INDUSTRY AND REGULATORY NEWS YOU CAN USE

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

11 Feb 2016 08:35:57 Z

"401ks are not the only retirement plan option for small businesses -- IRA-based alternatives exist. These alternatives should be considered when a business does not need the key virtues of a 401k plan -- high contribution limits and design flexibility -- but wants to help employees save for retirement. Like a 401k plan, these alternatives offer automatic payroll deduction, making retirement savings easy." [Charts outline contribution limits and pros/cons for each type of plan.] (Employee Fiduciary)

11 Feb 2016 08:35:57 Z

"In the past four years, the number of employers offering managed accounts more than tripled but Fidelity found that 49% of individuals don't understand how managed accounts work.... When employees are asked what the biggest benefit is of using managed accounts in their retirement plan, 48% said that managed accounts are constantly monitored by a professional." (Financial Planning)

11 Feb 2016 08:35:57 Z

17 pages "While ... a self-directed defined contribution plan carries less fiduciary risk than a traditional defined benefit plan ... too many plan sponsors are underestimating the fiduciary responsibilities -- and thus liability risk -- when offering a defined contribution plan.... [This whitepaper highlights] some of the fiduciary responsibilities faced by plan sponsors of defined contribution plans under ERISA." (Blitman & King, LLP, for Euclid Specialty Managers)

11 Feb 2016 08:35:57 Z

"There are numerous options available to allocate plan expenses among participants, each having its own positive and negative attributes. [This article explores] the three most popular models and the associated benefits and drawbacks." (Cammack Retirement Group)

11 Feb 2016 08:35:57 Z

"DC outsourcing ... allows sponsors to exploit scale and buying power to provide their employees with sophisticated retirement solutions without having to build the necessary expertise and functionality in-house. [This article provides] an overview of ... DC outsourcing -- covering everything from the fundamentals (why, what and how to outsource) to contracting to issues of residual fiduciary liability -- with links to ... more detailed discussions." (Russell Investments)

11 Feb 2016 08:35:57 Z

"The reasonableness of the Intel plans' investment fees is one of the many fiduciary issues raised in the new Intel case, but the core issue is whether the plan's investment options should include exposures to alternative asset classes....[T]he Intel plans offered customized model portfolios that included a target date strategy, as well as a balanced strategy. These model portfolios provided exposures to various asset classes, including alternative investments, that is, hedge funds and private equity. The participant complaint alleges that the alternative investment allocations were too high and that they were determined imprudently by the plan fiduciaries." (The Wagner Law Group)

11 Feb 2016 08:35:57 Z

"It was not all that long ago that investors automatically enrolled into retirement plans were almost exclusively placed in stable value funds, or perhaps money market funds -- investment approaches deemed to be safe and prudent for any of the small number of people actually defaulted into retirement plans ... Today, nearly a decade after passage of major reforms in the Pension Protection Act (PPA), the steady stream of highly customizable products and services targeted at automatically enrolled defined contribution plan participants tells a different story." (PLANSPONSOR)

11 Feb 2016 08:35:57 Z

"These cases include allegations that 401(k) plan fiduciary committees and their members breached their responsibilities by: [1] Constructing a custom target date strategy that included hedge funds that suffered significant losses; [2] Not using the least expensive mutual fund share classes available to the plan -- or using mutual funds when less expensive commingled trusts or separate accounts of essentially the same investment strategies were available; [3] Allowing the plan to pay excessive recordkeeping and administrative fees in a multiple employer plan arrangement; [4] Using a money market fund rather than a stable value fund as the plan's cash-equivalent alternative." (CAPTRUST Financial Advisors)

11 Feb 2016 08:35:57 Z

"A reduction in mutual funds' illiquid holdings resulting from the Securities and Exchange Commission's proposal, if ultimately approved, could lead to lower overall returns for those funds. That, in turn, could lead some defined contribution plans to drop mutual funds as investment options and replace them with separate accounts or commingled funds. Also, the proposal could lead to a decline in the overall value of illiquid securities, affecting defined benefit plan investments." (Pensions & Investments)

