INDUSTRY AND REGULATORY NEWS YOU CAN USE

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

05 Sep 2015 06:53:29 Z

"Employers who sponsor 401(k) plans report using a range of default investment types to automatically enroll employees in their plans based on each type's design and other attributes.... Plan sponsors responding to GAO's questionnaire and stakeholders GAO interviewed generally said that [DOL] regulations were unclear as to: [1] how sponsors could fulfill the regulatory requirement to factor the ages of participants into their default investment selection; [2] whether each default investment provided the same level of protection; or [3] whether they were allowed to incorporate other retirement features, such as products offering guaranteed retirement income, into a plan's default investment. Such uncertainty could lead some plan sponsors to make suboptimal choices when selecting a plan's default investment that could have long-lasting negative effects on participants' retirement savings." (U.S. Government Accountability Office [GAO])

05 Sep 2015 06:53:29 Z

"The enquiring employee benefits manager 'works' with the plan 'consultant' to make investment recommendations for [a hospital's] ERISA 403(b) plan to the plan's fiduciary committee. This manager is [1] not a named fiduciary in the plan document, [2] not a member of the plan's fiduciary committee, [3] doesn't make any decisions regarding plan investments, and [4] doesn't serve as a fiduciary since her or his employer doesn't intend that she or he so serve. Let's step back a moment to understand this situation and its implications." (Morningstar Advisor)

05 Sep 2015 06:53:29 Z

18 pages. "Fiduciary risk ... affects companies on many levels -- in your employees' preparation for retirement, in the recruitment and satisfaction of those employees, in the way you manage your plan, and in the help you seek from your advisors.... This brochure will review relevant fiduciary data and suggest actions you can take to help minimize fiduciary risk. This guide includes the following topics: [1] 404(c) protection and considerations for complying; [2] Key requirements needed for 404(c) compliance; [3] Six steps toward compliance." (Deutsche Bank AG)

05 Sep 2015 06:53:29 Z

"The EPCU is attempting to determine if outstanding loan balances at the time all plan assets were distributed were treated properly for income tax purposes.... Responses to a questionnaire will be used to determine: [1] identities of participants, beneficiaries and alternate payees who had unpaid loan balances at the time all the plan assets were distributed; [2] amounts of the unpaid loan balances for each of these participants, beneficiaries and alternate payees; and [3] total distributions received by these participants, beneficiaries and alternate payees. The EPCU will analyze the responses and corresponding Forms 1099-R." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"Although the temptation to earn a quick buck by rolling out trendy new funds has been too much for many rivals, T. Rowe has generally fielded a utilitarian lineup. And while manager departures have picked up in recent years ... T. Rowe has historically done a good job of retaining its investment personnel. Nor has the firm been reticent to close funds pre-emptively in an effort to preserve performance: As of late August 2015, 10 of the firm's 135 funds were closed to new investors. Yet, those closures present a few challenges for investors building a well-rounded T. Rowe Price portfolio from scratch today." (Morningstar)

05 Sep 2015 06:53:29 Z

This report shows the change in average 401(k) account balances, grouped by age and tenure, from January 1, 2014 through September 1, 2015, counting only those participants who had an account balance at the end of 2013. (Employee Benefit Research Institute [EBRI])

05 Sep 2015 06:53:29 Z

"Adding complex investment options that participants don't understand is like asking them to play Russian Roulette with their largest pile of money. Additionally, 52% of participants surveyed said that their 401k investment information is more confusing than their healthcare benefit information.... The confusion is not limited to 'complex' investments. Even traditional asset classes confound many who have little to no education in the field of investments." (Fiduciary News)

