Top Ten Reasons to Have an ERISA Litigator on Speed Dial

Summary: Nearly every large US company, whether public or private, offers pension and welfare benefits to its employees. In the 40 years since ERISA was enacted, the courts and the DOL have generated a morass of confusing and inconsistent rules that companies, benefit plans and plan fiduciaries must follow. Trying to stay on top of these rules and opinions can be daunting, and failure to do so can be expensive. Here are 10 reasons to regularly consult an ERISA litigator.

Source: Mayerbrown.com

Why Investment Monitoring Is As Important As Investment Selection

Summary: The US Supreme Court heard oral arguments in Tibble v. Edison, a 401k fiduciary breach lawsuit that had garnered a lot of attention even before the hearing. The issue that the court has to decide is whether a claim may proceed for a breach of the fiduciary duty to monitor investments when a claim based on the initial imprudent selection of the investments is barred based on statutory limitation grounds because the initial selection occurred more than six years earlier.

Source: Fi360.com

Captrust's February 2015 Fiduciary Update

Summary: Highlights several important court cases with ERISA retirement plan implications plus topics such as deferred annuities in target date funds and Washington's focus on small employer retirement plans.

Source: Captrustadvisors.com

General Items

How Do You Know When It's Time for a New Retirement Plan Adviser?

Summary: Commentary: "As a benefits professional, the relationship you have with your retirement adviser is an important one. Their role is to help you navigate some of the most complicated aspects of your job. Listed [here] are some of the phrases we hear employers use to justify sticking it out with their current adviser, even if the relationship isn't working."

Source: Benefitnews.com

Tax Credit for Small Employer Start-Up Plans

Summary: Many employers are unaware that, in certain circumstances, they may be eligible for a valuable tax credit in connection with their establishment of a retirement plan. This article is intended to familiarize readers with this tax credit so that they can attempt to evaluate its application to their (or their client's) situation.

Source: Legacyrsllc.com

Funds Cut Expenses by Shifting Billions to CIT's

Summary: Mutual fund companies have slashed fees on their most popular funds by shifting billions of dollars into collective investment trusts not regulated by the SEC. The growing shift to collective trusts could prove a weapon for actively managed mutual funds losing out to low cost passive investment products.

Source: Reuters.com

403(b) Plans

User Fee and Change of Address Information for Pre-approved 403(b)s

Summary: Revenue Procedure 2015-22 provides updated address information and user fees for submission of pre-approved Section 403(b) arrangements.

Source: Benefitsforward.com

Distribution of Small Accounts Not Easy for 403(b) Plans

Summary: Perhaps the most persistent of the regs' shortcomings is the failure to adequately recognize, and deal with, the fact that individuals -- and not plan sponsors -- control vast aspects of 403(b) plan operations under individually owned annuity contracts and custodial accounts. This results in circumstances which offer no easy solutions, such as small amounts in former employee's 403(b) annuity contracts.

Source: Ntsa-net.org

Insight: Studies, Research and White Papers

How Do You Define Success for Your DC Plan?

Summary: This five page paper presents an overview of common measures of DC plan success and other, less well-known contributing factors before describing a systematic approach to measuring a DC plan's effectiveness and determining what actions to take to make ongoing improvements. It also puts forth a process under which the plan can achieve success.

Source: Sibson.com

2015 Defined Contribution Trends

Summary: This is an Executive Summary of Callan's Defined Contribution Trends survey. Survey results incorporate responses from 144 plan sponsors, primarily large and mega 401k plans.

Source: Callan.com

Engaging the Next Generations in Retirement Savings

Summary: The challenge in addressing the savings deficit is complicated by the fact that employee education and communications strategies used by plan sponsors and consultants in the past to draw employees into the plan are not likely to resonate with Gen X and Gen Y. This white paper identifies some distinguishing characteristics of Gen X and Gen Y and suggests strategies that plan sponsors may want to adopt to engage younger workers in retirement savings today so they can achieve retirement readiness in the years to come.

Source: Calamos.com

Plan Automation

Researchers Find Little Cost Difference From Auto-Enrollment

Summary: Automatic enrollment is often expected to increase employer compensation costs as previously unenrolled workers start to receive matching retirement plan contributions, but researchers have found this not to be true.

Source: Planadviser.com

Compliance and Regulatory Related

IRS Issues Its Annual Lineup of Legal Changes for Qualified Plans

Summary: A summary of the key new items on the 2014 Cumulative List. Notably, the 2014 Cumulative List deletes all items that were reviewed by the IRS during the prior Cycle E submission period. Notably, a newly established plan that does not have a prior determination letter will need to satisfy all tax-qualification requirements, even if not listed on the 2014 Cumulative List.

Source: Groom.com

Video: Maintaining Opt Out Reports

Summary: For plans that have an auto-enrollment feature, maintaining a paper trail of those employees who choose to "opt-out" of the plan can require some focus by the plan sponsor. This video offers a few best practices.

Source: Erisasunscreen.com

Are Errors on Your Form 5500 Sending Red Flags to the IRS?

Summary: The IRS recently released an article citing errors on Form 5500 filings that are used by the IRS to select cases for compliance audits. The IRS states, "Entering incorrect information on the return or report or leaving a field blank when there would be an entry increases the likelihood that you'll be selected for an EPCU compliance check."

Source: Schneiderdowns.com

Complying With the Allocation Rules for Distributions From Qualified Plans With After-Tax Accounts

Summary: Compliance starts with understanding. Understanding the rules set forth in Notice 2014-54, assisted us with the application of the rules in a situation in which a participant was entitled to take a distribution from his after-tax account only, in a qualified plan that provides and separately accounts for: a) elective deferrals, b) after-tax contributions, and c) matching contributions.

Source: Belfint.com

Marketplace News

Towers Watson Opens New Investment Office With Three Hires

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.