How to Build and Run a Retirement Plan Committee
|
Newsletter Sponsor 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.
Fiduciary Related Material and Insight How to Build and Run a Retirement Plan Committee Summary: An important first step in fulfilling plan governance requirements is establishing a retirement plan committee. Retirement plan committees serve as the backbone of any retirement plan governance structure. They're responsible for making many of the decisions regarding the plan and are also the primary named fiduciaries of the plan. This guide offers insight to help create and manage a committee that operates in the best interests of plan participants. Source: Planpilot.com The Pursuit of Procedural Prudence: Do You Have the Expertise? Summary: Prudence is the most important because it underpin's the fulfillment of the other key ERISA duties. Therefore, in and of itself, it can be said that prudence carries the greatest amount of risk relative to the other duties. As such, a plan sponsor's actions will be evaluated by the process used to make the decision (procedural prudence) and the result of the decision (substantive prudence). Anyone can follow a "process," but a "prudent process" requires looking at the right information in the right way. Source: Porteval.com Mixing SEC Filings and SPDs Could Lead to a Fiduciary Hangover Summary: While "stock-drop" cases are not new these days, a recent Ninth Circuit case added a new spin that retirement plan fiduciaries should be aware of. In Harris v. Amgen, the court found that statements made in SEC filings and expressly incorporated into a plan's SPD are fiduciary activities that can form the basis of liability under ERISA. Source: Benefitsbryancave.com DC Fee Management -- Mitigating Fiduciary Risk and Maximizing Plan Performance Summary: Effective fee management is a critical component in maximizing retirement readiness and minimizing fiduciary risk. DC plan fees are the target of intense scrutiny from legislators, regulators, and litigators, and lawsuits continue to grab headlines. This paper on DC Fee Management will help plan sponsors to ensure DC plan fees are competitive and appropriately allocated, and assist committee members in satisfying their fiduciary requirements. Source: Mercer.com Summary: It is not uncommon for investment consultants to provide what can best be described as merely pretend portfolio investment services. Because of this, investment fiduciaries often settle for consultants whose practice discipline is focused on selecting active managers and actively managed mutual funds. Plan assets are not managed with respect to the plan's funding policy needs and objectives; and even the monitoring and measuring function is focused, not on the portfolio, but on the performance of discrete asset class silos against straw-man index fund benchmarks. Every pension investment fiduciary deserves better than that. Source: 401khelpcenter.com A Plan Sponsor's Guide to 401k Revenue Sharing Summary: The problem with revenue sharing is that many plan sponsors are unaware of the true cost of the "free money" that mutual fund companies pay third party administrators to offset plan expenses. This paper is about the true cost of all of that free revenue sharing money and why plan sponsors may consider avoiding all revenue sharing pay funds. Source: Jdsupra.com
Compliance and Regulatory Related Paying Fees From the Plan is Not a "No-Brainer" Summary: Although using the revenue generated by the Plan's investment funds to pay investment, advisory or recordkeeping fees may seem at first a "no-brainer," this decision requires financial analysis, assessment of fiduciary obligations, and an examination of the Plan Sponsor's goals. Here are some of the things to keep in mind. Source: Poynerspruill.com Puerto Rico Treasury Expected to Issue Guidance on Retirement Plan Limits Summary: As required by the Puerto Rico Internal Revenue Code of 2011, the Puerto Rico Secretary of the Treasury is expected to issue a Circular Letter announcing the key pension limits for 2014. Source: Groom.com The DOL Plan Investigation 408(b)(2) Style Summary: Plan sponsors of late have been receiving letters from DOL containing requests for some 22 separate items. For those sponsors who have yet to receive the letter, now is the time to prepare. This will avoid the panic and sick feeling in the stomach that will inevitably that inevitably follows the receipt of such a letter when a plan sponsor is not prepared. Source: Fiduciaryplangovernance.com Summary: Qualified plans frequently provide that participation commences on an entry date that coincides with or immediately follows completion of a year of service. While there seems to be no issue with the concept that the calendar year begins on January 1 and ends on December 31, making that same determination with respect to periods that do not begin on the first day, or end on the last day, of a month sometimes seems to present difficulties. An IRS official responses. Source: Benefitsbryancave.com
