Digest
Disconnect Between Participants and Sponsors - Summary: Separate surveys of plan sponsors and participants reveal a disconnect between plan sponsors and participants, regarding whether some form of income option should be included in retirement plans.
Located at: Spectrem Group. Click on headline for full article.
The Dynamics of Lifecycle Investing in 401k Plans - Summary: Comparing retirement plan portfolios before and after adoption of target maturity funds, the authors of this paper observed that these funds meaningfully change the age structure of equity exposure, eliminate zero- or all-equity portfolios, and reduce the share of idiosyncratic portfolio risk.
Located at: Vanguard Center for Retirement Research (PDF File). Click on headline for full article.
Another Survey Confirms Workers' Lack of Retirement Confidence - Summary: Working Americans' confidence in their ability to retire comfortably declined significantly in the past year, according to the Ninth Annual Transamerica Retirement Survey.
Located at: Planadviser.com. Click on headline for full article.
Characteristics and Efficiency of 401k Investment Menus - Summary: The key factor contributing to plan efficiency and performance is the particular set of funds offered, rather than the total number of investment options provided. In 401k arena, more is not necessarily better.
Located at: Pension Research Council. Click on headline for full article.
Talk Smarter, Not Louder to Get Employees on Track for Retirement - Summary: Employers and service providers agree that a strong emphasis on retirement education and planning needs to stay a top priority in 2008. But the message isn't about restating the same scary facts to employees over and over again.
Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Pension Protection Act of 2006: Implementation and Aftermath - Summary: This five-section special report provides insights from benefit experts on retirement plan administration in the post-PPA world as well as a look at how the PPA affects critical aspects of plan administration as the dust continues to settle.
Located at: Thompson Publishing (PDF File). Click on headline for full article.
Retirement Plan Participation: Race/Ethnicity Differences - Summary: How do race and ethnicity affect the likelihood of participating in a retirement plan? How do the size of employers and the birthplace of workers affect these levels?
Located at: Employee Benefit Research Institute (PDF File). Click on headline for full article.
Fees Push Managed Accounts Off 401k Default Lists - Summary: Managed accounts aren't popular default options in 401k plans, because fees are too high for plan executives to justify, leaving them concerned about fulfilling their fiduciary responsibility, experts say.
Located at: Investmentnews.com (free registration may be required). Click on headline for full article.
Court Items
Supreme Court Allows Individual Participants to Sue for a Breach of Fiduciary Duty - Summary: In a decision with significant implications for plan fiduciaries, the U.S. Supreme Court has held that individual participants in a defined contribution plan can sue for a breach of fiduciary duty that results in a loss to the participant's own account, even if not all participants' accounts have similar losses.
Located at: Drinker Biddle & Reath LLP (PDF File). Click on headline for full article.
Suits by Individual 401k Plan Participants Based on "Impaired Value" - Summary: Should courts begin to scrutinize more closely the propriety of plaintiffs' self-serving characterizations of the nature of their claims, employers and plan fiduciaries will undoubtedly benefit. Certainly, employers and plan fiduciaries should look to employ Roberts' reasoning to constrain plaintiffs' attempts to transform simple benefits disputes into broad breach of fiduciary duty claims.
Located at: Dechert LLP (PDF File). Click on headline for full article.
Supreme Court Addresses the Remedies Available for Fiduciary Breach - Summary: In an important legal development in the area of retirement plan fiduciary liability, the U.S. Supreme Court has held that individual participants may sue ERISA fiduciaries for account losses.
Located at: Littler Mendelson. Click on headline for full article.
Supreme Court Gives "Green Light" to ERISA Breach of Fiduciary Duty Claims - Summary: The Supreme Court ruled that an individual participant in a 401k defined contribution plan can maintain a breach of fiduciary duty claim under ERISA, even though the alleged breach affected only the value of his own individual account.
Located at: Groom Law Group. Click on headline for full article.
DOL and IRS Items
DOL Proposes Safe Harbor for Deposit of Employee 401k Contributions - Summary: On February 28, 2008, the DOL announced that employee contributions to a "small" retirement plan will be deemed to be made in compliance with the law if those amounts are deposited with the plan within seven business days of receipt or withholding.
Located at: Retirement Plan Blog. 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.
