BPP401k.com Newsletter Benefit Plans Plus 11 12 08

BPP401k.com Newsletter
November 12, 2008

News Highlights

With Democratic Win, What Happens Now With Retirement Plans, Social Security? Mr. Obama’s policy statements during the election campaign provide a guide to the direction of employee benefits legislation in the next few years and provides some suggestions for the future in retirement plan legislation.

Five Basics to Remember in a Down Market Down markets are a fact of life. But they need not be a cause for panic or rash decision-making based on newspaper headlines or TV talk shows. Here are five things every investor should remember in these times.

401k Plans Face Disparity Issue As cash-strapped workers curb their 401k contributions, more employers could be forced to limit or refund the retirement-plan contributions of higher earners to meet federal nondiscrimination rules.

Maintaining Standards in Unusual Times By now, even the most ardent advocates of asset allocation have to be asking themselves whether they should just go to cash and wait for saner times. The problem for fiduciaries is that they have a duty to diversify unless it is clearly prudent not to do so.

December 31, 2008 Deadline to Adopt a 403(b) Written Plan Rev. Proc. 2007-71 requires a written plan or amendments to an existing plan — in compliance with the final 403(b) regulations — to be in place by no later than January 1, 2009. This deadline applies to off-calendar year plans also.

IRS Says: Beware of ROBS Beware of promoters promising that participants can use their funds in their 401k, IRA, profit-sharing, or annuity plans to open a business without paying taxes on the distribution.

Year-End Checklist for Tax-Qualified Retirement Plans - Summary: It is important to stop and review whether any qualified plan action items must be addressed prior to year-end. This checklist describes potential year-end amendments and notices that may be necessary for tax-qualified retirement and savings plans. Located at: Morgan, Lewis & Bockius LLP (PDF File). Click on headline for full article.

Five Basics to Remember in a Down Market - Summary: Down markets are a fact of life. But they need not be a cause for panic or rash decision-making based on newspaper headlines or TV talk shows. Here are five things every investor should remember in these times. Located at: The Standard (PDF File). Click on headline for full article.

Plan Sponsors Address Market Turmoil - Summary: Plan sponsors are taking their fiduciary responsibilities seriously and dealing proactively with the financial crisis, suggests a new survey from Aon Consulting. Of the 100 defined contribution plan sponsors recently surveyed, 78% have reviewed their plan's core offerings to ensure they have sufficient diversification. Located at: Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Match is Key Factor in How Much Employees Save in 401k Plans - Summary: Charles Schwab has released a new report revealing an important connection between how a company offers its 401k plan matching contribution and employee saving levels. Located at: 401khelpcenter.com. Click on headline for full article.

Balance Forward 401k Plans - Summary: If you're a plan sponsor or a 401k plan participant, today's investment climate is not a good time to be part of a balance forward plan. The author explains why. Located at: Retirement Plan Blog. Click on headline for full article.

401k Plans Face Disparity Issue - Summary: As cash-strapped workers curb their 401k contributions, more employers could be forced to limit or refund the retirement-plan contributions of higher earners to meet federal nondiscrimination rules. Located at: Located at: Wall Street Journal Online. Click on headline for full article.

DC Plans With Unbundled Providers to Add Options - Summary: The Spectrem Group Report also says that plans using unbundled providers are likely to add employer stock, high-yield bonds and target-date funds as new investment choices. Located at: Workforce.com (free registration may be required). Click on headline for full article.

Maintaining Standards in Unusual Times - Summary: By now, even the most ardent advocates of asset allocation have to be asking themselves whether they should just go to cash and wait for saner times. The problem for fiduciaries is that they have a duty to diversify unless it is clearly prudent not to do so. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

December 31, 2008 Deadline to Adopt a 403(b) Written Plan - Summary: Rev. Proc. 2007-71 requires a written plan or amendments to an existing plan — in compliance with the final 403(b) regulations — to be in place by no later than January 1, 2009. This deadline applies to off-calendar year plans also. Located at: McKay Hochman. Click on headline for full article.

State-by-State Participation in 401k Type Plans - Summary: How many wage and salary workers in each state participate in 401k type plans? What does that translate into on a percentage basis? Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.

Change Election Produces Little So Far on the Hill - Summary: Despite the undeniable impact the "change" element had in the Presidential election the leadership of the key Congressional committees with jurisdiction over employee benefit matters in both the House and Senate will likely remain the same next year. Located at: Benefits Biz Blog. Click on headline for full article.

IRS Says: Beware of ROBS - Summary: Beware of promoters promising that participants can use their funds in their 401k, IRA, profit-sharing, or annuity plans to open a business without paying taxes on the distribution. Located at: BenefitsBlog. Click on headline for full article.

How IRS Correction Program Updates Affect You - Summary: EPCRS allows and encourages plan sponsors to correct certain errors in employee retirement plans, in some instances without having to notify the IRS. The program helps employers and plan sponsors take a proactive role in identifying and correcting mistakes, and also encourages implementation of practices and procedures to help ensure retirement plans comply with the laws and regulations. Correcting errors in this manner allows the plan's tax-favored status to be maintained and protects the retirement benefits of employees and retirees. Located at: Vanguard (PDF File). Click on headline for full article.

This eNewsletter is published as a service to our clients. BSW Benefit Plans Plus, L.L.C. is not the author of the material unless specifically noted. We review each article to ensure that it is related to the interests of our clients, but BSW Benefit Plans Plus, L.L.C. does not endorse and disclaims any and all responsibility or liability for the accuracy, content, completeness, legality, or reliability of the material. All articles are copyrighted to their publishers.

THIS ENEWSLETTER IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED AS LEGAL, TAX OR INVESTMENT ADVICE.