Top Ten New Year's Resolutions for Retirement Plan Fiduciaries
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Fiduciary and Plan Governance Material Top Ten New Year's Resolutions for Retirement Plan Fiduciaries Summary: You can become a better retirement plan fiduciary. To get you started down the right path in the new year, this article lays out the top ten new year's resolutions that retirement plan fiduciaries should consider making for 2014. Source: Benefitsbryancave.com Fee Benchmarking Should Be a Priority in the Wake of 401k Plan Fee Litigation Summary: 401k plan fiduciaries that have not benchmarked 401k plan fees and expenses against market rates recently should do so in 2014, in light of legal victories secured in 2013 by 401k plan participants. In several noteworthy cases, plan participants prevailed in lawsuits alleging that employers and plan fiduciaries allowed their 401k plans to charge excessive administrative and/or investment management fees and expenses. Source: Winston.com 401k Plan Sponsor Should Be Aware of These Future Threats Summary: What was good then isn't good now and what is good now may not be good tomorrow. As a retirement plan sponsor you have to understand what isn't good now and you need to be concerned what might not be good later. This article talks about what maybe issues for plan sponsors in the future, as governmental action and litigation may make what is OK today not so good tomorrow. Source: Jdsupra.com The Benefits of Incorporating a Full Range of Lifestyle Options on an Investment Menu Summary: A well-structured and well-communicated investment menu can help Plan Sponsors manage their fiduciary liability and is key to minimizing a wide range of common problems associated with participant-directed plans. Article suggests that a Plan's investment menu would be enhanced by the inclusion of a coordinated family of lifestyle or risk-based options that would provide investment solutions for a wide range of participants. Source: Manning-Napier.com
General Items Top Five Goals for 401k Plan Sponsors in 2014 Summary: According to Mercer, there are 10 steps plan sponsors should take in 2014 to keep their 401k plans leading edge and market competitive. From Mercer's top ten, here are the five that the author thinks are the most important. Source: Benefitnews.com
403(b) Plans A 403(b) Plan Sponsor Decides Simplification Is Best for Everyone Summary: Many 403(b) sponsors were faced with necessary changes following passage of new Internal Revenue Service regulations in 2007, and Niagara University was no different. The university recognized it needed a retirement plan committee responsible for monitoring investments, so University President Reverend James J. Maher appointed people to the committee, including faculty, staff and administration. Source: Plansponsor.com
Insights: Studies, Research and White Papers A Guide to Retirement Plan Fees & Expenses Summary: This paper discusses retirement plan fees and expenses with the intention of assisting retirement plan sponsors in achieving a greater understanding of their plan's fees. Generally, retirement plan fees can be classified into three main categories, but the associated services can apply to multiple categories. For the purposes of this paper, it categorizes the fees and then detail the specific functions typically related to each expense. Source: Multnomahgroup.com Summary: Employees are putting 401k contributions on the back burner as their concerns about paying for health care continue to grow. That's according to the latest edition of the annual Mercer Workplace Survey, a nationally representative poll of retirement plan participants who also receive health benefits at work. The 2013 study also revealed a number of troubling contradictions that carry important implications for plan sponsors and administrators. Source: Mercerhrs.com Summary: It was not until plan sponsors and regulators began to understand that behavioral finance concepts influenced participant behavior that auto enrollment, qualified default investment alternatives, and target-date funds began to gain traction in defined contribution plans. This paper will broadly examine several of the participant behaviors that necessitated the creation of target-date funds, and discuss ways that well-structured target-date funds can and should be managed in order to maximize participant retirement outcomes. Source: Manning-Napier.com Health of Canadian DB Plans Reaches Record Level Summary: The health of Canadian defined benefit plans recently reached the best level observed in more than 10 years. Mercer's Pension Health Index, which tracks the funded status of a hypothetical DB plan, was at 106% as of December 31, 2013, for Canadian plans, its highest level since June 2001. The index was at 82% in January 2013 and 98% in September 2013. Source: Plansponsor.com Corporate Pension Plan Funding