What Top 401k Plans Do Differently
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In This Issue
General Items
What Top 401k Plans Do Differently Summary: When it comes to getting workers, particularly lower-earning workers, to save more of their money, the effort goes beyond plan design. Advisers find that it makes sense to talk to them about the saver's credit, a tax credit for employees that can be as high as 50% of their contribution, depending on their adjusted gross income.
Source: Investmentnews.com (free registration may be required)
Industry Leaders Share Thoughts About ERISA Summary: Forty years ago on September 2nd, in response to failing companies resulting in workers losing pensions, sweeping legislation designed to protect workers from losing their earned retirement income was signed into law.
Source: Plansponsor.com
Automatic Rollovers Not Just for Active Plan Cleanup Summary: Implementing an automatic rollover program can help retirement plan sponsors establish safe harbor individual retirement accounts for missing or non-responsive participants.
Source: Plansponsor.com Summary: The fear of increased fiduciary responsibility has kept most Canadian plan sponsors away from helping members past the accumulation phase of their group retirement and savings arrangements. Yet we are seeing more and more sponsors dip their toes in the water and get involved.
Source: Benefitscanada.com
403(b) Plans
Increasing Participation Rates in 403(b) Plans Summary: Employers are increasingly concerned about low participation rates in 403(b) plans, in particular plans in the public education K-12 market segment where there are most often no matching contributions. Article reviews some strategies for increasing participation.
Source: Ntsa-net.org
Insight: Studies, Research and White Papers
America Has a Retirement Spending Problem Summary: The ongoing debate about Americans' saving behavior during their working years misses the equally important question of whether retirees will spend their nest egg in the right way. Americans are not perfect savers, but retirement security requires much more than just a high personal saving rate. Contrary to public sentiment, America has a retirement spending problem, not just a saving one.
Source: Brookings.edu
401k Participation High, but Workers Still Could Face Shortfalls; Survey Summary: Participants in 401k retirement plans who work with financial advisors save more and have clearer financial goals than their peers, according to a study by Natixis Global Asset Management. Overall, however, the study shows many workers -- including those close to retirement -- aren't on track to meet the savings targets they've set for themselves.
Source: 401khelpcenter.com
Generation X Workers' Retirement Collision Course Can Still Be Corrected Summary: Transamerica Center for Retirement Studies released a this report, Generation X: Retirement Reality Bites Unless Answers Are Implemented, revealing the current lack of retirement preparedness among Generation X workers (born between 1965 and1978) that identifies opportunities for improving their long-term outcomes.
Source: Transamericacenter.org
Fiduciary and Plan Governance Material
Fiduciary Guarantees -- There's Tinsel on the Tinsel Summary: Sometimes called the fiduciary promise, industry messaging misleadingly overstates its value to plan sponsors. Words such as "guarantee" and "warranty" connote protection and security -- that sense that I can't be harmed if things go wrong because someone else has promised to protect me. In the 401k context, this generally means its "my provider -- not me-- who will be liable." But these promises fall far short of delivering plan sponsors meaningful protection from fiduciary liability.
Source: Fiduciaryplangovernance.com
Why Plan Sponsors Are Buying 401k Liability Insurance Summary: As legal shake-ups rattle more plan sponsor windows, warranties and fiduciary insurance policies in the 401k arena are making a comeback, despite the long memories of some prominent skeptics who recall how rotten such policies were the first time around.
Source: Riabiz.com
The Fiduciary Quicksand of Acquiring, Holding and Selling Employer Stock Summary: Congress knew that holding large amounts of employer stock in a company's pension plan created significant tension between the intrinsically high risk of a single stock and the demands of a fiduciary's standard of conduct. Five page article gets into detail on the legal and fiduciary foundation of holding employer stock in a plan.
Source: Erisafiduciaryadministrators.com
You Might Have a Problem With Your Retirement Plan When... Summary: You just saw your plan provider is on TV and it's not for an interview or a commercial. There are quite a few instances when you should know when your retirement plan is in trouble. In this article, Ary Rosenbaum talks about those instances and gives examples.
