BPP401k.com Newsletter Benefit Plans Plus 2_11

BPP401k.com Newsletter
February 11, 2009

News Highlights

Steps for Smooth Sailing in 401k Rollovers By managing the terminated participant population, plan sponsors can rebalance their ratio of current-to-former participants and diminish the costs they incur for former employees' retirement benefits and their future legal risks.

Mid-Year Safe Harbor 401k Plan Changes As the economy continues to struggle, practitioners have been besieged with questions regarding how employers can reduce or eliminate retirement plan contributions. This FAQ addresses how an employer can eliminate or freeze fixed contributions under a safe harbor 401k plan.

ERISA Reporting and Disclosure: Eight Common Mistakes to Avoid Law firm of Chang, Ruthenberg & Long provides a quick overview of eight common mistakes to avoid related to ERISA reporting and disclosure.

Some Items of Interest to Advisors Scott Simon writes, "To kick off 2009, I thought it might be a good idea to cover a few items that don't merit treatment in a column on their own but nonetheless may be of interest to advisors.

The Structure of 401k Fees This paper reviews the structure of 401k plans, describing the services they provide and the cost of these services. It also reviews the typical schedules of fees that providers of financial services charge plan sponsors and participants. It finds that 401k fees are so complex, confusing, or obscure that many sponsors and participants report that they do not understand either their magnitude or their consequences.

Markets Put Employers on Defensive About 401k Plans - Summary: Corporations that sponsor 401k plans may have more pressing issues at the moment, but that hardly means they should ignore the waning confidence in what has become their primary retirement benefits offering. Located at: Workforce.com (free registration may be required). Click on headline for full article.

Mid-Year Safe Harbor 401k Plan Changes - Summary: As the economy continues to struggle, practitioners have been besieged with questions regarding how employers can reduce or eliminate retirement plan contributions. This FAQ addresses how an employer can eliminate or freeze fixed contributions under a safe harbor 401k plan. Located at: Sungard/Relius. Click on headline for full article.

Fewer Companies Adopting Automatic Enrollment and Other High-Cost Retirement Programs - Summary: According to a new survey by Hewitt Associates the number of employers adopting premium retirement features, such as automatic enrollment and company matches, has reached a plateau in response to the economic climate. Instead, they are focusing their efforts on offering more lower-cost strategies. Located at: 401khelpcenter.com. Click on headline for full article.

73% of DC Sponsors Plan No 2009 Match Changes - Summary: While media accounts may be full of reports of employer decisions to suspend their retirement plan company match contributions, 73% of DC plan sponsors in a new survey plan no match changes. Located at: Planadviser.com. Click on headline for full article.

70% of U.S. Households Have Retirement Savings - Summary: Seven in 10 U.S. households have some type of tax-advantaged retirement savings through work or through Individual Retirement Accounts (IRAs), according to a new Investment Company Institute study. Located at: Investment Company Institute. Click on headline for full article.

44% of DC Plans Expect to Replace Options in '09 - Summary: A Callan survey just released showed 44% of private and public defined contribution plans expect to replace an investment option for performance-related reasons in 2009, up from 39% that did so last year. Located at: PIonline.com. Click on headline for full article.

ERISA Reporting and Disclosure: Eight Common Mistakes to Avoid - Summary: Law firm of Chang, Ruthenberg & Long provides a quick overview of eight common mistakes to avoid related to ERISA reporting and disclosure. Located at: Chang, Ruthenberg & Long PC. Click on headline for full article.

Steps for Smooth Sailing in 401k Rollovers - Summary: By managing the terminated participant population, plan sponsors can rebalance their ratio of current-to-former participants, and diminish the costs they incur for former employees' retirement benefits and their future legal risks. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Some Items of Interest to Advisors - Summary: Scott Simon writes, "To kick off 2009, I thought it might be a good idea to cover a few items that don't merit treatment in a column on their own but nonetheless may be of interest to advisors." Located at: Morningstar.com. Click on headline for full article.

Conflict-Free 401k Advice Still not Foolproof - Summary: Just when the Labor Department thought it had buttoned up the final regulations governing the advice given to 401k plan participants, new questions are being asked about conflicts of interest and the quality of the advice. Located at: Chicago Tribune. Click on headline for full article.

The Structure of 401k Fees - Summary: This paper reviews the structure of 401k plans, describing the services they provide and the cost of these services. It also reviews the typical schedules of fees that providers of financial services charge plan sponsors and participants. It finds that 401k fees are so complex, confusing, or obscure that many sponsors and participants report that they do not understand either their magnitude or their consequences. Located at: Center for Retirement Research at Boston College (PDF File). Click on headline for full article.

Retirement Plan Participation and Contribution Trends - Summary: The U.S. Census Bureau periodically collects information from individuals about their participation in employer-sponsored retirement plans. This CRS report presents a summary of the data and a comparison of the results of the 2006 survey with similar surveys that the Census Bureau conducted in 1998 and 2003. Located at: Congressional Research Service (PDF File). Click on headline for full article.

Bunch v. W.R. Grace: What a Breach of Fiduciary Duty Doesn't Look Like - Summary: Anybody interested in fiduciary obligations under ERISA should become familiar with the First Circuit's decision in Bunch v. W.R. Grace & Co, where what was at issue is whether it was a breach of fiduciary duty to sell company stock after retaining outside advisors to investigate the stock's value, potential and appropriateness as an investment option. Located at: Boston ERISA Law Blog. Click on headline for full article.

DOL Proposes to Delay Final Advice Regulations - Summary: The DOL notice does not explain which of the OMB factors triggered its decision to propose an extension, but there have been numerous reports of Congressional opposition to the PTE, so the DOL's willingness to consider an extension is not too surprising (notwithstanding its staunch defense of the PTE in the preamble to the regulations). Located at: Employee Benefits Institute of America. Click on headline for full article.

DOL Provides Guidance for Madoff-Maimed Retirement Plan - Summary: With an expanding list of retirement plans snared by investments tied to Bernard L. Madoff, the Labor Department has published some guidance for plan fiduciaries. Located at: Planadviser.com. Click on headline for full article.

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