INDUSTRY AND REGULATORY NEWS YOU CAN USE

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

30 Jan 2015 20:53:13 Z

"Vanguard's research found the average five-year annualized return was 21%, but there was wide variation: The five-year annualized return was negative 0.04% at the fifth percentile and a positive 44% at the 95th percentile. 'If you happened to work for a company with returns in the top 5%, you earned a 44% return -- that's pretty sweet' " says Jean Young, senior research analyst in Vanguard's Center for Retirement Research. 'People who see that kind of return become very attached to their company stock, but it's a type of error in portfolio construction. They don't understand the risks they are taking.' " (Morningstar)

30 Jan 2015 20:53:13 Z

"The proposals under Title II of the [Secure Annuities for Employee Retirement Act of 2013] include ... expanded plan-design options, simplified administrative and notification requirements, extended deadlines and the elimination of certain restrictions on rollovers and forfeitures. These proposals may have evolved over time out of frustration with shortcomings in the law or efforts to identify areas particularly ripe for relatively non-controversial improvement." (Dechert LLP, via Bloomberg BNA Pension & Benefits Daily)

30 Jan 2015 20:53:13 Z

"The year-end average 401(k) balance was $91,300, a record high for 401(k) accounts.... For employees in a 401(k) plan for 10 years or more, the average balance was $248,000, up 11% year-over-year." (Fidelity)

30 Jan 2015 20:53:13 Z

"Saving for retirement is not a major priority for 81 percent of the workers surveyed.... [S]aving takes a back seat to myriad other financial concerns, topped by the impact of the global economic downturn and the U.S. job market. Things are much clearer to retirees. Nearly half of them, when asked for the latest age at which people should start preparing to retire, said before 30. Many retirees -- about two out of five -- said 'they did not realize that their preparation had fallen short until it was far too late.' " (SquaredAway Blog, by the Center for Retirement Research at Boston College)

30 Jan 2015 20:53:13 Z

"Almost half of the employers surveyed (47%) said they had recently taken the first [step] in managing plan costs, which is reviewing them. Of the remaining half, 71% were very likely to do so in 2015.... One-quarter of plans surveyed said they have recently restructured their administrative fees in other to be calculated in a more equitable manner, meaning as a per-person charge to participants or using an asset-based or revenue sharing model." (Money Management Intelligence)

30 Jan 2015 20:53:13 Z

"Many industry groups were particularly fond of Title II in the [Secure Annuities for Employees (SAFE) Retirement Act], which would expand the availability of qualified retirement plans among private sector workers, especially for employees of small businesses.... Other key elements of the SAFE Retirement Act would 'ensure that hardworking Americans will continue to have affordable access to professional investment advice by restoring jurisdiction over the IRA fiduciary duty rule to the Treasury Department and requiring Treasury to consult with the [SEC] when prescribing rules relating to the professional standard of care owed by brokers and investment advisors to IRA owners.' " (PLANSPONSOR)

30 Jan 2015 20:53:13 Z

"Our industry spends a lot of time and money educating workers about the advantages and mechanics of saving for retirement. But here are six things [that] too often go unsaid. [1] Your 401(k) isn't free.... [2] That employer match isn't 'free' either.... [3] Saving to the level of the match is probably not enough.... [4] How much you save is more important than how you invest what you save.... [5] If you've never tried to figure out how much you'll need to live in retirement, you may not live very comfortably in retirement.... [6] If you don't know what you're doing, get help." (Nevin Adams, via LinkedIn)

30 Jan 2015 20:53:13 Z

"A petition submitted by Edison International asks the Supreme Court to reverse its decision to review key parts of Tibble vs. Edison International, a potential precedent-setting case related to ERISA's limitations period and whether retirement plan fiduciaries have an ongoing duty to monitor plan investment options that is distinct from the initial duty to select. The case is currently set for oral arguments before the Supreme Court on February 25[.]" [Tibble v. Edison International, No. 13-550 (9th Cir. Aug. 1, 2013; cert. pet. granted Oct. 2, 2014)] (planadviser)