Insights: Studies, Research and White Papers Employers Boost 401k Match Contributions, Relax Eligibility Rules Summary: Employers are increasingly taking bolder actions to help ensure that participants achieve greater financial security through 401k and other defined contribution retirement plans, according to a 2013 survey by consultancy Aon Hewitt. Source: Shrm.org Summary: Exchange-traded funds (ETFs) are one of the most poorly understood investments among Canadians, according to a report by the BMO Wealth Institute. Source: Benefitscanada.com No Canadian Retirement Crisis: Actuaries Summary: While there may be challenges with people living longer, Canada isn't facing a retirement crisis, according to the Canadian Institute of Actuaries. However, the organization believes there are other areas where policymakers should take notice. Source: Benefitscanada.com
Items of Special Interest to Advisors DCIO Assets Still Growing Strong, but Challenges Mount Summary: While the DCIO market, as a whole, is strong and growing, a sizable share of managers are struggling to maintain net inflows as competition increases and opportunities become more limited. This year, for the first time, one-third of managers surveyed are on track to experience annual DCIO net redemptions. Source: 401khelpcenter.com Demand Rising for 401k Advisors Summary: Plan sponsors are actively searching out skilled 401k advisors, so the market is booming for qualified plan advisors. But advisors who specialize in group retirement plans are few and far between. Source: Benefitspro.com Ibbotson Target Maturity Report 3Q 2013 Summary: This report reviews the target maturity industry during the 3rd quarter and for the last 12 months by examining the performance of retail target maturity funds and by investigating the drivers of performance. It also provide an update to industry-wide, retail fund flows over the past quarter and year. Finally, it explores how glide paths have changed during the years following 2008's financial crisis and the implications of those changes for plan sponsors and their participants. Source: Thecfdd.com Pursuing Rollovers in an Evolving Regulatory Landscape Summary: The current regulatory environment and possible changes to the DOL fiduciary advice regulation can present challenges to advisors who provide services to retirement plans or retirement plan participants. This white paper identifies steps for advisors to consider in light of the current regulatory environment and anticipated developments pertaining to capturing rollovers. Source: Pershing.com (free registration may be required)
Court, Legislative and Washington DC Case Underscores Importance of Plan Documents When Plans Hold Company Stock Summary: A recent Northern District of Georgia case illustrates how, by having clear language in the plan documents, employers can protect fiduciaries from risks of fiduciary liability associated with having a company stock fund among their defined contribution plan investments. Source: Mazconlaw.com New Excessive Fee Case Filed by MassMutual Employees Summary: Employees of MassMutual filed an ERISA class action lawsuit against their employer alleging self-dealing and excessive fees. The plaintiffs allege that the fiduciaries to the plan were conflicted because of their roles as executives to MassMutual. In particular, the plaintiffs attack the CFO as well as the fact that three investment managers from the very products being offered to participants were on the fiduciary investment committee. Source: Fraplantools.com
General Items Point: 401k Participation Should Be Mandatory Summary: Author writes, "The biggest omission from 401k menus is the omission of 'mandatory.' People should be 'shoved' into 401ks rather than 'nudged' into them. Nudging leaves behind the people most in need of a structured retirement savings program." Source: Wall Street Journal Blog Counterpoint: Mandatory 401k Participation. Trending? Summary: Author writes, "In the last two days I've read two separate blogs proposing that 401k participation be made mandatory for all employees. I am flabbergasted!" Source: Employeefiduciary.com Marketplace News Bank of America Moves Its $19 Billion 401k Plan In-house Coalition to Protect Retirement Launches New Campaign Mutual of America Enhances Mobile Website Colonial Surety and CEFEX Collaborate on E&O Program Sapiens Rolls Out New Retirement Recordkeeping Platform DiCenso Joins MassMutual's Institutional Retirement Group
|
