Managing Retirement Plan Participants' Reactions to Volatility
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General Items Managing Retirement Plan Participants' Reactions to Volatility Summary: Experts counsel plan sponsors to rely on their advisers to set reasonable expectations for market volatility. They also say it is critical for sponsors to ensure their participants appreciate the benefits of buy-and-hold investing so that when fluctuations do occur. Source: Plansponsor.com Summary: An interview with Vanguard's Martha King where she discusses retirement plan industry trends, including the powerful impact of plan design on participant outcomes. Source: Vanguard.com
403(b) Plans Summary: This 403(b)/457 Buyer's Guide shows the providers who service these two markets, what they focus on in terms of market segment, and the services they provide to plan sponsors. Source: Plansponsor.com Cracking the Code: Taxing Developments in 403(b) Plan Compliance Summary: The audits of Code Section 403(b) plans and Code Section 457 plans has increased dramatically in the last few years to the point where the IRS has now issued its "top ten list" of issues which tax-exempt entities need to focus on when sponsoring these types of plans. Article reviews the top seven 403(b) issues. Source: Mwe.com
Fiduciary and Plan Governance Material Dual Role Service Providers and Conflicts of Interest Summary: A recent study suggested that evidence existed that shows mutual fund companies that act in the role of management will make decisions that advance their own interests at the expense of participants. Of significant interest was the determination that the bias is especially pronounced in the favor of affiliated funds that delivered sub-par returns over the preceding periods. What can a plan sponsor do to protect their fiduciary interests? Source: 5500audit.com
Insight: Studies, Research and White Papers Defined Contribution Plan Participant Study Released Summary: Study of 2,031 DC plan participants (grouped by ages 55-65 and 25-54) looks at their perspectives on how much they rely on the guidance of their employers, especially with regard to saving sufficiently and consistently for retirement. Source: 401khelpcenter.com The Economics of Providing 401k Plans: Services, Fees, and Expenses Summary: This 32 page report concludes that the downward trend in the expense ratios that 401k plan participants incur for investing in mutual funds continued in 2014. The average expense ratio that 401k plan participants incurred for investing in equity mutual funds fell from 0.58 percent in 2013 to 0.54 percent in 2014. Source: Ici.org 16th Annual Transamerica Retirement Survey Summary: This 185-page report provides a five-year trend analysis and in-depth perspectives on access to employer-sponsored retirement benefits, savings rates, planning-related activities and the changing nature of retirement. Source: Transamericacenter.org
Items of Special Interest to Service Providers Service and Technology Drive TPA Satisfaction Summary: Chatham Partners recently conducted its 4th annual TPA Satisfaction and Needs Assessment Study, surveying 213 TPAs and gathering their opinions on 19 leading retirement service providers. The study assessed TPAs' attitudes and perceptions of leading retirement service providers, including their levels of satisfaction with providers' TPA support services, personnel, technology, product and service offerings, and overall impressions. Key findings are reviewed here. Source: 401khelpcenter.com 401k Market Growth Slows While Cash Balance Plans Soar Summary: Kravitz today released the 2015 National Cash Balance Research Report, showing a 32% increase in new plans for the most recent year. In contrast, the number of new 401k plans increased just 3% despite positive economic trends and steady job growth. Source: 401khelpcenter.com
Plan Communications 401k Education: Giving Employees a Voice Summary: An eleven page overview of how employers can design a retirement plan communication program that will help meet the needs of their employees. Source: Surveygizmo.com
Court and Legal Investment Manager Held Liable for Not Diversifying Plan Assets Summary: A federal district court has determined that an investment management firm and its only executive officer are liable for losses suffered by defined contribution plans as a result of non-diversification. Source: Planadviser.com
Compliance and Regulatory The Great Divide: The Different Effect of the DOL's Fiduciary Proposal on Large and Small Plans Summary: The DOL conflict of interest proposal includes a complex array of exceptions and exemptions, the requirements of which vary depending on the size and nature of the retirement vehicle, as well as the type of product being sold. Some of these requirements will change in the process of finalizing the proposal. It is incumbent on plan sponsors, as well as their advisers, to avoid engaging in prohibited transactions, but to do this will require close monitoring of how the new rules work together. Source: Wagnerlawgroup.com SEC Clears Up Money Market Fund Reform Misunderstanding Summary: Retirement plans will not necessarily have to divest from retail money market funds under SEC's pending reforms, but plan sponsors and advisers may decide it's best. Source: Plansponsor.com Many DC Plan Sponsors Must Annually "Notice" Their Participants Summary: Sponsors of defined contribution plans with certain features are required to provide annual notices to participants. This four page publication provides a summary of the annual notice requirements, including timing, recipients, contents, and method of delivery. Source: Prudential.com Three Options to Consider for Nondiscrimination Testing in a Merger Situation Summary: Nondiscrimination testing for retirement plans that merge mid-year can be problematic. Testing could result in failed tests, which could lead to refunds, additional contributions, upset participants, etc. Article reviews three options to consider when performing ADP and ACP testing for plans that merge mid-year. Source: Principal.com
Marketplace News The Standard Appoints New Retirement Plan Consultant ABG Rolls Out Web Based Retirement Planning Service Adele Barbato Joins Retirement Playbook WealthPath Investment Advisors Joins Pensionmark FIS to Acquire SunGard for $9.1 Billion
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