Levels Increased Sharply in 2013 Summary: The pension funded status of the nation's largest corporate sponsors increased sharply in 2013 due primarily to rising interest rates (which lowered liabilities) and a strong stock market, according to a new analysis by Towers Watson. In reviewing estimated year-end pension plan results, Towers Watson found that 2013 pension plan funding levels increased by 16 percentage points to reach their highest levels since 2007. Source: Towerswatson.com Australia's Retirement Journey -- Moving Beyond the "Pot of Gold" Summary: In this article, PIMCO speaks with Professor Michael Drew about the development of the DC system in Australia. He shares with us the need to think about three success drivers: communication, contributions and investment management. Though the compulsory contribution rate is increasing to 12% in Australia, Drew warns this still may be insufficient if risk is not managed appropriately. Source: Pimco.com
Items of Special Interest to Advisors ERISA Compliance Policies and Procedures: Where Are Yours? Summary: An investment advisor becoming an investment advice fiduciary under ERISA should revise its written policies and procedures and code of ethics to address its ERISA obligations. Industry practice unfortunately appears to not always include a complete discussion of the relevant ERISA risk considerations in the firm's compliance manual. This article identifies a few examples of common risk items which should have written policies and procedures. Source: Wagnerlawgroup.com Rollovers to Individual Retirement Accounts Summary: FINRA is issuing this Notice to remind firms of their responsibilities when (1) recommending a rollover or transfer of assets in an employer-sponsored retirement plan to an Individual Retirement Account (IRA) or (2) marketing IRAs and associated services. Reviewing firm practices in this area will be an examination priority for FINRA in 2014. Source: Finra.org Investment Advisers Should Begin Preparing to Submit Their Annual Form ADV Amendment Summary: On January 2, 2014, Final Renewal Statements and reports are available viewing and printing. Registered investment adviser firms should download and review these reports as soon as they become available; the deadline for receipt of Final Renewal Statement payments in January 10, 2014. Source: Ria-compliance-consultants.com DOL Fiduciary Rules Delayed Until August Summary: The re-release of the Department of Labor's fiduciary rules will be delayed until August so that Labor Secretary Thomas Perez can work closely with both sides of the political aisle to come up with new fiduciary rules to govern the financial advisors who work within the retirement space. The original release date for the rules was in the spring. Source: Benefitspro.com Brokers Begin to Break Into the 401k Market Summary: Because the defined contribution market is booming, many advisors and benefits brokers who've never worked with retirement plans would like to break into this market. They just don't know where to start. One place to start is to align with someone who's already successful in the 401k environment. Source: Benefitspro.com
Compliance and Regulatory Related 2014 401k and Other Pension Plan Limits Summary: Some pension limitations such as those governing 401k plans and IRAs will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. However, other pension plan limitations will increase for 2014. Here are the full details. Source: 401khelpcenter.com 2014 Benefit Basics and Reporting and Disclosure Calendar Summary: Benefit Basics Card and Reporting and Disclosure Calendar provide a handy listing of updated statutory limits, disclosure requirements and deadlines, and related 2014 information for retirement, and health and welfare plans. Source: Towerswatson.com IRS Gives Plans More Time to Amend for Roth Accounts Summary: Plan sponsors have been waiting for details on rollovers within retirement plans to designated after-tax Roth accounts. The IRS has issued new guidance that may prove beneficial. Among the clarifications and changes in Notice 2013-74 was an extension of the deadline for amending plans to incorporate in-plan Roth accounts. Source: Thompson.com Deadline for Depositing Partners Elective Deferrals Summary: One of the more significant challenges facing 401k plan (and ERISA 403(b) plans) plan sponsors and practitioners is the timing issue regarding the depositing of elective deferrals into the trust. The lack of regular paychecks and the timing of the determination of earned income often cause confusion regarding the application of the rules regarding the timing of the deposits for partners' 401k plan deferrals. This technical update addresses the timing issue. Source: Relius.net
Marketplace News T. Rowe Price Closes Funds to New Investors CoPiloted Launches Managed 401k Accounts
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