11 Feb 2016 08:35:57 Z

"Prior IRS rulings have looked favorably on the automatic and mandatory contribution of unused vacation into another plan -- and a recent ruling allowed employees to choose which of two retiree medical plans would get the contribution ... However, the choice between an HRA and a 401(k) plan is a new twist.... The nondiscrimination rules could be an obstacle in other situations and for other plans (including HRAs), depending on the design." (Thomson Reuters / EBIA)

11 Feb 2016 08:35:57 Z

"[W]hile 62 percent of employers with large plans (over $200 million in assets) automatically enroll new employees into their plan, far fewer (48 percent) have adopted automatic escalation... The top three reasons that employers gave for not offering automatic escalation were: [1] Too paternalistic toward employees ... [2] Employees would complain ... [3] Too costly from a company matching perspective[.]" (Society for Human Resource Management [SHRM])

11 Feb 2016 08:35:57 Z

"The relief applies to both traditional and qualified automatic contribution arrangement (QACA) safe harbor plans, and is effective immediately. Notice 2016-16 supplements and significantly expands existing IRS guidance and also provides clarity regarding the process of making mid -- year changes to safe harbor plans and safe harbor notices. The guidance also applies to 403(b) safe harbor plans." (Ascensus)

11 Feb 2016 08:35:57 Z

"Evaluating which target-date funds to offer in a DC plan investment lineup can be equated to building a house -- with a good foundation (a stable asset manager), frame (asset allocation), roof (glidepath) and walls (underlying funds)." (benefits Magazine, published by the International Foundation of Employee Benefit Plans [IFEBP])

11 Feb 2016 08:35:57 Z

"The President ... thinks the costs of 401(k) plans are prohibiting employer participation. But this is wrong. This is not a cost thing. It's an education thing. Many [small companies] who do not offer these plans are not aware of how easy and inexpensive they are to setup. They are busy people and have many other things to worry about. And many ... who do offer these plans have low participation rates because their employees aren't educated about the benefits." (Gene Marks, in The Huffington Post)

11 Feb 2016 08:35:57 Z

12 pages. "TDF users report contributing more to their accounts than non-users -- a median of 2% more of income.... Even knowledgeable users, however, seem not to fully understand the diversification benefits of TDFs: significant numbers of them use other funds to diversify away from the TDF, though in most cases that is not necessary. Less than one-sixth of survey respondents said they put 100% of their contributions into the plan's TDF; the mean value was 47% of contributions." (Voya Investment Management)

11 Feb 2016 08:35:57 Z

"If selecting even a marginally more expensive investment option opens the door to liability, that marginal expense can add up to a crushing damages award when multiplied across the entire plan. Anthem's plan is one of the largest in the United States, and has more than 59,000 participants with account balances. Would-be plaintiffs seem to be increasingly aware of this vulnerability, and cases like Bell v. Anthem could become more common as participants stake their bets on defendants' willingness to settle for cents on the dollar, rather than take their chances in litigation." (Cozen O'Connor, via Lexology)

11 Feb 2016 08:35:57 Z

"The proposed regulation provides that a rate group cannot pass the average benefit test unless 'The formula that is used to determine the allocation for the HCE with respect to whom the rate group is established applies to a group of employees that satisfies the reasonable classification requirement of section 1.410(b)-4(b).' Passing the ratio percentage in rate group testing a cross-tested plan frequently will require most contributions to one or more NHCE participants." (FIS Relius)

11 Feb 2016 08:35:57 Z

32 pages. "Survey responses indicated that households value the discipline and investment opportunity that 401(k) plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts. A majority of households also affirmed a preference for control over the disposition of their retirement accounts and opposed proposals to require retirement accounts to be converted into a fair contract promising them income for life from either the government or an insurance company. In addition, a vast majority of households disagreed with the proposal to require workers to participate in a new government-sponsored pension plan." (Investment Company Institute [ICI])

