INDUSTRY AND REGULATORY NEWS YOU CAN USE

Read recent articles and other information of interest to employers, plan sponsors, participants and industry professionals. 

21 Sep 2014 01:03:55 Z

"Previously, the IRS stated in Notice 2009-68 that the splitting of pretax and after-tax amounts in participant accounts could not be done by direct rollover, but could be done if a plan participant received a direct distribution and then indirectly rolled over ('60-day rollover') a pretax amount to an IRA or retirement plan.... Notice 2014-54 makes possible the splitting of pretax and after-tax amounts by direct rollover." (Ascensus)

21 Sep 2014 01:03:55 Z

16 pages. "This paper is intended to discuss how plan demographics and sponsor goals may influence the QDIA selection process, and covers the following points: [1] Selecting an appropriate type of QDIA (i.e., single balanced fund or suite of TDFs) in light of plan demographics and sponsor goals; [2] If the fiduciary decides to use TDFs, selecting specific target date fund investment strategies that best fit plan demographics and sponsor goals; and [3] Given the DOL' s guidance for plan sponsors to consider custom glide path alternatives, the demographics that may suggest a need for customization." (Jeffrey S. Coons, of Manning & Napier; in collaboration with Fred Reish & Bruce Ashton, of Drinker Biddle & Reath LLP)

21 Sep 2014 01:03:55 Z

"This notice provides rules for allocating pretax and after-tax amounts among disbursements that are made to multiple destinations from a qualified plan described in Section 401(a) of the Internal Revenue Code. These rules also apply to disbursements from a Section 403(b) plan or a Section 457(b) plan maintained by a governmental employer described in Section 457(e)(1)(A). Section VI of this notice provides transition rules." (Internal Revenue Service [IRS])

21 Sep 2014 01:03:55 Z

"A good starting place for a compliance tune up is to see if you can answer some basic questions about your plan ... After you get past these, some basic questions about plan administration come into play:... Think of your 401(k) plan as a well maintained car. It needs a check up on a regular basis to keep running smoothly." (Fox Rothschild LLP)

21 Sep 2014 01:03:55 Z

"The U.S. retirement plan landscape has moved from defined benefit to defined contribution, and now to an undefined contribution system, one Treasury official contends.... Mark Iwry, senior advisor to the Secretary of the Treasury, and deputy assistant secretary of Retirement and Health Policy at the U.S. Treasury, explained that, in the age of 401(k)s and 403(b)s, rather than straight profit-sharing plans, the contribution is unknown.... 'We need to restructure the retirement system so that retirement income can be defined,' he said. 'There are things that can be done without the government passing more regulations.' " (PLANSPONSOR)

21 Sep 2014 01:03:55 Z

"The dramatic growth of [target date funds] is evidence that safe harbors provided by Congress and the [DOL] can help plan sponsors do what they believe is right for those participants who cannot or will not engage in decision making. But how about helping the plan sponsors? While most business owners or managers want to provide employees (and themselves) with good investments and successful outcomes, few have the background, knowledge, and, perhaps most of all, the time to properly engage in that responsibility. What can be done to make it easier for these plan sponsors who are, by necessity if not also by aptitude, disengaged?" (CAPTRUST Financial Advisors)

21 Sep 2014 01:03:55 Z

"According to a 2013 survey, 84 percent of households said that the tax-deferred treatment of contributions was 'a big incentive to contribute.' More than half (51 percent) said they probably would not have saved for retirement without the plan.... It is often noted that retirement savings provisions are among the largest items in the ranking of federal tax expenditures.... [It] is important to recognize that taxes will be paid on the contributions and investment returns when funds are withdrawn by retirees." (American Council of Life Insurers [ACLI])

21 Sep 2014 01:03:55 Z

"With a continuing focus on deficit reduction and tax reform, Congress is always looking for revenue raisers. And, over the last several years, Congress has set a clear pattern of using the retirement system to help finance unrelated legislation. What do these ongoing fiscal battles mean for the retirement system?" (Association for Financial Professionals [AFP])

21 Sep 2014 01:03:55 Z

"The current employer-based retirement system benefits workers by providing workers with protections, while facilitating retirement savings. The voluntary employer-based retirement plan system allows companies to attract and retain quality workers, while giving companies the flexibility they need. Congress should protect the tax incentives that help workers to save for retirement." (The ERISA Industry Committee [ERIC])

