Borzi Takes on Wall Street in Fight Over 401k's
|
Newsletter Sponsor Register Today for CFDD's 2014 Advisor Conference The CFDD's October 15-17, 2014 Advisor Conference, Enhancing Margins, Enterprise Value & Motivating Sponsors to Implement Your Recommendations, is the premier education and networking event for the retirement plans advisory industry. Hosted on the cost effective, culturally rich and networking friendly San Antonio River Walk, CFDD '14 offers more content, CE credits, and value than any other industry event. There is no substitute for face-to-face networking with the "A" Team. Click here to learn more.
In This Issue
General Items Borzi Takes on Wall Street in Fight Over 401k's Summary: Phyllis Borzi spent decades helping invent ways to protect people from unpleasant surprises in their health and retirement plans. Never did she run into the kind of resistance finance firms have mustered against her latest idea. And rarely has the industry met a bureaucrat so difficult to shut down. Source: Bloomberg.com Bosses Overriding Workers' 401k Picks Summary: While one of the biggest trends in 401k plans is auto-enrollment, making it easier for employees to take part in their company retirement plans, many employers are taking matters even further. Spurred by data that shows many older workers take on too much risk and that younger employees may take too little risk in the funds they choose, companies are simply re-enrolling their plan participants in new funds in their own choice, usually target-date funds based on age and expected retirement date. Source: Benefitspro.com
Fiduciary and Plan Governance Material What Plan Sponsors Need to Know About Prohibited Transactions Summary: Employee benefit plans may engage in business transactions with companies and individuals who are considered parties in interest, but certain transactions are prohibited. At the very broadest level, ERISA prohibits the use of a plan's assets for the benefit of a party in interest or a plan fiduciary. Source: Mossadams.com Are Your Service Providers Fiduciaries of Your 401k Plan? Summary: With the increased scrutiny regarding retirement plan investments and administration under ERISA, many plan sponsors are seeking ways to minimize their fiduciary liability by hiring service providers to serve in a fiduciary capacity. Hiring the right service providers can insulate retirement plan sponsors from some fiduciary liability, but it depends on the service agreement itself and how plan governance is structured. Source: Ifebp.org ERISA Fiduciaries: Making Sense of All the Numbers Summary: Most plan sponsors don't know the difference between an ERISA §3(16), ERISA §3(21), and ERISA §3(38) fiduciary, it becomes a number soup. This article is going to break down what a fiduciary is and what these fiduciary number actually means. Source: Jdsupra.com
Insight: Studies, Research and White Papers Plan Sponsors Shift Toward Simplicity Over Flexibility and Choice Summary: Simplicity surpasses flexibility and choice as the leading philosophy behind retirement plan design, according to the 2014 MetLife Qualified Retirement Plan Barometer. An overwhelming majority, 89%, of companies that offer broad access to defined benefit and defined contribution plans and 77% of DC-only plan sponsors say "keep it simple and avoid over-complication," when it comes to retirement plan design. Source: 401khelpcenter.com Collective Investment Funds Most Used in Larger DC Plans Summary: Research with leading defined contribution investment-only managers indicates that CTFs are viable conduits to winning DC business, with almost half of asset managers finding that plan sponsors with more than $250 million are amenable to them. Source: 401khelpcenter.com Forty-Four Percent of Those Who Take a Plan Loan Regret Decision Summary: A new study by TIAA-CREF shows that nearly one-third (29 percent) of Americans who participate in a retirement plan say they have taken out a loan from the savings in their plan. Yet 44 percent of those who have borrowed against their retirement plan savings regret the decision. Among those who took out a loan, 43 percent have taken out two or more loans. Source: 401khelpcenter.com Vanguard Small Business Retirement Plan Report Summary: This 27 page report is designed to help small-business DC plan sponsors understand how their plans compare with other small-business plans. The report information should help small-businesses make more effective plan decisions and serve as a valuable reference tool. Source: Vanguard.com A Study of Retirement Income Culture Among the Fortune 1000 Summary: MetLife developed the Qualified Retirement Plan Barometer study, first released in 2011, as a benchmark for assessing, at a point in time, whether, and to what extent, Fortune 1000 companies were creating a retirement income culture within their respective organizations -- one that includes emphasis on both retirement savings and retirement income. This just released 28 page document is the 2014 version. Source: Metlife.com
