Digest
Is Your ERISA Plan Up-to-Date? - Summary: Benefit plans and operational policies and procedures that have not remained current with new requirements are at risk for being non-compliant and subject to fines and penalties.
Located at: Aiken & Aiken Blog. Click on headline for full article.
Increases in Retirement Plan Loans, Withdrawals No Cause for Concern - Summary: While the media has made much of employees raiding their 401ks to pay bills, the upward trend in loans and hardship withdrawals from retirement plans is not raising red flags among plan sponsors, providers or industry experts.
Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
The Federal Thrift Savings Plan: A Model for the Private Sector? - Summary: The federal Thrift Savings Plan (a 401k-like plan for federal workers) often is portrayed as an example for all participant-directed retirement plans. But, does it bear any resemblance to its private-sector counterparts.
Located at: Investment Company Institute (PDF File). Click on headline for full article.
Retirement 401k Debit Cards Are Costly - Summary: Using a debit card to take cash from your 401k retirement plan may generate hefty fees and trigger duplicate taxes, the main U.S. brokerage regulator said.
Located at: Bloomberg. Click on headline for full article.
Defined-Benefit Plans Still in the Retirement Mix - Summary: A new Watson Wyatt study finds a noticeable slowdown in large companies ditching their defined-benefit offerings. Hybrid plans are staging a minor comeback.
Located at: Workforce.com (free registration may be required). Click on headline for full article.
Housing Helps Explain Slowing Growth in 401k - Summary: The national housing obsession in recent years may have dulled the urge to invest in 401k retirement plans.
Located at: The Hartford Courant. Click on headline for full article.
Court and Legislative Items
Seventh Circuit Rejects "Reasonableness" as the Standard for Excessive Fee Claims - Summary: In rejecting the Gartenberg standard, the Seventh Circuit accentuated a philosophical split among the circuits - with the Second and the Fourth Circuits applying a judicially determined reasonableness standard under Gartenberg, and the Third and Seventh Circuits largely rejecting judicial inquiry into the reasonableness of rates and focusing on the sufficiency of disclosure by fiduciaries as the proper touchstone for analysis.
Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
Research
Fixed Income Annuities for Retirement Income - Summary: This study evaluates results of various allocations within a hypothetical Retirement Income Account tested to produce a targeted level of retirement income. The objective of this study was to gain insight on how alternative combinations of retirement income asset classes might have performed had a full range of retirement income solutions been offered at the start of this test period.
Located at: MassMutual's Center for Behavioral Research (PDF File). Click on headline for full article.
Defined Benefit vs. 401k Plans: Investment Returns for 2003-2006 - Summary: Watson Wyatt compared rates of return between defined benefit and defined contribution plans and finds that DB plans outperformed 401k plans even in the bull markets of 2003 through 2006.
Located at: Watson Wyatt. Click on headline for full article.
Research Shows Most Retirement Income is from Investment Returns - Summary: Russell Investments has released research to its clients that shows that investment returns generated by 401k savings during an individual's retirement play the critical role in providing retirement income. This challenges the conventional belief that retirement income is derived predominantly from savings and returns accumulated during a participant's working years.
Located at: 401khelpcenter.com. Click on headline for full article.
Highlights from Form 5500 Reports - Summary: Using Form 5500 reports, this analysis looks at total participants, contributions, benefit disbursements and assets of retirement plans with at least 100 participants for 2005 and retirement plan trends since 1975.
Located at: Watson Wyatt. Click on headline for full article.
401k Fee Related Items
401k Fees on Front Burner at DOL, Congress - Summary: Legislators and federal agencies plan to concentrate their efforts on addressing excessive 401k fees, and employers can expect to see new guidance on several retirement-related topics soon.
Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
DOL and IRS Items
Benefits Groups Call for Flexibility in IRS Regs on Automatic 401k Contributions - Summary: In testimony presented at a hearing on the IRS's proposed regulations governing automatic contribution arrangements under 401k and similar plans, the American Benefits Council and the Investment Company Institute called for the IRS to provide greater flexibility in the rules. This is a review of that testimony.
Located at: CCH. Click on headline for full article.
Rollover Confusion is Back - Summary: It's now back up in the air whether employers must allow nonspouse rollovers from company retirement plans in 2008.
Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
DOL Amends and Supplements QDIA Regulation - Summary: In April, plan fiduciaries received further guidance from the DOL regarding the administration of Qualified Default Investment Alternatives — investments made by plan fiduciaries on behalf of participants or beneficiaries in individual account plans who fail to direct the investment of assets.
Located at: Trucker Huss. Click on headline for full article.
DOL Regs Most Likely Route to PPA Fine-Tuning - Summary: Despite high marks for hitting major policy objectives, the Pension Protection Act of 2006 needs refinements that will more likely be delivered through Department of Labor regulations than additional legislation, according to industry analysts.
Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
