Safe Harbor 401k Chart
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General Items Summary: Chart covers some of the basics that an employer needs to know before considering a 401k Safe Harbor Plan. Each employer's goals, plan design, contribution sources and demographics form a unique scenario which the employer will wish to discuss with his or her plan provider before finalizing the decision to make the plan a 401k Safe Harbor Plan. Source: McKay Hochman Guide to Safe Harbor 401k Plans Summary: Safe Harbor 401k Plans are very popular with business owners and plan participants alike. The Safe Harbor 401k provisions have some very big benefits and a few drawbacks. This article outlines the rules for Safe Harbor 401k plans and 403(b) plans to help a business owner decide if this design is right for you. Source: Benefit-Resources.com Promoting Defined Contribution Plans: 10 Tips for Plan Sponsors Summary: Employers who actively promote and communicate their retirement plans can demonstrate its importance to employees. Here are 10 ideas for plan sponsors to help employees get the most from their retirement plan. Source: Milliman.com Bogle's Retirement "Disaster" Unlikely to Occur Summary: Recently John Bogle, founder of the Vanguard mutual fund group, said that future retirees face a looming disaster because Social Security is going broke, DB plans are underfunded and participants aren't contributing enough to their 401ks. Author writes on why Bogle is wrong. Source: Benefitnews.com How Retirement Plan Sponsors Can Take Their Contributions to the Limit Summary: This article is about how plan sponsors can take employer contributions to the limit that puts more money in the pockets of their highly compensated employees and less money in the pockets of government. Source: Jdsupra.com
Compliance and Regulatory Related DOL Guidance on Same-Sex Marriages Summary: As was the case with the IRS before it, the DOL has now issued guidance on the recognition of same-sex marriages for Federal purposes. The DOL released Technical Release 2013-04, providing that the Secretary of Labor will interpret the terms "spouse" and "marriage," for purposes of ERISA and related regulations and opinions, to include individuals who are lawfully married under any state law (regardless of state of domicile). Source: Benefitsforward.com Summary Prospectus May Be Used to Satisfy Prohibited Transaction Exemption Summary: In Advisory Opinion 2013-04A, the U.S. Department of Labor confirmed that, in satisfying the requirements of Prohibited Transaction Exemption (PTE) 77-4, a summary prospectus may be used in lieu of a statutory prospectus. Source: Sutherland.com How Should ERISA Plans Handle Powers of Attorney and Court-Appointed Guardians Summary: This article discusses when an ERISA plan may, and when it must, comply with directions of (1) an attorney in fact under a power of attorney, or (2) a court-appointed guardians. Such issues are not limited to cases in which an ERISA plan participant or beneficiary lacks the capacity to act on his or her own because a person able to act on his own may wish to appoint a third-party agent to act on his behalf, such as an investment manager. Source: Social Science Electronic Publishing Summary: Practical information through video (with a little exaggerated humor) to help prevent fiduciaries from getting burned with their 401k. This week: Exactly what is a timely deposit in the world of the DOL? Source: Erisasunscreen.com
403(b) Plans Higher Ed. Institutions See Benefits of Sole 403(b) Provider Summary: A single recordkeeper model is beneficial for both plan sponsors and participants by providing retirement savings information that can lead to better decision-making and savings habits. In addition to streamlining administrative tasks, sole recordkeeping centralizes the management of plan administration to one institution. Providers can more easily monitor fiduciary obligations and ensure compliance needs are met, and keeping track of investment performance is simpler. Source: Plansponsor.com
Fiduciary Material and Insight How Investment Theory Explains 401k Plan Sponsors' Evolving Fiduciary Duties Summary: Understanding the dominant investment theory of the era helps explain the fiduciary motivations of 401k plan sponsors. It is both instructive and ominous to see how plan sponsors respond. Source: Fiduciarynews.com Retirement Plan Sponsors Need to Be Careful About Buying "Fiduciary Services" Summary: Unlike other languages, English is full of deceptive words that entice people to purchase products and services they think they are getting when they are not. It happens a lot with retirement plan services, especially when it relates to fiduciary services. This article will try to let plan sponsors know what the term fiduciary really means and what products and services out there don't offer the fiduciary liability protection that plan sponsors assume they are getting. Source: Jdsupra.com Fiduciary Rule May Not Appear Until Spring, 408(b)(2) Guide Out Soon Summary: Some in the retirement community are in a state of unrest while awaiting the re-proposal because they can't make plans for the new fiduciary regime, but others are glad that EBSA is taking its time with the rule. One "wild card" in the fiduciary re-proposal will be how the DOL addresses individual retirement accounts and associated rollovers and rollover solicitations. Source: Bna.com