30 Jan 2015 20:53:13 Z

"29 percent of employers automatically enroll participants in the plan at a savings rate that is at or above the company match threshold. Another 27 percent of employers automatically enroll individuals below the full match rate, but automatically escalate contributions over time so that workers will eventually be saving enough to receive the full company match.... 8 percent of companies automatically enroll participants below the full match threshold and have contribution escalation as an opt-in feature. 70 percent of companies responding to the survey have automatic enrollment." (Aon Hewitt)

30 Jan 2015 20:53:13 Z

"This table provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners.... Plans covered: SEP IRAs; SIMPLE IRAs; 401(k)s; Solo 401(k) / Individual-K; Profit Sharing; Money Purchase Pension; and Defined Benefit Pension." (Appleby Retirement Dictionary)

30 Jan 2015 20:53:13 Z

"The majority of nonretired investors in the U.S. say their employer offers a 401(k) plan, and of these, 89% say they participate in it. Yet 21% of those who participate in such a plan say they have either taken out a 401(k) loan or even taken an early withdrawal from the plan in the last five years." (Gallup)

30 Jan 2015 20:53:13 Z

"The administration is already prepared to defend the Department of Labor rule with an economic justification document that is seen as a key to getting a court to uphold the regulation if it is finalized but then challenged in court. The economic justification document ... purports to show that consumer protections for investment advice to the retail and small plan markets are inadequate and that the current regulatory environment 'creates perverse incentives that ultimately cost savers billions of dollars a year.' The justification document said evidence through various studies indicates these costs arise from incentives to steer savers into higher cost products within the IRA market." (InsuranceNewsNet.com)

30 Jan 2015 20:53:13 Z

"Seventy-one percent of U.S. households had favorable impressions of 401(k) and similar retirement plan accounts in fall 2014, up from 66 percent in fall 2013 and 65 percent in 2012/2013. Among households expressing an opinion, 90 percent had favorable impressions of 401(k) plans, with 39 percent agreeing that they had a 'very favorable' impression.... More than eight in 10 DC-owning households said the tax treatment of their retirement plans was a big incentive to contribute. Nearly all households with DC accounts agreed that it was important to have choice in, and control of, the investments in their DC plans. Eighty-two percent indicated that their DC plan offered a good lineup of investment options." (Investment Company Institute [ICI])

30 Jan 2015 20:53:13 Z

"Target-date funds that don't charge an overlay fee generally have an annual report net expense ratio of zero and a prospectus net expense ratio that represents a weighted average of the expense ratios charged by the underlying funds. This prospectus net expense ratio represents what investors pay annually to own the fund. For most target-date funds, an annual report net expense ratio that is more than zero represents an overlay fee above and beyond the cost of owning the underlying funds and is included in the prospectus net expense ratio." (Morningstar)

30 Jan 2015 20:53:13 Z

"GAO ... recommended repealing a provision that lets plans disregard larger rollover amounts included in departed participants' accounts when identifying eligible balances of $5,000 or less for IRA transfers. As a result of this rule, accounts of significant size can end up in forced transfers when participants don't indicate what should be done with the money once they've left." (Thompson SmartHR Manager)

30 Jan 2015 20:53:13 Z

"The first choice to consider is an employer-sponsored cash-or-deferred plan (such as a 401(k) plan) where the employer matches some or all of the employee's contribution.... The next best retirement plan for younger people is undoubtedly the Roth IRA.... The worst type of plan for the young person is the traditional IRA." (Morningstar)

30 Jan 2015 20:53:13 Z

"In December, defined contribution plan participants were light traders, with only two days of above-normal transfer activity ... Overall, 0.022% of total assets traded in December, with a slight preference of days (55%) favoring equities over fixed income assets.... After incorporating December's contributions, trades, and market activity, the overall participant allocation to equities increased slightly from 66.0% in November to 66.4% in December. Future contributions to equities decreased marginally month-over-month from 66.3% to 66.1%." (Aon Hewitt)

