Interesting, Risky, or Downright Dumb Retirement Plan Investments
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In This Issue
Fiduciary and Plan Governance Material Interesting, Risky, or Downright Dumb Retirement Plan Investments Summary: Most retirement plans today follow a rational investment process and keep it simple with a mix of good quality funds covering an appropriate spectrum of asset classes. But for every rule, there is an exception, and what Pete Swisher lays out in this article is just a sampling of the exceptions; interesting, risky, or downright stupid investments that illustrate useful lessons in retirement plans. Source: Pentegra.com Please Respond to This RFP: Thoroughly Vetting Service Providers Summary: Retirement plan fiduciaries have many responsibilities, one of which is the identification and selection of a service provider through a formal request for proposals process. A fiduciary must test the waters every so often to meet its ongoing monitoring responsibility. An RFP provides the structure for a well-thought-out evaluation and leaves a written document trail as evidence of the fiduciary process. Source: Wagnerlawgroup.com Seven Reasons for Hiring a Dedicated Retirement Plan Advisor Summary: This paper examines the range of professional services that a Plan Advisor can offer to fiduciaries of an employer-sponsored retirement plan. It is intended to raise awareness on the part of plan fiduciaries of the type of support they could expect by engaging a Plan Advisor who generally are hired to serve at least seven major functions. Source: Strategicbenefitservices.com Improving Retirement Plan Participant Decisions Summary: As a plan sponsor and fiduciary, part of your responsibility is to help your participants make better choices when it comes to their plan investments. This article reviews some of the benefits of preventing participant mistakes, what the most common mistakes are, and some possible solutions. Source: 401khelpcenter.com Dispelling the Myth: Is a 3(16) Fiduciary Really Necessary? Summary: Tacking on the term "3(16) fiduciary" to the service contract and charging additional service fees does not mean that the TPA has magically removed the liability of the plan from the plan sponsor, particularly when the TPA can claim that any mistakes they make are caused by bad or untimely data provided by the employer. Source: Consultrms.com
General Items Keeping Up With the Trends in 401k Plans Summary: Being an ERISA plan fiduciary is hard work, particularly in the current landscape of evolving plan and investment structures, coupled with increased regulation and scrutiny. In the age of constant evolution in technology and streamlining of processes, it can be hard to keep up with the latest plan trends. Here is a summary of just a few of them. Source: Benefitsbryancave.com Retirement Education is Not the Answer to the Retirement Crisis Summary: The evidence is clear: employers need to provide their employees with a way to save for retirement that requires little effort on their part. They need an automated retirement program that ensures they are saving the right amount for retirement, with automatic contribution adjustments made as market fluctuations dictate. Source: Xerox.com What to Outsource in Your DC Plan Summary: Before undertaking a formal program of outsourcing fiduciary responsibility, a sponsor will want to engage in an explicit decision-making process to determine which functions to outsource and which to retain control over. This paper explores how DC plan sponsors should think about what functions to outsource and provides a client case study challenge. Source: Russell.com
403(b) Plans More 403(b) Plans Offer Target-Date Options as Part of Streamlined Investment Platforms Summary: 403(b) plans are simplifying investment platforms by streamlining the options available for investors, according to the sixth annual PSCA 2014 403(b) Plan Survey. The survey found that more plans are offering target-date investment options as part of a slimmer overall investment platform and that more plan sponsors are retaining investment advisors, possibly reflecting a growing recognition of fiduciary responsibilities under ERISA. Source: Wolterskluwerlb.com
