BPP401k.com Newsletter Benefit Plans Plus 3_18

BPP401k.com Newsletter
March 18, 2009

News Highlights

Patrick Shelton, GBA Named Managing Member Patrick Shelton has been named managing member at Benefit Plans Plus.

Retirement Design: Which Lens Are You Looking Through? Regardless of what drives retirement redesign, some plan sponsors consider four essential perspectives – external, cost and risk, employee and employer – to clarify their objectives for their retirement provisions.

Over a Third of 401k Participants Use Target-Date Funds About 37 percent of 401k plan participants who were offered target-date funds had at least some fraction of their account in target-date funds in 2007, and this is expected to increase as the push for better diversification of 401k participants' assets intensifies.

Fiduciary Fundamentals Plan fiduciaries are sometimes unaware that they are fiduciaries — and, even if they are, what that means is not always explained. In this first-ever Plan Sponsor Fiduciary Guide, they hope you will find what you need to know to be a better fiduciary.

Non-Disclose of Revenue Sharing Arrangement not Fiduciary Breach An employer sponsor of 401k plans did not breach its fiduciary duties by failing to disclose to plan participants a revenue sharing arrangement between the plan’s mutual fund providers, the U.S. Court of Appeals in Chicago has ruled in Hecker v. Deere and Company.

Patrick Shelton, GBA Named Managing Member Patrick Shelton has been named managing member at Benefit Plans Plus.

Courts Could Decide 12b-1 Fee Regulation - Summary: Advisers using revenue-sharing might also face tighter regulation. It is unclear if Congress or regulation will step up, but getting paid out of mutual fund revenues could be at risk. Located at: Planadviser.com. Click on headline for full article.

ICI Chief Favors Fiduciary Role for Advisers - Summary: In what might come as a surprise to the organization's members, the head of the mutual fund industry's biggest trade group said that he supports the idea of requiring all financial advisers to act as fiduciaries. Located at: Investment News (free registration may be required). Click on headline for full article.

Retirement Design: Which Lens Are You Looking Through? - Summary: Regardless of what drives retirement redesign, this article suggests that plan sponsors consider four essential perspectives – external, cost and risk, employee, and employer – to clarify their objectives in offering or amending their retirement provisions. Located at: Mercer. Click on headline for full article.

The Case for a Single Vendor Approach in Higher Education Plans - Summary: With all of the confusion, complexity, and costs that will have to be absorbed by sponsors with multi vendor plans due to 403(b) regulation changes, there is a very strong argument for moving to a single provider model for higher education plans. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

401k Investors Pour $65M into Company Stock in January - Summary: For the first time in seven years and after the sorry lessons of Enron and WorldCom, investors poured more money into company stock, $65 million, than they did any other investment category in January, according to Hewitt Associates. Located at: Financial-planning.com. Click on headline for full article.

Over a Third of 401k Participants Use Target-Date Funds - Summary: About 37 percent of 401k plan participants who were offered target-date funds had at least some fraction of their account in target-date funds in 2007, and this is expected to increase as the push for better diversification of 401k participants' assets intensifies. Located at: 401khelpcenter.com. Click on headline for full article.

ERISA Conflicts of Interest - Summary: The purpose of this White Paper is to analyze the law relating to conflicts of interest that retirement plan fiduciaries may encounter in selecting the investments and service providers for 401k plans. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.

Fiduciary Fundamentals - Summary: Plan fiduciaries sometimes are not aware that they are fiduciaries—and, even if they are, what that means is not always explained. In this first-ever Plan Sponsor Fiduciary Guide, they hope you will find what you need to know to be a better fiduciary. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

What Not to do as a Plan Fiduciary - Summary: Plan fiduciaries should not take their duties lightly, especially in turbulent times when participants are extremely sensitive about their retirement accounts. This article provides some tips to help limit plan fiduciary liabilities. Located at: Precept Group Blog. Click on headline for full article.

Non-Disclose of Revenue Sharing Arrangement not Fiduciary Breach - Summary: An employer sponsor of 401k plans did not breach its fiduciary duties by failing to disclose to plan participants a revenue sharing arrangement between the plan’s mutual fund providers, the U.S. Court of Appeals in Chicago has ruled in Hecker v. Deere and Company. Located at: CCH. Click on headline for full article.

The Schwab Self-Directed Brokerage Account Indicators - Summary: Charles Schwab Corporate and Retirement Services released this detailed participant behavior in Self Directed Brokerage Accounts for the fourth quarter and year-end 2008. SDBA accounts are generally used by 401k participants who are looking for more investment options than are available in their core 401k fund line-up. Located at: Charles Schwab (PDF File). Click on headline for full article.

Use of Target-Date Funds in 401k Plans - Summary: Of the 401k plan participants in the EBRI/ICI 401k database who were found to be in plans that offered target-date funds, 37 percent had at least some fraction of their account in target-date funds. Located at: Employee Benefit Research Institute. Click on headline for full article.

Prohibited Transactions and Level Fee Advice - Summary: This is the second in a series of articles regarding the Department of Labor's regulation on invest. advice for participants. This article looks at the application of the regulation to pure level fee investment advisers. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.

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