Insights: Studies, Research and White Papers The Investment Policy of the Future Summary: In this white paper, authors discuss how to develop an investment policy that aligns with your objectives and makes possible a more adaptable, nimble investment strategy. They propose some new ways to approach your investment objectives and asset allocation process. With the understanding that change can be difficult, they demonstrate how these changes can be beneficial not only in the short term, but in terms of creating a solid framework from within which your investment strategy can adapt to a shifting landscape. Source: Arnerich Massena Money Market Funds in DC Plans: Time to Rethink? Summary: When the comment period on the SEC's proposed money market fund reforms ends in September, a period of review will begin, leading to implementation as soon as 2014. Although details could change, the reforms will likely add to the growing challenges MMFs face as an effective capital preservation solution within DC plans. In fact, the challenges are sufficiently significant that, in PIMCO's view, the time has come for DC plan sponsors who use MMFs to take a hard look at their choice of capital preservation strategy. Source: Pimco.com Top 50 Canadian DC Plans Report: Why worry? Summary: In Canada, the DC plan market is still relatively immature and, while volatility in financial markets continues to pose a challenge to DC plan sponsors and members, the initial panic that followed in the wake of 2008 has somewhat subsided. It has now been replaced by a broader discussion of the strategies that can be employed in plans to improve retirement readiness. Source: Benefitscanada.com Survey Finds Nearly One in Five Americans Expect Never to Retire Summary: Working until you drop is no longer confined to the pages of Victorian novels according to the findings of a new report published by HSBC. The study discovered that nearly one in five (18%) working-age Americans expect they will never be able to afford to completely retire, believing that circumstances will require them to work indefinitely. Source: 401khelpcenter.com U.S. Investors Underestimating Retirement Income Needs Summary: Most American investors are optimistic that their finances will improve in the next year, and the vast majority is confident that their current investment approach has them on track to meet their retirement savings goals. However, less than half say they have a financial plan, and those who do may be significantly underestimating the amount they will need in retirement, according to a survey released today by the Natixis Global Asset Management. Source: 401khelpcenter.com Automatic Features Remain Popular With Sponsors Summary: According to a new survey, 56% of responding plan sponsors reported that they offer automatic enrollment. One-fourth of these sponsors use automatic enrollment with an automatic contribution rate escalation feature and 30% have auto enrollment without auto escalation. About 18% of respondents not currently offering these provisions are considering auto enrollment. Source: Pensionmark.com
Items of Special Interest to Advisors Responsible Plan Fiduciaries and Disclosure Issues Summary: The 408(b)(2) regulation requires that its service, status and compensation disclosures be made to "responsible plan fiduciaries" or "RPFs." In the rush to make the 408(b)(2) disclosures, most recordkeepers, broker-dealers and RIAs sent their disclosure documents to their primary contact at the plan sponsor. In at least some of those cases, the primary contact was not the RPF. Source: Fredreish.com CalPERS and Passive Investing: A Couple of Thoughts Summary: If a major and highly influential pension fund goes the index/passive investing route, how long will it be until others follow, seeking both safety in numbers and the potential defense to breach of fiduciary duty claims of pointing to CalPERS' decision as reflecting an industry-wide standard of reasonableness? Source: Bostonerisalaw.com
Court, Legislative and Washington DC First Circuit to Potential Business Acquirers: Buyer Beware of Underfunded Pension Liabilities Summary: Sun Capital Partners vs. New England Teamsters & Trucking Pension Fund could have a much wider impact beyond private equity funds and multiemployer plans in the First Circuit. Single employer acquisitions of companies that have pension liabilities often face similar controlled group issues. These controlled group issues also could affect other qualified plans, executive compensation plans, and health and welfare plans of employers. Source: Employeebenefitslawreport.com
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