401k Plan Participants React Visibly to Market Dip
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General Items 401k Plan Participants React Visibly to Market Dip Summary: The last full week of August was a test of will for retirement plan participants. Many buckled under the pressure. Data from the Aon Hewitt 401k Index, which tracks the investment activity of 1.5 million 401k investors, shows trading in 401k accounts spiked with recent market swings. Source: Plansponsor.com Post-Employment 401k Rollovers: Questions HR Should Ask Summary: Before the DOL issues its final fiduciary rule, now may be an ideal time for plan sponsors to more formally review their position regarding terminated plan participants and IRA rollovers. To help them get started, there are three questions in particular that sponsors may want to address in the coming months. Source: Shrm.org Questioning Canadian Retirement Policies Summary: A CBC news report noted "Canada scores poorly among developed countries in providing public pensions to seniors, according to an internal analysis of retirement income by the federal government. And voluntary tax-free savings accounts or TFSAs, introduced by the Harper Conservatives in 2009, are so far unproven as a retirement solution." Author agrees and suggests that "there isn't much thinking going on in Ottawa when it comes to bolstering Canada's retirement system." Source: Pensionpulse.Blogspot.com
Fiduciary and Plan Governance Material Avoiding 401k Fiduciary Liability Doesn't Need to Be Difficult; Simple "Best Practices" Are the Key Summary: While 401k sponsors are subject to complex fiduciary responsibilities under ERISA, a qualified service provider can make it simple for sponsors to meet their fiduciary responsibilities with some basic "best practice" guidance. Article highlights four guidance areas. Source: Employeefiduciary.com Keeping or Terminating the Employer Stock Fund After Dudenhoeffer and Tatum Summary: This article proposes a process allowing the ERISA fiduciary to decide whether it may prudently keep the employer stock fund, and also whether it may prudently terminate the employer stock fund. The process for either decision is based on the Supreme Court's decision in Dudenhoeffer v. Fifth Third Bancorp, and its foundations in Rule 10b-5 case law and financial market theory. Source: Ipbtax.com
Insight: Studies, Research and White Papers People Prioritize Wealth Over Health, but Retirement Savings Hurdles Remain Summary: A new survey illustrates the vital role of 401k plans in helping workers save for retirement, but also identifies obstacles to saving effectively and a strong desire among participants for professional help in choosing the right investments. There is also widespread belief that retirement should be a major issue discussed by the presidential candidates in the upcoming debates. Source: 401khelpcenter.com Employees "Put Off" by Complexity of Asset Allocation Choices Summary: A report by James Choi of the Yale School of Management and the National Bureau of Economic Research looked at how individuals make decisions in their workplace-sponsored defined contribution plans to gauge how they make economic decisions in general. Findings include employees being put off by the complexity of the asset allocation choice they must make in order to opt into the plan. Source: Benefitnews.com Small-Business 401ks Follow Large-Plan Trends: Vanguard Summary: Small-business plans aren't too different from their larger counterparts. Vanguard released a small-business-focused study which found small 401k plans are mirroring trends seen at larger companies. Source: Thinkadvisor.com
DOL's Re-Proposed Fiduciary Rule Summary of Comments From the DOL Hearing on the Proposed Conflict of Interest Rule Summary: On August 13, 2015, the DOL concluded a four day public hearing on its proposed conflict of interest rule. The approximately 75 witnesses generally fell into two groups: the financial services industry and consumer groups. During the hearing, each witness read a prepared statement before responding to questions from a panel of DOL employees. This article summarizes some of those comments. Source: Shearman.com Fiduciary's Failure, in One Flowchart Summary: This chart maps out the restrictions the DOL's proposed change to the definition of fiduciary puts on consumers, employers and financial advisors. Source: Uschamber.com
Plan Communications Generational Differences Regarding Retirement Summary: This publication serves as a handy checklist for plan sponsors to better understand the behaviors, attitudes and communication preferences each demographic group has when it comes to retirement planning. Suggested communication points are included that plan sponsors might incorporate into participant materials and meetings. Source: Nagdca.org
Court and Legal TDF Investors Allege State Farm Charged Excessive Fees Summary: State Farm Investment Management Corp. is being sued over alleged excessive fees it charges on five of its proprietary target-date funds. Source: Benefitspro.com Boeing 401k Fiduciary Breach Lawsuit Settled Summary: Attorneys for Boeing and participants in a Boeing 401k plan reached a provisional settlement in a case in which the participants had alleged breaches of fiduciary duty by plan administrators. Source: Pionline.com
Compliance and Regulatory DOL's Initiative Regarding Fidelity Bonding Summary: The Department of Labor is launching an initiative to contact plan sponsors who appear to have no fidelity bond, or an insufficient amount of bonding as reported on the Form 5500. The DOL will contact the plan sponsor and allow 15 days for them to obtain sufficient bonding. Proof of the bonding must be sent back to the DOL, or risk a citation from the DOL. Source: Aktrps.com How to Avoid a $70,000 Plan Error With One Simple Question Summary: Most of the time the plan errors are unintentional. In rare instances they may even be cases of intentional fiduciary misconduct and even theft. But the errors that leave the author the most bewildered are the ones where one simple question could have saved a whole lot of time and trouble for a client. Source: Consultrms.com Draft Form 5500-EZ Shows IRS Seeks More Compliance Information Summary: The IRS has released a draft version 2015 Form 5500-EZ which indicates the IRS is seeking more detailed compliance information. The draft 2015 form contains a number of notable changes from the 2014 plan year version. Source: Ascensus.com Relief for Elective Deferral Failures Summary: An elective deferral failure occurs when a plan sponsor fails to correctly implement an elective deferral. This includes deferrals participants "elect" to make and deferrals based on a plan's automatic contribution features. An elective deferral failure also occurs if a plan sponsor fails to provide an employee with the opportunity to make an affirmative election because the employee was improperly excluded from the plan. Source: Unitedretirement.com
Marketplace News Northern Trust Names Global Head of Defined Contribution Prudential Hires TRS Product Team Lead Guardian Expands Retirement Fund Lineup
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