BPP401k.com Newsletter Benefit Plans Plus 3_4

BPP401k.com Newsletter
March 4, 2009

News Highlights

DC Plans: A Successful Cornerstone Of Our Nation's Retirement System While individuals have understandable retirement income concerns resulting from the recent economic downturn, it is critical to acknowledge the vital role these plans play in ensuring personal financial security.

Toolkit Available Saver's Credit rewards middle-and lower-income employees for their retirement plan saving.

Economic Conditions and Retirement Plan Advisors Advisors should be prepared for challenging conditions including fiduciary liability, increased claims, inadequate coverage, disgorged compensation and new business.

House Committee Advised Not to Scare Participants While individuals speaking during the U.S. House Education and Labor Committee's hearing on "Strengthening Worker Retirement Security" described the nation's retirement system as being "in peril," lawmakers were warned not to frighten participants away from it.

Disclosure Regs for 401k Fees in Limbo The Bush administration's failure to win final approval of new fee disclosure regulations for defined contribution plans could turn into a major headache for corporate executives.

Impact of Market Losses on 401k Account Balances EBRI published an analysis of the impact shows that participants' losses were largely determined by their account balance, age, and job tenure.

Chairman Miller Statement at Hearing on "Strengthening Worker Retirement Security" This is the prepared remarks of U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, for a February 24, 2009, committee hearing on "Strengthening Worker Retirement Security.

2008 401kExchange Market Share Report - Summary: Based on almost 50,000 surveys with 401k plan sponsors in 2008, many of the top 10 record keepers gained significant market share over the past year and the past three years. Located at: 401kexchange.com. Click on headline for full article.

Economic Conditions and Retirement Plan Advisors - Summary: This paper discusses items advisors should be prepared for during today's challenging conditions including fiduciary liability, increased claims, inadequate coverage, disgorged compensation and new business. Located at: Center for Due Diligence (PDF File). Click on headline for full article.

Toolkit Available Saver's Credit rewards middle-and lower-income employees for their retirement plan saving.

Impact of Market Losses on 401k Account Balances - Summary: EBRI published an analysis of the impact of the recent financial crisis on 401k retirement account balances from Jan. 1, 2008, to Jan. 20, 2009, showing that participants' losses were largely determined by their account balance, age, and job tenure. Located at: 401khelpcenter.com. Click on headline for full article.

Research Highlights Severity of Market Tumble on Retirement Income Needs - Summary: While most Americans are well aware of the hit their 401k balances have taken in recent months, a new analysis by Hewitt Associates highlights the true severity of the market collapse on employees' retirement savings. Located at: 401khelpcenter.com. Click on headline for full article.

DC Plans: A Successful Cornerstone Of Our Nation's Retirement System - Summary: Employer-sponsored 401k and other defined contribution retirement plans are a core element of our nation's retirement system and successfully assist tens of millions of families in accumulating retirement savings. While individuals have understandable retirement income concerns resulting from the recent economic downturn, it is critical to acknowledge the vital role these plans play in ensuring personal financial security. Located at: American Benefits Council (PDF File). Click on headline for full article.

Lump-Sum Distribution Rollovers, by Age Group - Summary: When a worker changes jobs and receives a lump-sum distribution from his or her retirement plan, a key question is whether he or she will preserve the savings by "rolling over" the entire distribution to another tax-qualified savings vehicle. The age of the worker is a major factor in that decision. Located at: 401khelpcenter.com. Click on headline for full article.

Are Terminated 401k Participants Still Costing You Money? - Summary: The answer to this question is almost certainly yes. Former employees/participants don't always focus on moving their accounts to their new employer or a rollover IRA, and it's easily forgotten by plan administrators. There are at least two ways that this could be costing you money—perhaps a lot of money. Located at: Westport Benefits Group. Click on headline for full article.

Matching Contributions Key to 401k Participation - Summary: Workers' participation in 401k plans is largely driven by their companies' matching contributions, so if employers stop contributing, retirement accounts will suffer, according to an analysis released today by Fidelity Investments. Located at: Investment News (free registration may be required). Click on headline for full article.

