BPP401k.com Newsletter Benefit Plans Plus

BPP401k.com Newsletter
August 6, 2008

News Highlights

BPP Launches New Product -- The Fiduciary Health Check^SM In response to market demand, Benefit Plans Plus, LLC has developed the Fiduciary Health Check^SM to help you understand and fulfill fiduciary responsibilities owed to your retirement plan. As an incentive to review plan compliance, Benefit Plans Plus is offering a 25 percent discount for all Fiduciary Health Checks initiated by the end of September. MORE

Sponsors Must Beware Paying Plan Expenses From the Plan An employer might ask: Can plan expenses be paid from my pension plan or 401k plan? Yes, they certainly can and, in fact, probably already are. However, the decision to do so must be made by the responsible plan fiduciaries who make sure that proper documentation and disclosures are provided.

The Future of Retirement This article looks at different ways to define retirement as part of the lifecycle and focuses on reinventing retirement to create a better future. It provides scenarios for the future of retirement, expresses the opinions of the author and builds on the work done by the Society of Actuaries in the Risks and Process of Retirement Surveys and other work.

What Incentives Might Make Workers Delay Retirement? What are the most effective actions employers could take to encourage workers to delay retirement? First and foremost, workers want to feel they are needed.

Senate Bill Would Limit 401k Loans To address concerns of excessive borrowing from 401k plans, a bill introduced in the Senate this month would ban debit cards allowing investors to borrow from their retirement accounts and would limit the number of outstanding loans to three.

ERISA Section 404(c) Required Disclosure Items - Summary: This chart is a summary of disclosure items under section 404(c) and includes suggestion on where to make the disclosure and suggested method of delivery. Located at: Prudential Retirement (PDF File). Click on headline for full article.

Roth 401ks Gaining Ground in Retirement Plan Space - Summary: Despite a stumbling start, the Roth 401k feature may have found its footing in the defined contribution plan space. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Sponsors Must Beware Paying Plan Expenses From the Plan - Summary: An employer might ask: Can plan expenses be paid from my pension plan or 401k plan? Yes, they certainly can and, in fact, probably already are. However, the decision to do so must be made by the responsible plan fiduciaries who make sure that proper documentation and disclosures are provided. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

401k Debit Cards—Think Before You Swipe - Summary: Although they may seem to be an attractive feature of some 401k plans, taking money out of your retirement savings, even for a short period of time, can have enormous repercussions for your retirement security—particularly if you never put the money back. Located at: Financial Industry Regulatory Authority. Click on headline for full article.

401k Debit Cards: What You Might Not Know - Summary: More akin to a traditional credit card, you must repay the money you withdraw using the card, along with fees and interest –- or you may incur substantial penalties. There are a number of important factors you should consider before using a 401k debit card. Located at: SEC. Click on headline for full article.

Rate of 401k Hardship Withdrawals Jump - Summary: The trend worries retirement plan consults because it might mean that employees aren't exhausting all of their options before making hardship withdrawals, which come with a penalty and tax consequences. Located at: Workforce.com (free registration may be required). Click on headline for full article.

The Future of Retirement - Summary: This article looks at different ways to define retirement as part of the lifecycle and focuses on reinventing retirement to create a better future. It provides scenarios for the future of retirement, expresses the opinions of the author and builds on the work done by the Society of Actuaries in the Risks and Process of Retirement Surveys and other work. Located at: redOrbit.com. Click on headline for full article.

What Incentives Might Make Workers Delay Retirement? - Summary: What are the most effective actions employers could take to encourage workers to delay retirement? First and foremost, workers want to feel they are needed. Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.

The Annuity Puzzle and Negative Framing - Summary: For years, researchers have been puzzled by why so few people purchase fixed, immediate, lifetime annuities for their retirement portfolios. Rational theories have been proposed, but none can fully explain the small size of the actual market. This decision is becoming increasingly important given the shift to 401k plans, as individuals will need to determine how best to manage their accumulated nest egg in retirement. Located at: Center for Retirement Research at Boston College (PDF File). Click on headline for full article.

Updated - 401k Fee Litigation - Summary: Over the past several years, more than two dozen lawsuits have been filed relating to 401k plan fees and, more specifically, revenue sharing arrangements with plan service providers. This is an update on those lawsuits. Located at: Groom Law Group. Click on headline for full article.

Senate Bill Would Limit 401k Loans - Summary: To address concerns of excessive borrowing from 401k plans, a bill introduced in the Senate this month would ban debit cards allowing investors to borrow from their retirement accounts and would limit the number of outstanding loans to three. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

401k Plan Loan and Termination of Employment Create the Perfect Storm - Summary: "There has been a great deal written about why borrowing from your 401k plan is a bad idea. If you want to read a good case in point that illustrates how things can go awry when it comes to a 401k plan loan, read the recent Tax Court case of Tilley v. Commissioner." Located at: Benefits Blog. Click on headline for full article.

Summary of Proposed Rule on Fiduciary Requirements for Fee Disclosure - Summary: The DOLs approach, that the disclosure duties outlined in the proposed rule are included in the current fiduciary standards, has generated some concern that some courts may be more likely to apply this reasoning retroactively in fee lawsuits. Located at: Profit Sharing/401k Council of America (PDF File). Click on headline for full article.

DOL Requirements For Participant-Directed Investments - Summary: This article summarizes the DOLs section 404(c) regulations and describes the participant disclosure rules that must be satisfied to obtain 404(c) protection. In addition, it identifies fiduciary obligations that are not eligible for 404(c) protection, impacts of automatic enrollment on 404(c) protection, and Form 5500 reporting requirements for 404(c) plans. Located at: Prudential Retirement (PDF File). Click on headline for full article.

FAQs Issued for New Schedule C Requirements - Summary: The EBSA has released 40 frequently asked questions (FAQs) to provide guidance on the revised Schedule C/Form 5500 reporting requirements regarding direct and indirect compensation and fees paid to plan service providers. Located at: CCH. Click on headline for full article.

Feds Propose Rules to Show 401k Costs - Summary: Fees become vitally important when an employee leaves his job and has to decide whether to leave his 401k account behind or transfer it to a new employer's plan or an individual retirement account. Located at: San Francisco Chronicle. Click on headline for full article.

SEC and DOL Agree to Cooperate in Examinations - Summary: The agencies have pledged to conduct regular meetings to discuss regulatory requirements that impact each agency's responsibilities, examination findings and trends, enforcement cases, and any other matters that the SEC and DOL staffs believe would be of interest to the other regulator for fulfilling its respective regulatory responsibilities. Located at: Morgan, Lewis & Bockius LLP (PDF File). Click on headline for full article.

Department of Labor and SEC Formalize Regulatory Cooperation - Summary: Staff from the DOLs Employee Benefits Security Administration and the SEC will meet regularly to discuss industry trends and regulations. Each agency will grant the other access to nonpublic enforcement information under their purview. Located at: Workforce.com (free registration may be required). Click on headline for full article.

Headline News

Labor Department Seeks to Recover Employee Contributions to 401k Plan

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