BPP401k.com Newsletter Benefit Plans Plus 3_11

BPP401k.com Newsletter
March 11, 2009

News Highlights

Reallocation Versus Rebalancing Given the broad disarray in financial markets, advisors might find the difference between rebalancing a portfolio's current asset allocation and outright changing a portfolio's target asset allocation to be of interest.

VIDEO: How Will the Economy Respond to Rescue Efforts? Vanguard's chief economist discusses the recent federal stimulus bill and efforts to resolve the banking crisis and the troubled housing market and offers his outlook on the economy and the stock market.

After a 401k Match is Cut, Do Workers Stop Saving for Retirement?New research confirms that employees are more likely to participate in a 401k plan when a match is offered.

Advice to Participants: What the "Final" DOL Regulation Means What steps should firms begin taking now to come into compliance with the new rules?

ASPPA Seeks 401k Safe Harbor Relief The American Society of Pension Professionals and Actuaries has requested the IRS and Treasury Department grant relief for sponsors of safe harbor 401k plans unable to make required 3% nonelective safe harbor contributions due to current economic conditions.

Economic Crisis Puts Stable-Value Funds on Shaky Ground Despite the comforting name and generally strong track record, stable-value funds aren't entirely stable anymore. Employee-investors can lose money, and the funds also carry a credit risk.

Small Businesses Ponder 401k Funding One of the first questions many small business owners hear from accountants at tax time is whether they've started or funded a retirement plan. That's a painful topic for many owners during a recession.

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.

Small Businesses Ponder 401k Funding - Summary: One of the first questions many small business owners hear from accountants at tax time is whether they've started or funded a retirement plan. That's a painful topic for many owners during a recession. Located at: AZcentral.com. Click on headline for full article.

Economic Crisis Puts Stable-Value Funds on Shaky Ground - Summary: Despite the comforting name and generally strong track record, stable-value funds aren't entirely stable anymore. Employee-investors can lose money, and the funds also carry a credit risk. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

VIDEO: How Will the Economy Respond to Rescue Efforts? - Summary: Vanguard's chief economist discusses the recent federal stimulus bill and efforts to resolve the banking crisis and the troubled housing market. He also offers his outlook on the economy and the stock market. Located at: Vanguard. Click on headline for full article.

Table of Companies Suspending or Reducing 401k Contributions - Summary: This is a partial listing compiled by the Center for Retirement Research at Boston College of companies that have either suspended or reduced 401k matching contributions in 2008 and 2009. Located at: Center for Retirement Research at Boston College (PDF File). Click on headline for full article.

After a 401k Match is Cut, Do Workers Stop Saving for Retirement? - Summary: A company match to your 401k contributions is a valuable incentive to save for retirement. New research confirms that employees are more likely to participate in a 401k plan when a match is offered. Located at: U.S. News & World Report. Click on headline for full article.

Court Finds no Support for Fiduciary Breach Claim - Summary: The U.S. District Court for the Southern District of Ohio ruled that retirement plan participants did not prove that Fifth Third Bancorp breached its fiduciary duties by continuing to offer company stock as an investment choice. Located at: Planadviser.com. Click on headline for full article.

Judge Backs United Technologies in 401k Lawsuit - Summary: A federal court judge in Bridgeport, CT, ruled that United Technologies Corp. did not breach its fiduciary duties in connection with its 401k plan expenses and investment options. Located at: PIonline.com. Click on headline for full article.

Kohl Calls for Increased Scrutiny of Target-Date Funds - Summary: The chairman of the Senate Special Committee on Aging has called for more scrutiny of target-date retirement funds after several 2010 target-date funds posted huge losses in 2008. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.

Reallocation Versus Rebalancing - Summary: The allocation of many portfolios has changed as a result of significant movements in financial markets, especially over the last six months. Given this broad disarray in financial markets, advisors might find a brief discussion about the difference between (1) rebalancing a portfolio's current asset allocation and (2) outright changing a portfolio's target asset allocation to be of interest. Located at: Morningstar.com. Click on headline for full article.

Advice to Participants: What the "Final" DOL Regulation Means - Summary: This article examines the effect of the regulation on broker-dealers and registered investment advisers that provide invest. advice to 401k plan participants and IRA beneficiaries. We first discuss the regulation and then suggest steps that firms should begin taking now to come into compliance with the new rules, whether or not they are effective in their current form. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.

ASPPA Seeks 401k Safe Harbor Relief - Summary: The American Society of Pension Professionals and Actuaries has requested that the IRS and Treasury Department grant relief for sponsors of safe harbor 401k plans who are unable to make required 3% nonelective safe harbor contributions for the entire year due to current economic conditions. Located at: CCH. Click on headline for full article.

IRS Issues Final 401k Auto-Enrollment Regulations - Summary: Containing some notable changes from the proposed version, final Treasury Regulations have been issued for qualified automatic contribution arrangements and for eligible automatic contribution arrangements. Located at: Benefitslink.com. Click on headline for full article.

IRS Rules on 401k Will Help Some Employers - Summary: Final rules issued last week by the Internal Revenue Service will aid employers that want to add an automatic enrollment feature to their 401k plans without running nondiscrimination tests. Located at: Businessinsurance.com. Click on headline for full article.

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