21 Sep 2014 01:03:55 Z

"Congress should consider greater tax incentives for employers to offer a match to employees.... Congress also should address incenting workers to save at a higher rate.... Congress should consider making withdrawals from retirement plans more difficult.... Congress should consider legislation directing the DOL to establish index investment standards related to underlying index, acceptable tracking error and transparent pricing.... And we need target date fund standards." (Employee Fiduciary)

21 Sep 2014 01:03:55 Z

"The suggestions include [1] permitting changes that do not affect safe harbor features or any information contained in the notice, [2] allowing certain corrective and other amendments designed to maintain plan qualification, and [3] allowing certain amendments but only in connection with mergers and acquisition." (American Benefits Council)

21 Sep 2014 01:03:55 Z

"IRA funds dwarf the amount of retirement assets held in employer sponsored retirement plans. Those IRAs will offer tempting targets to creditors when they pass on death to beneficiaries other than a surviving spouse. Consider leaving retirement assets in your employer sponsored plans, where protection from creditors is assured, as long as possible. Alternatively, for assets currently held in an IRA, consider retaining the spouse as the primary beneficiary (that appears to be safe for now) and naming only a spendthrift trust as the alternative beneficiary[.]" (The Retirement Plan Blog)

21 Sep 2014 01:03:55 Z

"[T]he IRS has provided a list of questions that you, as a Plan Sponsor, must be able to answer to ensure compliance with IRS regulations. These questions are designed to help you document and evaluate your plan's policies, procedures and internal controls.... Plan service providers ... Employee eligibility ... Contributions ... Plan distributions ... Plan testing and administration." (Kushner & Company)

21 Sep 2014 01:03:55 Z

"Action items for plan fiduciaries ... [1] Consider retaining an independent fiduciary to serve as 'special purpose Trustee' with respect to the Company stock fund ... [2] Consider retaining independent legal counsel for the fiduciary committee to assist it in documenting its procedural prudence with respect to the company stock fund. [3] Consider whether to establish limits on the investment in company stock.... [4] Document, document, document." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)] (Wilkins Finston Law Group LLP)

21 Sep 2014 01:03:55 Z

"Your company's vesting policy may not be on your mind when considering your next career move, but it should be.... One in four workers who left their job last year lost out on this valuable retirement savings ... On average, they left behind $1,710 in savings ... Younger workers were by far the most frequent losers. More than a third of Millennials left behind an average 24% of their account balance after leaving their job. In contrast, only 11% of Baby Boomers left money behind." (CNNMoney.com)

21 Sep 2014 01:03:55 Z

8 pages. "Best-practice governance routines and fee disclosure regulations place equal emphasis on documenting the process for determining reasonableness and making the determination itself. If you establish and document processes and procedures for understanding and assessing the fees paid by your plan, and you are diligent in following them, generally you are assured that you've fulfilled the fee disclosure requirements." (Bank of America Merrill Lynch)

21 Sep 2014 01:03:55 Z

"Assess alternate testing methods.... Make any necessary refunds.... Consider making a Qualified Non-Elective Contribution (QNEC) or Qualified Matching Contribution (QMAC).... Institute automatic enrollment.... Institute automatic increases... Implement a safe harbor 401(k) plan.... Make your match go further.... Build a case for retirement savings.... Target non-highly-compensated employees for a participation campaign.... Keep it simple." (TRI-AD)

21 Sep 2014 01:03:55 Z

"Designing a 401(k) plan to serve your company and its employees is more than just selecting the right investments.... Incorporate behavioral finance fundamentals to help improve participant and plan results.... Deliver participant advice on a one to one basis.... Include plan design features to make enrollment and investment selection easy for participants.... Provide financial wellness services to improve the financial health of your employees.... Have a sound investment process." (Bronfman E.L. Rothschild)

21 Sep 2014 01:03:55 Z

"There is no clear answer to the leakage problem in plans. A good retirement plan design can greatly influence the behavior of its participants. It has to include and encourage regular employer and employee contributions to help build retirement accounts. Withdrawal provisions and loans in plans don't signify poor plan design, but tighter administrative controls around the plan provisions, such as allowing only one in-service withdrawal per year, helps keep money in the plan." (Milliman Retirement Town Hall)

