Research
Adjusting Retirement Goals and Saving Behavior: The Role of Financial Education - Summary: Given the low level of saving by many households, the need for enhanced financial education to improve the level of financial literacy is an important policy issue. Employer-sponsored education programs can play a major role in disseminating specific information in order to increase the knowledge related to retirement planning.
Located at: TIAA-CREF Institute (PDF File). Click on headline for full article.
Participant Reaction and The Performance of Funds Offered by 401k Plans - Summary: This is the first study to examine both how well plan administrators select funds and how participants react to plan administrator decisions. They found that on average administrators select funds that outperform randomly selected funds of the same type. When administrators change offerings, they choose funds that did well in the past, but after the change deleted funds do better than added funds.
Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
Digest
401k Loans: Deal or No Deal? - Summary: Conventional wisdom is that 401k loans are just a part of any well-rounded plan, but unfettered access to 401k accounts is counter to the plans' purpose of providing a way for participants to save successfully for retirement.
Located at: TRI-AD (PDF File). Click on headline for full article.
Automatic Enrollment Leads 60% to Use Professionally Managed Option - Summary: Financial Engines issued data showing that when plan sponsors automatically enrolled existing retirement plan participants into a managed account program, an average of 60 percent stayed with the program.
Located at: 401khelpcenter.com. Click on headline for full article.
Researchers Say Post-Retirement Spending Drop a Myth - Summary: A newly released research study casts doubt on the traditional notion that calculations of a person’s retirement nest egg should take into account a post-retirement spending drop off.
Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Participant Equities Exodus Continues in March - Summary: Participants moved assets from equities to fixed-income investments during 80% of the trading days in March, according to the Hewitt 401k Index.
Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Plan Participants Want Help, but Won't Pay, Study Finds - Summary: The analysis, by Spectrem Group, a Chicago-based research and consulting firm, showed that plan participants are interested in advice, but don't want to pay for it. Close to half of plan participants still turn to friends and family for advice about their retirement plan assets.
Located at: InvestmentNews (free registration may be required). Click on headline for full article.
401k Fee Items
VIDEO: Excerpts from Hearing on HR 3185 - Summary: Chairman Miller and financial industry insiders discuss the problems caused by a lack of transparency in 401k fees.
Located at: YouTube. Click on headline for full article.
Execs Profit by Querying 401k Costs, Plans Can Save Millions - Summary: A growing number of 401k plan executives are demanding to know how much in excess revenue is generated by their plans and how they can get their hands on that money to cut costs and enhance services to participants.
Located at: Workforce.com (free registration may be required). Click on headline for full article.
A Road Map to Your 401k Fees - Summary: Retirement plan expenses can whittle away at the money in your long-term savings accounts. But how do you tell what your 401k fees really are?
Located at: Washington Post (free registration may be required). Click on headline for full article.
DOL and IRS Items
DOL Working Hard to Ferret Out Fiduciary Breaches - Summary: It appears that the Atlanta regional office of the DOL is more active about looking for fiduciary breaches by plan sponsors than other parts of the country. Nonetheless, it is quite concerning, and plan sponsors and service providers everywhere should take notice.
Located at: Ilene H. Ferenczy, LLC. Click on headline for full article.
ASPPA Comment Letter to IRS on EPCRS - Summary: On April 25, 2008, ASPPA submitted a comment letter to the IRS and Treasury discussing current methods available to plan sponsors through EPCRS to retroactively correct certain document errors, and providing additional examples to assist plan sponsor and practitioners.
Located at: ASPPA (PDF File). Click on headline for full article.
IRS Updates 2007-2008 Priority Guidance Plan - Summary: The Department of the Treasury and the IRS have updated their 2007-2008 Priority Guidance Plan (for the period July 1, 2007 through June 30, 2008), which was initially released in August 2007. Significant guidance on a variety of benefits issues can be expected this year.
Located at: Employee Benefits Institute of America. Click on headline for full article.
