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BPP401k.com Newsletter March 16

Legal Uncertainty Stifles Phased Retirement – Summary: Adoption of phased retirement has been sluggish, partly because of increasingly complex legal hurdles. With two rules on phased retirement stipulating different age limits, legal uncertainty abounds. Employers continue to assume a “wait and see” posture. Located at: Benefitnews.com. Click on headline for full article.

Reducing the Complexity Costs of 401k Participation Through Quick Enrollment – Summary: This study found that, through a simplified enrollment process, participation increased by 10 to 20 percentage points among the affected employees. Since the participant asset allocation decisions were also expedited the same percent of employees enjoyed the benefits of quality asset allocation. Located at: Boettner Center for Pensions and Retirement Research (PDF File). Click on headline for full article.

Few Company CEOs are Knowledgeable About the Pension Reform Act – Summary: According to PricewaterhouseCoopers, few CEOs of fast-growth private companies, 27 percent, are knowledgeable about the new 2006 Pension Reform Act guidelines that took effect on January 1, 2007; only four percent were rated very knowledgeable and 23 percent somewhat knowledgeable. Most CEOs, 61 percent, admitted they are not knowledgeable at all, while three percent were uncertain and nine percent did not report. Located at: PricewaterhouseCoopers. Click on headline for full article.

Even High-Wage Earners Pass Up 401k Plans – Summary: The challenge that employers face in getting workers to participate in 401k plans isn’t limited to young and lower-paid employees. At many large companies, even some older and high-earning workers fail to enroll in the prevalent retirement savings program, according to an analysis conducted by consulting firm Watson Wyatt Worldwide. Located at: SmartPros.com. Click on headline for full article.

PPA Compliance Alert for Sponsors of DC Plans – Summary: Reviews a number of requires of the PPA including quarterly benefit statements and accelerated vesting schedules. Located at: Morgan, Lewis & Bockius LLP (PDF File). Click on headline for full article.

The Behavioral Economics of Retirement Savings Behavior – Summary: Saving for retirement is a difficult and challenging task, and workers need all the help they can get. Fortunately, many effective ways to help participants are also the least costly interventions, namely, small changes in plan design, sensible default options and opportunities to automatically increase savings rates and rebalance portfolios. These design features help less sophisticated investors while maintaining flexibility for more sophisticated types. Located at: AARP (PDF File). Click on headline for full article.

Higher Earners Also Among 401k Non-Participants – Summary: A new Watson Wyatt analysis has found that younger, lower-paid workers are not the only ones dragging their feet about getting into their employer’s 401k plan. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Federal Legislation Quick Guide for Retirement Plans – Summary: This chart summarizes federal legislation that is currently under active consideration by Congress or has recently been enacted into law. In most cases, other bills have also been introduced on the same issue, but are not being actively considered by Congress at this time. Located at: Hewitt Associates (PDF File). Click on headline for full article.

Auto 401ks May Turn More Volatile – Summary: The shift to professional investment management, like that used in defined-benefit pension plans, could add volatility to 401k returns in the short run but should improve them in the end. Located at: Workforce.com (free registration may be required). Click on headline for full article.

Disclosure of Conflicting Revenues – Summary: It is clear that, by the end of this year, plan expenses and revenue sharing will be on everybody’s radar screen and the requirements for reporting and disclosure will be much greater than they are today. That is because of the recent rash of lawsuits against plan sponsors and providers and because of two or three pieces of guidance that the Department of Labor will issue this year. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.

Congressional Testimony On 401k Fees – Summary: On March 6, 2007, the U.S. House Education and Labor Committee, chaired by Rep. George Miller (D-CA), held hearings on “Hidden 401k Fees Undermining Retirement Security?” Here is the testimony of the witnesses that appeared before the committee. Located at: 401khelpcenter.com. Click on headline for full article.

AUDIO: 401k Fees Get Congressional Attention – Summary: According to this Morning Edition news piece, if you have a 401k retirement account, you may be paying more in fees than you think. So say pension experts who spoke on Capitol Hill this week. Over time, the fees paid can personal retirement savings by tens of thousands of dollars. Located at: National Public Radio. Click on headline for full article.

Congressional Committee Hears 401k Fee Disclosure Testimony – Summary: A Congressional hearing addressed Tuesday whether fees paid by 401k participants take too big a chunk out of workers’ retirement savings and whether those fees should be more completely disclosed to individual investors, the Associated Press reported. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

DOL Interim Final Rule Clarifies Issues of QDRO Timing and Order – Summary: The Department of Labor’s Employee Benefits Security Administration released March 6 an interim final rule clarifying issues relating to the timing and order of qualified domestic relations orders. Located at: BNA.com. Click on headline for full article.

For more information visit www.bpp401k.com

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