Retirement Plan Year-End Action Items
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General Items Retirement Plan Year-End Action Items Summary: This is a non-exhaustive list that describes year-end action items and the annual notices for retirement plans that must be distributed within a reasonable time prior to the start of the plan year. For calendar year plans, providing the notices outlined here by December 1 will meet this requirement in most cases. Source: Haynesboone.com Why Defined Benefit Plans Are Still Relevant Summary: If the goal is to provide employees with a secure retirement, DB plans are still relevant. Through the combination of pooled investment by experts, mitigating longevity risk, and the potential for the same portability as 401k plans, DB plans can still be a key part of today's retirement plan landscape. Source: Milliman.com
Compliance and Regulatory Related IRS Initiates Internal Controls Outreach Campaign, Signaling New Emphasis in Plan Audits Summary: Recent publications and public forums sponsored by the Internal Revenue Service indicate that the agency has initiated an outreach campaign emphasizing plan sponsors' internal controls in the administration of tax-qualified retirement plans. Given the intensity of the outreach campaign, plan sponsors would be well advised to review and document internal controls. Source: Truckerhuss.com A Plan for Retirement Plan Compliance Summary: It should come as no surprise that something as technical and complicated as the establishment, operation and maintenance of a tax-qualified retirement plan follows the same planning and preparedness principles that apply to life in general. This article focuses on administrative preparedness for just one potential crisis encountered by a retirement plan fiduciary, an audit or investigation by a governmental agency such as the IRS or DOL. Source: Legacyrsllc.com SEC Settles With Nebraska RIA Over Fiduciary Breach Summary: The SEC determined that Manarin Investment Counsel, of Omaha, and its founder and president, Roland Manarin, arranged for the investment vehicles at issue -- which are funds of funds -- to purchase Class A shares of underlying mutual funds while cheaper, institutional shares of the same funds were available. Source: Financial-planning.com Video: Are Your Plan's Financial Statements Using the Correct Auditor's Report? Summary: Are your plan's financial statements using the correct auditor's report? Effective for December 31, 2012 financial statements there is a new auditor's report that is required to be included in a plan's financial statements. Watch this video post to learn more about the new requirements. Source: Erisasunscreen.com
403(b) Plans Wild West in Government 403(b) Continues Summary: When the IRS issued new regulations for the 403(b) several years ago there was hope that the "wild west environment" that existed for k-12 Government plan participants would change for the better. Nearly five years after those regulations went into affect (and seven since issued) there have been some positive changes, but the "wild west environment" remains. Source: Teacher's Advocate
Fiduciary Material and Insight Between a Rock and a Hard Place: DC Plan Fiduciaries Are Feeling the Squeeze Summary: DC plan fiduciaries are increasingly caught between a rock and a hard place. Responsibilities for the role are growing in step with plan participants' increased reliance on DC plans as the primary source of future retirement income. Many fiduciaries are meanwhile challenged to find time to properly discharge their obligations and cultivate the resources needed to navigate today's plan complexities. Industry news suggests that this gap is exposing plan fiduciaries to litigation. Source: Russell.com Considering Money Market Reforms Summary: The debate over the stability of money market funds highlights this important fiduciary obligation to act in clients' best interests. In fiduciary terms, this translates into establishing a consistent process to ensure that all investment recommendations are suitable, even when the recommendation involves a product as seemingly benign as a money market fund. Source: Investmentnews.com (free registration may be required) Harmonizing Your DB and DC Investment Approaches Summary: While an organization's defined benefit and defined contribution retirement plans typically share the same investment committee members, these plans don't always share a consistent investment approach. This Russell Viewpoint discusses how harmonizing your investment approach across plans may lead to improved outcomes and a more defensible fiduciary position. Source: Russell.com Fiduciary Implications of Revenue Sharing Arrangements Summary: The DOL has promulgated regulations that describe what constitute employee benefit plan assets. However, no DOL guidance has focused on whether revenue sharing payments constitute plan assets. That changed in Advisory Opinion 2013-03A where the DOL pointed to several factors that could suggest that a plan has a beneficial interest in revenue sharing payments. Source: Jdsupra.com
