BPP401k.com Newsletter
June 25, 2008
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Compliance Checklist for 2008 - Summary: This checklist as a quick glance resource to help you meet plan reporting and disclosure requirements for plans subject to the reporting and disclosure requirements of ERISA. Located at: Prudential Retirement (PDF File). Click on headline for full article.
Pensions Outperformed 401k Plans - Summary: Rates of return for defined benefit pension plans outpaced those for employee-directed 401k plans during the most recent bull market from 2003 to 2006, according to an analysis by Watson Wyatt Worldwide. Located at: 401khelpcenter.com. Click on headline for full article.
How Does Your Retirement Program Stack Up? - 2008 Highlights - Summary: Provides total and industry group benchmark data that encompasses the three policy levers of Mercer's Integrated Retirement Financial Management framework – design, contributions and investment. Employers can use this information as a governance tool to evaluate the performance of their own plans. Located at: Mercer. Click on headline for full article.
Canadians Say U.S. Has it Right When it Comes to DC Plans - Summary: "The truth is Americans have it right when it comes to minimizing risk for plan sponsors and also for ensuring much more certainty for plan members in the defined contribution world," Koskie Minsky partner Ari Kaplan told a sold-out crowd at the Canadian Benefits Summit in Toronto. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Unsteady Economy Prompts 401k Strategy Shifts - Summary: The unsteady economy is altering people's attitudes toward retirement savings. Some are trimming back their 401k contributions as prices for daily staples like food and energy creep higher. Others are boosting savings to better prepare for what could be a costlier retirement. Located at: Wallstreet Journal Online. Click on headline for full article.
Why Data Matters: Generating Value from Retirement Plan Data - Summary: This white paper outlines the process through which retirement plan data can be used to enhance plan value, performance and participant engagement; streamline or reduce administration; and help plan fiduciaries meet their obligations. Located at: MassMutual Center for Behavioral Research (PDF File). Click on headline for full article.
401k Contributions Drop in Troubled Economy - Summary: While workers continue to put money into their 401k plans during the current downturn in the economy, they are investing at a lower rate, a survey released by Putnam Investments found. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.
How Demographic Factors Affect 401k-Type Plan Participation - Summary: How do such factors as family income, education, gender, and race affect participation in a 401k-type retirement plan? What are the average contributions for 401k-type plan participants? Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
With EGTRRA Restatement, a Perfect Time for Plan Changes - Summary: If you offer a defined contribution plan to your workers, your plan document must be restated with the IRS sometime within the next year. The IRS is now requiring a complete plan restatement that includes updated EGTRRA provisions in order to maintain compliance. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
How Well Are We Handling Our 401ks? - Summary: A new study shows that of some one million 401k portfolios, some 69 percent of participants have portfolios with inappropriate risk or diversification, 36 percent hold high concentrations of company stock, and 33 percent fail to contribute enough to receive the full company match. Located at: webCPA.com. Click on headline for full article.
Court and Legislative Items
New Heroes Act Changes Benefit Rules - Summary: Congress passed the Heroes Earnings Assistance and Relief Tax Act of 2008, which changes certain rules pertaining to retirement plans, health flexible spending accounts, and group health plans with the goal of increasing or improving the pay and employee benefits provided to employees in military service. Located at: Dechert LLP (PDF File). Click on headline for full article.
Heroes Earnings Assistance and Relief Tax Act - Summary: President Bush signed the Heroes Earnings Assistance and Relief Tax Act of 2008 (the "HEART Act"). The HEART Act addresses the treatment of payments made to individuals who are called to active military service, provides mandatory and optional changes to the treatment of reservists on active military duty under retirement plans, and permits special distributions from health flexible spending arrangements to employees who are called to active military service. Located at: Kilpatrick Stockton LLP. Click on headline for full article.
Cashed-Out Participants Keep Legal Standing Under ERISA - Summary: A federal appellate court ruled that employees don't lose the right to pursue individual claims when they cash out their plan balances. Located at: Planadviser.com. Click on headline for full article.
Treasury Official Predicts More Penalty-Free Plan Withdrawals to be Allowed - Summary: Penalty-free withdrawals from retirement plans will become more common as lawmakers look for ways to give individuals greater access to their savings to pay for non retirement needs, according to W. Thomas Reeder, benefits counsel, Office of the Treasury Assistant Secretary for Tax Policy. Located at: CCH. Click on headline for full article.
401k Fee Items
The Truth Behind Hidden Fees in 401k Plans - Summary: Aired on June 19, 2008, this special Bloomberg Television report on "401k Hidden Fees" shows how these legal fees are buried in the fine print of obscure documents or are so confusing that even financial consultants find them hard to untangle. Located at: Bloomberg News Video. Click on headline for full article.
Sponsor Concedes Defeat on 401k Fee Bill - Summary: Legislation (H.R. 3185) approved by a House panel to require greater disclosure of 401k plan fees won't pass this year, Rep. George Miller, the panel's chairman and a sponsor of the legislation, said. Located at: Businessinsurance.com. Click on headline for full article.
Annuitization
Increasing Annuitization in 401k Plans with Automatic Income - Summary: In a paper for The Hamilton Project, a diverse group of retirement experts -- William G. Gale and J. Mark Iwry of the Brookings Institution, David C. John of The Heritage Foundation, and Lina Walker of the Retirement Security Project -- propose a strategy for expanding the role of lifetime income in 401k plans. Located at: Brookings Institution (PDF File). Click on headline for full article.
Deferred Annuities in Defined Contribution Plans - Summary: Conventional deferred annuities are being repackaged as "DB in DC" investment options. Various fiduciary and investment considerations are likely to impede their rapid growth. Located at: Vanguard Group (PDF File). Click on headline for full article.
Distributing Annuities from Defined Contribution Plans: The QPDA - Summary: Qualified Plan Distributed Annuity contracts are financial instruments which are unfamiliar to most retirement law practitioners and consultants. They have been around as long as have defined benefit plans, but seeing only limited service in the defined contribution market. That, however, is about to change. Located at: Baker and Daniels, LLP (PDF File). Click on headline for full article.
DOL and IRS Items
IRS Employee Plans Newsletter - Summer 2008 Edition - Summary: This edition contains articles such as Steven T. Miller, TE/GE Commissioner, Speaks at Mid-Atlantic Benefits Conference; Form 5307 Has Been Revised; Critical Priorities...With Monika Templeman; Maintaining Electronic Records for EPTA Plans; 5500 Filing Tips - Are You a Multiemployer Plan?; Things to Remember - 2007 Forms 5500/5500EZ; We Want You...to complete our Survey; DOL; and PBGC. Located at: IRS (PDF File). Click on headline for full article.
Headline News
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