30 Jan 2015 20:53:13 Z

16 pages. "[This report provides] updated statistics drawn from Vanguard recordkeeping data of the effects of automatic enrollment on participants' saving and investing behaviors. [The] study is based on more than 500,000 eligible newly hired employees in 460 plans.... [The authors] examine the effects of automatic enrollment on new hires because it is the most common way that the feature is first introduced into DC plans. Participants in the sample are younger, have shorter tenure (an average of about one year), and have median account balances of generally less than $4,000[.]" (Vanguard)

30 Jan 2015 20:53:13 Z

[F]ew sponsors have bought into the idea of annually automatically re-enrolling participants in a qualified default investment alternative, such as a target-date fund, as a means of assuring that their assets are allocated in a manner experts would consider appropriate for retirement investing. Less than 5% of surveyed employers said they had ever done so.... [T]he most common reason [for] 're-mapping' participants' investments on those rare occasions when it did occur wasn't to play an aggressive role in influencing participant investment behavior, but as a response to significant changes in the plan's investment option menu." (Employee Benefit News)

30 Jan 2015 20:53:13 Z

"[F]ar too many plan participants -- when faced with a market reversal -- behave like poorly trained soldiers confronting their first battle. Rather than hunkering down and preparing to weather the siege of a market decline, they panic, cast off their good judgment and head for the imagined security of a non-volatile investment. Some may never again move back into the types of investments that have the potential to generate real long-term growth." (Todd Berghuis, for Ascensus)

30 Jan 2015 20:53:13 Z

"[U]nder the regulations issued in 2004, the plan satisfies its fiduciary obligation if the investment preserves the dollar value of the rolled balances. In other words, the money can be invested in a money-market fund. The problem is that the fees charged to the forced transfer accounts often outpace the low returns earned by the conservative investments prescribed by the DOL's safe harbor rules, causing account balances to decline." (Alicia Munnell, in MarketWatch)

30 Jan 2015 20:53:13 Z

"Reasons to Consider Taking Your [2015] RMD Now: [1] You don't have to worry about the 50% penalty ... [2] Don't leave beneficiaries with a tight window ... [3] You can convert or rollover the remainder of the account ... Reasons to Wait Until Later This Year to Take Your RMD: [1] Giving up tax deferral ... [2] No [qualified charitable distribution] provision currently in place ... for 2015(.]" (Slott Report)

30 Jan 2015 20:53:13 Z

"Over 90% of survey respondents -- regardless of age, income level, or 401(k) plan balance -- want their 401(k) statements to include estimates of lifetime retirement income.... The survey found no overwhelming preference for one type of retirement income estimate, and some correlation of preferences were seen with age, income, and plan balance levels.... More than 75% of survey respondents stated they would increase their contribution level by four percentage points or more after seeing estimates of lifetime retirement income.... Over 90% of survey respondents stated they want their employers to provide them with online retirement income calculators so they can use their own assumptions to calculate estimates of lifetime retirement income." (Insured Retirement Institute [IRI])

30 Jan 2015 20:53:13 Z

11 pages. "The [included] chart provides an explanation of key plan events for Section 401(a) and 401(k) defined contribution plans and the deadline for each. The chart is intended as a tool to assist employers with monitoring the key annual plan requirements." (VOYA Financial)

30 Jan 2015 20:53:13 Z

"New Treasury Department rules on using deferred annuities within target-date funds as part of a defined contribution plan shouldn't be viewed as excluding the department's consideration of other lifetime income options in those plans, said J. Mark Iwry, deputy assistant secretary for retirement and health policy.... Because guaranteed withdrawal benefit products are different from standard fixed or variable annuities, the Treasury Department and IRS must 'look at how they fit into qualified (DC) plans,' Mr. Iwry said." (Pensions & Investments)