21 Sep 2014 01:03:55 Z

"The fiduciary responsibility model in 401k plans produces optimal results. When appropriately implemented, fiduciary standards work fine. Sponsors and fiduciary advisors quietly add value and help participants prepare for retirement. Brokerage windows undermine the fiduciary process and devalue the beneficial work done by fiduciaries. What seems like increased choice is actually a rejection of the fiduciary process. Bottom line: the increased choice often results in a net loss versus a fiduciary solution." (Employee Fiduciary)

21 Sep 2014 01:03:55 Z

"Many studies ... indicate that workers should save at least 12% to 15% of their income each year. It is likely that most of your 401(k) plan participants are not saving anything near this amount.... [Here] are four ideas on your 401(k) plan participants could save more: Make a budget ... Raise your 401(k) savings rate with each salary increase.... Collect the full company match.... Invest appropriately for your age and risk tolerance." (Lawton Retirement Plan Consultants)

21 Sep 2014 01:03:55 Z

"Employers don't usually intend to charge fees unfairly, but may be surprised to know that fees are often inadvertently structured inequitably. Fee equalization can eliminate fee imbalances across the participant base to help plan sponsors embed fundamental fairness into the plan. In this paper, [the authors] examine the ways in which traditional fee structures create imbalances among participants and consider ways to equalize fees. (Arnerich Massena)

21 Sep 2014 01:03:55 Z

"August trading activity continued to be light in defined contribution plans, with only 0.020% of balances transferring. This marks the tenth consecutive month that trading activity was below 0.03%. Total transfer activity was $214 million or 0.13% of total assets, with zero days in August having above normal trading activity." (Aon Hewitt)

21 Sep 2014 01:03:55 Z

"No two people are alike, but ... the typical 35-year-old who hopes to retire at 65 should sock away 15 percent of his earnings, starting now. Prefer to retire at 62? Hike that to 24 percent. To get the percent deducted from one's paycheck down into the single digits, young adults should start saving in their mid-20s and think about retiring at 67." (SquaredAway Blog, by the Center for Retirement Research at Boston College)

21 Sep 2014 01:03:55 Z

"Automatic enrollment, automatic contribution increases, and default investment funds overcome the all-too-human trait of inertia, and they are relatively easy to implement; however, before automating your plan, be aware that while adding automatic features to your plan can be beneficial to your employees and to the plan (in the form of improved testing), these features come with their own set of challenges" (Bryan, Pendleton, Swats & McAllister, LLC)

21 Sep 2014 01:03:55 Z

"At the bare minimum, at least three other pieces of information should be included on your statement. The first missing metric is the amount of risk being taken by each investment choice.... The second piece of missing information is the returns in both bull and bear markets.... And finally, a statement should show you what it costs to invest in each individual fund, and this information should be as prominent as the returns, not buried in the disclosures." (Indianapolis Star)

21 Sep 2014 01:03:55 Z

"Given these lingering questions about the legal standard, and the practical difficulty of proving what hypothetical prudent fiduciaries would have done, the lesson for plan fiduciaries is simple: Avoid disputes about causation by using a prudent decisionmaking process. Plan fiduciaries looking for guidance about what a prudent process might look like will find some suggestions in the trial court's discussion of procedural prudence." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)] (Thomson Reuters / EBIA)

21 Sep 2014 01:03:55 Z

"At its most basic, the decision of how much to match is a financial one.... Sustainability is a key question for employers. Even if they can manage the match now, what will happen if the organization does not meet its revenue, growth or profitability projections in the future?" (Society for Human Resource Management [SHRM])

21 Sep 2014 01:03:55 Z

"[1] Why do plan participants withdraw money? ... [2] Factors that Participants Should Consider in Deciding Whether to Rollover ... [3] Employer Attitudes Toward Plan Withdrawals ... [4] Steps employers can take to discourage pre-retirement consumption of plan assets and to encourage good financial decision making in deciding between a rollover or keeping assets in a plan (without incurring potential fiduciary exposure) ... [5] Possible Department of Labor Actions." (Prof. Norman Stein, on behalf of Pension Rights Center)

