Automated Investment Services: Are DC Plan Participants Better Off Using These Services?

Summary: This study delves deep to analyze the investment returns of do-it-yourself retirement plan investors vs. those using an automated investment allocation service. Key highlights: 1) The median return for participants using an automated investment allocation service was approximately 11.7% higher than the median return for participants using a DIY approach. 2) Automated investment allocation may decrease the likelihood of low or negative returns.

Source: Trsretirementservices.com

IRS Eases Automatic Enrollment in 401k Plans

Summary: The Internal Revenue Service and the Treasury Department have issued guidance aimed at making it easier for taxpayers to be automatically enrolled in retirement plans such as 401k and 403(b) plans by their employers, simplifying the correction methods if errors are made.

Source: Accountingtoday.com

403(b) Plans

The 403(b) Plan Document: LRM Housekeeping and Dealing With Plan Document Errors

Summary: Plan documents continue to demand the attention of the advisor because of the transitional period in which we find ourselves until the IRS begins approving prototype and volume submitter plans sometime next year. Advisors can help their 403(b) plan sponsors understand two particularly important plan document issues.

Source: Ntsa-net.org

Excluding Eligible Employees From Your 403(b) Plan - Fixing Common Plan Mistakes

Summary: Under the universal availability rule, employees must be given an "effective opportunity" to make a deferral. Determining whether employees have this opportunity depends on the facts and circumstances. How do you fix a universal availability failure?

Source: Irs.gov

Fiduciary and Plan Governance Material

Retirement Plan Best Practices for Using an Independent Advisor

Summary: Best practices underscore the value of using an independent advisor with regard to developing, implementing, and overseeing a retirement plan. An experienced, independent advisor can offer valuable guidance and feedback to help ensure that a retirement plan is meeting the objectives of both the plan sponsor and participants.

Source: Strategicbenefitservices.com

What Information Does a Plan Fiduciary Have the Duty to Provide?

Summary: There are a number of things that the fiduciary is required to disclose to participants and beneficiaries. The disclosure of such items is governed by Title I of ERISA. Article reviews the disclosures that must be provided by a plan on a regular basis.

Source: Nyhart.com

Insight: Studies, Research and White Papers

Overview of Collective Investment Trusts

Summary: As part of its CIT Awareness Week, the Coalition of Collective Investment Trusts released this 15 page white paper that provides a look at the history of collective investment trusts, an understanding of how the funds operate, their structure, and when they might be appropriate investment vehicles for eligible retirement plans.

Source: Ctfcoalition.com

CIT Myths and Facts

Summary: Collective Investment Trusts (CITs) can be a valuable tool in developing a retirement plan lineup once the facts are distinguished from the myths. Here are several common myths about CITs, along with the related factual information.

Source: Ctfcoalition.com

Financial Disruptions Delay Targeted Retirement Age; Survey

Summary: The retirement age is not set in stone. Major financial disruptions such as unemployment, illness or divorce take a toll on the average Americans' retirement, postponing the expected starting age by roughly five years. In newly released data, TD Ameritrade's 2015 Financial Disruptions Survey reveals how the targeted retirement age has changed for many Americans as a result of financial disruptions and provides helpful tips to rebuild lost long-term savings.

Source: 401khelpcenter.com

Court and Legal

Another Court Enforces DOL's Electronic SPD Rules

Summary: At some point, as electronic communication becomes the norm and as paper virtually disappears from the workplace, we will surely see a softening of the conditions imposed by the Department of Labor on the electronic distribution of summary plan descriptions. But a recent decision by a New York federal court confirms that we are not yet at that point.

Source: Benefitsinbrief.com

Litigation Results From Failure to Establish Clear Beneficiary Designation Procedures

Summary: A recent Ninth Circuit decision, Becker v. Williams, highlights the pitfalls of maintaining ambiguous plan rules governing beneficiary designations. Plan sponsors who want to avoid disputes should include clear procedures in their plan documents and SPDs for designating and changing a death beneficiary.

Source: Troutmansanders.com

Compliance and Regulatory Related

Canadian Pension Investment Regulations Finalized

Summary: The federal government recently released the final draft of the new investment regulations Canadian registered pension plans will be subject to. The new rules also apply to those pension plans whose governing provincial legislation incorporates Schedule III.

Source: Benefitscanada.com

IRS Adjusts Voluntary Correction Program, Including Fees

Summary: The 17-page Rev. Proc. 2015-27 does not supersede Rev. Proc. 2013-12, the agency said, but it is intended to update and clarify the previous guidance. It applies to both defined benefit and defined contribution plans covered by requirements in the federal Tax Code.

Source: Thompson.com

Required Loan and Hardship Distribution Documentation

Summary: Does your U.S. retirement plan make distributions to foreign persons? If so, you must generally withhold 30% from a plan distribution paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes the payee is a U.S. person or a foreign person entitled to a rate of withholding lower than 30%. Here is an overview of the rules.

Source: Irs.gov

Plan Distributions to Foreign Persons Require Withholding

Summary: Does your U.S. retirement plan make distributions to foreign persons? If so, you must generally withhold 30% from a plan distribution paid to a foreign payee unless you can reliably associate the payment with valid documentation that establishes the payee is a U.S. person or a foreign person entitled to a rate of withholding lower than 30%. Here is an overview of the rules.

Source: Irs.gov

Marketplace News

NFP Expands With Acquisition of Trinity Consulting

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.