Changing Safe Harbor Plan Match - Summary: One of the most frequently asked questions (and most misunderstood options) involves whether it is permissible to reduce or suspend the employer safe harbor matching contributions, during a plan year, under a safe harbor 401k plan. Located at: Planadviser.com. Click on headline for full article.

Chairman Miller Statement at Hearing on "Strengthening Worker Retirement Security" - Summary: This is the prepared remarks of U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, for a February 24, 2009, committee hearing on "Strengthening Worker Retirement Security." Located at: 401khelpcenter.com. Click on headline for full article.

Miller Says 401k Plans Are High-Stakes 'Crap Shoot' - Summary: House Education and Labor Committee Chairman George Miller said 401k retirement plans do not provide sufficient retirement security for many Americans and must be revamped. Located at: Bloomberg. Click on headline for full article.

Five Steps to Restoring Trust in the 401k System - Summary: Statement submitted by Matthew D. Hutcheson, Independent Pension Fiduciary, on solutions to ensure that Americans can enjoy a safe and secure retirement after a lifetime of hard work, to the Committee on Education and Labor, U.S. House of Representatives, February 24, 2009. Located at: 401khelpcenter.com (PDF File). Click on headline for full article.

House Committee Advised not to Scare Participants - Summary: While individuals speaking during the U.S. House Education and Labor Committee's hearing on "Strengthening Worker Retirement Security" described the nation's retirement system as being "in peril," lawmakers were warned not to frighten participants away from it. Located at: Planadviser.com. Click on headline for full article.

Congress Takes Up Boomer Retirement Woes - Summary: The Senate Special Committee on Aging is looking into 401k target-date funds, with some members calling for new protections for account holders. Located at: Consumeraffairs.com. Click on headline for full article.

Senate Committee Takes Aim at Target-Date Funds - Summary: The U.S. Senate Special Committee on Aging held a hearing about the economic downturn's effect on retirement security, particularly for those who are on the brink of retirement. Will also take a close look 401k target-date funds. Located at: Planadviser.com. Click on headline for full article.

Seventh Circuit Dismisses 401k Revenue Sharing & Excessive Fee Lawsuit - Summary: The ruling is the first significant appellate decision in a recent wave of ERISA lawsuits brought by plan participants against large companies and their 401k plans. Located at: Littler Mendelson. Click on headline for full article.

EESA Affects Retirement Plan Administration - Summary: This relief is available to sponsors of qualified plans, ERISA 403(b) plans, and governmental section 457(b) plans whose participants were directly affected by the flooding, severe storms and tornadoes that occurred in the Midwestern disaster area. It is also available to affected participants in non-ERISA 403(b) programs. Located at: Prudential (PDF File). Click on headline for full article.

Devil is in the Details of RMD Suspension - Summary: WRERA suspends for 2009 IRS rules that compelled retirees age 70 1/2 and older to take required minimum distributions from defined contribution retirement plans and IRAs. Although the law's goal was reasonable and the solution simple, it leads to inevitable complexity. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Participant Decisions to Stop Contributions 2006–2008 - Summary: In response to current market conditions, slightly more participants than in the past have stopped contributing to their retirement plans. This research provides insight into who these participants are and why they may have stopped contributing. Located at: Vanguard (PDF File). Click on headline for full article.

Final IRS Automatic Contribution Arrangements Regs - Summary: This document contains final regulations relating to automatic contribution arrangements. These regulations affect administrators of, employers maintaining, participants in, and beneficiaries of section 401k plans and other eligible plans that include an automatic contribution arrangement. Located at: Benefitslink.com (PDF File). Click on headline for full article.

Disclosure Regs for 401k Fees in Limbo - Summary: The Bush administration's failure to win final approval of new fee disclosure regulations for defined contribution plans, say industry experts, could well turn into a major headache for corporate executives. Located at: Financialweek.com. Click on headline for full article.

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