PSCA Releases 57th Annual Survey of the 401k System
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In This Issue
Insight: Studies, Research and White Papers
PSCA Releases 57th Annual Survey of the 401k System Summary: The survey finds that plan sponsors are spending more time and effort to educate, promote, and encourage saving for the long-term. They are making great strides in adopting new plan design features, investments, and financial wellness programs that are making a positive impact on participant outcomes. This year, 613 plans with eight million participants and $832 billion in plan assets were surveyed.
Source: 401khelpcenter.com
Fee Compression Slowing, Fee Structures Changing Summary: Asset levels continue to peak in DC plans, driving fees tied to asset levels higher in the investment management as well as recordkeeping and administration marketplaces. However, after three straight years of material compression in recordkeeping and administration expenses, the market may have found equilibrium.
Source: Multnomahgroup.com
403(b) Plans
NTSA 403(b) Plan Compliance Calendar Summary: This 403(b) Plan Compliance Calendar is a listing of the critical compliance deadline dates for 403(b) plans. Some of the deadlines only apply to particular plan types (such as ERISA plans) and are noted accordingly. This year's calendar is not significantly different from the 2014 calendar, which should be good news for all of those who work with 403(b) plans.
Source: Ntsa-net.org
General Items
A Guide to Communications/Participant Education Summary: DC plans are most successful when participants understand their choices and are empowered to take action. As a plan sponsor, you must transform complexity into simplicity, and fear into action. Yet, you are faced with many communications challenges; because participants crave simplicity, but DC plans are inherently complex. Though communication can be difficult, the benefits offered by a successful communication program outweigh the challenges.
Source: Nagdca.org
Hiring a Quality Auditor to Perform Your Employee Benefit Plan Audit Summary: The AICPA Employee Benefit Plan Audit Quality Center prepared this 24 page advisory to provide plan sponsors, administrators, and trustees with an understanding of the importance of hiring a quality auditor to perform their employee benefit plan financial statement audit, and information to help select a quality auditor.
Source: Aicpa.org
Fiduciary and Plan Governance Material
Roadmap to a Successful Tiered Investment Menu Design and Communication Program Summary: Plan fiduciaries have an important task of managing fiduciary responsibility and, at the same time, designing an investment menu that is easily understood by participants and addresses the needs of a diverse participant base. Thoughtful investment design can help lead to better participant outcomes. This paper suggests that a first step is to shift the focus of menu design to a tiered structure, based on a plan's unique needs and the level of participant involvement.
Source: Manning-napier.com
Evaluating Plan Expenses: A Road Map of Possible Routes and Potholes to Avoid! Summary: It is important for plan fiduciaries to understand that while certain plan expenses can be paid out of plan assets, such expenses must be reasonable. A plan fiduciary must also evaluate and defray investment fees and expenses as part of that process because such costs could have a significant impact on plan investment returns. Therefore, to fully satisfy his/her fiduciary obligations with respect to a plan, each fiduciary should understand how to evaluate the myriad of plan fees, including unraveling those associated with various plan investments and plan services. This article provides guidance.
Source: Drinkerbiddle.com
Items of Special Interest to Service Providers
Why It's up to the Industry to Solve the Fiduciary Standard Issue Summary: In this 1:43 minute video, HighTower Advisors CEO Elliot Weissbluth discusses how financial advisers and clients will ultimately be the ones to navigate through this key transition.
Source: Investmentnews.com (free registration may be required)
When Will the Fiduciary Reproposal Surface? Summary: The revised guidance plan provided for the first time an expected release date for final regulations regarding a new required “guide” to accompany the disclosures that must be provided to responsible plan fiduciaries under the 408(b)(2) regulations. The final regulations are projected to be out in September 2015.
Source: Napa-net.org
Cerulli Sees Consolidated, High Tech Future Summary: A limited group of strategic acquirers will continue to gain influence in the financial advisory industry, according to new research from analytics firm Cerulli Associates. Helping to fuel the trend is the relative aging of financial advisers and the lack of succession planning and engagement of younger generations of advisers.
Source: Planadviser.com
DOL Planning RFI on 408(b)(2) Disclosure Effectiveness Summary: The Department of Labor wants to request new industry input and form focus groups about the effectiveness of retirement plan service provider fee disclosure requirements. The DOL says a new information collection effort is needed to explore current practices and effects of a final regulation.
Source: Plansponsor.com
Court, Legal, Legislative and Washington DC Summary: The Tenth Circuit affirmed and further noted that Kristopher's allegations that the forms were forged failed to state a claim under ERISA because a plan administrator has no duty to inquire into the authenticity of the forms if it had "no reason to suspect that anything was amiss."
Source: Erisapracticecenter.com
Compliance and Regulatory Related
2014 Plan Year-End Compliance Reminders for DC Plans Subject to ERISA Summary: Every year, plan sponsors must make sure their plans meet certain compliance requirements. This publication identifies the materials you need to review and will help you prepare for year-end. This information applies to qualified defined contribution plans and 403(b) plans that are subject to Title I of ERISA.
Source: Prudential.com
2015 Compliance Calendar for Defined Contribution Plans Summary: This 2015 compliance calendar for defined contribution plans shows recurring compliance and notice requirements for qualified defined contribution plans. The deadlines are for plans with calendar-year plan years and is intended to provide plan sponsors with a list of notable deadlines.
Source: Vanguard.com
IRS Issues Guidance on Distribution Allocation Rules and Updated 402(f) Notice Summary: The IRS recently released guidance on the allocation of pre-tax and post-tax amounts distributed from certain tax-qualified plans. In connection with this change, the IRS issued revised safe harbor rollover notices to satisfy the notice requirements under Code Section 402(f). The guidance accompanying the notices also describes changes that should be made to the existing model notices to reflect tax law changes since 2009. On and after December 8, 2014, plan administrators who rely on the safe harbor rollover notices must use the revised notices.
Source: Troutmansanders.com
Fixing Common Plan Mistakes -- Failure to Obtain Spousal Consent Summary: A common plan mistake is the distribution to a participant of a benefit approved automatically via an electronic distribution request, and the plan sponsor not realizing that it is responsible for securing the spousal consent. Article provides more detail and how to correct such errors.
Source: Belfint.com
Marketplace News New York Life Investment Management to Acquire IndexIQ HighTower Partners With Envestnet Multnomah Group Adds to Consulting Team Wells Fargo Launches 'Wells Fargo Investment Institute' Northwestern Mutual Completes $2.7 Billion Sale of Russell Tim Seifert Joins Lincoln Financial as a National Sales Manager
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