General Items
Suspending the 401k Match: Look Before You Leap — Summary: While suspending matching or non-elective contributions provides a relatively easy and immediate source of expense reduction, it's important to understand both the implications and the potential pitfalls of taking this action. Mercer reviews the issues in this report. Located at: Mercer (PDF File). Click on headline for full article.
Americans Increasingly Concerned About Retirement Income — Summary: For the first time this decade, a majority of non-retired Americans, 52%, doubt they will have enough money to live comfortably once they retire; only 41% say they will. Located at: Gallup. Click on headline for full article.
FAQs Regarding Hardship Distributions — Summary: This FAQ is provided by the IRS as a general guide and overview regarding hardship distributions from 401k plans. Located at: IRS. Click on headline for full article.
Employees and Employers Out of Synch on Range of Retirement Issues — Summary: At a time in our country's history when alignment of retirement issues between employers and their employees is becoming increasingly important, findings from MetLife's "7th Annual Employee Benefits Trends Study" highlight the fact that the two groups are out of synch on some key retirement issues ranging from advice to income. Located at: 401khelpcenter.com. Click on headline for full article.
Fiduciary Items
ERISA Plan Fiduciaries: What "Prudence" Demands — Summary: As scrutiny of fiduciaries by plan participants and other fiduciaries continues to increase, plan sponsors should take steps to ensure that their retirement plan governance procedures are working to safeguard the plan and its participants. Located at: Towers Perrin. Click on headline for full article.
Tips on Managing Investment-Related Risks — Summary: Most claims arise from either investment-related activities or the lack of prudent administrative processes and procedures. This article discusses methods of shifting or mitigating liability for investment losses as well as how to ensure that you are meeting your fiduciary duties in doing so. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
Offering Range of Funds Not a Fiduciary Protection — Summary: Offering a broad menu of funds or a brokerage window should not relieve 401k plan fiduciaries of the duty to prudently select investments, according to a Department of Labor brief filed in response to a recent appellate decision rejecting claims of excessive plan fees. Located at: Mercer. Click on headline for full article.
Saving on 401k Expenses in Hard Times — Summary: With the bad economy many are looking for ways to reduce costs for 401k plans. While the largest cost is usually the matching contributions, the expenses of operating a plan are next. However, there are traps for the unwary. Not every expense can be paid from plan assets. Some must be paid by the plan sponsor. This article discusses which can and which cannot. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
Research Items
The Case for Employer-Sponsored Retirement Plans — Summary: The SPARK Institute issued this white paper that explains why 401k and other employer-sponsored retirement plans are the most effective, secure and viable way for American workers to save and invest to reach their retirement goals. Located at: Spark Institute (PDF File). Click on headline for full article.
The 2009 Retirement Confidence Survey — Summary: The recession has cast a pall over the retirement expectations of the vast majority of Americans, leaving a record-low 13 percent this year able to say they are very confident of having enough money to live comfortably in retirement, according to the 19th Annual Retirement Confidence Survey released by the nonpartisan Employee Benefit Research Institute. Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
10th Annual Transamerica Retirement Survey — Summary: Since 1999, the Transamerica Center for Retirement Studies has conducted a national survey of U.S. business employers and workers regarding their attitudes toward retirement. The overall goal for the study is to illuminate emerging trends, promote awareness, and help educate the public. This is the just released published results of the latest survey. Located at: Transamerica Center for Retirement Studies (PDF File). Click on headline for full article.
Court and Legislative Items
House Bill on 401k Fee Disclosure Introduced — Summary: The current law is needlessly complex, many agree. Simplifying fee disclosure would allow plan participants to make better investment choices to reduce fees. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Regulatory Items
Identity Theft and Participant Loans — Summary: 401k plans offering participant loans may be subject to a Federal Trade Commission identity theft prevention rule if the sponsoring employer is a "financial institution" or "creditor," according to new comments from FTC staff to the law firm White & Case LLP. Located at: Mercer. Click on headline for full article.
Plan Loans to be Exempt From Truth-in-Lending Disclosures — Summary: Qualified plans that make loans to participants will, effective July 1, 2010, no longer be required to make detailed disclosures under the Truth in Lending Act. In providing an exemption from governing Regulation Z, the Federal Reserve has acknowledged the inherent differences between commercial loans and plan loans, in which payments of interest and principal are reinvested in the participant's account and the loan is not subject to finance charges imposed by a third party. Located at: CCH. Click on headline for full article.
