Four Strategies to Help Increase 401k Participation
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In This Issue
General Items Four Strategies to Help Increase 401k Participation Summary: Americans need to save for retirement, but many are unsure how to go about it. Employers realize that they are part of the solution that can lead employees toward making choices that can help to drive better outcomes. This white paper features four strategies and action steps which may help you increase plan participation. Source: Baml.com Plan Sponsors: Have You Thought About Branching Out in Your Employee Communications? Summary: Delivering ERISA-required retirement plan information to participants can be difficult to keep straight. It can also be time consuming and expensive. But, a simpler way to communicate has taken root -- the use of e-mail and other electronic methods for delivering required plan information is growing exponentially. Source: Principal.com
403(b) Plans As Clear as Mud? The 403(b) Plan Termination Rules Summary: Though it is welcome news that a 403(b) plan could indeed be terminated, the IRS guidance has created more questions than answers as to the actual termination process. This article attempts to get to the bottom of the issues that can make plan terminations, as a practical matter, difficult or even impossible to complete. Source: Cammackretirement.com
Fiduciary and Plan Governance Material Internal Controls, Good Communications Key to Reducing Plan Errors, Consultant Says Summary: Retirement plan sponsors need to have internal controls and good communications between all relevant departments to reduce typical problems that would prompt an investigation from the Internal Revenue Service that could lead to disqualifying their plans, a consultant said at the American Institute of CPAs employee benefits conference. Source: Bna.com Plan Document Mistakes a Retirement Plan Sponsor Should Avoid Summary: A retirement plan document can cause many issues for a retirement plan sponsor. This article can help plan sponsors take count of the many problems their plan document can have on their retirement plan and what steps they should take to avoid these problems. Source: Jdsupra.com
Insight: Studies, Research and White Papers One in Four Americans' Nest Egg Balance: $0 Summary: The sluggish economic recovery may have put many Americans on a back foot when it comes to saving enough to retire when they would like to, but a recent Country Financial Security Index survey sheds light on a more concerning factor. One in four (25 percent) Americans, across all age groups, admit they are not saving at all for retirement, or they are unsure. Source: 401khelpcenter.com "401k Geographic Trends" Analysis Reveals Top Cities for Retirement Investing Summary: Fidelity Investments released analysis that shows which cities and its citizens are saving the most -- or least -- in their workplace retirement accounts, and which are more prone to having an outstanding 401k loan. Source: 401khelpcenter.com Canadian DC Retirement Income Levels Decline Summary: Replacement income levels generated by capital accumulation plans declined to 63% in the first quarter of 2014, according to Eckler's Capital Accumulation Plan Income Tracker. While investment returns were strong in the quarter, the drop was driven by a combination of lower interest rates, which raised annuity prices and wage increases. Source: Belfint.com
Items of Special Interest to Service Providers Asset Managers Should Prepare for Rise in DC Specialists Summary: While the DC business remains largely the domain of large record-keeper/asset managers and investment consultants, asset managers who ignore the financial advisors serving smaller plans are missing an opportunity to remain competitive in the DC advisor market. Source: 401khelpcenter.com Sideways Market and Increased Expenses Bring Declining Operating Margins to Asset Managers Summary: The apparent market slowdown led to a more difficult quarter for asset managers resulting in declining operating margins and moderate AUM growth for most firms. On average, asset managers saw a 2.8% increase in their AUM as they continued to benefit mainly from market appreciation. Although steady, AUM growth did taper significantly from the 6.7% average growth rate seen in 2013. Source: Kasina.com Recordkeeper Consolidation Will Continue Summary: The consensus among DC industry consultants, executives and experts is that recordkeeper consolidation will continue, driven by rising technology costs, lower fees and increased intellectual capital needed to remain competitive. The prognosis is for fewer providers, which will result in higher fees and worse service. Source: Napa-net.org Incredible Marketing Opportunity for RIAs Summary: The DOL's pending fiduciary revisions and the SEC's stall tactics provide an incredible opportunity for investment advisers, who are already subject to a fiduciary standard. Prudent investment advisers will focus their marketing on the inequitable dual standard that currently exists and the dangers that result from same. Source: Prudent Investment Adviser Overview of ERISA Issues Related to In-House Plan Use of Proprietary Products and Services Summary: Article provides an overview of the principal ERISA issues that arise in connection with the use of proprietary products and services, and highlight the prohibited transaction exemptions that may be utilized to avoid violations of ERISA's prohibited transaction rules. It then address the major themes in the litigation related to proprietary products and services. Finally, article describe strategies and approaches for complying with ERISA and mitigating litigation risk when using proprietary products and services. Source: Groom.com
Court, Legal, Legislative and Washington DC ASPPA's Graff Blasts Rubio's Retirement Proposal Summary: Though Rubio is attempting to confront the widespread problem of saving too little for retirement, his proposed solution is not addressing the cause of the issue, says Brian Graff, CEO of the American Society of Pension Professionals and Actuaries. Source: Asppanews.org Presumption of Reasonableness Applied to Plan Fiduciary's Delayed Sale of Employer Stock Summary: In the latest installment of this stock drop case involving 401k plans sponsored by General Motors, the trial court has again ruled against the participants' claim that the independent fiduciary managing the plans' employer stock fund breached its fiduciary duty under ERISA. Source: Ebia.com
Compliance and Regulatory Related Summary: One of the six 401k hardship withdrawal safe harbor reasons is for casualty losses to a participant's principal residence. Since this is a relatively recent addition to the safe harbor reasons, and because there seem to be more and more storms causing damage to principal residences, it's a good time review and understand the subject. Source: Mhco.com Mid-Year Plan Amendments Related to Marriages of Same Sex Couples Summary: Safe harbor 401k or 401(m) plans may be amended mid-year to comply with the Supreme Court's decision in United States v. Windsor and related IRS guidance in Revenue Ruling 2013-17 and Notice 2014-19 (Notice 2014-37). Source: Irs.gov One Participant Plans Can Now Correct Late Form 5500 Filings Summary: In Revenue Procedure 2014-32, the Internal Revenue Service introduced a pilot correction program for plans which are subject to the Form 5500 filing requirement under the Internal Revenue Code, but which are exempt from Title I of ERISA. This covers certain foreign plans and plans which are considered one participant plans. Source: Benefitsbryancave.com Qualified Plans Should Not Hope to Get a Qualified Audit Opinion Summary: As a result of recent changes to the AICPA-approved language for audit reports, unqualified audit opinions will no longer confuse plan sponsors and service providers who associate the word qualified with compliance. New accounting pronouncements have changed the phraseology used to indicate the plan's financial statements are not materially misstated from "unqualified opinion" to "unmodified opinion." Unfortunately, they did not take the extra step to rename the "qualified opinion" as a "modified opinion," so the changes only eliminated half the problem. Source: Belfint.com Puerto Rico Pension Feature Codes Misapplied by Plan Sponsors Summary: During its Hacienda project, the Employee Plans Compliance Unit looked at whether plan sponsors properly classified plans covering employees who are Puerto Rico residents. The result showed that most of the sampled sponsors misunderstood the Puerto Rico related pension feature codes 3C and 3J. Source: Irs.gov
Marketplace News John Hancock Expands Asset Allocation Offerings CEFEX Introduces Data Security Requirements Into Certification Assessments Beltz Ianni & Associates Adds Retirement Plan Consultant vWise Appoints SVP of Sales for Mid-Market TRA Restructures for Better Client Service Focus 401k Widgets Announces New Products Manning & Napier Unveils Website to Help Navigate Fiduciary Risk
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