BPP401k.com Newsletter
July 23, 2008

Automatic 401k Provisions Are Having Desired Effect - Summary: Nearly two years after the Pension Protection Act of 2006 became law, the legislation's "automatic" provisions are beginning to have the desired effect, according to speakers at the nonpartisan Employee Benefit Research Institute's semi-annual policy forum. Located at: 401khelpcenter.com. Click on headline for full article.

Study Finds American Fundamentally Rethinking Retirement - Summary: Landmark study by Charles Schwab and Age Wave reveals that all generations are asking for help to help themselves achieve financial self-reliance as hopes, fears, expectations regarding work and relationships among the generations change. Located at: 401khelpcenter.com. Click on headline for full article.

Study Finds Most Middle Class Retirees Will Outlive Retirement Savings - Summary: Almost three out of five new middle-class retirees will outlive their financial assets if they attempt to maintain their pre-retirement standard of living, according to a new study conducted by Ernst & Young. Located at: 401khelpcenter.com. Click on headline for full article.

401k Plans Have Become Critical Savings Vehicles - Summary: New research recently released by Hewitt Associates highlights the importance of employee contributions to 401k plans. Located at: CCH. Click on headline for full article.

401k Matches May Be Targeted in Market Downturn - Summary: In the last market downturn, in 2001-02, companies hit hardest—such as Ford Motor Co. and Bethlehem Steel—suspended their 401k matches to save money. Will financially distressed companies take this route if the markets continue to drop? Located at: Workforce.com (free registration may be required). Click on headline for full article.

On a 401k Mission - Summary: Seeing investors waste the chance to build retirement savings accounts prompted the chief executive of Scarborough Capital Management Inc. to write a book highlighting the importance of adequately saving for a 401k plan by showcasing examples from 20 people. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

Why Do Spouses Have to be the Automatic Beneficiary of a Retirement Plan? - Summary: It's an interesting question, both from a historical standpoint and in the current political environment in which women's issues are an important component. So here's the answer for all to see. Located at: Retirement Plan Blog. Click on headline for full article.

Fiduciary Items

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Are Best Practices Enough? - Summary: In casual conversation about the troubled financial markets, the words "risk" and "uncertainty" often are treated as synonyms. But for the fiduciary, there must be no confusion about their very different meanings. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

Court and Legislative Items

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Senators Unveil 401k Debit Card Ban - Summary: Two U.S. Senators have announced a legislative proposal to ban debit cards linked to 401k plans. Located at: Planadviser.com. Click on headline for full article.

401k Plan Debit Card Bill - Summary: Bill introduced to amend the Internal Revenue Code to provide that no loan may be made from a qualified employer plan using a credit card or other intermediary and to limit the number of loans that may be made from a qualified employer plan to a participant or beneficiary. Located at: American Benefits Council (PDF File). Click on headline for full article.

Failure to Meet Technical Requirements Prevent Recognition as QDRO - Summary: This case involved a divorce decree that was not submitted to the plan administrator until after the participant's death, which occurred more than two years after the divorce. Although this case did not involve a 401k plan, it raises two issues of significant interest to 401k plan sponsors and administrators. Located at: Employee Benefits Institute of America. Click on headline for full article.

Commentary

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Perspective Shift by Plan Sponsors - Summary: In its survey of large 401k plans (with median plan assets of $248 million), Hewitt found that, between 2005 and 2007, there had been a dramatic shift in the way that plan sponsors were measuring the success of their 401k plans. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Refreshing Participants Investment Elections - Summary: Even though they may have no fiduciary obligation to do so, some employers have begun to ask whether they can take advantage of the new rules to "nudge" employees periodically to take stock of their prior investment elections. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

DOL and IRS Items

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DOL Issues FAQs on Schedule C Reporting for 2009 Form 5500 - Summary: The DOL has issued 40 frequently asked questions on Form 5500 Schedule C reporting for plan years beginning January 1, 2009. Located at: Employee Benefits Institute of America. Click on headline for full article.

DOL's New Thinking on Schedule C - Summary: DOL creates a huge exception to the new reporting rules for operating companies and puts to rest the concern of many that venture company operating companies and real estate operating companies would need to be included in the list of service providers on Form 5500 of benefit plan investors. Located at: Benefits Biz Blog. Click on headline for full article.

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