05 Sep 2015 06:53:29 Z

"The goal of this project was to verify nondiscrimination compliance was met by requesting and reviewing information to: [1] Determine the plan provisions properly allowed and adopted a 401(k) as part of a CODA. [2] Determine compliance with IRC Section 401(k)(11) for SIMPLE 401(k) plans. [3] Determine compliance with IRC Section 401(k)(12) for Safe Harbor plans. [4] Verify corrective measures were taken to satisfy ADP or ACP tests and any applicable 1099-Rs were issued. [5] Verify reporting and the accuracy of calculations used to determine the amount of excise tax asserted under IRC Section 4979, requesting corrections when errors were identified." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"We discovered... that over ninety percent of schools offer employees the opportunity to defer salary to a 403(b) plan. Most appear to make the plan available with little restriction as to minimum deferral amounts required. The vast majority exclude substitute and part-time teachers as a group ... Some schools allow excludable employees working under 20 hours to participate ... Nearly half offered other deferral options like a 401(k) plan in addition to the 403(b)." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"Our records indicate you sponsor a 401(k) plan for the benefit of your employees and you filed a Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans) reporting excise tax under Internal Revenue Code (IRC) section 4971(a). This appears to be in error as 401(k) plans are not subject to the minimum funding requirements and, therefore, would not owe this type of excise tax.... It is important to us that you report the correct amount of excise tax due for transactions involving your retirement plan. Please review your records including the information regarding excise taxes and have someone knowledgeable about your above referenced plan provide the following information." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"Overall ... nearly 60% of asset managers will make changes to share class offerings heading into 2016. In this group, a quarter plans to add share classes, 'primarily cited as R6 or some zero revenue share class,' and a similar number will move away from share classes that generate revenue through commissions or sales fees. The movement away from commissions and revenue sharing reflects regulators' focus on fiduciary care and conflicts of interest." (planadviser)

05 Sep 2015 06:53:29 Z

"A review of the Form 5330 return showed that excise tax was paid under IRC Section 4971(a) for late payment of required minimum contributions. The Form 5500 series return reports the plan contains a 401(k) feature and was not subject to the minimum funding requirements of IRC section 412. The EPCU will be mailing the contact letter and Information Request to plan sponsors. A closing letter will be issued to the plan sponsor upon completion of our review." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"Aside from the rise of index funds, it has taken hundreds of fee-related class-action lawsuits, two Department of Labor rules and numerous advances in recordkeeping technology to push down 401(k) fees. But plan costs are also coming down for a reason that has nothing to do with mutual funds themselves. The fact is, plan sponsors have been increasingly jettisoning mutual fund lineups in favor of more efficient retirement plan vehicles." (Institutional Investor)

05 Sep 2015 06:53:29 Z

"[T]rading activity [on Friday August 21 was 2 times the normal level, while activity on Monday [August 24] was 7 times the normal level, the third highest day of trading since 2008.... Preceding Friday's market drop, the Aon Hewitt 401(k) Index showed no days of above normal trading in July or the beginning of August. The trading movement on Friday and Monday was out of equities and into fixed income." (Aon Hewitt)

05 Sep 2015 06:53:29 Z

"Sixty-seven percent of respondents said they would like personalized investment advice for their 401(k) plan ... However, only 12% indicated they currently get this type of professional advice in managing their retirement assets.... On their own, only 44% of the total indicated they were 'extremely/very' confident in their ability to make the correct decisions. With the help of a financial professional, that figure increased to 73%." (Pensions & Investments)

05 Sep 2015 06:53:29 Z

"Variable annuities (VAs) with no income guarantees will 'probably be eliminated' from [IRAs] under the [DOL's] proposed conflict of interest rule, [Ryan Krueger, head of U.S. life insurance research for Keefe, Bruyette & Woods] said.... 'We'll take a look at it, we'll adjust, we'll adapt, we'll find a path forward and ... I really believe that what's going to continue to happen is market share is going to continue to move from second- and third-tier providers to first-tier providers,' said Larry D. Zimpleman, chairman and CEO of Principal Financial." (InsuranceNewsNet.com)

05 Sep 2015 06:53:29 Z

"[This] article provides analysis of the ability of QLACs to provide an effective longevity hedge for Boomers and Gen Xers who are simulated to participate in an in-plan offering either through a 10-year series of laddered purchases or as a one-time purchase based on the accumulated value of employer contributions from the current employer.... [E]ven at today's historically low interest rates, the purchase of these products may provide a significant increase in retirement readiness for the longest-lived quartile, compared with only a small reduction for the general population. Sensitivity analysis on the QLAC premiums resulting from likely increases in future interest rates provides even more favorable results." (Employee Benefit Research Institute [EBRI])

