Retirement Communications: Emerging and Future Trends
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In This Issue
General Items Retirement Communications: Emerging and Future Trends Summary: Four important trends are emerging as providers rise to meet the challenge of delivering more personalized, contextual and interactive communications to plan participants -- segmentation, channel optimization, data integration and management, and metrics. Source: 401khelpcenter.com Retirement Plans Need to Be Considered in M&As Summary: Human resources, the chief financial officer and an ERISA attorney need to assess the costs and benefits of the respective retirement plans of both the buyer and the seller to determine if the plans should remain separate, be combined or if one of the plans should be terminated. Failure to do so until after the M&A deal closes results in very few options, and typically forces the seller to foot the bill for both plans. Source: Planadviser.com
403(b) Plans Enforcing Plan Limits for 403(b)s Not So Simple Summary: The IRS recently announced cost of living adjustments affecting dollar limitations for retirement plans, which included an increase in the elective deferral limit. But, there are unique rules for 403(b) plans that make enforcing contribution and benefit limits not so straightforward. Article discusses them. Source: Planadviser.com
Insight: Studies, Research and White Papers Fidelity Reports Average 401k Balance Rise; Contributions Up Summary: Fidelity Investments discloses that quarter-end 401k balance increased nearly six percent over the same period last year and employee contributions into 401k accounts continued to trend upward, reaching record levels. Source: 401khelpcenter.com 401k Participation Rate Varies Widely by State, Delaware Tops Summary: Judy Diamond Associates released an analysis of 401k participation rates by states, revealing wide disparities in states' performance on this crucial measure of retirement preparedness. Delaware had the highest participation rate at 85.8%. Nevada had the lowest participation rate at 53.0%. Source: 401khelpcenter.com 2014 CAP Member Survey: Financial Preparedness for Retirement Summary: Canadian employers that provide capital accumulation plans to help employees save for retirement may want to double check on their plan members' perceptions of retirement readiness. This year's CAP Member Survey found a significant gap between sponsors' and members' beliefs and expectations. Source: Benefitscanada.com Recordkeeper Data Show Retirement Plan Participants' Commitment to Saving Summary: ICI's latest study of retirement plan savers' actions, based on defined contribution plan recordkeeper data covering about 25 million employer-based DC plan participant accounts, shows Americans' continuing commitment to saving for retirement. Source: 401khelpcenter.com
Items of Special Interest to Service Providers Special Report: Fewer Firms Servicing the 401k Field Summary: Over the past year, competition for 401k providers has increased and the competition has never been fiercer. Consolidation has picked up and there may only be five or six providers left in a few years according to some sources. In 2007, Callan data showed 38 major players offering recordkeeping services. Today, only 29 are still in the market. Source: Workforce.com Ten Best Practices in Using TPA Service Agreements Summary: Using a service agreement on most engagements is a simple matter of risk and return. "Without a service agreement, if there is a dispute, it will fall to the lawyers to sort it out," says Summit Benefits' Norman Levinrad. What should be in a service agreement? Levinrad outlined 10 key elements. Source: Asppa.org How to Carve Out a Niche in the 401k Market Summary: If you're one of those advisors and would like to expand your 401k business, or you've been thinking about moving into this segment of the financial industry, then the four steps listed in this article will help you get started. Source: Advisorchecklist.squarespace.com Charter Schools: A Growing 403(b) Market Summary: According to the National Alliance for Public Charter Schools, there are 6,400 charter schools in 42 states, with 2.5 million students. Many NTSA members do include charter schools in their target market. Ellie Lowder discusses some unusual situations that may arise in administering a 403(b) plan for a charter school. Source: Ntsa-net.org
Issue of Lifetime Income Longevity Annuities in Retirement Planning: A Gamble That Might Pay Off Handsomely Summary: A QLAC is not for everybody, but for the one who wins the longevity bet, it could pay handsomely. It can make investing retirement funds more predictable by hedging the unknown longevity risk. Article reviews QLAC's and their use in retirement planning. Source: Quarles.com Better Financial Security in Retirement? Realizing the Promise of Longevity Annuities Summary: This paper highlights how recent trends have hastened a need for products that offer protection against longevity risk, considers whether longevity annuities can improve retirement security, then highlights barriers to more widespread take-up of longevity annuities, and offer a menu of potential reforms to bolster this fledgling market. Source: Brookings.edu
Court, Legal, Legislative and Washington DC MassMutual Settles Excessive Fee Lawsuit Summary: On Friday, October 31, 2014, the parties in Goldenstar, Inc. v. MassMutual Life Insurance Co. filed a motion seeking the court to approve a settlement agreed to by the parties. It appears that the lawsuit brought by MassMutual's own employees is not affected by this agreement. Source: Fraplantools.com Court Opens Door for Disclosure of Investment Guidelines Summary: An appeals court has opened the door for the requirement that an ERISA plan's investment guidelines be disclosed to participants upon request. The determination comes from the 5th U.S. Circuit Court of Appeals, as part of a case involving thousands of Verizon retirees who say they were involuntarily moved from Verizon's main retirement plans into the pension plan of a now-defunct spinoff company, Idearc Inc. Source: Plansponsor.com
Compliance and Regulatory Related New MEP 5500 Legislation Requires Substantial New Reporting for 2014 Plan Year Summary: MEPs will now have to report all of their participating employers, their EIN and a good faith estimate of the percentage of the contributions made by all participating employers made by each employer relative to the total contributions made by each employer. Source: Businessofbenefits.com Year-End Compliance Issues for Single-Employer Retirement Plans Summary: By year-end 2014, sponsors of calendar-year single-employer retirement plans must act on necessary and discretionary amendments and perform a range of administrative procedures to ensure compliance with statutory and regulatory requirements. This article looks at key areas that such employers and sponsors of DB and DC plans should address by Dec. 31, 2014. Source: Milliman.com Puerto Rico Treasury Department Expected to Issue Guidance on Retirement Plan Limits for 2015 Summary: As required by the Puerto Rico Internal Revenue Code of 2011, the Puerto Rico Secretary of the Treasury is expected to issue a Circular Letter announcing the key pension limits for 2015. Here's what to expect. Source: Groom.com
Marketplace News Financial Engines Makes Leadership Change at the Top Nationwide Expands 3(38) Fiduciary Service Retirement Revolution Hires Business Development Officer DOL Files Suit Against Fiduciaries for $7mm in Plan Losses Pension Consultants Expands Out of Midwest Mercer's Names Benefits Administration Leader
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