General Items
Hot Topics in Retirement 2009 — Summary: Hewitt Associates surveyed employers to learn their likely areas of focus and action in 2009 regarding the design, management, and delivery of their defined contribution, defined benefit, and retiree medical plans for their active, salaried U.S. employees. Located at: Hewitt. Click on headline for full article.
DC Plans: What Does Reform Mean to Employers? — Summary: This article focuses on DC plan design reforms rather than on distribution or investment option reform. Specifically, it reviews the growth of DC plans, describes four proposals for DC plan design reform, and poses questions to consider in assessing whether these proposals would provide a more secure and reliable retirement system. Located at: Buck Consultants (PDF File). Click on headline for full article.
Rules Surrounding Partial Plan Terminations — Summary: This article discusses the collateral issue of plan partial terminations following events that affect the level of overall retirement plan participation, such as a reduction in force. Located at: Planadviser.com. Click on headline for full article.
Despite Historical Losses, Few Employees Changed Their 401k Habits — Summary: Despite U.S. employees sustaining record losses in their 401k savings in 2008, their 401k saving and investing habits showed very little change, according to an annual study by Hewitt Associates. Located at: 401khelpcenter.com. Click on headline for full article.
Pros and Cons of 401k Loans and Early Distributions — Summary: Retirement plans are intended to help employees save for retirement. Although fundamental, this concept has been eroded in the context of 401k plans because many employees believe that loans, hardship distributions and in-service distributions should be automatically permitted, particularly with regard to employee contributions. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Fiduciary Items
The New Take on 404(c): Confusion in the Federal Courts — Summary: ERISA Section 404(c) provides fiduciaries with a defense against losses incurred by participants who exercise control over their accounts. But the protection applies only to the investment decisions made by the participants and not to the selection and monitoring of the investment options offered to the participants...right? Maybe. For the present, we have an anomaly; the answer depends on where you live. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
Mitigating Fiduciary Risk in a Down Market — Summary: The dramatic increase in ERISA litigation in recent years is causing plan sponsors and fiduciaries to take a fresh look at who is serving in a fiduciary capacity and whether those individuals are prudently performing their duties. Plan fiduciaries should understand their duties and accurately document their prudent execution. Here are some suggestions for what to do now. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Thoughts on Properly Delegating Fiduciary Duties — Summary: Recognizing the high anxiety of today's ERISA fiduciaries, some plan service providers are offering to "share the fiduciary load" by stating in their service agreements that they are co-fiduciaries. But what does that really mean? This article explains that co-fiduciary status is, at best, a half measure. Located at: Jones Day (PDF File). Click on headline for full article.
"Red Flags Rule" Raises Questions for Some 401k Plan Sponsors — Summary: Plan sponsors that are considered financial institutions or creditors may be subject to the Red Flags Rule on and after May 1, 2009, with respect to employee benefit plans that offer plan loans or feature individual accounts. This Q&As explain the Red Flags Rule, provide guidance on determining whether the Rule applies to an entity, and outlines the Rule's requirements. Located at: Pillsbury Winthrop Shaw Pittman LLP (PDF File). Click on headline for full article.
Research
Making the Case for Employer-Sponsored Retirement Plans: Coverage, Participation and Retirement Security — Summary: This white paper is the second installment in a series developed by The SPARK Institute to demonstrate that employer-sponsored retirement plans, particularly 401k plans, are the most effective, secure and viable way for American workers to save and invest to reach their retirement goals. Located at: The Spark Institute (PDF File). Click on headline for full article.
Court and Legislative Items
Towers Perrin Legislative Tracking Chart — Summary: This chart tracks bills related to retirement and executive compensation. Thousands of bills are introduced in Congress but only a select few are summarized on this chart. This selection represents Towers Perrin's best judgment on the likelihood of enactment and the relevance of the issue for employers. Located at: Towers Perrin (PDF File). Click on headline for full article.
401k Fee Litigation May 2009 Update — Summary: 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. This is a written update from the Groom Law Group on these lawsuits. Located at: Groom Law Group (PDF File). Click on headline for full article.