05 Sep 2015 06:53:29 Z

"[1] Auto-enroll all employees into the plan on an annual basis.... [2] Increase the default deferral percentage.... [3] Incorporate opt-out auto escalation.... [4] Incentivize increased savings by adopting stretch matching contributions.... [5] Make employee financial wellness and engagement a year round campaign rather than an annual benefits enrollment consideration." (Manning & Napier)

05 Sep 2015 06:53:29 Z

"Attorneys for The Boeing Co., Chicago, and participants in a Boeing 401(k) plan reached a provisional settlement in a case in which the participants had alleged breaches of fiduciary duty by plan administrators... The notice filed Wednesday by U.S. District Judge Nancy J. Rosenstengel didn't describe the terms of the provisional settlement." (Pensions & Investments)

05 Sep 2015 06:53:29 Z

"Before taking on his first retirement case, Mr. Schlichter says he and his firm spent a year and a half learning about the field. 'The practices in the industry were off in a dark corner,' he says. 'There was a significant amount of inattention we observed.' Eight of his suits have resulted in settlements totaling more than $214 million in payouts, with $70 million of that going to 67-year-old Mr. Schlichter and his law firm, Schlichter Bogard & Denton LLP." (The Wall Street Journal; subscription may be required)

05 Sep 2015 06:53:29 Z

"While 401k sponsors are subject to complex fiduciary responsibilities under ERISA, a qualified (and inclined) service provider can make it simple for sponsors to meet their fiduciary responsibilities with some basic 'best practice' guidance.... 401k sponsors should be mindful of the 4 key sources of fiduciary liability today: [1] Paying excessive plan fees; [2] Selecting imprudent investments; [3] Not remitting participant contributions timely; [4] Failing to follow plan document terms." (Employee Fiduciary)

05 Sep 2015 06:53:29 Z

"90 percent of respondents said they would think twice about taking a job if the company did not offer a 401(k) plan. The survey also found: More than two-thirds (68%) consider making the best 401(k) investment choices a key priority -- even more so than staying in shape (59%). 73 percent would rather have their 401(k) balance grow by 15 percent this year than lose 15 pounds. Participants pay more attention to 401(k) investment fees (64%) than ATM fees (60%), airline baggage fees (50%) or gym sign-up fees (49%)." (Charles Schwab)

05 Sep 2015 06:53:29 Z

21 pages. "[This article describes] a process by which the fiduciary can prudently decide to keep the employer stock fund open to new investment and a process by which the fiduciary can prudently decide to terminate the fund. Both are based on Dudenhoeffer and the case law and financial market theory on which it is based. [The authors] also set forth some additional thoughts for possibly shoring up the fiduciary's 404(c) protection by transferring some of the decision from the fiduciary to participants." (Ivins, Phillips & Barker, via Bloomberg BNA Pension & Benefits Daily)

05 Sep 2015 06:53:29 Z

"Before the DOL issues its final rule, now may be an ideal time for plan sponsors to more formally review their position regarding terminated plan participants.... [T]here are three questions in particular that sponsors may want to address ... [1] What currently happens when a plan participant terminates from service? ... [2] What is the plan sponsor's preference regarding whether terminated participants leave their money behind in the plan or roll their balances to a new plan or IRA? ... [3] Are the plan design and employee education offerings currently aligned with the company's goals?" (Society for Human Resource Management [SHRM])

05 Sep 2015 06:53:29 Z

"The purpose of a retirement plan is to replace income in retirement. If you're still thinking about your retirement plan in terms of accumulated assets you might be more likely to have a negative reaction to market declines.... However, if you're thinking about your retirement plan in terms of the monthly income you'll receive in retirement, then market corrections are going to seem less impactful. The effect of even a large market move on your monthly paycheck in retirement is going to seem insignificant if you're planning for the long term." (Empower Retirement)

05 Sep 2015 06:53:29 Z

"[I]nvestment managers and strategists overwhelmingly urge retirement plan sponsors to ask their advisers to counsel participants to remain invested and level-headed. They also say it is critical for sponsors to ensure their participants appreciate the benefits of buy-and-hold investing so that when fluctuations do occur, the rationale of an unyielding approach to investing has been firmly set." (PLANSPONSOR)

