatory Related Proposed SEC Rule Changes for Money Market Funds Summary: The SEC released a proposal that, if adopted, would fundamentally change how most money market funds operate. This article focuses on the impact that the adoption of one (or both) of the alternatives discussed in the SEC proposal would have on defined contribution plans. Source: Octoberthree.com Summary: Responds to a request for an advisory opinion concerning section II(d) of Prohibited Transaction Exemption (PTE) 77-4. Specifically, whether delivery of a "summary prospectus" may be used to satisfy the condition in section II(d) of PTE 77-4 that requires the delivery of a mutual fund's prospectus to the second fiduciary. Source: Dol.gov DOL Pushes Back Fiduciary Rule Again Summary: Department of Labor's Phyllis Borzi says the agency will not meet its original October deadline to produce a new rule on the definition of a fiduciary under ERISA. "While we've been making progress on our fiduciary proposal, you will not see anything in October because we're not finished," Borzi says. Source: Wealthmanagement.com Borzi: DOL Fiduciary Rule Won't 'Outlaw' Commissions Summary: Commissions will not be outlawed when the Labor Department submits its final proposal redefining the fiduciary responsibilities of advisors working with retirement, according to Assistant Secretary of Labor Phyllis Borzi. The final rule proposal might allow "potentially problematic, conflicted" transactions that might have a positive benefit, as long as these transactions were accompanied by appropriate disclosure, she added. Source: Fa-mag.com
403(b) Plans 403(b) Plan Listing of Required Modifications Summary: Regarding 403(b) pre-approved plans process, ASPPA believes certain sample language recently provided by the IRS to plan sponsors adds confusion more than clarity. They suggest in this letter two recommendations for solving this problem and improving the sample language. Source: Asppa.org
Fiduciary Material and Insight Fiduciary Duty and Investment Advice: Attitudes of 401k and 403(b) Participants Summary: The intent of the survey is to understand the degree to which plan participants are concerned about the fact that advice offered by their plan provider may not be required to be in their best interest and whether they would support or oppose requirements to hold investment advice from plan providers to a higher standard. The survey also explores a variety of related issues. Source: Aarp.org Raising the Bar on Target-Date Due Diligence Summary: Despite the rapid adoption of target-date funds and the responsibilities of monitoring such funds, many fiduciaries are unclear on what their target-date funds really hold. This uncertainty comes from lack of complete and comparable disclosure among target-date funds. The challenges to comprehensive target-date due diligence are addressed in this white paper. Source: Manning-Napier.com Fiduciary Issues for Target-Date Funds Summary: This article briefly reviews some of the fiduciary challenges that TDFs present. It begins with a brief review of how TDFs work and the features of TDFs that increase the complexity of the fiduciary's job. Then reviews the issues presented by TDFs in key areas of fiduciary exposure -- fund selection, monitoring and benchmarking, and fees. Source: Octoberthree.com The Misappropriation of Employee Deferrals Summary: Plan sponsors have a fiduciary duty to timely deposit employee contributions. In some cases, employers facing financial hardships may decide to delay depositing the employee contributions to the plan's trust and instead use the funds to pay company Expenses such as payroll. This is a prohibited transaction under ERISA and plan sponsors who choose to delay contributions for any purpose, risk significant financial penalties. Source: Unitedretirement.com When Pension Plans Send Checks to Ex-Employees, the Problems Are Just Starting Summary: Today's retirement plans are facing a new problem -- what to do with uncashed checks. Over time, plan sponsors have mailed checks to thousands of ex-employees who participated in their plans, but today the checks remain uncashed. While the number and amount outstanding varies for each plan, collectively they add up to billions of unclaimed dollars. This article outlines the issues surrounding the issuance of distribution checks that are not cashed along with how Automatic Rollover IRAs provide an easy, fiduciary solution to the problem. Source: Mtrustcompany.com
Insights: Studies, Research and White Papers Survey Reveals Significant Gaps Between Plan Sponsor Intent and Reality Summary: J.P. Morgan Asset Management released the results of an online survey of nearly 800 401k plan sponsors, which highlights a clear gap between the intent to provide retirement well-being for plan participants and the actual approaches they are using to achieve results. The report also uncovered issues that may be impeding progress toward achieving plan objectives. Source: 401khelpcenter.com Canadian DC Plans Continue to Struggle Summary: Canada's workplace DC pension plans continue to struggle. Higher employer contributions can offset that trend, but they're generally not taking place, leaving the onus on employees to increase their retirement contributions amid a slow economic recovery. The latest DC Retirement Index from Towers Watson shows only a slight increase in monthly pension assets. Source: Benefitscanada.com Top Industries With the Best 401k Plans for 2013 Summary: Here is a list of top industries with the highest ranked 401k plans containing more than $100 million in assets. Law tops this 2013 list of industries with the best 401k plans, while blue collar industries such as Manufacturing and Automotive beat out Health and Medicine. Source: Brightscope.com Popularity of Hybrid Plans Expected to Grow Summary: Hybrid plans could become almost as popular as DC plans in the United States by the end of the decade, according to a report. The Wealth Allocation Council report, called The New Wave of Pension Plans in America, estimates that only 5% of total U.S. retirement assets are currently in hybrid plans and may reach 17% in the next seven years. Source: Benefitscanada.com
Items of Special Interest to Advisors The 401k Industry Braces Itself for Fruits of a CalPERS Rethink Summary: One of the last holdouts of active investing on a monster scale appears to be giving in to the lure and logic of passive investing -- and the people in the 401k industry responsible for shaping investment policy will hardly turn a blind eye. Source: Riabiz.com DOL Credits Itself for Notable Evolution in the 401k Industry -- Not Without Criticism Summary: The Department of Labor is taking credit for pushing over the first domino in the line that has led to an accelerating revolution in the 401k industry that is marked by lower fees, higher-quality advice and greater transparency. Source: Riabiz.com
Court, Legislative and Washington DC ERISA Class Action Filed Against J.P. Morgan Over Defunct American Century SVF Summary: J.P. Morgan Retirement Plan Services has been hit with an ERISA class action by participants who invested in the now defunct American Century Stable Asset Fund. The complaint was filed by two plaintiffs who are participants in two different 401k plans that offered the ACSAF. Case represent a new breed of ERISA fiduciary breach cases where class actions are being filed seeking to represent hundreds of plans and the participants in those plans. Source: Fraplantools.com
Marketplace News TPAresources.com Launches Early for NIPA Members StanCorp Announces Strategic Leadership Changes New Tool for Advisors Helps Business Owners Benchmark Benefits Lincoln Financial Announces Enhanced Ibbotson Insights Series BrightScope and The Spaulding Group Release UAPS White Paper for Comment Integrated Benefit Services Rebrands as Pentra Vantage Selects FolioDynamix for 401k Platform Guardian Retirement Adds 24 New Enhanced Funds Bruce Graham Joins Connecticut Office of CapTrust Nationwide Introduces Simplified Small Plan 401k Product Transamerica Announces Webinar on U.S. Retirement Plan Policy Updates
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