BPP401k.com Newsletter
July 30, 2008
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The Portability Myth - Summary: 401ks no doubt have a place in the retirement landscape, so long as people understand the real intrinsic differences between defined-contribution plans and defined-benefit plans. Portability is not one of those differences. Plan sponsors are in a position to correct this misconception, and should not be swayed from pursuing an effective defined-benefit strategy in the name of portability. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Beneficiary FAQs - Summary: This FAQ has been prepared by McKay Hochman to address many beneficiary questions related to qualified plans? Located at: McKay Hochman. Click on headline for full article.
Bent Keeps 401k Debit Card Crusade Going - Summary: Money man Bruce Bent can be a bit prickly about one of his progeny and how "clean" it is -- the 401k Debit Card. Located at: Newsday.com. Click on headline for full article.
Deloitte 2008 401k Benchmarking Survey - Summary: Employers are diligently seeking better ways to leverage their investment in 401k plans to attract, motivate, and retain workers. They are doing so with a relatively consistent set of beliefs about the key elements of plan effectiveness. Yet employers also are expressing some doubts and disappointments with their 401k plans as they experiment with designs and policies to achieve their business goals – sentiments that point to the need for additional fine-tuning, or perhaps in some cases, even a radical overhaul. Located at: International Foundation of Employee Benefit Plans (PDF File). Click on headline for full article.
U.S. Retirement Market, 2007 - Summary: Given the importance of retirement savings to mutual funds and their investors, the Investment Company Institute publishes these statistics on the U.S. retirement market as an information resource for mutual fund companies, the media, policy makers, and researchers. Located at: Investment Company Institute (PDF File). Click on headline for full article.
Hewitt Federal Legislation Quick Guide - Summary: This Quick Guide provides short updates on federal legislation that is currently under active consideration by Congress or has recently been enacted into law regarding retirement plans. Located at: Hewitt (PDF File). Click on headline for full article.
Heroes Earnings Assistance and Relief Tax (HEART) Act - Summary: The HEART Act amends USERRA and addresses something that was not previously covered, namely, providing similar benefit protection to those who died or became disabled and could not return to work. This article will analyze the sections of the law relevant to retirement plans. Located at: McKay Hochman. Click on headline for full article.
Wal-Mart Answers Excessive 401k Fee Allegations - Summary: In a 35-page response to a class action lawsuit over excessive fees in its 401k plan, Wal-Mart said disclosures about such things as how investments options were selected or revenue sharing arrangements are "demonstrably immaterial to any investment decision faced by participants." Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
New Proposed Legislation on 401k Debit Cards - Summary: Senators Charles E. Schumer, Democrat of New York, and Herb Kohl, Democrat of Wisconsin, have introduced legislation that would outlaw the use of credit or debit cards in association with 401ks or other similar retirement plans. Located at: New York Times (free registration may be required). Click on headline for full article.
Class Certified in 401k Fee Case - Summary: On July 17, 2008, an Illinois district court granted the motion for class certification filed by the plaintiffs in the 401k fee case relating to the Kraft Foods 401k plan. The Kraft case is the fourth 401k fee case in which class certification recently has been granted. Located at: Groom Law Group. Click on headline for full article.
DOL Proposes Additional Fee and Investment-Related Disclosures - Summary: To satisfy the duty to disclose, fiduciaries must provide participants with certain plan-related and investment-related information when they first become eligible, and on a quarterly or annual basis. In connection with the new disclosure requirements, the DOL has also proposed certain changes to the disclosure requirements for plans that currently comply with ERISA section 404(c). Located at: Sutherland (PDF File). Click on headline for full article.
Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans - Summary: From Federal Register: July 23, 2008. This document contains a proposed regulation under the Employee Retirement Income Security Act of 1974 (ERISA) that, upon adoption, would require the disclosure of certain plan and investment-related information, including fee and expense information, to participants and beneficiaries in participant-directed individual account plans (e.g., 401k plans). Located at: Department of Labor. Click on headline for full article.
Fee-Disclosure Proposal Scrutinized - Summary: Most observers were pleased with the proposed fee-disclosure regulation issued by the DOL, which could take effect for the 2009 plan year. It requires both quarterly and annual disclosures, as well as information on investment performance. Critics say the proposal does not go far enough. Located at: HRonline.com (free registration may be required). Click on headline for full article.
DOL Pushes for Clearer Disclosure of 401k Fees - Summary: The Labor Department revealed proposed rules meant to clearly lay out the fees and expenses associated with each investment option, along with any administrative costs. It proposed the regulations would be effective for plan years beginning on or after Jan. 1, 2009. Located at: Wall Street Journal Online. Click on headline for full article.
Labor Department Proposes Dollar-Based 401k Fee Disclosure - Summary: The DOL has proposed requiring 401k plan fiduciaries to supply investors with standard account summaries that will clearly state fees, expenses and any administrative costs such as legal, accounting and recordkeeping charges—in actual dollars; performance and comparable benchmark returns; investment options; and how to obtain more detailed information, including education and/or advice. Located at: Onwallstreet.com. Click on headline for full article.
DOL 401k Disclosure Plan Completed - Summary: The Department of Labor issued its final regulatory proposal governing 401k fee disclosures, a move that would affect 65 million plan participants. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.
DOL Proposes Regulation on Fiduciary Disclosures - Summary: The DOL acknowledges that the regulation may trigger increased administrative costs and burdens for plans and plan sponsors, but notes that many of the regulation’s required disclosures are similar to those currently required for ERISA Section 404(c) plans. The deadline for comments on the proposed regulation is September 8, 2008. Located at: Employee Benefits Institute of America. Click on headline for full article.
DOL Issues Form 5500 Schedule C FAQ - Summary: In the 40 separate FAQs, DOL addresses a variety of questions, but leaves important issues unanswered. Located at: Groom Law Group. Click on headline for full article.
FAQs on Schedule C for 2009 Plan Years - Summary: Although the new Form 5500 will not be required until the filing date for the 2009 plan year (July 31, 2010 for calendar-year plans), even a casual review of these FAQs illustrates the challenges of future Schedule C compliance and the attendant need for advance planning to allow timely changes in systems and procedures. Located at: Employee Benefits Institute of America. Click on headline for full article.
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