Digest
More People Tap 401k Accounts for Cash - Summary: Some of the nation's largest retirement plan administrators are seeing double-digit spikes in hardship withdrawals and increases in loan requests, a sharp departure from levels that traditionally varied little.
Located at: New York Times. Click on headline for full article.
Future of Asset-Allocation Solutions - Summary: Asset-allocation solutions generally, and target-date solutions specifically, have, seemingly overnight, become a ubiquitous and yet essential component of retirement savings programs. Even as these "new" solutions take hold, new battle lines are emerging.
Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Survey Finds Trend Toward Earlier Participation in 401k Plans - Summary: More employers are allowing earlier participation in their 401k plans than in the past and more are providing matching funds earlier in an employee's career, according to a survey released by The Profit Sharing/401k Council of America.
Located at: CCH. Click on headline for full article.
January Equity Market Upset Ignites 401k Equities Exit - Summary: 401k participants with money in the equity market stampeded for the exits in droves during January, taking a record $1.75-billion in assets with them into fixed income investments, according to the latest Hewitt Associates 401k Index.
Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Selecting a Vesting Schedule Less Than Six-year Graded - Summary: May a plan select a vesting schedule that is shorter than the top-heavy six-year graded vesting schedule?
Located at: McKay Hochman. Click on headline for full article.
Discretionary Match and Safe Harbor 401k - Summary: May a safe harbor 401k make a discretionary match and avoid ACP testing?
Located at: McKay Hochman. Click on headline for full article.
Court Items
Supreme Court Says 401k Plan Participants Can Sue - Summary: U.S. Supreme Court issued its decision in LaRue v. DeWolff, Boberg & Associates, Inc., et al., which clarifies that individual participants in 401k and other retirement plans subject to federal pension laws can sue plan fiduciaries to recover investment losses from their accounts.
Located at: Ice Miller. Click on headline for full article.
High Court Allows Workers to Sue Over 401k Losses - Summary: Workers gained a powerful weapon Wednesday by winning the right to sue employers when their retirement plans are mismanaged, raising the possibility of lawsuits over other worker-fund matters as well.
Located at: Los Angeles Times. Click on headline for full article.
Ruling Allows Workers to Sue On 401k Losses - Summary: The U.S. Supreme Court unanimously upheld the right of workers to sue over losses in their 401k retirement-savings accounts in some circumstances, but pension-law experts said a minority opinion in the case could also bolster some defenses used by employers.
Located at: Wall Street Journal Online. Click on headline for full article.
Participant Can Sue Plan Employer over Loss - Summary: With today's defined contribution plans, fiduciary misconduct need not threaten the entire plan's solvency to reduce an individual participant's benefits below the amount that he or she would otherwise receive.
Located at: Goodwin Procter LLP (PDF File). Click on headline for full article.
401k Fee Items
A Primer on Indirect Mutual Fund Payments - Summary: When it comes to the fees paid to service providers -- like the recordkeeper and the adviser -- participants almost always bear the brunt of the cost. Fiduciaries must be aware of these payments and potential confl icts and must evaluate them.
Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
Labor Department Effort to Enhance Plan Fees Disclosure Draws Mixed Response - Summary: Plan providers and sponsors generally are happy with the Labor Department's fee disclosure guidance, while those who represent participants see a need for more work, according to interviews conducted by BNA during December and January.
Located at: Schultz Collins Lawson Chambers. Click on headline for full article.
DOL and IRS Items
Online DOL Resource Helps Chart Retirement Finances - Summary: The U.S. Department of Labor released this new online resource that makes it easier for Americans to prepare for a financially secure retirement. A series of interactive worksheets were developed as a companion to a 2006 publication entitled "Taking the Mystery Out of Retirement Planning."
Located at: U.S. Department of Labor. Click on headline for full article.
IRS Rules Against Qualified Long-Term Care Insurance in 401k Plan - Summary: The IRS ruled that the payment of premiums on qualified long-term care insurance by a 401k plan would be treated as a taxable distribution in violation of the distribution restrictions of section 401(k)(2)(B).
Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
Upcoming Audio Conferences
Eligibility and Participation
This audio conference will provide you with all the basics, starting with the statutory ERISA requirements and how to apply them. Conference will address different methods of determining eligibility such as Elapsed Time or Hour of Service. We'll also clarify, with examples, the eligibility rules for rehires – typically the most challenging of the eligibility rules, and an example of the coverage ratio test -- March 19, 2008. For more information, click here.
Vesting, DC Contributions, Allocations
Vesting is a non-forfeitable right to an employer contribution and you'll benefit knowing the ins and outs of how it works. You'll come away from having attended this module knowing the vesting basics including benefits, schedules, service requirements, break-in-service rules and more. Examples of employer and employee contributions to a plan will be used to give a full picture of what is out there -- March 26, 2008. For more information, click here.
Top Heavy Rules, Keys, Attribution, HCEs
This audio conference will address a number of concepts, beginning with the definition of HCEs and the family attribution rules and ending with an in-depth overview of the top heavy rules. Conference will also discuss that the IRS does not permit a plan to discriminate in favor of the HCEs – but it doesn't stop there -- April 2, 2008. For more information, click here.
Controlled Groups, 415 Limits, Deductions
When completing an adoption agreement, it is important to know if the employer is part of a controlled group. Join us to learn the basics of control groups. When dealing with qualified plans, you'll also need to know the annual limitations for participants, the employer deduction rules and the ERISA protection from creditor rules -- April 9, 2008. For more information, click here.
Plan Reporting and Disclosure
This audio conference will focus on plan reporting and disclosure. After this session, you will be familiar with key points to know about Form 5500 and you will understand the scope and significance of ERISA-required disclosures to participants and beneficiaries -- April 16, 2008. For more information, click here.