21 Sep 2014 01:03:55 Z

"[T]he definition of choice should not be based on selecting from among some multiple of the same kind of fund. Rather, it should be about selecting from different kinds of funds ... which will allow plan participants the ability to create a well-diversified portfolio.... Non-fiduciary plan providers care little about what any given participant invests in, because they just want to sell product ... Which is why they give plan participants lots of choices. Defining choice in that way, however, means that plan participants have a much greater risk of investing in portfolios that are sub-optimal in diversification." (W. Scott Simon, for Morningstar Advisor)

21 Sep 2014 01:03:55 Z

"Multiple studies consistently show that the majority of plans using automatic enrollment use a default rate of 3% savings. This rate mirrors the safe-harbor guidelines, but is required to be used only if adopting a safe-harbor plan, which most plans are not. The 3% rate also is generally believed to be the rate likely to reduce the level at which participants opt out of the program, although there is no empirical evidence suggesting this is the case. Several studies suggest default contribution rates could be increased significantly without a meaningful increase in opt-outs." (Strategic Benefit Services)

21 Sep 2014 01:03:55 Z

"As the 2014 plan year is nearing its end, it is important to look ahead at the notices that may need to be provided before the start of the 2015 plan year. This publication provides a summary of the annual notice requirements for those notices, including timing, recipients, contents, and method of delivery." (Prudential)

21 Sep 2014 01:03:55 Z

"[1] Require a ROTH Option.... [2] Require both Auto-Enrollment and Auto-Escalation Features.... [3] Eliminate the Required Minimum Distribution (RMD).... [4] Change Non-Discrimination Rules.... [5] Convert All 403(b) Plans to 401k Plans.... [6] Create Additional Fiduciary Safe Harbors." (Fiduciary News)

21 Sep 2014 01:03:55 Z

"Every service provider to the plan that takes funds out of the plan automatically should have a written procedure (agreed to by the plan fiduciary) under which the plan fiduciary has time to review the bill, that the passage of that time without objection is deemed to be approval by the fiduciary of the bill for payment by the plan, and that an automatic transfer of funds occurs only after that time has expired without objection. A procedure for resolving disputes is also a good thing." (Ferenczy Benefits Law Center LLC)

21 Sep 2014 01:03:55 Z

"By year-end 2013, only 24% of Fortune 500 companies offered any type of DB plan to new hires, down from 60% for the same selection of employers back in 1998.... Half the pension sponsors in this analysis have adopted a hybrid plan and 57% were still offering it to new hires at the end of 2013. Certain industry sectors, as well as employers whose pensions are relatively small ... and/or well-funded, are more likely to continue offering pension plans to new hires. While the end of pension accruals represents a substantial loss for employees, most employers then contribute more to the DC plan to at least partially make up for it." (Towers Watson)

21 Sep 2014 01:03:55 Z

"[T]he IRS takes a very restrictive position on the acceptability of mid-plan year amendments to 'safe harbor' 401(k) plans.... [T]here are currently very few amendments that can confidently be made to a safe harbor 401(k) without potentially running afoul of this restrictive IRS position.... [T]his article briefly discusses the limited, formally documented exceptions to the general 'do not amend' rule otherwise espoused by the IRS." (Legacy Retirement Solutions)

21 Sep 2014 01:03:55 Z

22 pages. "In light of the benefit to participants of using TDFs and the fiduciary protections offered by the QDIA rules, plan sponsors are well-advised to add TDFs to their investment lineups and to take steps to facilitate participant investment in those funds. The most effective way to do that is through the re-enrollment process ... One of the common misconceptions is that if participant assets are in a stable value fund, employer stock, brokerage account, or managed account, the plan cannot implement re-enrollment. This is not the case, but it does mean that re-enrollment needs to be done thoughtfully[.]" (Fred Reish & Bruce Ashton, for J.P. Morgan Asset Management)

21 Sep 2014 01:03:55 Z

"Myth #1: Retirement money is universally protected from creditors ... Myth #2: Plan money is always creditor protected ... Myth #3: General creditor protection and bankruptcy protection are the same ... Myth #4: Retirement account beneficiaries have the same levels of protection as owners ... Myth #5: Plan money retains its creditor protection when it's rolled over to an IRA." (The Slott Report)