30 Jan 2015 20:53:13 Z

"The court determined, among other things, that Principal Life was not acting as a plan fiduciary because service providers do not act as fiduciaries when negotiating the terms of their service with the plans as long as the service providers do not control the named fiduciary's negotiation and approval of those terms." [McCaffree Fin. Corp. v. Principal Life Ins. Co., 4:14-cv-00102 (S.D. Iowa Dec. 10, 2014)] (Proskauer's ERISA Practice Center)

30 Jan 2015 20:53:13 Z

"Present all products offered by a single-covered service provider (CSP) that your prospect or client qualifies to purchase.... If the CSP offers the same investment option in multiple share classes, present your recommended menu with each share class, ... Identify which investment options are proprietary, non-proprietary, and sub-advised, and identify the cost impact ... Disclose the gross and net operating expense ratio, the 12b-1, and any other indirect fee by fund.... Provide the [retirement plan fiduciary] with an estimate of the revenue sharing expected for each fund at the beginning of the plan year and a final tally of the revenue sharing paid for each fund at the end of the year." (The Lowenbaum Partnership and FRA PlanTools)

30 Jan 2015 20:53:13 Z

"[T]he average direct-sold active fund earns the same after-fee return as the average direct-sold index fund. Within this segment, funds earn back their management fees through successful investments in active management. In the broker-sold segment, it is a completely different story.... [A]ctive funds underperform index funds by more than the difference in expense ratios. Why? Because broker-sold active funds face much weaker incentives to generate risk-adjusted returns, they invest more in broker commissions than in trying to find the next skilled manager." (Fiduciary News)

30 Jan 2015 20:53:13 Z

"A regulation that would allow for a 'window' period for giving out the annual notice required in most 401(k) plans appears to be heading for a spring 2015 publication date ... [T]he guidance is listed as a 'direct final regulation' on the OMB website. This typically means that there will be no comment period after publication because the subject matter is deemed to be non-controversial. The net result is that it is likely to become effective very soon after its publication." (American Society of Pension Professionals & Actuaries [ASPPA])

30 Jan 2015 20:53:13 Z

"Although there are many abuses involving plan loans, there is still a valid reason to offer no more than two loans -- as long as participants are made aware of all the consequences. The first is the double taxation on loan interest.... The second consequence for employees to consider is leaving their job when they still have an outstanding loan." (Frenkel Benefits)

30 Jan 2015 20:53:13 Z

"[T]he disruption of investment fund menu strategies that results when superstar investment managers change teams presents an opportunity for sponsor-fiduciaries to rethink their commitment to a brand-based investment fund menu. The alternative -- a white-label, multi-manager strategy -- can often reduce costs, improve returns, diversify risk and encourage participants to focus on fundamentals." (Russell Investments)

30 Jan 2015 20:53:13 Z

"The Kodak and RadioShack cases demonstrate that the plaintiffs' bar is willing to test the post-Dudenhoeffer waters, looking for opportunities to bring claims based on poor performance, while avoiding claims based on over-valuation. Plan sponsors and fiduciaries of plans being maintained by struggling companies are considering hiring an independent fiduciary to monitor the company stock fund in the company's plan. Others are considering either freezing the company stock fund or terminating the fund altogether." (Groom Law Group)

30 Jan 2015 20:53:13 Z

"[M]ost Puerto Rico limits are identical to their U.S. counterparts, but there is one notable exception. In 2015, Puerto Rico participants in a dual-qualified 401(k) plan may contribute up to $18,000 on a pre-tax basis. However, participants in a Puerto Rico-only qualified '401(k)' plan may only contribute a maximum of $15,000." (Prudential)

30 Jan 2015 20:53:13 Z

"Current best practice is to maintain a relatively tight fund menu of nine or fewer diversified mutual funds, including a family of target retirement date funds as the default option.... [T]his approach may not address the preferences of plan participants who are also sophisticated investors, such as high-status partners with large 401(k) balances. It also fails as an enticement for star recruits with big rollovers, people who typically have an outside investment advisor." (BMO Retirement Insights)