Insights: Studies, Research and White Papers Defined Contribution Plan Fees Continue to Decline: 2013 NEPC Plan & Fee Study Summary: Fees related to retirement investment accounts hit another record low in 2013, according to a survey by NEPC. Once again, recordkeeping costs, the second largest component of total fees, saw the sharpest fall. The steep drop in recordkeeping fees, or costs related to documenting participant activity, has been fueled by new rules aimed at making fees more transparent and well publicized litigation. Source: Nepc.com Minimizing Defined Contribution Plan Loan Leakage Summary: Recent studies have illuminated the problem of defined contribution plan leakage and the negative impact it has on retirement income savings. One prominent source of plan leakage is loan defaults which primarily occur when a plan participant with an outstanding loan terminates employment. This paper outlines four actions plan sponsors can implement to decrease DC plan loan leakage. Source: Aon.com Report Released on the State of U.S. Employee Retirement Preparedness Summary: Financial Finesse announced the release of its third annual research report on the state of U.S. employee retirement preparedness. Report finds Millennials are the "lost generation" of retirement planning; women and lower-income employees also at significant risk of not being able to achieve retirement security. Source: 401khelpcenter.com Investment Structure: Coloring the Investment Menu With Collective Investment Trusts Summary: Collective investment trusts have been around for more than half a century, most notably in defined benefit plans and as a vehicle for stable value investments in defined contribution plans. Traditionally, these comparatively low-cost investments were available only to large plans. Now, with technological advances, regulatory reforms and other changes in the retirement plan investment landscape, some of these funds are growing, providers report, and not just in the large-plan market but at medium-sized and even small plans, as well. Source: Plansponsor.com
Items of Special Interest to Advisors Why a TPA Can Be a 401k Financial Advisor's Best Friend Summary: The relationships that an advisor can have with their clients and other retirement plan professionals are the most important things and everything else is secondary. One of the most important relationships that a financial advisor can develop to augment their practice to current and future clients is finding a few third party administrators to work with. In many ways, the TPA's can be the financial advisor's best friend and this article will show you why. Source: Jdsupra.com
Court, Legislative and Washington DC International Paper Settles Excessive Fee Case for $30 Million Summary: The parties in Beesley v. International Paper filed papers indicating they have settled their lawsuit and are now seeking approval of the district court. In total, International Paper agreed to pay $30 million and submit to extensive affirmative relief. The Beesley case was one of the original excessive fee cases filed on September 11, 2006 by current and former participants in IP's hourly and salaried 401k plans. Source: Fraplantools.com The Moench Presumption: An Examination of the Third Circuit's Standard of Prudence Summary: This article, which appeared in Benefits Law Journal, discusses the standard of prudence formulated by the Third Circuit for employer stock cases brought under ERISA and the Circuit Courts' subsequent treatment of that standard. Although a number of Circuit Courts have adopted the Moench presumption of prudence, there is still significant disagreement over the procedural stage at which the presumption applies and how the presumption can be rebutted. Source: McDermott Will & Emery Summary: Washington's current inactivity poses a challenge for defined contribution plan sponsors, investment management providers and recordkeepers. We've heard rumblings of legislative, regulatory and perhaps even taxation changes...but what changes seem likely to happen? Source: Alliancebernstein.com ERISA -- When Will a Court Deny Attorney Fees to a Claimant? Summary: Under ERISA, a court may in its discretion award reasonable attorney's fees and costs to a claimant seeking benefits if there is a showing of "some degree of success on the merits." But what does "some degree of success on the merits" mean? Source: Boomerisablog.com
Marketplace News Lincoln Financial Adds Two Relationship Managers Retirementcalculator.Org Launches Latest Calculator Blue Prairie Taps New Retiremap iPad Workshops Securian Develops Fee Benchmarking Service WMSI Acquires S&P Capital IQ Financial Communications Fidelity Reports Tax-Exempt DC Business Doubles Since 2008 Tegrit Group Finalizes DC Recordkeeping Business Sale ERISA Fiduciary Advisors Affiliates With Retirement Plan Advisory Group Aspire Partners With Ceridian on Automated Data Flow Compliancedashboard Expands Software to Cover 401k Plans Fidelity Rolls Out Retirement Transition Service AUL Announces Participant Asset Allocation Program
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