BPP401k.com Newsletter
July 16, 2008
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Retirement Plan Sponsors Demand Certified Service Providers - A recently completed survey conducted by Roland|Criss revealed that a growing number of retirement plan sponsors are demanding that their service providers hold either an investment fiduciary or recordkeeping certification.
Auto-Features Escalate Savings - Summary: New analysis by the Employee Benefit Research Institute finds that the automatic 401k features have a very significant positive impact in generating additional retirement savings, especially for low-income workers. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Retirement Education Needs to Define Success and Tap Into Motivation - Summary: Until success is clearly defined, and adult learning theory-based content is aligned with that definition, "retirement education" will continue to be a variety of topics told to adults who are not motivated to learn. This is the failed approach has been used for 30 years. Located at: Ackley Associates (PDF File). Click on headline for full article.
ERISA Budgets Gain Increased Prominence - Summary: ERISA accounts, more colloquially known as ERISA budgets, have gained increased prominence in recent months as part of a renewed focus on 401k plan fees and expenses. Ironically, there is nothing really new about the concept, but it seems fair to say that the opportunities behind the concept have only just begun to be fully exploited. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Is It Time to Reboot Your Defined-Contribution Plan? - Summary: Re-enrollment is essentially the same as "rebooting" the plan. It is a way of unwinding all of the poor investment decisions that plan participants have made in years past. It is also a way of seeing to it that existing participants more fully benefit from a plan that may look very different—and much more investor-friendly—from the plan in which they initially participated. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Research Shows Women Much Less Prepared to Retire Than Men - Summary: Despite having a more powerful presence in shaping today's workforce, women continue to be less prepared for retirement than men, according to a new study by Hewitt Associates. Located at: Hewitt Associates. Click on headline for full article.
When Credit Gets Tight, a 401k Loan Becomes Tempting - Summary: These are tricky times. Banks are frantically reducing the credit lines on existing home equity loans. Credit card issuers are deploying similar tactics. That makes 401k loans a more attractive option, or sometimes the only remaining one, for people who need money. Located at: New York Times (free registration may be required). Click on headline for full article.
Commentary
The DOLs New Participant-Contribution Regulation - Summary: One potential concern with the safe harbor is that plans that do not meet it may bear a heavier burden of demonstrating, if challenged, that they forwarded contributions by the time they could be reasonably segregated. This may be true for large as well as small employers. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Court and Legislative Items
NovaStar Faces 401k Company Stock Suit - Summary: Participants claim NovaStar's 401k plan was imprudently invested because of the company's alleged sub-prime mortgage lending practices. Located at: Planadviser.com. Click on headline for full article.
Cashed-Out Participants May Pursue ERISA Claims Over 401k Plan Investments - Summary: The Fourth Circuit U.S. Court of Appeals rules that participants who had been cashed out of 401k plans still could pursue their claims that the plan sponsors had breached their fiduciary duties under ERISA by imprudently investing in mutual funds. Located at: CCH. Click on headline for full article.
Proposed Legislation on Fees and Expenses - Summary: This discussion was prepared by the House Education and Labor Committee. It is intended to support the provisions included in The 401k Fair Disclosure for Retirement Security Act which was recently approved by he House Education and Labor Committee, by a vote that was largely along party lines. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
Plan Administration Items
Every Company's Retirement Plan Must be Amended this Year - Summary: Every retirement plan, including pension, profit sharing and 401k plans, regardless of whether the plan is a prototype, volume submitter, or individually drafted, must be amended to comply with the final Internal Revenue Code Section 415 regulations. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
How Early Can You Send Out the Annual QDIA Notices? - Summary: Plans can rely on the 90-day period for purposes of providing the annual QDIA notices, even if the plan does not include automatic enrollment. However, that does not mean that 90 days is the outer limit for furnishing the annual notice. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
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