30 Jan 2015 20:53:13 Z

"Plan sponsors seeking to provide employees with the ability to make after-tax contributions to a 401(k) plan may be interested in adding, along with the common Roth contribution feature, non-Roth after-tax contribution and 'in-plan Roth rollover' features to their 401(k) plans. These additional features would allow plan participants to save up to $53,000 (for 2015 and as reduced by matching and other employer contributions) annually with limited future tax liability." (Proskauer's ERISA Practice Center)

30 Jan 2015 20:53:13 Z

"[1] Embrace baby steps. Any undertaking outside of what's familiar can be daunting.... [2] Where possible, look for ways to simplify the process and keep it simple, which will go a long way toward increasing the number of those saving in, and benefiting from, these plans.... [3] Make saving and asset allocation automatic.... [4] Give participants someone to talk to." (The Wells Fargo Blog)

30 Jan 2015 20:53:13 Z

"[IRS Notice 2014-54] presents a middle-of-the-road approach that incorporates Sections 72(e)(8) and 402(c)(2) and provides new planning opportunities for participants with after-tax amounts who want to arrange a multiple destination distribution.... When a 401(k) participant has after-tax dollars in his or her account, the plan administrator tracks the amounts and, upon distribution, reports them appropriately on Form 1099-R. But when there are after-tax amounts in a traditional individual retirement account (IRA), they are generally not tracked by the institution holding the IRA. Instead, the IRA owner is responsible for keeping track of after-tax amounts." (Pentegra Retirement Services)

30 Jan 2015 20:53:13 Z

"Both spouses can participate.... It can happen anytime.... Learning can happen in short bursts.... It's YouTubian.... It is cost effective.... It is happening with financial wellness training.... It does not pull employees away from their work.... Learning can occur at the same time for everyone." (Lawton Retirement Plan Consultants)

30 Jan 2015 20:53:13 Z

"If Plan Sponsors want Millennials to get serious about saving for their future, retirement education must be conveyed in a format Millennials relate to and are comfortable with.... Give them access to technology that will depict the amount of savings they will need at retirement.... Participants should be given the tools they need to assess their risk tolerance and build an investment strategy that they are both comfortable with and confident will produce the savings needed over the long term." (Ekon Benefits)

30 Jan 2015 20:53:13 Z

"RadioShack said it received written notification from the DOL on November 14, 2014, that the agency would be conducting an official investigation beginning December 9, to determine if RadioShack's 401(k) plan was operating in compliance with Title I of [ERISA]. The letter from the DOL indicated that its review would cover plan years 2011 through the present. The DOL conducted on-site interviews and review of documents on December 15 and 16. Though the filing does not say what the DOL is investigating, it mentions that at least three participant lawsuits have been filed alleging breaches of fiduciary duties under ERISA." (PLANSPONSOR)

30 Jan 2015 20:53:13 Z

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

30 Jan 2015 20:53:13 Z

"Plan sponsors tend to recruit fiduciaries from far up the corporate 'food chain' where the candidates are the most proven, senior and financially literate executives. While this emphasizes competence, it does so at the expense of independence.... The history of 'excessive fee' cases teaches that the iconic notion of inside fiduciaries 'switching hats' as they deftly move back and forth across the fiduciary-settlor interface is an illusion.... The 401(k) industry can take a quantum leap forward by promoting a 'Best Practice' in which a plan's fiduciary committees include at least one outside, professional (unconflicted) fiduciary." (ERISA Fiduciary Administrators LLC)

30 Jan 2015 20:53:13 Z

"Many plan sponsors want to know how their 401k plan stacks up to the typical or average plan.... To help you answer this question, [the author has] identified some of the common performance characteristics and features offered by many 401k plans and compiled the statistics below from a variety of sources that will allow you to benchmark your plan." (401kHelpCenter.com)