05 Sep 2015 06:53:29 Z

"The voluntary automatic savings increase tool was not expected to have a major impact. Instead, it was considered something useful to help chip away at the lost 11.5% of annual DB benefits. It was also considered a means for those participants on a tight budget who were not automatically enrolled to increase their savings rates at their own pace.... [Instead, after] two years, over a quarter of the bank's participants have used this feature and voluntarily elected an increase schedule." (Milliman)

05 Sep 2015 06:53:29 Z

12 pages. "By using managed account advice, 6 in 10 participants increase their projected ten-year retirement wealth by an average of 30%, net of investment and advice fees.... Three in 10 participants earn value from managed accounts through a reduction in portfolio risk.... Four in 10 participants made an active savings decision at the time they adopted managed account advice." (Vanguard)

05 Sep 2015 06:53:29 Z

"Public sector defined benefit plans anticipating guidance from the IRS on whether individual member elections into benefit tiers and contributions levels would be permitted now have clarification that such individual elections cannot be made as part of pension plan reform in their jurisdictions." [PLR 201532036 (May 4, 2015, released Aug. 7, 2015)] (Segal Consulting)

05 Sep 2015 06:53:29 Z

"The Compendium provides a five-year trend analysis and in-depth perspectives on access to employer-sponsored retirement benefits, savings rates, planning-related activities, and the changing nature of retirement itself. This extensive report offers 20 key indicators of retirement readiness among workers by employer size, generation, gender, household income, and level of education." (Transamerica Center for Retirement Studies)

05 Sep 2015 06:53:29 Z

"401(k) participants paid an average expense ratio of 0.54% of assets for equity mutual funds in 2014, continuing a long-term downward slide, down 30% from 0.77% in 2000 ... At year-end 2014, 88% of 401(k) plan equity fund assets were invested in mutual funds with expense ratios of less than 1%. Only 1% of assets were invested in funds with expense ratios of 1.5% or greater." (Forbes)

05 Sep 2015 06:53:29 Z

"[A]pproximately 15 percent of older Americans with career jobs returned to the labor force after having retired; respondents were more likely to reenter the workforce if they were younger, were in better health, or had a defined-contribution pension plan." (Kevin E. Cahill, Michael D. Giandrea, and Joseph F. Quinn, via SSRN)

05 Sep 2015 06:53:29 Z

"96% indicated that they did want help completing enrollment, reviewing investments, or selecting the amount to save.... About a third of enrollees do receive guidance from a financial advisor. However, only 33% of those working with a financial advisor would seek out their assistance with the selections on the retirement plan.... 95% indicate that they understand their plan fees after the explanation by a provider. 95% of those also understand how fees can impact their long-term returns." (PlanVision)

05 Sep 2015 06:53:29 Z

"[A]rguments in the trial will be heard August 26, 2015, before the U.S. District Court of Southern District of Illinois. Plaintiffs allege that Boeing violated [ERISA] by permitting excessive fees to be charged to 401(k) plan participants. They also claim that Boeing engaged in self-serving conflicts of interest, and permitted imprudent funds to be included in the company retirement plan." (PLANSPONSOR)

05 Sep 2015 06:53:29 Z

"[T]he data now bears out that plan design has the most powerful impact on improving participant outcomes. Automatic enrollment is driving participation rates close to 90%. Eight of every 10 plans have designated a target-date fund (TDF) as their default investment. And plans are increasingly using autoescalation features to help participants boost their savings rates incrementally over time. This is a shift from a decade ago, when there was a belief and a hope that participant education would be the best way to improve outcomes." (Vanguard)

05 Sep 2015 06:53:29 Z

"Over the past few decades, 401(k)s have simply gotten a whole lot better. Insights from behavioral economics have led to the development of retirement plan features that have encouraged greater employee participation and higher deferral rates. The industry has developed investment options that simplify decision-making.... In many ways, the real debate has shifted from a discussion of whether 401(k)s can work for employees -- they definitely can -- to a debate about the best way to maximize the benefits of defined-contributions plans, and to bring them to a greater number of workers." (Morningstar Advisor)