Source: Jdsupra.com
Items of Special Interest to Service Providers
Professional Retirement Plan Advisors Have Significant Impact on Retirement Plan Performance Summary: Transamerica Retirement Solutions released a research report highlighting the benefits of partnering with a professional retirement plan advisor. This study demonstrates that professional retirement plan advisors are central to the strategic direction, administration, and overall performance of the retirement plans they manage. The study defines professional retirement plan advisors as those who work primarily or exclusively with retirement plans.
Source: 401khelpcenter.com
Court, Legal, Legislative and Washington DC
DOL Offers Some 'Friendly' Advice to Supremes on 401k Fee Case Summary: The DOL has offered some "friendly" advice to the U.S. Supreme Court as it considers a review of a high-profile 401k fee case. In a "friend of the Court" amicus brief filing, the DOL said it thinks that the high court should weigh in on the statute of limitations issue presented in Tibble v. Edison, but not on the issue of reviewing an alleged breach of duty in administering the plan in accordance with its terms.
Source: Napa-net.org
Company Owner Pleads Guilty to Falsifying ERISA Disclosures Summary: The owner of a Maryland electrical contracting company pleaded guilty to falsifying plan documents to avoid making contributions to several employee benefits plans.
Source: Plansponsor.com
Court Blocks DC Plan Participant Claims Against Madoff Trustee Summary: A federal bankruptcy judge has affirmed the denial of recovery claims from retirement plan participants who indirectly invested in the now-infamous Bernie Madoff Ponzi scheme.
Source: Planadviser.com
Compliance and Regulatory Related
DOL Requests Comments on Brokerage Windows in 401k Plans Summary: On August 20, 2014, the DOL published a request for information on the use of these brokerage windows 401k plans. The DOL's goal in issuing the request for information is to assist the DOL in determining whether, and to what extent, regulatory standards or other guidance concerning the use of brokerage windows may be necessary to protect plan participants.
Source: Winston.com
DOL Opens the Door to Questioning Brokerage Windows Under 401k Plans Summary: This RFI could signal an effort on the part of the DOL to promulgate additional regulatory requirements or other guidance applicable to the use of brokerage windows, with possible impact on plan sponsors that may offer windows under their plans and also on financial institutions that provide or facilitate the windows.
Source: Edechert.com
SEC Money Market Reform -- ERISA Impact Summary: The SEC has published its final regulations that reform money market mutual funds. The regulations provide for two core reforms. As a result of these reforms, plan sponsors and fiduciaries should consider several issues outlined here.
Source: Employeebenefitslawreport.com
IRS Issues Retirement Plan Group Investment Trust Guidance Summary: The IRS has issued Revenue Ruling 2014-24, providing additional guidance on the ability of certain retirement plans qualified under Puerto Rico tax laws to participate in group trusts for investment purposes. The guidance also addresses insurance contracts in the retirement plan group trust context.
Source: Ascensus.com
Marketplace News Trinity Benefit Advisors Is Newest UBA Partner Firm Plan Strategies Launches New Portfolio Allocation Offerings Cambridge Announces New Vice President Retirement Advisor Council Elects New Board Members Moira Hagy Joins Assurance Financial's Retirement Services Team Axios Advisory Group Joins the Pensionmark Network Worst States in Which to Have a 401k Plan Top Industries With the Best 401k Plans Partnership Unites Fiduciary Consulting Practices Segal Rogerscasey Adds Senior Investment Consultant Great-West Introduces Interactive Resource Centre for Plan Sponsors
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. 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, but publishers do move or delete articles. Therefore, we can't guarantee that the links provided will remain operational. 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. THIS NEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE INVESTMENT, TAX, ACCOUNTING OR LEGAL ADVICE. 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. 401khelpcenter.com, LLC
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