11 Feb 2016 08:35:57 Z

"The DOL may also be moving too quickly, Kent A. Mason, a partner with Davis & Harman LLP [said]. 'We reviewed the major DOL retirement regulations over the last 10 years and found that DOL almost always spends far more time on far less complicated regulations. Measured a different way, the time DOL spent working on the final rule works out to less than one hour per comment letter, even counting nights, weekends and holidays. This is completely unprecedented in terms of the shortness of the time spent per comment letter,' Mason said." (Bloomberg BNA)

11 Feb 2016 08:35:57 Z

"As a contingent of graduate students continues to call for unionization, the Council largely focused on discussing whether Harvard should offer a similar 401(k) retirement plan -- available to staff and faculty -- to graduate students.... [Council president Darcy Frear] said a graduate student emailed her about retirement plans, writing 'that they're spending so much time in grad school that they're wasting that time for investing money earlier on' ... [Vice President John Gee] said 'the reason that there isn't this option is almost certainly that Harvard graduate students don't have the status of employees.' " (The Harvard Crimson)

11 Feb 2016 08:35:57 Z

"The IRS made virtually a complete about-face in Notice 2016-16, generally allowing most mid-year changes to safe harbor 401(k) plans.... [A] mid-year change to a safe harbor 401(k) plan will not cause the plan to lose its safe harbor status simply because it is a mid-year change, as long as: [1] The change is not a prohibited mid-year change, as described in the IRS Notice; and [2] If information that is required to be included in the plan's safe harbor notice will change, participants are provided with an updated safe harbor notice and allowed to change their deferral elections." (Mazursky Constantine LLC)

11 Feb 2016 08:35:57 Z

"[A]lmost one fourth of Baby Boomers 'cashed out' retirement savings at least once when changing jobs, while one third of Millennials and GenXers did so.... Millennials are increasingly using cash outs for non-emergency spending.... Even among the highest income level (those earning over $150,000 annually), 33% reported they have cashed out at least one account during their career.... [O]bstacles such as the length and complexity of the roll-over process are barriers to the rollover decision." (Defined Contribution Institutional Investment Association [DCIIA])

11 Feb 2016 08:35:57 Z

"[C]ertain mid-year changes may be made so long as an additional updated Safe Harbor notice is provided at least 30 days in advance of the change and plan participants are given the opportunity to modify their deferral elections in response to the plan changes.... Other changes are permitted with notice only, without notice and without having to give participants additional election opportunities. The Notice also states which mid-year changes are prohibited even under the new rules." (Stinson Leonard Street)

11 Feb 2016 08:35:57 Z

"How easy is it to bail and move into cash in your 401(k)? It's probably a simple matter. But don't do it. Avoid the temptation. Buy more shares in stock funds. You're getting a better price and buying more shares when the price goes down. And since you're reinvesting the dividends, you're buying even more shares." (Forbes)

11 Feb 2016 08:35:57 Z

"Only 15% of target-date users put all of their retirement money in these funds in 2015.... Among participants choosing other investments in addition to target-date funds, 46% said they did so for diversification ... 28% said they wanted to invest more aggressively, 28% said they wanted to customize their portfolios, 26% said they wanted to invest more conservatively and 16% said they also wanted to invest in a risk-based or balanced fund." (Pensions & Investments)

11 Feb 2016 08:35:57 Z

"The House Committee on Education and the Workforce... [has] approved two bipartisan bills that will strengthen the retirement security of working Americans: the Affordable Retirement Advice Protection Act (H.R. 4293), introduced by Rep. Phil Roe (R-TN), and the Strengthening Access to Valuable Education and Retirement Support Act (H.R. 4294), introduced by Rep. Peter Roskam (R-IL). The complementary proposals will require financial advisors to serve their clients' best interests and protect access to high-quality, affordable retirement advice." [Video of Feb. 2 Committee hearing is available online.] (Committee on Education and the Workforce, U.S. House of Representatives)