Insight: Studies, Research and White Papers Plan Sponsors: Offer Participants Tax Diversification Through Roth 401k In-Plan Conversions Summary: Offering in-plan Roth conversions in your plan is a minor administration change that could potentially make a huge difference in how much your employees have available at retirement. Which participants could benefit from taking advantage of the new Roth in-plan conversion rule? Article reviews a few of the most compelling examples. Source: 401khelpcenter.com 401k Plans Bring Retirement Readiness Within Reach Summary: Americans who have access to 401k plans can help to achieve a more secure retirement if they start early and save consistently over the course of their career, according to new research sponsored by Prudential. Source: 401khelpcenter.com Women, Low Earners Least Likely to Embrace Full Employer Match Summary: A new survey by TIAA-CREF shows that 78 percent of Americans who contribute to an employer-sponsored retirement plan receive matching contributions from their employer, and 77 percent of those who have matching contributions save enough to receive the full employer match. However, only 72 percent of women contribute enough to receive the full employer match, compared with 82 percent of men, and only 64 percent of those earning less than $35,000 a year receive the full match. Source: 401khelpcenter.com
Items of Special Interest to Service Providers Independent RIAs Continue to Threaten Wirehouses Summary: Wirehouses continue to struggle to retain their most productive advisors, according to new research from Cerulli Associates. The study shows that wirehouses are continuing to lose assets to advisors in independent channels at a "slow but persistent pace." Advisors at wirehouses also report a lower level of satisfaction with their employers than do independent RIAs. Source: Benefitspro.com QLACs Offer New Retirement Planning Options, Advisors Must do Their Due Diligence Summary: Recent regulations issued by the Department of Treasury, four years in the making, offer an intriguing new retirement planning option for pension and retail advisers by easing required minimum distribution rules to encourage the purchase of deferred-income annuities. Source: Fi360.com Study Released on DC Value-Added Programs Summary: Chatham Partners today announced findings from a groundbreaking new study on Defined Contribution value-added programs with the inaugural release of "Changing the DC Advisor Value-Add Game, Maximizing Your Investment in DC Advisor Value-Added Programs." Source: 401khelpcenter.com
Target-Date Funds NAGDCA Report on Target-Date Funds Summary: This 17 page publication reviews the current state of TDFs, pointing out trends in usage and changes in the types of funds available. It also suggest some tools that can help plan sponsors in evaluating the characteristics of TDFs and some tips on selecting an appropriate fund series for your specific plan. Source: Nagdca.org
Compliance and Regulatory Related Plan Sponsors Have Increased Responsibilities for Retirement Plan Audits Summary: A determination by DOL that an audit was substandard or deficient may result in DOL concluding a Form 5500 filing was not timely filed in that it did not include audited financial statements. The deficiency may subject the plan sponsor to late filing penalties and additional costs associated with the elimination of the audit deficiency or, in some cases, retaining a different CPA firm to re-audit the Plan. Source: Ellinandtucker.com SEC Adopts Money Market Fund Reform Rules Summary: The Securities and Exchange Commission adopted amendments to the rules that govern money market mutual funds. According to this press release, the amendments make structural and operational reforms to address risks of investor runs in money market funds, while preserving the benefits of the funds. Source: 401khelpcenter.com IRS and Treasury Officials Provide Informal Views on 401k Issues Summary: The Joint Committee on Employee Benefits of the American Bar Association has reported on its May 2014 Q&A session with IRS and Treasury officials. The report includes unofficial, nonbinding remarks about 401k plans and other topics. Here's a summary. Source: Ebia.com Avoiding Pitfalls in Retirement Plan Forfeitures Summary: The rules surrounding forfeitures may be less straightforward than expected, and some plans have received increased IRS scrutiny for their forfeiture practices. This paper offers sponsors information and insight, and helps them to manage forfeited assets in their plans. The paper also outlines the timing and approved uses of forfeitures and provides additional considerations for forfeiture-related events. Source: Vanguard.com
Marketplace News Nevin Adams Joins ASPPA as Communications Chief Voya Launches Online Retirement Planning Portal Newport Expands Reach With New Chicago Office United Benefit Advisors Names McPhearson CEO Retirement Playbook Hires Industry Veteran to Meet Growing Demand Fidelity's DC Plan Assets at $1.4 Trillion Prudential Retirement Names New Head of Stable Value Primer on Retirement Income Strategies and Market Innovation Published MassMutual Appoints Eight New Relationship Managers Wagner Law Group Expands ERISA Litigation Staff
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