Four Steps That Will Help You Grow Your 401k Practice
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In This Issue
Items of Special Interest to Service Providers Four Steps That Will Help You Grow Your 401k Practice Summary: And if you already have a few 401k clients and focus all of your energy and attention on outstanding customer service, you'll have an award-winning client retention rate, but this still does not equate to new client growth. If you want to grow your business and increase the number of clients you serve, you should start with the four steps outlined here. Source: 401kbestpractices.com $460 Billion in DC Plan Assets in Search of a New Home Summary: After years of extremely low turnover, retirement plan sponsors are giving serious consideration to altering their 401k plan recordkeeping relationships. With the current US-based 401k retirement plan assets estimated at $4.4 trillion assets controlled by plan sponsors planning a move represents a $460 billion opportunity for providers that can effectively differentiate themselves in an increasingly commoditized marketplace. Source: 401khelpcenter.com What ERISA Service Providers Should Know About Money Market Reform Summary: Most U.S. money market funds will begin restructuring their operations beginning in 2014 and throughout 2015 and 2016 as a result of the SEC's adoption of wide ranging changes to the rules regulating these funds. Since many plan participants invest in money market funds, ERISA plan sponsors, recordkeepers and investment consultants and other advisers will need to plan for operational, contractual, disclosure and other changes in connection with these new rules. Source: Drinkerbiddle.com Webinar: To 401k or Not 401k? Not the Only Question RIAs Must Answer Summary: Is the 401k market a place you want to get more involved in? This new webinar from RIABiz reveals the 401k opportunity for you in stark clarity and helps you avoid the potential landmines so you can both win and profit in the marketplace. Source: Riabiz.com Silver Lining in ERISA 408(b)(2) Summary: David Witz provides a high level review of the business opportunity available to those that consult on ERISA 408(b)(2) in the fall issue of Plan Consultants. While most service providers abide by the rules and deliver their disclosures as required on time, other more entrepreneurial service providers are using 408(b)(2) as a means to build their business by assisting plan sponsors with their obligation to evaluate their disclosures to ensure they are complete. Source: Fraplantools.com Conflicts of Interest on DOL's Radar Summary: More than 75 percent of consulting firms to pensions act as both investment managers and outside consultants for their clients, according to the SEC. The potential conflicts of interest that arise when consultants recommend their own firm as a manager of plans assets have been on regulators' radar for some time. Source: Benefitspro.com
General Items Roth vs. Regular 401k: The Math Summary: From the point of view of plan participants and plan sponsors, Roth math can be a little confusing. This article begins with a discussion of Roth tax benefit math and the relative value of Roth tax benefits in different scenarios. It then briefly describe Congress's Roth budget math -- which is what drives Roth policy generally. The article concludes with a brief review of possible Roth policy changes. Source: Octoberthree.com 401k Plans: With Great Power Comes Great Responsibility Summary: A 401k retirement plan provides employers with a powerful tool to incentivize productivity and recruit and retain talent. With that tool, however, comes great responsibility to properly administer the plan. Here are some important points employers should consider when offering 401k retirement plans. Source: Workforce.com
403(b) Plans Summary: Every year it's important that you review the requirements for operating your 403(b) retirement plan. This checklist is a "quick tool" to help you keep your plan in compliance with many of the important rules. Source: Irs.gov
Fiduciary and Plan Governance Material Outsourcing of Defined Contribution Plan Fiduciary Function Summary: The current trend towards the "institutionalization" of investments has made the DC plan fiduciary's job more demanding, and outsourcing is one solution to meeting those increased needs. This article begins with some background on the DC fiduciary outsourcing issue and then briefly looks at the issues DC fiduciary outsourcing presents under ERISA. Source: Octoberthree.com Employer Stock Plan Fiduciaries Can Take Liability-Shielding Measures, Attorneys Say Summary: Despite killing the fiduciary-friendly presumption of prudence, the U.S. Supreme Court's decision in Fifth Third Bancorp v. Dudenhoeffer erected significant barriers for plaintiffs bringing stock-drop claims, attorneys said in a panel presentation. Source: Bna.com
Insight: Studies, Research and White Papers How Big Is the Problem? The High Cost of Accounts Left Behind Summary: On the surface, the expense of administering accounts with small balances in a retirement plan may seem relatively immaterial and inexpensive. This white paper helps quantify the costs of maintaining small balance accounts for former employees. It offer some solutions for mitigating these costs as well as minimizing the fiduciary responsibilities created by these accounts. Source: Mtrustcompany.com Infographic: Retirement Income Then and Now Summary: The Investment Company Institute recently examined retirees' sources of income in 1975 and 2013. Then and now, Social Security accounted for more than half of a retiree's income stream. Source: Aarp.org
Court, Legal, Legislative and Washington DC Lack of Standing Fatal to ERISA Stock Drop Claims Summary: For plan administrators, the UBS litigation underscores the potential insulating effect of drafting plan documents that require investment in the company's own stock. For practitioners on both sides, the District Court's decision is a reminder always to consider fundamental, threshold issues such as standing when bringing or defending an ERISA case. Source: Benefitslawinsider.com
Compliance and Regulatory Related Do You Need to Send an Annual Notice to Plan Participants? Summary: Plan sponsors of defined contribution qualified plans may need to issue one or more annual notices to participants before the end of each plan year. Failure to issue a required annual notice can have significant consequences. This article serves as a reminder of the multiple year-end notices that defined contribution plans must issue to participants. Source: Alston.com Attorney Explains TDF Annuity Rule Summary: What does the new guidance about annuity investments in target-date funds mean for retirement plan sponsors and participants? Attorney Derrin Watson explains what the guidance allows and how annuities in TDFs will work for participants. Source: Planadviser.com IRS and DOL Guidance to Encourage Employers to Offer Annuity Options in DC Plans Summary: Paper summarizes the target-date fund description on which the guidance is based and the guidance provided by each agency. It also offer some observations -- both with respect to the new guidance and, more broadly, with respect to agencies' broader public policy goal of encouraging the use of lifetime income products by defined contribution plans and their participants. Source: Groom.com Lights Out for a 401k Investment Fund? Don't Forget the Blackout Notice Rules Summary: Replacement of an investment option or a permanent restriction on new contributions to an investment fund does not, in and of itself, trigger a blackout notice requirement. However, if pursuant to such actions the rights to diversify investments or take loans or distributions are suspended, a blackout notice may be in order. The penalties for noncompliance can be steep. Employers who are changing 401k investment funds are urged to carefully consider whether a blackout notice is required. Source: Mintz.com Required 2014 Qualified Retirement Plan Amendments and Cycle D Determination Letter Filing Deadline Summary: This article provides a summary of required qualified retirement plan amendments for individually designed plans that must be adopted to comply with the Internal Revenue Code by the end of the 2014 plan year. It also provides plan document considerations for January 2015 determination letter application filers (Cycle D). Source: Practicallaw.com
Marketplace News Great-West Rebrands Retirement Business as 'Empower' Hartford Funds Enhance DCIO Capabilities MacKay Shields Expands DC Capabilities With Two New CIT's LPL Unveils New Plan Participant Mobile App Two Industry Veterans Join Anova Consulting Group HighTower Expands Baltimore Retirement Team Mesirow Financial Adds Sales Distribution VP Nelson & Nelson Joins Commonwealth Financial Network David Baker, Founder of BenefitsLink, Inducted as Fellow of ACEBC ASPPA Inaugurates Kyla Keck as 46th President
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