Items of Special Interest to Service Providers DC Provider Mergers Seen as Response to Industry Needs Summary: Big mergers and acquisitions have altered the defined contribution retirement plan industry in recent years, leading some to ask what it all means for sponsors and advisers. Source: Plansponsor.com For U.S. Retirement Consultants, Advisers Disrupt the Industry Summary: The big retirement benefit consultants are facing increasing competition as more financial advisers with a "high level of expertise" are focusing on retirement plan design. For workers with 401k accounts the shift could translate into better investment choices, while for firms like Mercer and Aon Hewitt that have been big players in the business, it's a threat. Source: Reuters.com DCIO Market Consolidating, Maturing Summary: The defined contribution investment-only market has been making rapid headway for more than a decade, and its growth today is outpacing that of the DC plan market overall. While the numbers are encouraging, DCIO managers today face mounting challenges in what is now effectively a mature market. Source: Benefitspro.com
Target-Date Funds Ron Surz Says Regulators Can't Solve Target-Date Fund Problems Summary: Ron Surz is president & owner of Target Date Solutions. He says TDFs have become riskier at the target-date. "Fidelity recently increased their equity exposure, positioning for the performance horse race. Also, non-equities at the target-date are mostly long-term bonds, which are hardly safe in a zero interest rate environment. It's a disaster waiting to happen." Source: Fiduciarynews.com
Court, Legal, Legislative and Washington DC The Inadvertent Fiduciary: Mass Mutual Crosses the Line Summary: The ruling in Golden Star, Inc. v. Mass Mutual Life Insurance Company makes a clear case for establishing more consistent standards so that plan service providers know in advance whether they have fiduciary responsibilities and exposure. Source: Pensionsbenefitslaw.com Ninth Circuit Limiting Plaintiffs' Rights to Recover for Breach of Fiduciary Duty Under ERISA Summary: In 2011, the U.S. Supreme Court recognized that some forms of equitable relief could lead to an award of a monetary payment for breach of fiduciary duty under section 502(a)(3) of ERISA. The U.S. Court of Appeals for the Ninth Circuit recently ruled in Gabriel v. Alaska Elec. Pension Fund, that none of these theories was available to a retiree who was incorrectly informed that he was eligible for an annuity. The court was unanimous concerning the remedies of estoppel and reformation, but divided concerning the antiquated remedy of surcharge. Source: Littler.com
Compliance and Regulatory Related ERISA Accounts Useful for Paying Expenses in Plans, but Have Some Risks Summary: ERISA budget accounts are useful tools for managing retirement plan expenses, but they come with advantages and risks and therefore require careful monitoring by plan sponsors and record keepers, benefits attorneys told Bloomberg BNA. Source: Bna.com Coming to Grips With Excess Revenue Sharing Summary: As plans mature and become larger, the problem of excess revenue sharing enters the picture. That's when the revenue sharing coming from fund providers exceeds the amount necessary to pay for the plan's expenses. And plan fiduciaries have to decide what to do with the excess revenue-sharing amounts -- how the plan will use that money. Source: Alliancebernstein.com Frequently Asked Questions About IRS Delinquent Filer Relief Summary: The IRS recently released new requirements a plan must meet to qualify for relief from IRS late filing penalties in connection with the Department of Labor DFVC program. Essentially, plans must file Form 8955-SSA to receive relief from IRS late filing penalties. This is an FAQ on the new guidance. Source: Relius.net RMDs Difference Between Traditional IRAs and 401k's Summary: The term "required beginning date" (RBD) is defined by the IRS as the deadline to receive the first required minimum distribution. The RBD for the owner of a traditional IRA is April 1 of the year following the calendar year in which he or she reached age 70 1/2. But, in a 401k plan, the plan's definition of RBD controls. Source: Mhco.com
Marketplace News Genstar Capital Acquires Asset International, Parent of PLANSPONSOR and PLANADVISOR Firms Integrate Systems for K-12 403(b)s OneAmerica Expands Sales Regions, Appoints New Leadership Securian Financial Group Names New CEO Financial Engines Offers Free Income Planning Services JP Morgan Announces the Launch of First ETF Rocaton Adds 403(b) Expertise to DC Team Mutual of Omaha Offers ERISA 3(16) Service Alliance Benefit Group Expands in the Southeast
This eNewsletter is a digest of information published by a variety of web-based sources on 401k and related issues and is published as a service to our users. 401khelpcenter.com, LLC is not the author of the material unless specifically noted. We review each article to ensure that it is related to the interests of our subscribers, but 401khelpcenter.com, LLC does not endorse and disclaims any and all responsibility or liability for the accuracy, content, completeness, legality, or reliability of the material. Reliance on this material should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. All articles are copyrighted to their publishers. If you believe that your work has been copied in a way that constitutes copyright infringement, please contact the source site immediately. All links were tested before this eNewsletter was e-mailed to you to ensure that they are still functional.
Copyright © 2014 by 401khelpcenter.com, LLC. All rights reserved. No reproductions without prior authorization, but you are free to email this copy (in its entirety) along to colleagues or clients. This newsletter may not be posted to any website.
THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING OR LEGAL ADVICE.
401khelpcenter.com, LLC
|