21 Sep 2014 01:03:55 Z

"The sometimes Byzantine labyrinth of rules and regulations have often left the plan sponsor bewildered, wondering if, in the end, it's worth the personal risk to continue offering these lucrative retirement plans.... [T]here are opportunities to address some issues sooner rather than later.... [1] Make it Easier for Smaller Employers ... [2] Establish a Strong Across-the-Board Fiduciary Rule ... [3] Streamline Disclosure ... [4] Prohibit Revenue-Sharing." (Fiduciary News)

21 Sep 2014 01:03:55 Z

"Among approximately 75 large employers, nearly one-quarter (24%) are currently using a white label approach to naming defined contribution (DC) plan investment options ... Nearly half (46%) are using this approach for their entire fund lineup, while the remainder white label only some of their funds.... [T]here are two main strategies for white labeling. The first is to take a singular fund and make the name generic.... The second strategy is like a fund-of-funds approach, when a plan sponsor offers a single fund option to participants called the Large-Cap Equity fund, for example, but assets in the fund are directed to several underlying funds." (planadviser)

21 Sep 2014 01:03:55 Z

"Rather than assume that all 40-year-olds have the same savings goals and needs, 401(k) plan providers can address this issue through a much more personalized approach. In practice, this means offering and educating participants about the potential benefits of professional 401(k) advice that accounts for much more than just age when it comes to the particulars of each saver's situation. As a participant, you can take an active role in tailoring your 401(k) account by availing yourself of any such advice that is part of your 401(k) plan." (Charles Schwab)

21 Sep 2014 01:03:55 Z

"[A recent] survey of 1,601 college students and parents of undergraduate students found that 7 percent of families took a withdrawal from a retirement account to help cover college costs in 2014, up from 5 percent in 2013. The average retirement account distribution also grew from $2,710 in 2013 to $8,870 in 2014. And 1 percent of families took retirement account loans to pay for college, with loans averaging $5,062 in 2014, up from $3,952 in 2013." (U.S. News & World Report)

21 Sep 2014 01:03:55 Z

This report shows change in average account balances grouped by age and tenure, from January 1, 2013 through September 1, 2014, for 'consistent' participants (those who had an account balance as of December 31, 2012). (Employee Benefit Research Institute [EBRI])

21 Sep 2014 01:03:55 Z

"[A] recent paper calls for wholesale changes to the way Americans currently save for retirement, including suspending all defined contribution savings arrangements because 'they are complex, costly, and challenging for employers and employees to manage.' ... Perhaps the most egregious aspect of this proposal to 'save retirement' is that not only does it eliminate any incentive for employers to contribute money for their employees' retirement, but it actually seems to penalize workers for those contributions. This would have a terrible impact on the vast majority of the 60 million or more working Americans currently participating in employer-sponsored defined contribution plans." (National Association of Plan Advisors [NAPA])

21 Sep 2014 01:03:55 Z

"The pension system is not broken. The pension system does not need 're-energized'. And 401k plans are not trees. On a plan by plan basis they can change, and for the better. At greater issue is corporate and individual apathy, and a general lack of financial acumen, not the 401k plan. The foundation of the 401k plan is fine." (Tom Zgainer, America's Best 401k)

21 Sep 2014 01:03:55 Z

"In background comments to the RFI, the DOL notes its concern ... that brokerage windows have been marketed by some providers as a device to avoid making the disclosures required under the participant-level fee disclosure regulations. The DOL had stated in FAB 2012-02R that a plan fiduciary's failure to designate investment alternatives other than a brokerage window raises questions under ERISA's fiduciary duties of prudence and loyalty. With this RFI, the DOL is trying to determine 'how best to assure compliance with these duties in a practical and cost-effective manner.'" (Thomson Reuters / EBIA)

21 Sep 2014 01:03:55 Z

"From 1974 to 2004 the percentage of Americans covered by a pension shrank from 44 percent to 17 percent ... Companies instead set up 401(k) plans, which were never intended to be a retirement plan but a supplement to an existing pension ... As a result, we are looking at a retirement catastrophe. According to the Federal Reserve Board, the median amount saved for those age 55 to 64 was $100,000 in 2010 -- or a measly annual income of $4,000, or about $77 a week." (Jane White, via The Huffington Post)