11 Feb 2016 08:35:57 Z

16 pages, dated Oct. 2015; a joint publication by the two agencies. "This publication highlights some of a 401(k) plan's advantages, some of your options and responsibilities as an employer operating a 401(k) plan, and the differences among the types of 401(k) plans. For more information, a list of resources for you and for 401(k) plan participants is included at the end of this booklet." (Internal Revenue Service [IRS] and Employee Benefits Security Administration [EBSA])

11 Feb 2016 08:35:57 Z

"[Notice 2016-16] doesn't require any additional notice or election conditions for changes to information that is not required safe harbor notice content, even if that information is provided in a plan's safe harbor notice.... If the required information about the mid-year change and its effective date was provided with the pre-plan year annual safe harbor notice, an updated safe harbor notice is not required." (Proskauer's ERISA Practice Center)

11 Feb 2016 08:35:57 Z

"[Notice 2016-16] outlines the following changes that remain prohibited at midyear: [1] an increase in the number of completed years of service required for an employee to have a nonforfeitable right to his account balance under qualified automatic contribution arrangements; [2] a reduction or narrowing of the group of employees eligible to receive safe harbor contributions; [3] a switch in the type of safe harbor plan, such as moving from a traditional 401(k) safe harbor plan to a QACA safe harbor plan; and [4] a modification in, or addition of, a formula used to determine matching contributions, if the change increases the amount of the matching contributions." (Thompson SmartHR Manager)

11 Feb 2016 08:35:57 Z

"In [an] instance involving a new employee with substantial compensation, the employee could positively impact the ADP test by contributing the maximum deferral. If otherwise excludible employees are not tested separately, the contribution would improve the ADP for the Non-Highly Compensated Employee population, and thus allow the HCE population to defer more, or receive less in excess distributions, as applicable. Conversely, an employer cannot exclude from the HCE population an employee who voluntarily terminates employment prior to earning $120,000 in their final year of employment if the person's compensation exceeded the threshold in the lookback year, making him an HCE." (Belfint Lyons & Shuman, CPAs)

11 Feb 2016 08:35:57 Z

"[T]hrough an RFP, plan sponsors not only get a chance to speak with other advisors and get their perspectives on how they can help companies manage their retirement plan, the RFP engages the plan sponsor in the process -- beginning with what is important to them when selecting or using a plan advisor. Engagement in their retirement plan by plan sponsors is key to a successful plan, and selecting the right plan advisor is arguably the most important decision they will make." (Fred Barstein, for National Association of Plan Advisors [NAPA])

11 Feb 2016 08:35:57 Z

16 pages. "Salary raise frequency seems to have stabilized, but average increases remain below pre-crisis levels.... Average starting contribution rates continue to fall, with subsequent average increases rising much more slowly.... A large number of participants continue to take sizable account loans.... Pre-retirement leakage remains unpredictable.... Most participants withdraw their entire account balances once they stop working, usually in a single withdrawal.... [C]urrent participant cash flow volatility, while generally in line with past findings, remains much more prevalent than might be expected." (J.P. Morgan Asset Management)

11 Feb 2016 08:35:57 Z

"In short, the Notice permits mid-year changes with very few exceptions. Instead of saying 'You can do this and this and this,' the Notice says 'You can do what you want except for that and that and that.' This is a marked and very welcome change from the IRS." (SunGard Relius)

11 Feb 2016 08:35:57 Z

"[T]he average annual contribution rate was 7.2% for the 2012-2014 period; 7.4% for 2009-2011; 8% for 2007-2008; and 7.9% for 2001-2006. The reason for the decline is most likely due to the 'fallout' caused by auto features ... Participants might be put into lower initial contribution rates through auto enrollment than they might contribute on their own[.]" (Pensions & Investments)

11 Feb 2016 08:35:57 Z

"Retirement savers have come to understand that they need to think long term. Many lived through the far more unsettling years of the financial crisis, then saw the market get back to its earlier peak in about 5 years. That sure felt like a long time then, but even those who retire this week can reasonably expect to live another 20 years, long enough for the riskiest parts of any saver's portfolio to recover." (Denton Record-Chronicle)

