BPP401k.com Newsletter Benefit Plans Plus 11 03 08

BPP401k.com Newsletter
November 5, 2008

News Highlights

BPP In The News 403(b) Plans Must Meet January 1, 2009 Deadline Financial advisers, 403(b) administrators and plan sponsors who fail to understand the new 403(b) Plan rules face a rude awakening. All 403(b) plans must implement fundamental changes before January 1, 2009.

First, Do No Harm to 401k Plans Theresa Ghilarducci, who is the director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research, recently testified before Congress about her plan to replace 401ks with "government retirement accounts." Her proposal to replace the 401k with a government subsided plan would make a flawed system more flawed.

Avoiding Incorrect Self-Employed Retirement Deductions Retirement plans are not just for big businesses. They are also available for sole proprietorships. If you are self-employed small business owner, you can set up a qualified retirement plan for yourself and your employees.

The Four Pillars of U.S. Retirement Prudential has developed the "Four Pillars of U.S. Retirement" as a framework to discuss how Americans will prepare for and live in retirement. The Four Pillars have their origin in the traditional "three-legged stool" of retirement security: Social Security, Employment-Based Plans, and Personal Savings. To this, Prudential has added a fourth Pillar, Retirement Choices, to capture lifestyle and financial choices that are taking on greater significance given the changing nature of retirement in America.

Stable Value Fund Due Diligence Monitoring a stable value funds MV/BV ratio, underlying portfolio attributes, cash-flows and wrap exposures are important due diligence steps for a plan fiduciary in this environment.

Investors Stick With 401ks Despite the recent daily thousand-point swings in the Dow Jones Industrial Average and the understandable uncertainty among investors, Individual Retirement Accounts and 401k plans still remain American's dominant and trusted retirement vehicles.

LaRue, The Postscript Remember the grave concern in different quarters about whether the Supreme Court's ruling in LaRue would lead to a flood of litigation? Turns out it didn’t even do so in the LaRue case itself, which, now on remand at the trial court level, has been voluntarily dismissed by the plaintiff to avoid the expense of litigating the case.

The Four Pillars of U.S. Retirement - Summary: Prudential has developed the "Four Pillars of U.S. Retirement" as a framework to discuss how Americans will prepare for and live in retirement. The Four Pillars have their origin in the traditional "three-legged stool" of retirement security: Social Security, Employment-Based Plans, and Personal Savings. To this, Prudential has added a fourth Pillar, Retirement Choices, to capture lifestyle and financial choices that are taking on greater significance given the changing nature of retirement in America. Located at: Prudential (PDF File). Click on headline for full article.

Setting Up An Effective Strategy Around Lifecycle Funds - Summary: With the flood of lifecycle funds available in the market, plan sponsors need to consider which funds are most appropriate for their retirement plan. Here are some factors to examine. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Stable Value Fund Due Diligence - Summary: Monitoring a stable value funds MV/BV ratio, underlying portfolio attributes, cash-flows and wrap exposures are important due diligence steps for a plan fiduciary in this environment. Located at: Fiduciary Investor Blog. Click on headline for full article.

GM Won't Be Alone in Freezing Its 401k Match - Summary: Employees aren't the only ones thinking about suspending their 401k contributions as a result of the economic crisis. Many employers may be discussing a similar move with regard to 401k matches, experts say. Located at: Workforce.com (free registration may be required). Click on headline for full article.

The Case of the 401k Match Snatcher - Summary: One of the best perks of stashing cash in a 401k – the employer's free matching contribution – is disappearing at some struggling companies. Located at: FiLife.com Blog. Click on headline for full article.

Some 401k Sponsors Still Fans of Unbundled Services - Summary: The Spectrem research report said unbundled usage is highest among those with plan assets of $50 million to $199 million and that those going the unbundled route are more likely than those bundling to bring in a consultant to advise on their plan decisions. Located at: Planadviser.com. Click on headline for full article.

Auto Enrollment Wins Prevalence in DC Plans by Slim Margin - Summary: Automatic enrollment of employees into defined contribution retirement plans has been adopted by a majority of plan sponsors, according to a recent survey from Mercer. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Investors Stick With 401ks - Summary: Despite the recent daily thousand-point swings in the Dow Jones Industrial Average and the understandable uncertainty among investors, Individual Retirement Accounts and 401k plans still remain American's dominant and trusted retirement vehicles. Located at: OnWallStreet.com. Click on headline for full article.

Debating DB vs. DC plans - Summary: Plan sponsors are trying to connect the dots on how the Wall Street crash will affect their retirement plan benefits. Watson Wyatt's experts recently weighed in on the pros and cons of defined benefit and 401k plans amid a financial crisis. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

IRS 403(b) Phone Forum Planned - Summary: January 1, 2009 is coming up! Are you ready for the Final 403(b) Regulations? Please join Bob Architect on December 4th as he discusses the facts about it. Mr. Architect will answer questions following his presentation. Limited registration is now open! Located at: IRS. Click on headline for full article.

403(b) Plans Must Meet January 1, 2009 Deadline - Summary: Financial advisers, 403(b) administrators and plan sponsors who fail to understand the new 403(b) Plan rules face a rude awakening. All 403(b) plans must implement fundamental changes before January 1, 2009. Located at: 401khelpcenter.com. Click on headline for full article.

LaRue, The Postscript - Summary: Remember the grave concern in different quarters about whether the Supreme Court's ruling in LaRue would lead to a flood of litigation? Turns out it didn’t even do so in the LaRue case itself, which, now on remand at the trial court level, has been voluntarily dismissed by the plaintiff to avoid the expense of litigating the case. Located at: BostonERISAlaw.com. Click on headline for full article.

VIDEO: Misinformation on Chairman Miller's 401k Position - Summary: Rep. George Miller (D-CA) responds to Neil Cavuto on the spread of misinformation regarding his position on the 401k tax incentives. Located at: Fox News. Click on headline for full article.

Age-Based Retirement Investing - Summary: A white paper that discusses how does age-based (as opposed to retirement date) asset allocation respond to participant needs? It starts with the obvious – participants know their age. Age-based asset allocation can simplify investment decisions for the majority of "do it for me" participants. Located at: Securian Retirement (PDF File). Click on headline for full article.

IRA and 401k Plans: Early Withdrawals and Required Distributions - Summary: This CRS Report summarizes the provisions of law that govern the taxes applicable to pre-retirement distributions from retirement accounts, and the situations in which distributions must be taken from a plan in order to avoid a tax penalty. Located at: Congressional Research Service (PDF File). Click on headline for full article.

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