21 Sep 2014 01:03:55 Z

"The majority and dissent's sharply conflicting views regarding the standard for whether a fiduciary decision is objectively prudent provide great material for theoretical discussion among lawyers. Plan fiduciaries should assure, however, that they never become part of the debate. Had the RJR fiduciaries simply (i) performed a thorough investigation of the alternatives, (ii) made a reasoned decision based on their investigation, and (iii) documented the basis for their decision, no breach of duty would have occurred in the first place even though, with hindsight, the decision may have been different." [Tatum v. RJR Pension Investment Committee, No. 13-1360 (4th Cir. Aug. 4, 2014)] (Benefits Bryan Cave)

21 Sep 2014 01:03:55 Z

"Changing family relationships related to divorce or adoption, ownership details like stock options, and the correct application of the top-paid 20% group can all pose challenges when making the determination of HCEs for any given year.... The interaction of the ADP/ACP testing with other required nondiscrimination tests means that all of the plan's testing must be performed in a specific order and excess amounts refunded or forfeited because of failure from one test must be coordinated in performing the other tests. In the event of test failure, the calculation of the returns can be complicated, depending on how many HCEs are affected and whether or not the affected HCEs have already contributed the maximum 'catch-up' amount allowed for participants over age 50." (Retirement Management Services)

21 Sep 2014 01:03:55 Z

"Possible DOL rulemaking or other guidance on brokerage windows could have a wide-ranging effect. Among those potentially affected could be plan sponsors, recordkeepers who promote or liaise with brokers in making brokerage windows available to plan sponsors, brokers who offer or facilitate the use of brokerage windows, sponsors of funds that are offered through brokerage windows and privately offered or other alternative investments that plan participants might be able to access only through a brokerage window." (Dechert LLP)

21 Sep 2014 01:03:55 Z

"When fees aren't clear or comparable, it can be difficult to impossible for plan sponsors to determine the reasonableness of fees.... Under an all-in fee approach, all administrative, recordkeeping and investment expenses are summed into a single, total amount. This approach 'normalizes' the numerous fee arrangements used by 401k service providers, including compensation paid to providers from plan investments, making it easier for the sponsor to compare fees provider by provider." (Employee Fiduciary)

21 Sep 2014 01:03:55 Z

54 pages. "Sixty-one percent of Generation X workers are confident that they will be able to someday fully retire with a comfortable lifestyle; however, among them, only 14 percent are 'very confident.' ... Thirty-four percent of Generation X workers expect their standard of living to decrease when they retire. Eighty-three percent of Generation X workers are concerned that Social Security will not be there for them when they are ready to retire. The majority of Generation X workers (54 percent) plan to work past age 65 or do not plan to retire. Most Generation X workers (62 percent) envision a phased transition into retirement[.]" [5-page 'Fact Sheet' is also available.] (Transamerica Center for Retirement Studies)

21 Sep 2014 01:03:55 Z

"The maximum special catch-up amount is the LESSER of [1] Twice the current year's maximum, or $35,000 for 2013 or [2] The underutilized maximum amounts for prior years. Determining the underutilized limitation can be quite a challenge. The computation requires an analysis dating back to years beginning after December 31, 1978. From that initial year through years in effect prior to 2002, amounts contributed to ALL employers for whom a participant has performed services must be taken into account[.]" (Belfint Lyons & Shuman, CPAs)

21 Sep 2014 01:03:55 Z

"[T]he average retirement savings balance for women was up 17 percent from a year ago and 71 percent from 2009. The gap between the average balance between women and men narrowed to 37.8 percent in the second quarter from 40.5 percent in 2010.... [T]he average salary deferral rate for women continues to trail men, 5.37 percent to 5.70 percent of compensation, respectively. However, the deferral rates for women have remained fairly steady since 2010 while the rates for men have declined." (MassMutual)

21 Sep 2014 01:03:55 Z

"How much do your 401(k) plan participants need to accumulate in their accounts in order to retire without making significant lifestyle adjustments? Here are some estimates from the experts: 8 times final pay at age 67 -- Fidelity ... 11 times final pay at age 65 -- Aon Hewitt ... 18 times final pay -- EBRI ... 25 times final pay -- to ensure an annual withdrawal rate of 4%. With such a wide range of opinions, it can be hard for participants to know what to aim for." (Lawton Retirement Plan Consultants)

