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401k Averages Book 13th Edition -- Updated and Newly Released Fee Benchmarking Book

Want to become a "subject matter expert" on 401k fees? Use the 401k Averages Book to better understand investment, recordkeeping, revenue sharing expenses for all size 401k plans. The newly released and updated Averages Book is the leading source available for non-biased, comparative 401k fee information. It is designed to provide professionals with essential fee information to help their clients determine if their plan costs are above or below average. Click here for more information.

Insights: Studies, Research and White Papers

Chatham Releases TPA Benchmarking Study

Summary: Chatham Partners recently concluded its 2nd annual TPA Satisfaction and Needs Assessment Study; surveying 173 TPAs and gathering their opinions of leading retirement service providers. The study assessed TPAs' attitudes and perceptions of leading retirement service providers, including their levels of satisfaction with providers' TPA support services, personnel, technology, product and service offering, and overall impressions. Here are some key findings.

Source: 401khelpcenter.com

Defined-Maturity Funds: A Bond Alternative With Compromises

Summary: Defined-maturity funds are hybrid funds designed to bridge one of the biggest gaps between traditional bond funds and individual funds. In this article, author discusses the differences between individual bonds and defined-maturity funds. He then compares and contrasts the offerings from the three firms that he was able to identify as currently offering defined-maturity funds.

Source: Aaii.com

Evaluation of Target-Date Glide Paths Within Defined Contribution Plans

Summary: Paper presents a simple methodology to support sponsors of defined contribution plans when evaluating the allocation to equity in target-date glide paths. Researchers found that higher-equity glide paths offer greater efficacy for lifetime income replacement, while lower-equity glide paths offer greater efficacy for stable account balances with lower risk of large capital losses.

Source: Ssrn.com

How Does 401k Auto-Enrollment Relate to the Employer Match and Total Compensation?

Summary: This paper examines the relationship between auto-enrollment and employer decisions on matching contributions and overall compensation. Finding suggests that firms with auto-enrollment may offset higher 401k participation costs by trimming their per-participant contributions.

Source: Center for Retirement Research

Compliance and Regulatory Related

Electronic Self-Certification for Hardship Distributions May Be Insufficient, IRS Says

Summary: In some cases, allowing participants to apply for loans or hardship withdrawals online may not allow the plan sponsor adequate opportunity to verify and document the reason the participant is seeking this emergency funding.

Source: Erisapracticecenter.com

ASPPA Objects to Post-DOMA Paperwork

Summary: The American Society of Pension Professionals & Actuaries wrote to the IRS this week to object to certain paperwork requirements arising from the Supreme Court's decision to strike down a key portion of the Defense of Marriage Act.

Source: Benefitspro.com

403(b) Plans

About Reporting Those Late Deposits to 403(b) Plans

Summary: Some six years after the publication of IRS and DOL guidance related to the "new world" of 403(b) regulations, there continues to be a basic misunderstanding of some of the fundamental remaining differences between 403(b) and 401k plans-even from otherwise reputable auditing firms. One set of those involves the reporting rules related to the correction and reporting on the 5500 of one of the most common errors in any elective deferral plan, the late deposit of those deferrals into the plan.

Source: Businessofbenefits.com

Fiduciary Material and Insight

Ten Concepts That Every Retirement Plan Sponsor Should Know

Summary: It is important that retirement plan sponsors know basic concepts about retirement plans, so they can understand their role and their liability. This article is about 10 things that plan sponsor must know in order to understand their duties and the risk involved if they are derelict in their duties.

Source: Jdsupra.com

Custom Target-Date Funds -- Assessing the Best Fit

Summary: The white paper examines ways in which advisors can assist plan sponsors in fulfilling their ERISA fiduciary responsibilities and minimize risk through the use of custom target-date funds. The paper includes several good supplements.

Source: Drinkerbiddle.com

Video: Fiduciary Focus On Timely Deposits

Summary: Fiduciaries are well served to make sure their plan is making deposits timely, in order to prevent the perception that the fiduciary is not doing their job.

Source: Erisasunscreen.com

Will You Need to Drop Your Money Market Fund?