30 Jan 2015 20:53:13 Z

26 pages. "Compared with young adults in 1989, young adults in 2013 were more likely to own homes, stocks, and retirement accounts. Moreover, young adults in 2013 were less likely to have high debt payment burdens than older adults, young adults in 1989, and young adults in 2001." (Federal Reserve Bank of St. Louis)

30 Jan 2015 20:53:13 Z

"The evolution of 401(k) plan designs has resulted in a significant increase in the use of balanced multi-asset-class funds -- and, in particular, the growing use of target-date funds (TDFs) -- by recently hired employees ... One reason for lower TDF use among longer-tenured employees is that only about a third of plans that auto-enroll new employees (generally into TDFs, with an option to opt out) also annually auto-enroll current workers that don't participate in the plan[.]" (Society for Human Resource Management [SHRM])

30 Jan 2015 20:53:13 Z

"[1] Tax-Free Withdrawals in Retirement ... [2] Income Tax Diversification ... [3] If You're In a Low Tax Bracket Right Now ... [4] You'll Probably Still Get the Employer Match ... [5] No Required Minimum Distributions ... [6] More Flexibility for Your Life in Retirement ... [7] Advance Protection From Widely Anticipated Income Tax Increases." (DailyFinance)

30 Jan 2015 20:53:13 Z

"[W]hen assessing fees, plan sponsors frequently focus their attention on seeking out the lowest costs for plan services and investments, but fees are just one part of the story. Many plan sponsors may not fully consider the quality and effectiveness of the services they are receiving and how they contribute to positive outcomes for their employees." (PLANSPONSOR)

30 Jan 2015 20:53:13 Z

49 presentation slides provide an overview of: [1] IRS and DOL guidance; [2] COLA limits and the Bipartisan Budget Act of 2013; [3] HATFA and pension smoothing; [4] Charitable donation of an IRA; [5] Ending of the SSA letter forwarding program; [6] Changes at IRS TE/GE; [7] IRS compliance tools; [8] Qualified Longevity Annuity Contract final regulations; [9] The myRA; [10] U.S. v. Windsor: impact on qualified plans; [11] FAB 2014-1: updated guidance on handling missing participants under a terminating DC plan; and [12] Form 5500 series. (McKay Hochman)

30 Jan 2015 20:53:13 Z

[Chiricotti said,] "Going forward, I think you will see more geographically dispersed events over one-day periods. That would require even more work and less margins for conference hosts. New maturing industry trends, including government intrusion, more litigation and increased competition, will also burden the retirement plans advisory industry. Meeting the needs of an aging America are where the real opportunities are now. In addition to the steep learning curve, meeting those needs on an efficient, scalable and profitable basis will not be easy." (RIABiz)

30 Jan 2015 20:53:13 Z

"Here are three simple steps that will help you evaluate 401k fees in 2015: [1] Confirm the receipt of a 408(b)(2) disclosure for each 'covered' service provider; [2] Examine each 408(b)(2) disclosure for adequacy; [3] Prove fees for plan services are reasonable." (Employee Fiduciary)

30 Jan 2015 20:53:13 Z

"[1] Index Funds ... account for 35 percent of assets, a 2 percent increase from the Top 30 List of 2013. [2] Participation rates climb to almost 97 percent, up nearly 1 percent since last year's Top 30 List. [3] Salary deferrals per participant average over $13,600, growing from just over $12,500 since last year's Top 30 List.... [4] Employers on this year's list are easing the total plan cost burden, with the average dropping by 0.02% to 0.26 percent since last year's Top 30 List." (Forbes)

30 Jan 2015 20:53:13 Z

"[T]he public information defenses suggested by the Supreme Court have a limited range -- they only apply to [plans] holding the stock of publicly traded companies. For the thousands of ESOPs funded by stock of companies that are not publicly traded, those fiduciaries must continue to attend to the particulars of their own procedural prudence so as to avoid being the subject of future judicial guidance." (Baker & McKenzie via Lexology)

