Fact or Fiction: Small to Mid-Sized Businesses Are Reluctant to Start 401k Plans
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General Items Fact or Fiction: Small to Mid-Sized Businesses Are Reluctant to Start 401k Plans Abstract: Why in large companies do 9 out of 10 employees have access to retirement plans while in small to mid-sized companies only 1 in 2 employees have access to retirement benefits? Article explores this question including the misperceptions, disincentives, and barriers. Source: Fiduciarynews.com Small Business Retirement Plan Options: 401ks vs. SIMPLE and SEP IRAs Abstract: 401ks are not the only retirement plan option for small businesses. Small businesses should consider all of their options when deciding to offer a retirement plan to its employees. Article reviews the pros and cons of three basic retirement plan options -- 401k, SIMPLE IRAs, and SEP IRAs. Source: Employeefiduciary.com
Fiduciary and Plan Governance Material Abstract: DC outsourcing allows sponsors to exploit scale and buying power to provide their employees with sophisticated retirement solutions without having to build the necessary expertise and functionality in-house. This overview covers everything from the fundamentals (why, what, and how to outsource), contracting, and issues of residual fiduciary liability. Source: Russell.com New Guidance on SRIs, What Plan Committees Need to Know Abstract: Offers insight to managing economically targeted investments. The authors suggest that committees need to know the following when selecting investments that reflect ESG factors: Compare options in the same asset class against the market and consider each alternative using common measures; Understand whether ESG features will affect the expected return; and, Document the assessment that is made and monitor the decision frequently. Source: Drinkerbiddle.com
Insight: Studies, Research and White Papers Diversified Multi-Asset Strategies in a Defined Contribution Plan Abstract: DC plan participants currently faced with an environment that is marked by relatively expensive assets and low return expectations. One potential solution to this issue is to consider adding a diversified multi-asset strategy to a plan's lineup. This 7-page paper reviews the characteristics of these strategies, provides a comparison to more traditional real asset strategies, and outlines some of the considerations plan sponsors should understand. Source: Rocaton.com Are Too Many Choices Costing 401k Holders? Abstract: In investing, choice usually is a good thing. But new research suggests that having too many choices in a 401k retirement plan could be costly for participants. Source: Wsj.com
Target-Date Funds Building a Better Process for Target-Date Fund Selection Abstract: The process of evaluating and assessing these now-critical investment vehicles has lagged behind the rise in their significance as a key component of successful income replacement in retirement. This article describes a straightforward and efficient process a plan sponsor can use to rationally evaluate the quality of the TDF choices available to it. Source: Segalco.com
Legislative and Washington DC Obama Administration Budget Proposals Would Again Impact Retirement and Health Benefits Abstract: This year's Obama Administration budget package includes numerous proposals affecting retirement, health, and welfare plans. Many are consistent with the administration's proposals from prior years, but the 2017 package also includes several new items of significance. Source: Groom.com
Court and Other Legal Issues Intel Class Action Opens New Frontier in 401k Litigation Abstract: There is a surge in 401k fee litigation, but a recently filed class action lawsuit by a former employee against Intel and its 401k seeks to improve returns and reduce expenses by significantly restricting the range of assets in which the plan may invest. This 3-page article explores the case and its implications. Source: Wagnerlawgroup.com MassMutual Sued Over Stable Value Fund Fees Abstract: A 401k plan participant has filed suit against Massachusetts Mutual Life Insurance Company, alleging the firm collects tens of millions of dollars annually in undisclosed compensation due to the way it values the crediting rate for stable value funds offered to 401(a) and 403(b) retirement plans. Source: Planadviser.com 401k Custodial Contracts Must Be Disclosed, Judge Says Abstract: Federal law requires a retirement plan to disclose its custodial agreements with a service provider upon the request of a plan participant, a federal judge determined. Source: Bna.com
DOL's Re-Proposed Fiduciary Rule Sen. Warren Accuses Annuity Providers of Double Talk on DOL Fiduciary Rule Abstract: Sen. Elizabeth Warren urged Office of Management and Budget Director Shaun Donovan Wednesday to "quickly finalize" the DOL's rule to change the definition of fiduciary on retirement advice because large insurance companies and financial services firms have been exaggerating the negative impacts of the rule. Source: Thinkadvisor.com Fiduciary Rule Is a Game-Changer Abstract: The DOL's proposed conflict-of-interest, or fiduciary standard, rule would drastically alter the profits and business models of investment product manufacturers. Investors and business analysts looking only at the implementation costs of the rule are vastly underestimating its impact on the financial sector. Source: Morningstar.com
Compliance and Regulatory Cross-Tested Plans in the Crosshairs (Again) Abstract: Buried in a Treasury Department proposal is a new "reasonable classification" requirement on highly compensated employee rate groups that will make it significantly harder for plans that allocate these rate groups on an individual or specific basis to pass the general nondiscrimination test used for cross-tested defined contribution plans under Section 401(a)(4) of the Internal Revenue Code. Source: Napa-net.org, February 2016 Fee Allocation in Retirement Plans Abstract: There are numerous options available to allocate plan expenses among participants, each having its own positive and negative attributes. Paper explores the three most popular models and the associated benefits and drawbacks. Source: Cammackretirement.com
Marketplace News Lincoln Financial Names New Sales Director for North Central Region Hancock Hires Gary DiLoreto as RVP in Pacific Coast Division Mesirow to Acquire Fiduciary Management Associates Stadion and State Street Team on Micro- and Small-Plan 401k Solution
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