11 Feb 2016 08:35:57 Z

"The American Savings Act would establish a new universal savings account plan -- the American Savings Account [ASA] ... If your employer doesn't already offer a retirement plan, you'll automatically be given your own [ASA]. Initially, your employer will put 3% of your earnings into your account with each paycheck, but you can choose to adjust your contribution to as low as 2% of your income, or as high as $18,000 per year, or to opt out entirely. ASAs will have the same investment options as federal employees get through the TSP plan ... Workers will control their own accounts directly through a website. Contributions to an ASA would be tax-deductible, and participants would be able to rollover any previous IRAs into their ASA or roll their ASA funds into an employer-sponsored 401(k) or 403(b) plan." (Sen. Jeff Merkley [D-OR])

11 Feb 2016 08:35:57 Z

"This notice provides guidance on mid-year changes to a safe harbor plan under Sections 401(k) and 401(m) of the Internal Revenue Code. The notice provides that a mid-year change either to a safe harbor plan or to a plan's safe harbor notice does not violate the safe harbor rules merely because it is a mid-year change, provided that applicable notice and election opportunity conditions are satisfied and the mid-year change is not a prohibited mid-year change, as described in the notice. In addition, the notice requests comments on additional guidance that may be needed, in particular with respect to mid-year changes to safe harbor plans in cases in which a plan sponsor is involved in a merger or acquisition." (Internal Revenue Service [IRS])

11 Feb 2016 08:35:57 Z

"Richard Fulford, executive vice president and head of U.S. Retirement at PIMCO, suggests plan sponsors evaluate active approaches, including custom target-date strategies, core strategies augmented by income, real assets, hedged international equities and alternative capital preservation options. 'Of the six ideas proposed, only the first, going custom, requires a meaningful revamp of the plan, or more accurately, the target date option,' Fulford [said]." (PLANSPONSOR)

11 Feb 2016 08:35:57 Z

"401k fiduciaries [should] develop a checklist that compares three provider attributes: [1] Competence; [2] Value-added services; [3] Fees. [This article includes] a sample checklist for plan administration services. If you are a 401k fiduciary, you can use this sample as a basis for your own checklist -- adding or deleting the variables you want to compare." (Employee Fiduciary)

11 Feb 2016 08:35:57 Z

"Service providers to 401(k) plans won another victory this month when the Eighth Circuit upheld the dismissal of an ERISA class action. Ruling in McCaffree Financial Corp. v. Principal Life Insurance Co., the court found that Principal Life was not a fiduciary under ERISA ... Following the trend in the Third and Seventh Circuits, the opinion provides helpful guidance on the limits of fiduciary status under ERISA, both for service providers and other targets of ERISA class actions." (Sidley Austin LLP)

11 Feb 2016 08:35:57 Z

"What's necessary is to rethink ERISA and that's what the administration is beginning to do. There's still a need to protect people, but maybe the way to do it is to focus on the retirement product -- on its fees, its practices, and its returns -- rather than just imposing fiduciary duty on the employer and hoping they're willing to do so." (The Brookings Institution)

11 Feb 2016 08:35:57 Z

"The lawsuit alleges that Oracle plan executives 'deliberately' failed to disclose sufficient information to participants regarding the plan's revenue-sharing arrangement with record keeper Fidelity Investments.... The plaintiffs argued that Oracle should have negotiated a record-keeping contract based on a flat fee per person rather than an asset-based percentage of plan assets.... The complaint also alleged that Oracle plan executives haven't conducted competitive bidding for record keeping in more than 25 years." (Pensions & Investments)

11 Feb 2016 08:35:57 Z

95 pages. "The Senate Committee on Finance has scheduled a public hearing on January 28, 2016, on Helping Americans Prepare for Retirement: Increasing Access, Participation and Coverage in Retirement Savings Plans. This document, prepared by the staff of the Joint Committee on Taxation, provides a discussion of present law, economic issues and data, as well as descriptions of certain legislative proposals, relating to tax-favored retirement saving." (Joint Committee on Taxation [JCT], U.S. Congress)