21 Sep 2014 01:03:55 Z

"Norman P. Stein, a law professor at Drexel University School of Law, speaking on behalf of the Pension Rights Center, told the [ERISA Advisory Council] that the Department of Labor could 'issue guidance on steps employers can take to educate employees on how to evaluate plan distribution options without creating potential fiduciary liability on the part of the employer.' The DOL also could consider creating 'model documents for employers to provide employees to guide them in making decisions about plan distribution options,' or working with outside professional groups to create model documents[.]" (Bloomberg BNA Pension & Benefits Reporter, via Pension Rights Center)

21 Sep 2014 01:03:55 Z

"Arkansas had the lowest rate of participants in low scoring plans, 15.0%. Nevada had the highest concentration of participants in low scoring plans, with 80.6% in plans receiving scores less than 50. No state had a majority of its participants in high scoring plans, though Delaware came closest with 43.3% of participants in high scoring plans, or plans with scores of 75 or higher. Among the five largest states by plan participants, Pennsylvania had the lowest concentration of participants in high scoring plans, 5.9%, and the second highest concentration of participants in low scoring plans, 40.1%. The other four largest states by plan participants were California, Illinois, New York and Texas." (Judy Diamond Associates)

21 Sep 2014 01:03:55 Z

"Pension plans blossomed during the Depression and flourished when the American economy led the world. The precise features of the pension benefit became an important differentiator between companies competing for the best talent.... The most often mentioned 'killer' of the American pension is the 401k plan ... Rampant inflation, at the very least, was a very willing accomplice ... [V]arious demographic trends may have doomed them anyway.... [T]he push to win more benefits may have also shortened the life of the pension plan.... Part of this new reality includes changing priorities within today's job-hopping work force." (Fiduciary News)

21 Sep 2014 01:03:55 Z

"For those at or above the required minimum distribution (RMD) age of 70-1/2, the withdrawal rates at the median (mid-point) appeared close to the amount that is required to be withdrawn, though some were significantly more ... [A]mong individuals under age 60, 10% or fewer had a withdrawal.... 65.4% of the individuals taking a withdrawal were ages 65 or older, and just over half (51.1%) were ages 71 or older, while just 11.5% were younger than age 50." (Wolters Kluwer Law & Business)

21 Sep 2014 01:03:55 Z

"We recommend legislation that will create a single private DC system that can cover all working Americans with a single set of rules. A key part is that all employers who currently deduct payroll taxes -- unless they sponsor a defined benefit plan -- would be required to arrange for payroll deduction of a percentage of each employee's pay to be contributed to a trusteed retirement fund.... Sponsors of these TRFs would be trustees, with fiduciary responsibilities. Each TRF would have a trust deed, a published investment strategy and annual audits. The strategy would specify the fund's objectives, the broad diversification of its investments, its level of risk and its fee structure." (Russell Olson and Douglas Phillips, via Pensions & Investments)

Verisight: truthful insight.
"Veri" stems from veritas, Latin for truth.
"Sight" derived from "insight", the ability to perceive clearly and deeply.


WHAT'S NEW?

March 18, 2014
Verisight Expands Institutional Sales Team
Verisight, Inc., a privately-held, national corporation that offers comprehensive retirement plan services and consulting solutions announced the hire of Ross Brown as Senior Vice President of Institutional Sales. Read the press release.

January 28, 2014
Adviser Relationships Key in Acquisition. Last week, Verisight, Inc. announced it is acquiring retirement and benefit plan service provider DailyAccess Corporation and its subsidiaries. Read the full article.

January 23, 2014
Verisight, Inc. (Verisight), a recognized leader in comprehensive retirement plan services and consulting solutions, today announced the acquisition of DailyAccess Corporation (DailyAccess). DailyAccess, along with its subsidiaries, InterServ, LLC and DailyAccess Health and Welfare, LLC, provides retirement and benefit plan services for advisors, employers, and employees. Read the Full Release.

December 11, 2013

Employers surveyed consider:  benefits costs as the leading factor impacting total reward decisions; the cost of investments as the most significant factor when evaluating retirement plan offerings.  Read more in the 2013/2014 Verisight and McGladrey Compensation, Retirement and Benefits Trends Executive Summary.