Is the Form 5500 Worthless?
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In This Issue
Compliance and Regulatory Related Summary: Close to 700,000 retirement plans filed a Form 5500 in 2011, representing $6 trillion in assets held by more than 130 million Americans. Given the form's role as a primary tool for enforcing the Employee Retirement Income Security Act, it's safe to say that no reporting instrument is as vital to the accounting of retirement assets. It's also safe to say that few have much respect for it. Source: Benefitspro.com How to Understand and Review Form 5500 Summary: If you are the person -- or one of the people -- at your company who is responsible for administering the company's retirement plan, please make sure you review the Form 5500 for your plan each year. It is important for you to understand the 5500. This article reviews the important items you need to review on your Form 5500-SF (short form) or Form 5500 (long form). Source: Consultrms.com Summary: By complying with ERISA section 404(c), sponsors and other fiduciaries of retirement plans with participant-directed investments may shield themselves from liability for poor investment decisions made by plan participants. This checklist will help you determine how well you are complying with ERISA section 404(c). Source: Strategicbenefitservices.com 2014 Mid-Year Compliance Update Summary: While 2014 has been a relatively quiet year in terms of new rules affecting retirement plans, the January 1, 2015 effective date for the Affordable Care Act employer shared responsibility mandate is now in sight. This summary discusses a few key developments regarding employee benefit plans for employers to consider as they move into the second half of 2014. Source: Employeebenefitsupdate.com Video: Monitoring Controls Over Catch-Up Contributions Summary: Plan participants, who are age 50 or older by the end of the calendar year, are eligible to make catch-up contributions into their 401k plan (other than a SIMPLE plan), 403(b) plan, SARSEP or 457(b) plan. Watch this video to learn how to monitor catch-up contributions. Source: Erisasunscreen.com
Fiduciary and Plan Governance Material Understanding Your Fiduciary Role Summary: This 16 page fiduciary guide can help you understand and manage your fiduciary responsibilities through a better understanding of existing rules and regulations. Source: Jpmorganfunds.com Suit Highlights Potential Fiduciary Risks for 401k Plan Sponsors Summary: If you haven't been paying close attention to the administration of your company's 401k plan, the case of Tussey v. ABB Inc. should make you sit up and take notice. How can plan sponsors minimize fiduciary risk and avoid litigation? Experts advise following these seven tips. Source: Cfo.com Using Re-enrollment to Improve Participant Investing and Provide Fiduciary Protections Summary: There is tension in the world of 401k plans. Participants fret over the investment decisions they must make. Their employers worry about fiduciary liability for how the participants' accounts are invested. Fortunately, there is a straightforward strategy for dealing with this tension -- a strategy that dramatically improves the quality of participant investing while providing enhanced protections to the plan sponsors and committee members who manage those plans. This strategy is known as "re-enrollment." Source: Jpmorganfunds.com
Insight: Studies, Research and White Papers Pre-Retiree Study Shows Today's Priorities Trump Future Retirement Plans Summary: The study, which consisted of responses from 1,619 full-time employed individuals between the ages of 25 and 65 who have been participating in their employer-sponsored retirement plan, looked at why participants delay saving for retirement and how those barriers can be overcome. Source: 401khelpcenter.com Transamerica Releases Study on Savings Habits of American Millennials Summary: The nonprofit Transamerica Center for Retirement Studies released a new report and fact sheet revealing the retirement savings habits of American Millennial workers (born between 1979 and 1996) from its 15th Annual Transamerica Retirement Survey, one of the largest and longest-running national surveys of its kind. Source: 401khelpcenter.com The Economics of Providing 401k Plans: Services, Fees, and Expenses, 2013 Summary: To provide and maintain 401k plans, employers are required to obtain a variety of administrative, participant-focused, regulatory, and compliance services. All of these services involve costs. This updated study looks at those costs. Key findings include plan participants investing in mutual funds tend to hold lower-cost funds, the expense ratios that 401k plan participants incur for investing in mutual funds have