BPP401k.com Newsletter Benefit Plans Plus 2_25

BPP401k.com Newsletter
February 25, 2009

News Highlights

Advisers Toughing Out Troubled Times The times may be troubled, the markets volatile, but advisers seem resilient.

403(b) Relief is Good News for Plan Sponsors The Internal Revenue Service recently cleared up some confusion about its relief of the written plan document requirement for 403(b) plans.

Seventh Circuit Rules on Fiduciary Duties Related to 401(k) Fees A bit of good news for sponsors of 401(k) plans was provided by the Seventh Circuit in Hecker v. Deere & Co., the first appellate decision to address the duties of fiduciaries to control fees. Hecker will reduce, at least until legislation is passed or regulations finally approved, the litigation pressure on employers sponsoring 401(k) plans due to fees charged to participants.

Forced Investment in the Market Seems Like Bad Timing to Participants Plan sponsors have found success with automatic enrollment and new default investment options, but this places them in an awkward situation at the start of 2009. The result of their success has been that a large number of employees took on exposure to financial markets in general and to equity markets in particular virtually on the eve of the biggest market collapse in 70 years.

Compliance Calendar for 2009 Vanguard has created a 2009 compliance calendar that alerts you to key dates and gives you instant access to compliance deadlines. This calendar lists recurring compliance and notice requirements for qualified defined contribution plans.

401k Plan Corrective Distributions for 2009 This technical update reviews the rules, including recent law changes, relating to 401k plan corrective distributions.

Update on Participant Activity Amid Market Volatility - Summary: Volatility in the markets during 2008 was of historic proportions. But how did plan participants on the whole react? To assess participant behavior last year, the Vanguard Center for Retirement Research examined recent transactions and other activities in plan records kept by Vanguard. Located at: Vanguard. Click on headline for full article.

Fewer Employers to Adopt Automatic 401k Enrollment - Summary: The number of employers adopting premium 401k features like automatic enrollment and company matches has slowed in response to the economic climate, according to a survey by Hewitt Associates. Located at: hr.blr.com February 2009. Click on headline for full article.

Forced Investment in the Market Seems Like Bad Timing to Participants - Summary: Plan sponsors have found success with automatic enrollment and new default investment options, but this places them in an awkward situation at the start of 2009. The result of their success has been that a large number of employees took on exposure to financial markets in general and to equity markets in particular virtually on the eve of the biggest market collapse in 70 years. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

401k Plan Corrective Distributions for 2009 - Summary: The purpose of this technical update is to review the rules, including recent law changes, relating to 401k plan corrective distributions. Located at: Sungard/Relius. Click on headline for full article.

The Future of DC Plans is Full of Change - Summary: The devastation defined contribution plans suffered in last year's market mayhem is expected to lead to major changes in plan design and asset allocation, as well as increased emphasis on retirement income, industry professionals say. Located at: PIonline.com. Click on headline for full article.

Select Compliance Deadlines and Reminders - Summary: Seven page summary of select compliance deadlines compiled by the law firm of Reinhart Boerner Van Deuren. Located at: Reinhart Boerner Van Deuren (PDF File). Click on headline for full article.

Compliance Calendar for 2009 - Summary: Vanguard has created a 2009 compliance calendar that alerts you to key dates and gives you instant access to compliance deadlines. This calendar lists recurring compliance and notice requirements for qualified defined contribution plans. Located at: Vanguard (PDF File). Click on headline for full article.

Boost in Target-Date Funds Hurt 401ks - Summary: Defined contribution plan participants have been exposed to more financial market risk by the increased use of target-date fund strategies as default investment options and away from more secure investments, according to a new study by Greenwich Associates. Located at: PIonline.com. Click on headline for full article.

Advisers Toughing Out Troubled Times - Summary: The times may be troubled, the markets volatile, but advisers seem resilient. Located at: Planadviser.com. Click on headline for full article.

Hearings on Retirement Security, 401k Resurface - Summary: The market's impact continues to weigh on the nation's retirement security – and it seems that Congress wants to do something about it. Located at: Planadviser.com. Click on headline for full article.

Congress Begins Review of 401ks - Summary: Although retirement-plan design is probably not at the top of any company's agenda in these tumultuous times, delaying such consideration may not be an option for long. With trillions being lost and Congress preparing for hearings, HR leaders may need to start paying more attention to this issue. Located at: HREonline.com. Click on headline for full article.

U.S. Retirement Market, Third Quarter 2008 - Summary: Comprehensive reports, charts and graphs are compiled quarterly. This quarter's report notes that U.S. retirement assets totaled $15.9 trillion as of September 30, 2008, down from $16.9 trillion on June 30, 2008. Retirement savings accounted for 35 percent of all household financial assets in the United States. Located at: Investment Company Institute (PDF File). Click on headline for full article.

403(b) Relief is Good News for Plan Sponsors - Summary: The Internal Revenue Service recently cleared up some confusion about its relief of the written plan document requirement for 403(b) plans. Located at: Planadviser.com. Click on headline for full article.

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