TOP
Experts in Personalized Retirement Plan Design & Administration

BPP401k.com Newsletter May 4

An Interview With Fred Reish – Summary: Fred Reish has been practicing law in the employee benefits area since the dawn of modern defined contribution plans. Now, the Los Angeles-based attorney – managing director of law firm Reish Luftman Reicher & Cohen – spends his time helping employers and advisers wade through the complicated 401k arena. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

Automatic Enrollment: Taking It Up a Notch – Summary: With automatic enrollment becoming the norm, sponsors look to add existing workers and increase deferral rates. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Wal-Mart Hit with Class-Action Over 401k – Summary: The new nationwide class-action alleges that because Wal-Mart makes profit-sharing contributions to its 401k plan based on each employee’s compensation, illegally “shaving” that compensation operated to reduce Wal-Mart’s profit-sharing contributions. Plaintiffs allege that the 401k plan fiduciaries breached their duties under ERISA by participating in or failing to stop this reduction. Located at: Spencer Fane. Click on headline for full article.

Will the Roth 401ks New “Permanent” Status Make a Difference? – Summary: With the passage of the Pension Protection Act last year, some sponsors are looking anew at the idea of adding a Roth 401k option to their plans, but will it be enough to make a difference? Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Poll: Early Retirement is Not Expected – Summary: Bankrate.com released a new poll which found that nearly one out of five individuals plan to work until death. Another key finding shows that 28% of those surveyed save less than 5 percent with 16 percent saving nothing at all for retirement. Located at: 401khelpcenter.com. Click on headline for full article.

Managing the Managed Account – Summary: Assuming the DOL does give its seal of approval to the safe harbor, plan sponsors also will need to consider carefully costs inherent in a more pricey managed account approach utilized as a default option. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

The Next Generation of Participant Advice Begins – Summary: In the lexicon of ERISA, perhaps only “404c” is more often misapplied and misunderstood than “advice.” Still, in the decade since the DOL famously attempted to craft a workable line between education and advice, regulators, legislators, and the industry itself have done much to transform the ways in which participants are given help making decisions involving their retirement accounts. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

Are 401k Plans Ready for ETFs? – Summary: ETFs have been slow to catch on among 401k plan sponsors principally because of the operational barriers that exist. Recordkeeping and fee issues still exist. Once those issues have been resolved, ETFs are certain to become popular investment vehicles in 401ks. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.

The Big Four of Certification and Assessment – Summary: Courts and regulators will evaluate your effectiveness as an investment adviser against a process standard – as opposed to a performance standard. It is not about whether you made money for your clients; it is about whether you can demonstrate the fiduciary process that you followed to manage your client’s investment decisions prudently. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

Early Adoption of the Roth 401k – Summary: This paper examines plan and participant adoption of the Roth feature among Vanguard defined contribution recordkeeping clients during 2006, the first full year that the Roth 401k was available. The Roth 401k was adopted by 14% of Vanguard® plans, and 5% of participants within these plans elected the option. Early Roth adopters included new plan enrollees, high savers, Web-registered participants, and high-income households. Located at: Vanguard Center for Retirement Research (PDF File). Click on headline for full article.

Retirement Focus on Downshifting – Summary: A new Vanguard study shows that the majority (61%) of American workers age 40 to 69 conceive of retirement as a period involving a “downshifting” from full-time employment to part-time employment rather than a period of full-time leisure. Workers’ choices about retirement are driven primarily by financial resources, but also by other factors such as health and personal preferences. Located at: Financial Executives Research Foundation. Click on headline for full article.

Scale Effects in Mutual Fund Performance: The Role of Trading Costs – Summary: Mutual fund trading costs have been noted on as one of the many “hidden costs” related to mutual funds. This paper examines the role of trading costs as a source of “diseconomies” of scale for mutual funds and the authors find that they are comparable in magnitude to the funds expense ratio. Located at: Social Science Research Network. Click on headline for full article.

IRS Clarifies Nonspouse Beneficiary RMDs After Rollover – Summary: The PPA gave designated beneficiaries of deceased participants the ability to roll over retirement plan death distributions to an IRA. Previously, only surviving spouses had that right. In Notice 2007-7, the IRS gave preliminary guidance regarding the new rollover rules and their relation to the required minimum distribution (RMD) rules of Code Section 401(a)(9). Located at: Sungard/Relius. Click on headline for full article.

DOL Wants Your Feedback on Retirement Plan Fees – Summary: DOL/EBSA is requesting you input and other information on fee and expense disclosures to participants in individual account plans. Located at: American Benefits Council (PDF File). Click on headline for full article.

DOLs 401k Changes Seen ‘Significant’ – Summary: New default options that the Department of Labor will likely approve for 401k investments will have a “significant” impact on the way mutual fund assets are invested, independent fund directors were told at a conference April 12th. Located at: Investmentnews.com (free registration may be required). Click on headline for full article.

For more information visit www.bpp401k.com

Share This!
WordPress › Error

There has been a critical error on this website.

Learn more about troubleshooting WordPress.