11 Feb 2016 08:35:57 Z

"The [DOL] wants to work with Congress to make it easier for multiple employers to get together and offer open MEPs ... But many plan sponsors have pointed to the the DOL's own Advisory Opinion 2012-04A as the chief hindrance to broader adoption of MEPs.... The administration will also ask Congress to pass a $100 million grant proposal to develop and test a federally run pilot program to provide retirement savings benefits for workers who are self-employed, have multiple employers, or have irregular or unpredictable work patterns." (Society for Human Resource Management [SHRM])

11 Feb 2016 08:35:57 Z

"[T]here has been a significant uptick in the number of ERISA fiduciary breach lawsuits filed in the last couple of months.... The most recent case filed was just last week against Oracle. The case against Anthem has received a lot of attention. But one that has slipped through the cracks a bit is against Reliance Trust and one its clients. This case may the first of its kind on this scale to go after an outsourced fiduciary who is not related to the plan sponsor. Finally, the case against BB&T will be familiar to readers as involving claims of a providers own in-house plan." (Fiduciary Matters Blog)

11 Feb 2016 08:35:57 Z

"Obama's plan consists of a number of legislative proposals, which he'll outline in the 2017 budget he'll submit to Congress next month. They include: [1] Offering tax credits to small businesses that automatically enroll employees in a 401(k)-style retirement plan; [2] Requiring companies with existing plans to offer them to long-term, part-time workers who work 500 hours a year for three years; and [3] Making it easier for companies to pool their retirement plans to bring down expenses through multiple employer plans. The White House previewed the proposals for reporters Monday but did not immediately reveal their budgetary impact." (USA TODAY)

11 Feb 2016 08:35:57 Z

"[The administration is] proposing legislation to allow multiple unrelated employers to come together and form pooled 401(k)s, resulting in lower costs and less burden for each employer. Through these 'open multiple employer plans' (open MEPs), more small businesses should be able to offer cost-effective plans to their employees, while certain nonprofits and other intermediaries could create pooled plans for contractors and other self-employed workers. As an added benefit, employees moving between employers participating in the same open MEP can continue contributing to the same plan -- and receiving employer contributions -- even if they switch jobs. And independent contractors participating in a pooled plan using that structure can contribute no matter which client is paying them." (U.S. Department of Labor [DOL] Blog)

11 Feb 2016 08:35:57 Z

"The Federal Retirement Thrift Investment Board reported 111,694 hardship withdrawals in 2015, totaling $1.02 billion, compared to 121,389 such withdrawals totaling $1.12 billion by participants in 2014." (Government Executive)

11 Feb 2016 08:35:57 Z

"The IRA rollover decision is a complex one, and it deserves the scrutiny of an expert adviser operating under the fiduciary standard of conduct. Instead of the representative of a mutual fund company, brokerage firm, or insurance company, automatically stating: 'Yes, rollover that IRA with us,' the reply should be: 'Let's examine your circumstances, so that we may advise you to undertake the actions that are most prudent for you.' " (Ron Rhoades)

11 Feb 2016 08:35:57 Z

"[T]he key issue for DC plans is the [SEC] rule requiring providers of prime money market funds to create redemption gates -- or limits -- on withdrawals by participants and to establish fees on withdrawals to prevent a run on the funds.... 'The fees and gates are too complicated for participants,' said Martha Tejera, president of Tejera & Associates... 'Prime money market funds will disappear from 401(k) plans.' " (Pensions & Investments)

11 Feb 2016 08:35:57 Z

" 'The amounts of the revenue-sharing payments bear absolutely no relationship to the value of the cost or value of such services' provided by Empower through separate accounts in the 401(k) plan for TPS Parking Management LLC, said the complaint filed Jan. 14 in U.S. District Court in Denver." (Pensions & Investments)