30 Jan 2015 20:53:13 Z

"[Neither plan sponsors nor participants] are fully grasping the trade-offs between the expectation for performance/return and the probability of success. Plan sponsors should select their qualified default investment alternative (QDIA) based on the likelihood of reaching the plan's objective in the sole interest of participants. If a target-date fund series is used, [the author] suggests identifying the strategic (not just the equity) glide path that is most likely to meet the plan sponsor's conscious trade-off between return and outcome certainty and then use this strategic glide path for performance benchmarking." (PIMCO)

30 Jan 2015 20:53:13 Z

"The Service has received a number of questions following the issuance of Notice 2014-54. The following FAQs are provided to assist taxpayers in applying the notice. [1] Can I roll over just the after-tax amounts in my account to a Roth IRA and leave the remaining amounts in the plan (i.e., take a partial distribution of just the after-tax amounts)? No.... [2] I want to roll over my after-tax contributions to a Roth IRA and roll over earnings on my after-tax contributions to a traditional IRA. Can I do that? Yes...." (Internal Revenue Service [IRS])

30 Jan 2015 20:53:13 Z

"Perhaps as a result of the growing use of automatic enrollment and qualified default investment alternatives (including TDFs), recently hired participants were more likely to hold TDFs than those with more years on the job: at year-end 2013, 51% of participants with two or fewer years of tenure held TDFs, compared with 41% of participants with more than five to 10 years of tenure, and a quarter of participants with more than 30 years of tenure. Industry surveys suggest that only about a third of auto-enrolling plans extend that to current workers[.]" (Nevin Adams, for National Association of Plan Advisors [NAPA])

30 Jan 2015 20:53:13 Z

"The end of the calendar year is fast approaching which means the plan year end for many qualified plans. It will be time for plan sponsors to collect complete employee data to enable their service providers to perform the numerous compliance tests required to retain the plans tax qualified status. This article provides a brief description of the required defined contribution plan compliance tests as well as an overview of the census data collection process." (Markley Actuarial)

30 Jan 2015 20:53:13 Z

"Here are a few things to consider in light of ... recent settlement announcements: Vendor transparency.... Service Provider Expenses.... Investment expenses.... Revenue sharing.... Year-end balances.... Total cost." (Milliman Retirement Town Hall)

30 Jan 2015 20:53:13 Z

"Barring strategies such as deferring retirement or investing more aggressively (in hopes of achieving higher returns on retirement assets), living longer means people need to save more to fund a longer retirement. However, many of the communications offering participants a lump-sum payment of their accrued pension benefit instead of a lifetime annuity don't mention they will have to make the payment last over an expected longer lifespan." (CFO)

30 Jan 2015 20:53:13 Z

"[A] 'robust evaluation framework' should place a very high emphasis on fees, and investment managers should be evaluated on their ability to add value net of fees.... Plan sponsors need to ask any plan vendor: What value will I get for my money, and how does it compare to other provider fee/service offerings? ... There is no reason that small 401k plan sponsors need to purchase investment management and participant education from same vendor.... Make the hires separately -- it could well be the same provider, but there is no reason it has to be.... Every participant needs to recognize how their portfolio will change over time -- especially as they get nearer to retirement age. We need more clarity and transparency on glide paths, be they actively managed or indexed." (Employee Fiduciary)

30 Jan 2015 20:53:13 Z

"Few people expect a return to traditional pensions so proposals tend to focus on making the current system work better. Here are some of the more interesting ideas and those gaining attention: Hybrid Plans ... Thrift Savings ... Avoiding Leaks ... Plan Disparity ... Fees Debate ... Reduce Balances." (Bloomberg)

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


WHAT'S NEW?

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.

October 15, 2014
The Newport Group, Inc. and Verisight, Inc. today announced they will be joining forces to increase the size, scale and reach of their respective businesses. Under the terms of the agreement, the holding company of Verisight. Read the full release.