An In-Depth Look at Private-Sector 401k Plans
|
Newsletter Sponsor
Looking for that key associate, firm partner or perhaps an outside partnership arrangement to round-out your firm's capabilities and take your practice to the next level? Sell401k, Inc. can help! We provide innovative and cost efficient talent and practice development solutions exclusively for retirement practices and TPAs nationwide. To learn more visit www.sell401k.com.
In This Issue
Insight: Studies, Research and White Papers
An In-Depth Look at Private-Sector 401k Plans Summary: This 64 page BrightScope/ICI Defined Contribution Plan Profile focuses primarily on private-sector 401k plans. It analyzes more than 35,000 DC plans that have between four and 100 investment options. This report focuses on plan year 2012, presenting data on how 401k plans are structured, the types of service providers that plan sponsors engage with, and the fees and expenses paid by 401k participants and plan sponsors for these services.
Source: Ici.org
Designing Balanced DC Menus: Considering Equity Investments Summary: Today's DC equity lineups often lack broad access to global markets. What's more, lineups are often shackled to market-capitalization-weighted indexes, which may further hamper returns and heighten volatility. By restructuring the equity lineup to include global, dividend and enhanced index strategies, plan sponsors may improve DC participants' risk-adjusted return opportunity and the likelihood of retirement success.
Source: Pimco.com
Changes to Plan Design Result in Better Outcomes and Increased Plan Participation Summary: White paper from Prudential has found that changing a plan's design, including the addition of an in-plan guaranteed lifetime income solution, improved participation and contributions. According to the paper, plans can increase participation rates nearly 35 percent by making slight modifications to plan design, with the addition of a lifetime income solution and the use of auto enrollment and auto escalation.
Source: Prudential.com
Company Stock in DC Plans: An Update Summary: Since 2005, the incidence of company stock in DC plans has declined. Fewer plans offer employer stock and fewer participants hold concentrated company stock positions in their retirement savings accounts. A higher proportion of plans offering company stock now impose restrictions on the option. This is an update of prior research on the changing nature of company stock in employer plans
Source: Vanguard.com
403(b) Plans
For Retirement Preparation, Higher Ed Is at the Head of the Class Summary: College faculty and staff are better prepared for retirement than the general population, according to a new TIAA-CREF survey. In addition to saving in their employer-sponsored retirement plan, 42 percent of higher education employees have saved in an IRA, compared to 34 percent of American employees overall. While 36 percent of college faculty and staff say they have met with a financial advisor, only 22 percent of the general population report the same.
Source: 401khelpcenter.com
Fiduciary and Plan Governance Material
Time to Take Action on 401k Admin Fees Summary: Employer sponsors of 401k plans may find themselves in a buyer's market when it comes to administrative fees. If you haven't revisited how much your plan is paying for recordkeeping services in a while, this article suggests that now may be the time to do so.
Source: Cfo.com
Benchmarking -- All About That Fee Summary: ERISA 408(b)(2) is designed to provide a responsible plan fiduciary with sufficient information to determine if fees are reasonable and conflicts are avoided. A practical approach to benchmarking fees in a manner that complies with 408(b)(2) is outlined here.
Source: Fraplantools.com
Items of Special Interest to Service Providers
The Uniform Fiduciary Standard and ERISA Plans - A New Kind of Status Quo Is Emerging for Brokers Summary: As argued in this four page article, until new fiduciaries rules are proposed and finalized, brokers that work with 401k and other benefit plans fall under the modified version of the status quo. Those that wish to continue to be brokers may, without being considered ERISA fiduciaries, if they order their affairs under the five prong test described here. They will, however, have to adjust to the FINRA modified suitability rule, the scope of which is not clear at this point.
Source: Imca.org
Issue of Lifetime Income
Why Longevity Annuities Aren't As Popular With 401k Fiduciaries As Regulators Think Summary: They're still relatively new, but there doesn't appear to be a rush of individual investors or even 401k plan sponsors knocking the doors down to obtain Longevity Annuities. Why not?
Source: Fiduciarynews.com
Qualifying Longevity Annuity Contracts -- Frequently Asked Questions Summary: The recently announced regulations make longevity annuities accessible to the defined contribution and individual retirement account markets. This resource seeks to provide clarification on common questions that plan sponsors and their advisors may have regarding these new regulations.
Source: Dciia.org
Court, Legal, Legislative and Washington DC Summary: The retirement plan industry is an ever-evolving landscape, shaped each year by growing and emerging trends, as well as prior and new legal initiatives. Here is a good summary of what to watch for in 2015.
Source: Planadviser.com
Fiduciary Advisor Files Amicus Brief on Behalf of Petitioners in Tibble V. Edison Summary: Cambridge Fiduciary Services filed an amicus brief with the U.S. Supreme Court in Tibble v. Edison. Cambridge collaborated with Bailey & Glasser LLP, a law firm specializing in high stakes litigation, including ERISA claims. Brief outlines reasons that the Ninth Circuit should be reversed.
Source: 401khelpcenter.com
Summary of Leading Proposals to Expand Retirement Plan Coverage Summary: This 15 page chart was prepared by the firm Davis and Harman, LLC. It lists the proposal and then information columns for: Mandatory or Voluntary, Description, Employers Affected, Contribution Structure, Investment of Contributions, and Tax Treatment.
Source: Americanbenefitscouncil.org
Compliance and Regulatory Related
Cumulative List for Individually Designed Plans Summary: The IRS has released Notice 2014-77 containing the 2014 cumulative list of qualification items that must be addressed in certain individually designed retirement plan documents submitted to the IRS for determination, opinion, or advisory letters. Specifically, the 2014 cumulative list applies to all individually designed documents (IDDs) of plans in remedial amendment Cycle E.
Source: Ascensus.com
Maintaining Your Retirement Plan Records Summary: As an employer sponsoring a retirement plan, you are required by law to keep your books and records available for review by the IRS. But which plan records should you keep in case of an IRS audit? And for how long?
Source: Irs.gov
What Is a Reasonable Interest Rate for Participant Loans? Summary: This 1:28 minute video explores what a reasonable interest rate for participant loans is and how it should be documented.
Source: Erisasunscreen.com
Marketplace News LIMRA Names New Research Head for LIMRA Secure Retirement Institute David Dennis Joins Lockton's Chicago Operation The Online 401k Rebrands As Ubiquity
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
|
Is Your Retirement Practice Positioned for Growth in 2015?
