BPP401k.com Newsletter
July 2, 2008
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Defined Contribution Plans Quickly Changing - Summary: Once just a supplement to the pension system, defined-contribution plans such as 401ks are growing and changing fast as they evolve into a linchpin of Americans' retirement savings and offer increasingly innovative investment options, a new study indicates. Located at: New York Times (free registration may be required). Click on headline for full article.
Putnam Finds Diminishing 401k Contributions - Summary: A survey by Putnam Investments has found a troubling trend among 401k participants. The tough economic environment is causing them to decrease contribution levels. Located at: Onwallstreet.com. Click on headline for full article.
Defining Spouse: Higher Stakes Than Ever for Employers - Summary: In light of conflicting trends and new laws, the prevalence of spousal benefits rights and features in employee benefit plans, and a variety of tax consequences, all employers should consider reviewing how their benefit plans define spouse, and the plan design and administration issues mentioned in this article. Located at: Thompson Publishing Group (PDF File). Click on headline for full article.
Five Mistakes to Avoid in Your 401k - Summary: While nearly a third of workers participate in 401k plans, some common mistakes and oversights limit the rewards they ultimately reap. Located at: Thestreet.com. Click on headline for full article.
What Should You Do With Your Old 401k? - Summary: While leaving your retirement account with a former employer is a better decision than cashing out your account and splurging on a boat, it may be more beneficial to consolidate your retirement savings by rolling your old 401k or similar employer-sponsored retirement plan into an IRA. This article talks about the benefits of such a rollover. Located at: 401khelpcenter.com. Click on headline for full article.
The Impact of PPA on Retirement Savings for 401k Participants - Summary: This Issue Brief simulates (under several assumptions) the likely impact of 401k plan sponsors switching from voluntary enrollment systems to automatic enrollment designs with automatic escalation of contributions for a significant portion of workers (not just current 401k participants or those eligible to participate). Located at: Employee Benefit Research Institute. Click on headline for full article.
Court and Legislative Items
House Considers Mandating Employer IRA Plans - Summary: The House Ways and Means Select Revenue Measures Subcommittee held hearings on bills that would encourage employers to automatically enroll their employees in individual retirement account plans. Located at: webCPA.com. Click on headline for full article.
Encouraging Small Business Owners To Offer Retirement Savings Vehicles - Summary: People generally aren't saving enough, small employers are not offering retirement plan vehicles for their employees, and Congress is looking at ways to encourage savings. Located at: Benefits Blog. Click on headline for full article.
The Role of IRAs in the American Retirement System - Summary: Testimony by Dallas Salisbury, Employee Benefit Research Institute, on June 26, 2008, before the House Ways and Means Committee Select Revenue Measures Subcommittee on The Role of Individual Retirement Accounts in the U.S. Retirement System. Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
Fiduciary Issues
401k Sponsors Push for Fee Cuts - Summary: Employers aren't waiting for the outcome of a slew of 401k-fee lawsuits now mired in the courts to define what are reasonable costs. Many are putting the squeeze on their 401k providers. Located at: Financialweek.com (free registration may be required). Click on headline for full article.
Law Firm Continues Probes of Fiduciary Breaches - Summary: The law firm of Stember Feinstein Doyle & Payne, LLC, has turned its watchful eye to possible fiduciary misconduct at Fifth Third. Located at: Planadviser.com. Click on headline for full article.
Fiduciary Concerns on the Rise, Advisers Say - Summary: Three out of four advisers have observed heightened fiduciary concerns from plan sponsors since last year, according to a survey by Putnam Investments. Located at: Planadviser.com. Click on headline for full article.
Research
Investment Choices in Defined Contribution Pension Plans - Summary: Few previous studies have explored whether defined contribution retirement saving plans offer sufficiently diversified investment menus, though it is likely that these menus significantly shape workers' accumulations of retirement wealth. This paper assesses the efficiency and performance of 401k investment options offered by a large group of US employers. Located at: Michigan Retirement Research Center (PDF File). Click on headline for full article.
Give Your Participants the Green Light - Summary: A Vanguard study examines portfolio choices—and how you can help participants go from red to green. Located at: The Vanguard Group. Click on headline for full article.
DOL and IRS Items
IRS on Common Electronic Record Retention Problems - Summary: In its latest newsletter for retirement plan practitioners, the IRS highlights some of the difficulties it has encountered in its employee plan examinations due to the increasing automation of plan administration, including functions such as payroll, discrimination testing, and distributions. Located at: Employee Benefits Institute of America. Click on headline for full article.
VIDEO: Choosing A Retirement Solution for Your Small Business - Summary: This video helps small employers and accountants understand the various options for providing a retirement program through four real-life experiences. Located at: U.S. Department of Labor. Click on headline for full article.
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