05 Sep 2015 06:53:29 Z

"[O]ne trap you can step into with regards to the Back-Door Roth IRA strategy -- or any Roth IRA conversion for that matter -- is when you 'cross streams' by rolling plan money into an IRA in the same year you make a Roth IRA conversion.... If you convert the entire IRA, you will not owe any tax, since the plan assets are excluded from the IRA pro-rata formula, and your IRA was all after-tax money.... [L]et's say you change jobs mid-year. Believing you'd be better off in an IRA than with your 401(k), you roll your 401(k) to an IRA. Bang! You just increased your tax bill for the year by several thousand dollars." (Slott Report)

05 Sep 2015 06:53:29 Z

32 pages. "401(k) plan participants investing in mutual funds tend to hold lower-cost funds.... The expense ratios that 401(k) plan participants incur for investing in mutual funds have declined substantially since 2000.... The downward trend in the expense ratios that 401(k) plan participants incur for investing in mutual funds continued in 2014.... 401(k) plans are a complex employee benefit to maintain and administer, and they are subject to an array of rules and regulations.... Employers and employees generally share the costs of operating 401(k) plans." (Investment Company Institute [ICI])

05 Sep 2015 06:53:29 Z

"The study estimates the DOL's proposed rule will cost the independent financial services industry and investors nearly $3.9 billion in total startup costs to implement the rule -- nearly 20 times DOL's preferred cost estimate. This amount does not take into account the cost of investors' lost access to advice or the ongoing costs of maintaining compliance with the rule.... The proposed rule will result in estimated startup costs ranging from $1.1 million to $16.3 million per firm, depending on firm size.... The proposed rule will result in industry consolidation likely to force small broker-dealers out of business." [Also available: an executive summary (6 pages) and the full text of the study (39 pages).] (Oxford Economics, for Financial Services Institute [FSI])

05 Sep 2015 06:53:29 Z

"First, sponsors and sponsor staff may be directly affected, that is, they may themselves in some cases be advice fiduciaries under the proposed rule. Second, sponsors may be affected as direct consumers of advice, when, for instance, they retain a consultant to advise them about which funds to put in a fund menu. Third, sponsors may be affected as indirect consumers of advice, when, for instance, they retain persons (educators, investment advisors or call center operators) to advise their participants.... The third issue -- the effect of the proposal on advice (and education) provided to participants -- is more complex." (October Three Consulting)

05 Sep 2015 06:53:29 Z

"[Vanguard] expressed serious concerns that, unless substantially changed, the proposal would limit access to important educational and advisory services for retirement investors, including plan participants. [A] second letter addresses the DOL's proposed prohibited transaction exemptions under ERISA for fiduciaries providing investment advisory services. Vanguard encouraged the DOL to significantly streamline the conditions of the proposed new exemption to allow investors continued access to useful investment products and services." (Vanguard)

05 Sep 2015 06:53:29 Z

"According to the study, proprietary funds, with a 13.7 percent deletion rate, were much less likely to be cut out of a 401(k) plan's menu than unaffiliated funds, which had a 19.1 percent deletion rate. The bias favoring proprietary funds was particularly pronounced for poorly performing funds, with plans removing just 13.7 percent of the funds in the poorest performing decile, or lowest 10 percent of funds, which was much less than the 25.5 percent deletion rate for unaffiliated funds in the same bottom decile of funds[.]" (Bloomberg BNA)

05 Sep 2015 06:53:29 Z

"Target date funds use plan participant inertia (the tendency of participants to set-it and forget-it) in a positive way.... The opposite is true with target-risk funds. Participants have to identify the various points in their lives when their risk tolerance changes and choose to move to a lower risk fund.... Participants take on more risk than they should.... Participants learn they are in the wrong fund at the wrong time.... Participants become dissatisfied with the plan.... Participants need a significant amount of education to understand their ability to bear risk and the risk profiles of the target-risk funds available." (Lawton Retirement Plan Consultants)

05 Sep 2015 06:53:29 Z

"Labor Department officials are determined to produce a new standard of fiduciary duty for anyone giving retirement investment advice, once they process concerns raised in thousands of comment letters and four days of hearings on their proposal.... Giving up on producing a final rule is not an option, [Labor Secretary Thomas Perez] said. 'The cost of inaction is too high.' " (Pensions & Investments)

