Eight Ways Companies Screw Up Their 401k Plans
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General Items Eight Ways Companies Screw Up Their 401k Plans Abstract: There are a staggering number of administrative responsibilities inherent to offering a 401k plan. However, administrative blunders can be costly, through a variety of penalties such as fines or, at their worst, plan disqualification, which creates a taxable event for all plan participants. Here are some of the common operational mistakes in 401k plans, according to plan advisers. Source: Investmentnews.com (registration may be required) Why Most Participant Communication is Horribly Ineffective - And What You Can Do About It Abstract: Retirement plan sponsors spend a considerable amount of time crafting participant communication in an attempt to increase plan participants, maximize employee deferrals, increase investment diversification, or improve plan metrics. Article suggests two primary reasons most communication campaign fail to change participant behavior. Source: Cammackretirement.com 401ks Will Feel Fed's Rate Hike: Impact on HR Abstract: The economy is getting better, and so after seven years of near zero percent interest rates, the Federal Reserve raised its benchmark rate. For human resources professionals, the interest rate hike might alert some employees wanting to know what that means for their organization's retirement accounts. Article provides some thoughts. Source: Workforce.com (registration may be required)
403(b) Plans IRS Memorandum on Spousal Provisions in 403(b) Plans Abstract: The IRS has issued an internal memorandum on its ruling position on Opinion Letter applications on spousal provisions in Section 403(b) Plans. Source: Benefitsforward.com Guidelines Set for 403(b) Pre-Approved Plan Applications for Letters Abstract: IRS Employee Plans Division Rulings & Agreements Director Karen Truss on March 1st issued a memo to EP determinations employees that sets forth interim guidelines they are to use in processing 403(b) pre-approved plan applications for opinion and advisory letters regarding spousal benefit provisions. Source: Napa-net.org
Fiduciary and Plan Governance Material DC Plan Re-Enrollment: A Fiduciary Imperative? Abstract: This paper looks at the role a re-enrollment campaign can play in guiding all plan participants to an appropriate asset allocation, common reasons cited by plan sponsors for avoiding re-enrollment, and counterpoints to each, key elements of a successful implementation, and re-enrollment terminology. Source: Russell.com Collective Investment Trusts: A Fiduciary Opportunity Abstract: CITs are not new to the retirement plan industry, but many plan sponsors are once again considering them as investment alternatives. Article reviews some of the opportunities CIT afford plan fiduciaries. Source: Manning-Napier.com 401k Fiduciaries Should Understand Consequences of SEC Money Market Reform Abstract: Recently, the Securities Exchange Commission made changes to the rules that govern money market mutual funds. The changes affect 401k plans. If you are a 401k fiduciary, you should be evaluating any plan MMF today so it can be replaced (if necessary) prior to the deadline. Source: Employeefiduciary.com
Plan Automation Whitepaper Released on Auto Enrollment in 401k and 403(b) Plans Abstract: Paragon Alliance Group has developed a new whitepaper that is designed to provide insight into the pros and cons of auto enrollment, and why it may or may not be suitable for all plan sponsors. Source: 401khelpcenter.com
Court and Other Legal Issues Recent Employer Stock and Other Fiduciary Litigation: A 43-Page Review Abstract: This is a 43-page handout from a recent presentation at the 2016 Plan Administrator Skills Workshop, Southwest Benefits Association. Session was conducted by John L. Utz, Esq., Utz & Lattan, LLC. Source: Utzlattan.com Judge Orders Fiduciary to Restore $111k to Retirement Plan Abstract: Judgment orders fiduciary to restore $111,331.71 to the plan. This amount represents the improperly transferred plan assets that the independent fiduciary could not recover and lost opportunity costs. In addition, the judgment bars fiduciary and the company from serving as a fiduciary or service provider to any ERISA covered employee benefit plan in the future. Source: Dol.gov Stable Value Funds in the Litigation Crosshairs Abstract: The revenue earned by providers of stable value funds is at issue in a recent class action lawsuit. Article focuses on the complaint's allegations detailing how MassMutual earns revenue from the stable value fund that it provides as an investment option in the Arthur J. Gallagher & Company 401k Savings and Thrift Plan. Source: Morningstar.com
Compliance and Regulatory IRS Changes Reflect Shift to Audits From Reviewing Plan Documents Abstract: It appears that the IRS has begun channeling its resources to audits rather than reviewing retirement plan documents. As part of this refocus, the IRS has issued four pieces of guidance on determination letters. They are reviewed in this piece. Source: Erisadiagnostics.com Is Your Company's Retirement Plan Fine, or About to Be Fined? Abstract: No matter the industry or size of the company, many employers seem to be making the same big mistake: They aren't as concerned about fiduciary liability related to their retirement plan as they should be. Sooner or later, it's going to cost them. Source: Cfo.com New Compliance Questions in IRS Form 5500 Warrant Screening Reviews of 401k Plans Abstract: The IRS recently added new questions to the 2015 Form 5500/5500-SF annual retirement plan returns. The new compliance questions are intended to aid the IRS in determining whether a retirement plan, such as a 401k plan, is in compliance with applicable law -- in particular, how the plan is satisfying discrimination testing and making timely plan amendments. Source: Littler.com Abstract: When matching contributions are funded each payroll period, but are required to be recalculated annually, a "true-up" calculation is needed. This is a short review of the process with an example. Source: 5500audit.com
Marketplace News BPAS Launches Online Participant Education Center Stable Value Investment Monitoring Services Announced Fidelity Sees Managed Account Adoption Grow Beacon Pointe Expands Into Retirement Plan Space
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