Using Match Structures to Improve Retirement Readiness
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In This Issue
General Items
Using Match Structures to Improve Retirement Readiness Summary: Most plan sponsors/employers would agree that the ultimate goal of a company-sponsored retirement plan is to help participants better prepare for life after their working career is over. With that in mind, many employers offer a company match to help encourage employees to save more for the future. A well-designed match structure can be a powerful tool to encourage employees to save more for their future. Article discusses how the match might be offered to have the greatest impact on participant behavior.
Source: Pension-consultants.com
401k Brokerage Windows Are All About the "Nudge" Summary: As the 401k plan has moved from being seen as a supplementary savings vehicle to taking on the role of primary retirement plan for most private sector workers, the way that plans are structured has evolved. It's probably the most widespread application of the principles of "choice architecture," which were described in Cass Sunstein's and Richard Thaler's influential book "Nudge."
Source: Russell.com
Will Annuities Make Their Way Into DC Plans? Summary: Qualified lifetime annuity contract regulations were introduced and safe harbor annuity selection regulations were issued in an effort to encourage plan sponsors to consider offering annuities in DC plans. The latest guidance from IRS (Notice 2014-66) provided another method to offer annuities. What impact will this guidance have on your plan?
Source: Thompson.com
Fiduciary and Plan Governance Material
Bundled Services: The Provider Independence Shell Game Summary: Article discusses a readily available "tool" that will aid plan fiduciaries in evaluating the fit of a bundled service provider's business model with the plan's own fiduciary governance structure.
Source: Erisafiduciaryadministrators.com
A Road Less Traveled: Including Alternative Investments in a 401k Plan Summary: There has been a steadily increasing acceptance of alternative investments as part of a retirement plan's investment portfolio, including in 401k plans. Their appeal lies in their unique asset classes and investment strategies which offer potentially higher returns, diversification, or downside risk protection. This article by Marcia Wagner discusses some of the issues raised by including alternative investments in 401k plan investment menus.
Source: Wagnerlawgroup.com
Considerations When Picking a Provider Summary: Advisers and consultants say that often when plan sponsors evaluate various providers' final presentations, the offerings look alike -- the providers present similar slides and give similar answers to questions. In actuality, though, the recordkeepers' services may be very different. Experts point to five areas where plan sponsors can look for providers to differentiate themselves: participant services, sponsor services, fees, technology and capabilities, and the vendor organization.
Source: Plansponsor.com
Insight: Studies, Research and White Papers
Retirement Elusive for Many Canadians Summary: A new LIMRA Secure Retirement Industry report finds that nearly a third of Canadians aged 55 to 70 do not know when they will retire. The oldest members of the group (ages 65 to 70) are the most undecided about when they will retire, with about one in 10 having no intention of ever retiring.
Source: 401khelpcenter.com
GAO Report on Multimillion Dollar IRAs Summary: The GAO Recommends that Congress consider revisiting its legislative vision for the use of IRAs. GAO makes five recommendations to IRS, including approving plans to fully compile and digitize new data on non-publicly traded IRA assets and seeking to extend the statute of limitations for IRA noncompliance. IRS generally agreed with GAO's recommendations.
Source: Gao.gov
Items of Special Interest to Service Providers
As Fiduciary Rule Stalls, DOL Advances Amicus Brief Program, Targets Providers Summary: Recent efforts in the courts to treat service providers as fiduciaries aren't a signal that providers should worry for the safety of their nonfiduciary status, but they could be a "warning shot" that the DOL is hungry to expand fiduciary status as it continues to work on crafting its yet-to-be-released fiduciary rule.
Source: Bna.com
The Top Five Things You Need to Know About ERISA 404(c) Summary: Section 404(c) is a historically misunderstood part of ERISA, with misconceptions rampant through the plan sponsor community even before the 404(a)(5) participant fee disclosure regulations added to the confusion. This article attempts to address the fundamental issues regarding ERISA section 404(c) that every advisor should master.
Source: Ntsa-net.org
Change Is Coming to the World of DC-oriented BDs and RIAs Summary: More dramatic shifts in the BD market and new regulations are likely to change the landscape in the future. Aggregators are growing. With a new wave of plan advisors, there will be an estimated 25,000 advisors with $25+ million of DC AUM, up from 5,000 before the Great Recession, it's going to be harder than ever for BDs to ignore this market.
Source: Napa-net.org Summary: Not all broker dealers are created equal, especially when it comes to supporting plan advisors. The most recent NAPA list of broker dealers that have at least one person dedicated to the DC market has remained relatively stable. NAPA calls this surprising given the increased attention being paid to retirement plans and the growing interest of advisors in this market. While all firms have a bit of support, the range of services, the commitment and the number of people dedicated to the retirement plan market all vary widely.
Source: Napa-net.org
Compliance and Regulatory Related
2014 Year-End Employee Benefit Plans Compliance Advisory Summary: With a month left in the year many employers may find themselves scrambling to meet plan amendment and notice deadlines, and planning for 2015 may still be in process for some. This brief article discusses a few key developments regarding employee benefit plans for employers to consider as they finish 2014 and move into 2015.
Source: Employeebenefitsupdate.com Summary: Whether a plan needs to be amended to comply with the new rules depends on the specific terms of the plan. If the terms of a plan are consistent with the Windsor decision, then the plan generally does not need to be amended. In contrast, if the terms of a plan conflict with the Windsor decision, then the plan must be amended to comply with the decision. Plan sponsors should begin immediately to review their qualified retirement plan documents and operations to determine whether any changes need to be made before the end of this year.
Source: Venable.com Summary: Required minimum distributions are still a specialized area with its intricate rules, exceptions to the rules, and special buzzwords and acronyms. This article addresses the 50% penalty and the Individual Waiver Method, and Correcting RMD Failures Using EPCRS.
Source: Mhco.com
Raking Away Old 401k Determination Letters Summary: Video on why plans would be well advised to "rake away" those old IRS approval letters, which for today's purposes, we will refer to as a "determination letter."
Source: Erisasunscreen.com
PBGC Final Regulations Facilitate Rollovers From DC Plans to DB Plans Summary: The Pension Benefit Guarantee Corporation has issued final regulations that facilitate rollovers from defined contribution plans to defined benefit plans by exempting rollover amounts from the maximum guarantee limits and the five-year phase-in limits.
Source: Practicallaw.com
IRS Issued Tax Notice (#2014-74) Edits for Qualified Retirement Plans Summary: The IRS issued Notice 2014-74 which provided the edits to the tax notices that all qualified retirement plans are required to provide to participants who are entitled to receive a distribution of their benefit. These edits must be incorporated into the tax notices that retirement plans provide on and after January 1, 2015 to implement the rollover modifications related to the treatment of Roth accounts.
Source: Winstead.com
Marketplace News Edge Collective Fund Series Introduced
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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