05 Sep 2015 06:53:29 Z

"[T]he biggest challenge for investors who are already sold on what Vanguard has to offer is winnowing down the firm's standout lineup into a reasonably compact portfolio. One way for retirement savers to do so is to buy one of the firm's target-date funds ... For investors who would like more nuance in their portfolios ... [the authors has] created Vanguard-specific portfolios.... This week's group of portfolios is geared toward investors in tax-deferred accounts, meaning that they're not designed for tax efficiency." (Morningstar)

05 Sep 2015 06:53:29 Z

"When given a choice between two job offers (one had an employer-sponsored retirement plan, and one had a higher salary), pre-retirees are five times more likely to choose the retirement plan offer ... [N]early all retirement plan participants -- nine in 10 -- said they have at least some regret about when they started saving for retirement. Some 75 percent said they could have saved at least a little more in the past.... The large majority of people want at least a 'slight nudge' from their employers when it comes to saving, but employers think that number is even lower. Eighty percent of study participants believe they would have more in savings if their employer would have done more to nudge them along." (American Century Investments)

05 Sep 2015 06:53:29 Z

"Plan sponsors are trying to enhance employee education and encourage participant engagement in their benefit programs using internal and external resources. Employers are concerned that the new conflict of interest and fiduciary definition rules will generate uncertainty, cost and potential liability. Without changes, this would result in employers pulling back on the tools they currently offer and could hurt the very people the Department is trying to protect." (American Benefits Council)

05 Sep 2015 06:53:29 Z

"Don Trone, often referred to as the 'Father of Fiduciary,' testified .. that [the DOL's] proposed fiduciary rulemaking would have failed to stop famed Ponzi schemer Bernie Madoff, and that more fiduciaries than brokers have stolen money from investors.... Trone told the DOL execs ... that DOL 'cannot simply wave its regulatory wand and make every advisor a fiduciary.' ... DOL's plan 'is not a fiduciary standard, but rather punitive rules,' Trone continued, adding that the proposed plan is 'going to make it easier for bad advisors to hide behind the complexity of the rules, and make it harder for honest advisors to provide their services.' " (ThinkAdvisor)

05 Sep 2015 06:53:29 Z

"If your spouse is the sole beneficiary of your IRA and he or she is more than 10 years younger than you, use this worksheet to calculate this year's required withdrawal for your traditional IRA." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"IRA Required Minimum Distribution Worksheet: Use this worksheet to figure this year's required withdrawal for your traditional IRA unless your spouse is the sole beneficiary of your IRA and he or she is more than 10 years younger than you." (Internal Revenue Service [IRS])

05 Sep 2015 06:53:29 Z

"In a 'traditional' defined benefit plan, the duty to monitor looks a lot like the duty to monitor investments in a traditional trust.... [I]mplementation of a 404(c)-401(k) plan frames the duty to monitor in a unique way. In this sort of plan, the plan fiduciary must [1] monitor for continued compliance with 404(c), [2] if the fiduciary is satisfied that the plan complies with 404(c), then its obligation to monitor individual (participant) investment decisions (e.g., with respect to asset allocation) is generally eliminated, but [3] the fiduciary does have a residual obligation to monitor for the ongoing prudence of the inclusion of the funds in the fund menu." (October Three Consulting)

05 Sep 2015 06:53:29 Z

"Accounts of abused investors and high-living brokers competed for sympathy with brokers' professed fears about their businesses in the debate about a proposed fiduciary rule on day two of the Labor Department's hearings ... One former broker explained how that standard worked in practice at a former firm, where he said the CEO urged brokers like him to develop a plan and stick with it." (Financial Planning)

05 Sep 2015 06:53:29 Z

Target page now includes individual links to: [1] Public Hearing Webcast Archive; [2] Written Testimony and Hearing-Related Materials; [3] Requests to Testify at Public Hearing; and [4] Public Comments. (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])