Summary: Most 401k plans offer a money market fund which may be the most popular fund in the plan. Traditionally a place to seek refuge when the markets become stormy, money market funds may be altered significantly as a result of Securities and Exchange Commission reforms. Although the reforms have yet to be finalized, it is likely that many of the changes outlined here will be implemented.

Source: Benefitnews.com

The Plan Sponsor's Guide to Delegating to Money Managers -- The Faceless Vendors

Summary: Few retirement plan sponsors ever actually meet the individuals who decide which stocks and bonds populate their retirement plans' investment funds. This article will shed light on the money manager role, and provide straightforward tips for plan sponsors on how to effectively choose a money manager and evaluate their service quality for a given retirement plan.

Source: Rolandcriss.com

Items of Special Interest to Advisors

The Key Succession Issues for an Advisory Practice

Summary: Succession planning has moved to the top of the practice management priority list for tens of thousands of advisory firms. As the average age of founder/advisors creeps ever closer to traditional retirement age, the profession is asking itself a lot of hard questions about how to keep these businesses alive -- and take care of clients -- after the founder retires.

Source: Advisorperspectives.com

Not Your Ordinary TPA (Part 2)

Summary: This article is part two of a three-part series on how not to be an ordinary service provider and discusses the relationship with the customer and what services customers value. In an increasingly commoditized business, part of the equation for success for retirement service firms will be to provide great customer service and a key part of that is looking for what customers will want in the future.

Source: Scs-consultants.com

Excessive Fee Suits Offer Advisor Lessons

Summary: More than 30 lawsuits have been filed against 401k plan sponsors in the past few years, leaving little doubt that the retirement field remains strewn with legal landmines. Attorneys Mike Prame and David Levine, speaking Monday at the 2013 Center for Due Diligence conference, drew up a map of sorts to help retirement advisors tiptoe their way to safety.

Source: Benefitspro.com

Court, Legislative and Washington DC

Another Participant Challenge to DB Plan Investments: Could Your Plan Defend Its Investment Program?

Summary: The focus of U.S. litigation challenging plan investments has been 401k plans, but that may be changing. Defined benefit plan sponsors may have felt that they were immune to these types of claims because the funding rules require them to make up investment losses, but defined benefit plans are now becoming targets in class action litigation. The latest complaint seeking class certification challenges U.S. Bancorp's investment of 100% of its assets in equities from 2007 through 2010.

Source: Pensionsbenefitslaw.com

Court Rules on Same-Sex Spouse's Rights Under DC Plan

Summary: In Cozen O'Connor, the United States District Court for the Eastern District of Pennsylvania held that a marriage between two women validly celebrated in Canada and (the court found) recognized in the participant's domicile of Illinois must be recognized for purposes of Cozen O'Connor's profit sharing plan. This article briefly reviews the case and then discuss its implications for plan sponsors and administrators.

Source: Octoberthree.com

General Items

The Future of Domestic Partner Benefits

Summary: When the U.S. Supreme Court in U.S. v. Windsor overturned a key part of the Defense of Marriage Act in June 2013, it opened up new doors to same-sex married couples when it comes to employee benefits. Although there is still much more guidance to come on the benefit changes employers must make as a result of the ruling, the decision itself raises a new question: Is there still a need for domestic partner offerings for unmarried couples in a post-Windsor landscape?

Source: Shrm.org

Presentation Slides: Hot Topics for 401k Plan Sponsors

Summary: These are the slides from a presentation by David Godofsky of Alston & Bird titled "Hot Topics for 401k Sponsors." Covers a number of topics including the real reason to offer a Roth 401k plan and 401k non-discrimination testing.

Source: Americanbenefitscouncil.org

Time to Retire the Idea of Retirement

Summary: Americans should plan on working as long as they are able. If their abilities decline, they should think in terms of de-intensifying their work schedules rather than ending them, as long as that is possible. The added years of earning, likely at or near peak levels, would probably do more to end the later years' funding gap than any other solution.

Source: Thinkadvisor.com

Marketplace News

FRA PlanTools Launches PLANbenchmark