Evaluating Retirement Plan Advisors -- Part A This is the first installment of a guide produced by the Center for Due Diligence to help plan sponsors fulfill their fiduciary duty and avoid liability. Source: Center for Due Diligence

The Regulatory Systems for Employee Benefits Employee Benefits Law is complex and often misunderstood. This article explains the regulatory systems developed by Congress over nearly a century and how all of the pieces fit together. Source: Social Science Electronic Publishing

As Fund Menus Tighten, Interest in Self-Directed Accounts Grow When the market takes a nose dive participants grow grumpy and start complaining about investment performance and the options available on their retirement plan menus. That is why now might be a good time for plan sponsors to at least consider the idea of offering their employees a self-directed brokerage account window. Source: Plansponsor.com

New Research Zeros in on Target-Date Funds Despite being fairly new to the 401k plan menu, target-date funds continue to move the needle on saving for retirement, but some investors need to get a better grasp on how the funds work. Source: Employee Benefit News

The Side Effects of 401k Auto-Enroll While automatically enrolling employees into 401k plans increases participation, it also may have some unintended side effects. Source: Wall Street Journal Blog

The Duty to Remove Investments It is commonly accepted that fiduciaries of participant-directed plans have a duty to select, monitor, and remove investments prudently. The threshold question is whether a fiduciary’s duty to remove investments applies to individual investments or whether the decisions are judged on the basis of the investments in the aggregate. Source: Plansponsor.com

Addressing Fiduciary Concerns in the Purchase of 401k Distributed Annuities -- Part 1 In this article the author focuses on the fiduciary risk of "irrevocably" (the 30 year risk) or how one gets comfortable with the inherent risk of an insurance company failing over an annuitant's lifetime. Source: Business of Benefits Blog

Addressing Fiduciary Concerns in the Purchase of 401k Distributed Annuities -- Part 2 Inflexibility and Inaccessibility are closely related, as they really point out the nature of annuity products purchased from plan assets which make them plan investments. As plan assets, the inclusion of an annuity in a DC plan becomes a fiduciary decision, not a settlor function. Source: Business of Benefits Blog

Wal-Mart Decision Reinvigorates 401k Plan Fee Challenges A recent decision by the Court of Appeals for the Eighth Circuit has overturned the dismissal of challenges to fees paid by the Wal-Mart 401k Plan, one of the largest in the U.S. Coming after a recent agreement by Caterpillar Inc. to settle similar claims against it, the Wal-Mart decision is sending shock waves through the U.S. investment and fiduciary communities. Source: Pensions & Benefits Law Blog

401k Fee Litigation December 2009 Update Over the past several years, more than two dozen lawsuits have been filed relating to 401k plan fees and, more specifically, "revenue sharing" arrangements with plan service providers. In addition to the lawsuits against plan sponsors, lawsuits have been brought against 401k plan service providers. These cases typically are based on allegations that the service providers are "functional fiduciaries" under ERISA. Source: Groom Law Group

House Democrats Introduce Bill Amending Qualified Plan Nondiscrimination Rules Representative Lloyd Doggett (D-TX) recently introduced H.R. 4126, the "Retirement Fairness Act of 2009," which would significantly strengthen the qualified plan nondiscrimination rules and potentially jeopardize the qualified status of many plans. Source: JP Morgan

Court Moves Forward Kraft Foods Excessive Fee Suit A federal judge has moved forward claims by Kraft Foods Global employees that retirement plan fiduciaries breached their duties by offering investment options that under performed and charged excessive fees. Source: Planadviser.com

The Trouble With 403(b) Cash; the 403(b) SAR; and Other 403(b) Stocking Stuffers 403(b) devotees often speak of the continuing and significant number of technical differences between 403(b) and 401k plans. This article lists a few of the differences not given a lot of attention. Source: Business of Benefits Blog

401k and Profit Sharing Plan Eligibility Survey 2009 This is the 12th year that PSCA has collected defined contribution plan eligibility data. The changes over time have been significant. In 1998, only 24 percent of plans allowed employees to begin contributing to their 401k plans immediately upon employment. This percentage has more than doubled since. Source: Profit Sharing/401k Council of America

Retirement Plan Participation: Race/Ethnicity Differences How do race and ethnicity affect the likelihood of participating in a retirement plan? How do the size of employers and the birthplace of workers affect these levels? Here are some of the key findings concerning race/ethnicity differences in employment-based retirement plan participation. Source: Employee Benefit Research Institute

Participating in a Retirement Plan: Gender Differences How does gender affect the likelihood of participating in a retirement plan? Here are some of the key findings on gender in employment-based retirement plan participation. Source: Employee Benefit Research Institute

Emerging Retirement Model Study: A Survey of Plan Sponsors MetLife conducted this survey of 240 plan sponsors at companies with at least 1,000 employees to examine employer attitudes and behaviors towards the aging workforce in the midst of a deep economic crisis, and recent regulation addressing the retirement security provided by pension and retirement plans. Source: MetLife

Defined Benefit vs. 401k Investment Returns Watson Wyatt has been comparing investment rates of return in defined benefit and defined contribution plans for more than 10 years, and DB plans have been the long-term victor. This analysis updates our prior studies with investment returns for 2006 and 2007 for a large set of plans, as well as a snapshot of year-end returns for 2008 based on a small set of plan sponsors. Source: Watson Wyatt

NAPFA Applauds SEC Effort to Rethink 12b-1 Fees Advisors who cultivate relationships with retirement plan sponsors benefit from significantly larger books of business than their peers. Source: 401khelpcenter.com

DOL Issues Ruling on Target-Date and Lifecycle Mutual Funds Although the DOL affirmed the current state of the law in its recent advisory opinion, regulatory and legislative initiatives affecting target-date funds and their use in retirement plans remain under discussion, and have been the subject of additional Congressional hearings. In addition, guidance for benefit plan fiduciaries on the selection and use of target-date funds is expected to be published by the DOL. Source: Dechert LLP

DOL Approves Use of Summary Prospectus to Satisfy ERISA 404(c) In September 2009, the DOL issued Field Assistance Bulletin 2009-03, permitting the use of summary prospectuses to satisfy the prospectus requirement of ERISA Section 404(c). Source: Prudential

Coming Soon: Broader Definition of Fiduciary Under ERISA The Labor Department is planning to expand its definition of fiduciary under ERISA — a move that would have implications for all financial advisers that work on retirement plans. Source: Investmentnews.com

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