05 Sep 2015 06:53:29 Z

"[Y]ou have heard a litany of complaints from various segments of the financial services industry about how the rules are unworkable, and that middle-income Americans and communities of color will suffer grievous harm if the proposals are implemented.... [E]very single consumer-oriented group with an interest in retirement security who represents these communities has expressed support for the proposals, while the opposition has come exclusively from an industry with billions of dollars at stake in maintaining the status quo. We should be wary when the lion claims to represent the interests of the lamb." (Pension Rights Center)

05 Sep 2015 06:53:29 Z

" 'The best-interest contract exemption is self-defeating because it will allow brokerage firms to continue mandating arbitration clauses in these customer agreements,' [James D. Keeney] said Aug. 10 during the first day of the three-day DOL hearing. Investors would have to waive their Sixth Amendment right to a jury trial, and by doing so would waive the fiduciary protections that would be required under the DOL's proposal, he added." (Bloomberg BNA)

05 Sep 2015 06:53:29 Z

"Underpinning these startups is a belief technology can solve a key problem for most small business retirement plans -- high fees. Since their launch, these companies have received a good bit of attention by the media ... Each company has significant shortcoming(s) the media has failed to mention." (Employee Fiduciary)

05 Sep 2015 06:53:29 Z

"The DOL constructed the 25 panels to couple witnesses who are generally critical of the proposal with witnesses who largely support it. The result, at least as it played out on the first of four days of testimony, was a jarring display of arguments from both sides of the debate that gives the impression that the DOL proposal strikes a middle ground." (National Association of Plan Advisors [NAPA])

05 Sep 2015 06:53:29 Z

"[A]fter a sponsor outsources plan-related functions, what is its ongoing, 'residual' review obligation? The law on the duty to monitor is, currently, abstract -- we know some basic principles, but how they apply to specific issues (relevant to, e.g., fees or outsourcing) is, as yet, not very well articulated. In this article [the authors] review those basics, [and] identify some key duty-to-monitor issues for sponsors and some monitoring strategies that sponsors may consider." (October Three Consulting)

05 Sep 2015 06:53:29 Z

"Mutual fund companies that are trustees of 401(k) plans must serve plan participants' needs, but they also have an incentive to promote their own funds. The analysis suggests that these trustees tend to favor their own funds, especially their poor-quality funds. And 401(k) participants do not offset this bias by shifting their savings away from trustee-affiliated funds. In short, fund companies serving as trustees often make decisions that appear to adversely affect employees' retirement security." (Center for Retirement Research at Boston College)

05 Sep 2015 06:53:29 Z

"The huge extraction of rents by Wall Street and the insurance companies must stop. The size of the financial services sector, relative to the overall U.S. economy, has grown from under 3% in 1950 to well over 30%, and perhaps even 40%, today.... Due to conflicts of interest, many individual investors have not accumulated enough for retirement. As a result, the burden upon federal, state and local governments to provide for our retired citizens increases.... The fiduciary standard is a much-needed correction to the current unworkable system for the provision of retirement advice. The suitability standard, on the other hand, is not the answer." (Ron Rhoades)

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


WHAT'S NEW?

June 1, 2015
Mobile App Now Available! Verisight has launched Verisight Anytime Mobile for plan participants. The app is available for iPhone® and Android™ phones in their respective app stores. Verisight Anytime Mobile is a new way for participants to access their retirement account while on the go.

   

November 18, 2014
Verisight, Inc., a recognized leader in comprehensive retirement plan services and consulting solutions, announced today that Laura Ramanis will join the organization’s leadership team as Chief Operating Officer, effective November 17, 2014. Read the full release.

October 24, 2014
The 2015 Cost of Living Adjustments have been released by the Internal Revenue Service. Each year, the IRS is required to review and adjust the dollar limitations on benefits and contributions under qualified retirement plans to account for cost of living increases. Some limitations will remain unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. However, other limitations will increase for 2015. View the 2015 limits.

October 23, 2014
Verisight will be hosting a series of 401(k) Boot Camps in November for our 401(k) plan sponsor clients.  Invitations to this 3 part series can be downloaded here.

This program will provide tools to help in-house plan sponsor staff operate their retirement plan correctly. Over the course of 3 webcasts, Verisight will cover basic in-house 401(k) operations from the employer’s perspective to give your team information to help avoid common operational errors.