BPP401k.com Newsletter
October 22, 2008
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Financial Crisis Sparks New Debate on Retirement Benefits - Summary: The current financial crisis has renewed debate on Capitol Hill on how to ensure U.S. workers are saving enough for retirement, and how to guarantee that they have enough money to retire comfortably. Located at: Society for Human Resource Management. Click on headline for full article.
Financial Crisis Calls for Communication - Summary: As employees struggle with the personal implications of current market meltdowns, communications tips from Watson Wyatt will resonate with senior leaders, benefit directors and other HR professionals. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Financial Crisis Recasts Debate on Pensions Versus 401ks - Summary: The financial crisis starkly highlights the relative pros and cons of defined benefit pensions and 401k plans, according to experts at Watson Wyatt. Located at: 401khelpcenter.com. Click on headline for full article.
Automatic Enrollment – Time to Plan and Act - Summary: This is an introduction to the basics of automatic contribution arrangements and an overview of how automatic enrollment (with or without employer matching contributions) can maximize retirement savings for all employees, with employee dollars. Located at: Chang, Ruthenberg & Long. Click on headline for full article.
Are 401ks Still Viable? - Summary: The steepness of this year's market collapse and the still-uncertain depth of the economic downturn has prompted lawmakers, academics and economists to question the wisdom of letting workers hitch their retirement fortunes to the precariousness of the stock market. Located at: Washington Post. Click on headline for full article.
Retirement Plan Comparison Chart - Summary: This chart compares SIMPLE IRA, SIMPLE 401k, Safe Harbor 401k and QACA plans. Located at: McKay Hochman. Click on headline for full article.
Required Minimum Distribution FAQ - Summary: Answers to a few questions related to Required Minimum Distributions. Located at: McKay Hochman. Click on headline for full article.
Social Networking and 401ks Can Be a Good Fit - Summary: Two years ago, when Ann Bender suggested using Best Buy's internal social networking site to tout the company's 401k plan, she was met with blank stares. But social networking sites may prove to be powerful marketing tool for 401k plans. Located at: Workforce Management (free registration may be required). Click on headline for full article.
Lawmakers Call for End of RMD Penalty - Summary: Two Congressional lawmakers have formally called on the Treasury Department to suspend the tax penalty for taxpayers who do not take the minimum required distribution from their 401ks. Located at: Planadviser.com. Click on headline for full article.
Plans to Ease Withdrawal Rules Draw Criticism - Summary: Proposals swirling around Washington that would relax minimum-distribution rules for retirement plans are drawing a skeptical response from advisers. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.
House Democrats Contemplate Abolishing 401k Tax Breaks - Summary: Powerful House Democrats are eyeing proposals to overhaul the nation’s $3 trillion 401k system, including the elimination of most of the $80 billion in annual tax breaks that 401k investors receive. Located at: Workforce Management (free registration may be required). Click on headline for full article.
Emergency Economic Stabilization Act - Summary: The EESA contains a few provisions related to retirement plans. That article highlights some of them. Located at: McKay Hochman. Click on headline for full article.
How Do Lower-Income Families Think about Retirement? - Summary: This paper presents evidence on this question based on 51 qualitative interviews with low-income families in the Detroit area. They find that the great majority of low-income households think about retirement, although this does not necessarily mean they are able to plan and/or save actively for retirement. Located at: Michigan Retirement Research Center (PDF File). Click on headline for full article.
Are All Americans Saving Optimally for Retirement? - Summary: Many people fear that Americans are preparing poorly for retirement. But developing rigorous evidence on this issue is difficult. This paper briefly discusses evidence on the adequacy of retirement wealth accumulation. The paper concludes that existing descriptive evidence does not seem consistent with dire assessments of poor financial preparation. Located at: Michigan Retirement Research Center (PDF File). Click on headline for full article.
Preparation for Retirement, Financial Literacy and Cognitive Resources - Summary: Traditional economic models assume that individuals have full information and act perfectly rationally. However, this paper shows that there is considerable variation in financial literacy in the population and propose modeling the acquisition of financial knowledge in a human capital production framework. Located at: Michigan Retirement Research Center (PDF File). Click on headline for full article.
2009 Plan Limits Announced - Summary: The Internal Revenue Service has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2009. Here are the 401k related items. Located at: 401khelpcenter.com. Click on headline for full article.
DOL Reiterates Position on SRI Investment Criteria and Proxy Voting - Summary: The DOL announced the issuance of new guidance under the ERISA clarifying the obligations of plan fiduciaries when considering shareholder rights and investments in economically targeted investments. Located at: 401khelpcenter.com. Click on headline for full article.
DOL Revises ERISA Interpretive Statements on Shareholder Rights and Economically Targeted Investments - Summary: On October 17, 2008, the U.S. Department of Labor published in the Federal Register interpretive bulletins updating and modifying its prior bulletins on the exercise of shareholder rights, including proxy voting, and on economically targeted investments by ERISA-governed employee benefit plans. Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
EBSA Gives Thumbs Down to SRI Investment Criteria - Summary: Federal regulators have reaffirmed their position that the goal for investments in Employee Retirement Income Security Act (ERISA) plans must be to generate maximum returns to meet pension liabilities and not for socially responsive investing purposes. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Surplus Assets Transferred to 401k Plan Cannot Fund Matching Contributions - Summary: Two recent IRS private letter rulings indicate that sponsors cannot use surplus assets from a terminating defined benefit plan for matching contributions under a defined contribution replacement plan. Located at: Watson Wyatt. Click on headline for full article.
IRS Proposed Regulations on Distribution Notices - Summary: The IRS has issued proposed regulations, mandated by PPA, that affect the timing and content of distribution notices. Located at: Sungard/Relius. Click on headline for full article.
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