declined substantially since 2000, and the downward trend in the expense ratios that plan participants incur for investing in mutual funds continued in 2013. Source: Ici.org Revenue Sharing is on the Decline in 401k Plans Summary: Reports indicate revenue sharing has been declining over the last few years, both in terms of the percentage of plans including it and as a portion of the expense ratio. Fee disclosure requirements have likely played at least some part in this trend, but market forces have been more influential in reducing the incidence of revenue sharing. Source: Employeefiduciary.com Measuring Employee Savings and Investing Behavior in DC Plans Summary: This Aon Hewitt research report analyzes the participant behavior of more than 3.5 million employees eligible for defined contribution plans offered by their employers. The data can be used to provide a comprehensive view of the defined contribution universe including participation rates, savings levels, plan balances, investment actions and account activity. This is a nine page highlight report. Source: Aon.com Stock Market's Rise Lifts Retirement Balances to a New Record High Summary: The recent record markets have resulted in increased retirement savings for millions of Americans according to a second quarter 2014 Fidelity analysis of its 401k and IRA accounts. Source: 401khelpcenter.com Pension Advance Transaction Firms Use 'Questionable' Practices, GAO Report Says Summary: An undercover GAO investigator looking into firms that offer pension advances received offers with effective interest rates that mostly ranged from 27 percent to 46 percent, at times far exceeding the legal limits set by states on the interest rates assessed for various types of personal credit, the GAO said in a new report. Source: Pensionrights.org
Plan Automation Retirement Plan Participants in Favor of Automatic Annual Increase Summary: Survey respondents ranked several financial priorities that compete with their retirement account contributions including: paying off debt (29 percent), day-to-day expenses (23 percent), taking care of family (11 percent) and saving for college (4 percent) among others. But 55% said they would favor automatic annual increases to their contributions. Source: 401khelpcenter.com Understanding Re-Enrollment Benefits for Participants and Plan Sponsors Summary: Despite participant education efforts and the availability of simplified investment decision-making options, there is a general lack of confidence that participants are appropriately diversified within their 401k plans. Conducting a re-enrollment not only helps get participants into a diversified portfolio, but also helps to ensure their asset allocation changes with them over time. Source: Jpmorganfunds.com
Items of Special Interest to Service Providers SEC Staff Issues Guidance on Investment Adviser Proxy Voting Responsibilities Summary: The SEC appears to expand the oversight responsibilities of investment advisers that retain proxy advisory firms to provide proxy voting recommendations by establishing an ongoing duty to monitor these firms to ensure that they have the capacity and competency to adequately analyze proxy issues. The guidance reiterates and builds upon positions that the SEC has previously taken. Source: Jdsupra.com
Court, Legal, Legislative and Washington DC 2014 Mid-Year Supreme Court Case Review Summary: The 2013-2014 term of the Supreme Court of the United States produced opinions that will have substantial effects on the design and administration of most employee benefits plans. This summary highlights three key decisions, one significant procedural ruling, and an emerging issue likely headed for Supreme Court review, all of which deserve the attention of employee benefits professionals. Source: Employeebenefitsupdate.com BP Workers Can Sue Over Retirement Losses Tied to Gulf Spill Summary: BP employees can sue managers of the company's retirement savings plan over losses related to the 2010 Gulf of Mexico oil spill, a U.S. appeals court said. The New Orleans-based appellate court today, citing a recent Supreme Court ruling, rejected Houston U.S. District Judge Keith Ellison's 2012 decision denying claims for millions of dollars in losses suffered by the plans. Source: Benefitspro.com
Marketplace News Morningstar Pays $61 Million in Trade Secrets Case Sageview Adds Investment Advisor to Boston Team Securian Adds to Sales Staff in New England and Texas Envestnet Acquires Advice Provider Klein Decisions Pensionmark Creates 'Practice Acquisition Group' Pentegra Retirement Announces New Board Appointments Samuel Choy Joins Law Firm of King & Spalding PEI Adds to Consultant and Investment Staff
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