BPP401k.com Newsletter Benefit Plans Plus 11 26 08

BPP401k.com Newsletter
November 26, 2008

News Highlights

Navigating Your Way Through Market Turbulence Take an in-depth look at how the market volatility may be affecting four common retirement plan types and how retirement plan sponsors can take action.

The Business Case for 401k Automatic Enrollment Companies using automatic 401ks have seen employee participation rates soar (often above 90%) and especially among lower-income and minority workers who are too often left behind. They have found there are at least three sound business reasons for using automatic enrollment.

Plan Sponsors Faring Well in Fee Lawsuits Judges dismiss or limit plaintiffs' claims so far and a pair of recent court rulings in major 401k fee lawsuits could be a boon to large corporations that sponsor such plans.

It's Crunch Time for 403(b) Plans Much has been said and written about the new 403(b) regulations effective January 1, 2009, but most 403(b) plans haven't even started to get ready for compliance. And so it's crunch time for 403(b) plans.

403(b) Crunch Time Series #2 Second in a series, this article is about complying with the 403(b) contribution limits which are governed by Section 402(g) of the Internal Revenue Code.

Navigating Your Way Through Market Turbulence - Summary: Take an in-depth look at how the market volatility may be affecting four common retirement plan types and how retirement plan sponsors can take action. Located at: Principal Financial Group (PDF File). Click on headline for full article.

The Business Case for 401k Automatic Enrollment - Summary: Companies using automatic 401ks have seen employee participation rates soar (often above 90%) and especially among lower-income and minority workers who are too often left behind. They have found there are at least three sound business reasons for using automatic enrollment. Located at: Retirementmadesimpler.org. Click on headline for full article.

Year-End Checkup for Benefit Plans - Summary: This document will help identify general year-end administrative and planning issues that could lead to compliance or employee relations problems if not addressed before, or early in, 2009. In addition, it highlights recent legislative or regulatory developments that may require plan design or documentation changes. Located at: Aon (PDF File). Click on headline for full article.

2008 End of Year Plan Sponsor "To Do" Lists - Summary: This document contains seven "to do" lists on items that may require plan sponsors to take action before the end of 2008 or in early 2009. Many of the action items are a result of the Pension Protection Act of 2006. Located at: Snell & Wilmer LLP (PDF File). Click on headline for full article.

Financial Crisis Highlights Contrasting Pension and 401k Investment Risks - Summary: Watson Wyatt has analyzed the contrasting investment risks faced by defined benefit pensions and 401k plans during the current financial crisis. The predictable, mainly guaranteed income of pensions (including hybrid plans like cash balance plans) contrasts sharply with the day-to-day fluctuation of 401k account values, which are wreaking havoc on planned retirements. Located at: CCH. Click on headline for full article.

Roth 401ks Expected to Join the Mainstream - Summary: Employers are adopting Roth 401k savings plans faster than employees are embracing them, but many observers expect the plans to join the mainstream of employer-sponsored retirement packages in the coming years. Located at: Insurancenewsnet.com. Click on headline for full article.

AUDIO: Retirement Tips For An Economic Crisis - Summary: What are your investment options if you're nearing retirement? Or if retirement's many years away? How can the Great Depression give us perspective on today's crisis? Guest host Lynn Neary talks with Gail MarksJarvis, a personal finance columnist for the Chicago Tribune for survival investment tips. Located at: NPR. Click on headline for full article.

Retirement Out of Reach - Summary: With pensions and retiree health benefits largely things of the past -- and financial markets devastating 401ks -- companies are at risk of losing their competitive edge if they become storehouses of embittered older employees who put in only the minimum effort to keep their jobs. Located at: Workforce.com (free registration may be required). Click on headline for full article.

Chairman Miller Unveils Principles to Preserve and Strengthen 401ks - Summary: Recent hearings held by the committee have shown the devastating toll the economic downturn has leveled on Americans' retirement savings. To help preserve and strengthen 401k and other retirement plans, Chairman Miller released this list of principles. Located at: House Committee on Education and Labor. Click on headline for full article.

Plan Sponsors Faring Well in Fee Lawsuits - Summary: Judges dismiss or limit plaintiffs' claims so far and a pair of recent court rulings in major 401k fee lawsuits could be a boon to large corporations that sponsor such plans. Located at: PIonline.com. Click on headline for full article.

Wal-Mart Captures Resounding Excessive Fee Suit Victory - Summary: A federal judge in Missouri handed retail giant Wal-Mart Stores a resounding legal victory by swatting away a participant’s excessive fee lawsuit for falling short of the plaintiff’s responsibility to show the employer violated its fiduciary responsibilities. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Towers Perrin Legislative Tracking Chart -- Retirement - Summary: The chart summarizes selected federal legislation that would affect employee benefit programs. The bills included on the chart are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors. Located at: Towers Perrin (PDF File). Click on headline for full article.

It's Crunch Time for 403(b) Plans - Summary: Much has been said and written about the new 403(b) regulations effective January 1, 2009, but most 403(b) plans haven't even started to get ready for compliance. And so it's crunch time for 403(b) plans. Located at: Retirement Plan Blog. Click on headline for full article.

403(b) Crunch Time Series #2 - Summary: Second in a series, this article is about complying with the 403(b) contribution limits which are governed by Section 402(g) of the Internal Revenue Code. Located at: Retirement Plan Blog. Click on headline for full article.

How Much Risk is Acceptable? - Summary: This paper takes the first step in exploring the question of how much financial risk in saving for retirement is acceptable. The first section makes the case for a new tier of retirement income. The second section describes the implications of using a defined contribution approach for the new tier. The third section uses a model developed by Gary Burtless to demonstrate that even using target date funds and full annuitization at retirement, a defined contribution approach produces enormous variation in outcomes. The fourth section explores the implications of modifying these fluctuations. The final section concludes. Located at: Center for Retirement Research at Boston College. Click on headline for full article.

IRS Retirement News for Employers - Fall 2008 Edition - Summary: This edition includes articles such as Help Your Employees Weather the Storm: Hardship Withdrawals and Loans from Retirement Plans; Do the Right Thing Even When Times are Tough!; Is My Plan the Right Plan?; Required Minimum Distribution Reminder; RNE Survey; Failure to Provide a Safe Harbor 401k Plan Notice; 2009 Retirement Plan Limits Announced; and DOL News. Located at: IRS (PDF File). Click on headline for full article.

DOL Issues Additional Guidance on Investing Benefit and Plan Assets - Summary: The DOL recently issued two new Interpretive Bulletins relating to certain fiduciary implications of investments by employee benefit plans, the first having to do with economically targeted investments and the second relating to the exercise of shareholder rights. Located at: Seyfarth Shaw LLP. Click on headline for full article.

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