11 Feb 2016 08:35:57 Z

"70 percent of those who work with a financial advisor are on track or ahead in saving for retirement, versus 33 percent of those not working with an advisor. Among people who have an advisor, more than a third had determined how much to save for retirement and half had contributed to an IRA; for people without an advisor, only 14 percent knew how much they'd need for retirement and 16 percent had contributed to an IRA[.]" (John Hancock)

11 Feb 2016 08:35:57 Z

" 'The rumor mill is very active,' Fred Reish, a partner at Drinker Biddle & Reath [said]. 'The prevailing thinking is that the final package of the regulation and exemptions will go to OMB in the next three weeks and could go any day now. The tea leaves say that the fiduciary package will be ... published in the Federal Register somewhere between mid-March and mid-April.' " (InvestmentNews)

11 Feb 2016 08:35:57 Z

"Have you experienced any life changes? ... Reexamine your risk tolerance ... Is your asset allocation still on track? ... Regaining your balance ... Revisit your plan rules and features ... Could you add a little more each pay period? ... A little maintenance goes a long way." (Asset Strategy Advisors)

11 Feb 2016 08:35:57 Z

"Auto-enrollment and auto-escalation work for those who can afford it. It doesn't work for those who are living day to day, and sadly today, that seems to be the majority of American families. In the Pension Protection Act of 2006, Congress claims to have intended to protected pensions. They did take some very positive steps while they were at it though by statutorily legalizing what are known as hybrid plans (cash balance, pension equity, variable annuity, etc.) and while they were at it, statutorily legalizing market return hybrid plans. If you really want to help to prepare your employees for retirement, these are better vehicles." (Benefits and Compensation with John Lowell)

11 Feb 2016 08:35:57 Z

"[A] new lawsuit makes broad allegations against a plan administered by Vanguard that primarily uses lower cost Vanguard funds. This lawsuit should make all employers take note and realize that their plans may be sued with regard to their fee structure and that they need to take appropriate action to be in position to defend their decisions against a similar lawsuit." (Bradley Arant Boult Cummings LLP)

11 Feb 2016 08:35:57 Z

"According to the complaint, filed Jan. 14 in the U.S. District Court for the District of Colorado, Great-West's retirement plan business -- branded Empower Retirement -- receives kickbacks from the mutual funds it offers to 401(k) plans as part of an impermissible 'pay-to-play scheme' that drains money from plan participants' retirement savings.... If recent appellate court decisions are any indication, the participants bringing this suit may face an uphill battle in their quest to treat Great-West as a fiduciary under [ERISA]." (Bloomberg BNA)

11 Feb 2016 08:35:57 Z

"When it comes to investment, the rational economic agent prefers more options to fully optimize and diversify. For the average investor, however, too many choices can produce information overload, taxing their cognitive resources and leading to indecision. Another reaction to complex investment menus is naive diversification -- investing evenly in all available options. Behavioral finance can help identify the most efficient combination of options and tier them according to participants' financial sophistication and desire for involvement." (Institutional Investor)

11 Feb 2016 08:35:57 Z

13 pages. "[The authors] provide a detailed examination of target date fund glide paths ... [with a focus] on fiduciary responsibility and the characteristics of a glide path that make it Prudent.... A glide path does not have to produce high returns to be Prudent. In fact, high returns can be an indication of imprudent risk taking." (Target Date Solutions)

11 Feb 2016 08:35:57 Z

"The pro-rata calculation is not based on the balances in your IRAs on the date of the conversion. The account balance used is as of year-end of the year of the transaction. This means that you generally should not roll over employer retirement plan balances in the same year you do a Roth conversion. They will be included in the pro-rata calculation and will skew the results." (Slott Report)

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


WHAT'S NEW?

October 22, 2015
The 2016 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. Most limitations have remained unchanged because the increase in the Consumer Price Index did not meet the statutory thresholds for their adjustment. View the 2016 limits.

September 25, 2015
Verisight understands the importance of educating plan participants about saving for the future. We are excited to announce the launch of the new Participant Learning Center on September 25. The new Participant Learning Center will allow participants to view important articles, videos and calculators. These tools are sorted into life stages—from just starting a career to enjoying retirement. Read More.

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.