Exposing the Myth of Participant Education - Summary: The myth that colorful participant statement stuffers and interactive web sites will turn your 401k plan participants into little Warren Buffetts by reading and interacting with them is only that, a myth. Let's be honest and finally admit it - we are failing to provide our participants with the services and choices they need to make effective investment decisions. Located at: 401khelpcenter.com. Click on headline for full article.
IBM Strives for the Security of Defined-Benefit Programs as It Shifts Focus to 401ks - Summary: Managed accounts, automated features and annuities are aimed at ensuring that employees have enough to last after retirement. Located at: Workforce.com. Click on headline for full article.
Missing Participants and the Internet - Summary: There are thousands of missing participants with balances in a former employer's profit sharing or 401k plan. But how many of them think they are lost? Located at: Profit Sharing/401k Council of America (free registration required). Click on headline for full article.
Americans Hitting Roadblocks to Retirement - Summary: The desire by many Americans to save for retirement is being overshadowed by the financial demands of everyday living, according to "Roadblocks to Retirement," a new study released today by Prudential. Located at: 401khelpcenter.com. Click on headline for full article.
The Cadillac of 401ks belongs to GM - Summary: General Motors' business may be stressed, but the auto giant's 401k plan is cheap and smart. In fact, workers should pressure their bosses to emulate it. Located at: MSN Money. Click on headline for full article.
Employer Match Moves Workers to Use Retirement Plans - Summary: Employees are willing to save for retirement, but they want their employers to bring something to the table as well - namely, matching funds. Employees don't only want cash, they want convenience. Located at: Benefitnews.com. Click on headline for full article.
Circle K Studies Ways to Get More Employees in 401k - Summary: A big challenge for Circle K is merely raising awareness of its 401k plan. With 20,000 employees nationwide, including many young and part-time workers, it's hard to get the word out. Located at: Arizona Republic. Click on headline for full article.
Towers Perrin U.S. Legislative Tracking Charts - Retirement - Summary: This chart summarize selected federal legislation that would affect employee benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors. Located at: Towers Perrin (PDF file). Click on headline for full article.
Technical Tips
Calculating the Excise Tax on Prohibited Transactions - Summary: A calendar year 401k plan has not been remitting deferrals timely. The plan sponsor would now like to make the plan whole and send in all outstanding deferrals. Is the amount that must be shown on the 5330 (and hence, subject to the 15% excise tax penalty) the TOTAL amount of all late deferrals or is it only the trust income lost due to the deferrals not being deposited timely? Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
10% Excise Tax Penalty - Summary: Does the 10% excise tax penalty for premature plan distributions apply when the reason for the distribution is a participant's disability? Located at: McKay Hochman. Click on headline for full article.
Department of Labor and IRS Issues
DOL Seeks To Bolster 401ks With Group Annuities - Summary: The Department of Labor, as part of its overall effort to beef up 401k retirement savings as DB plans decline, is encouraging people to think about making group annuities a feature of 401k plans. Doing so would help replicate the benefit of a DB pension in that it provides an assured income for life. Located at: DC News. Click on headline for full article.
DOL: Fiduciaries Have to Offset Fund Company Payments - Summary: Banks, brokerage firms and investment firms cannot accept payments from mutual fund companies in exchange for steering retirement account customers into those funds without cutting other payments by the same amount. Located at: Plansponsor.com (free registration required). Click on headline for full article.
ASPPA Comments on Roth 401k Contributions - Summary: ASPPA submitted comments to the IRS and Treasury on their proposed regulations relating to designated Roth contributions to cash or deferred arrangements under Section 401(k). Located at: ASPPA. Click on headline for full article.
Limitations on Benefits and Contributions Under Qualified Plans - Summary: The Treasury Department and IRS today issued proposed regulations relating to the section 415 limits on benefits and contributions under qualified retirement plans. Significantly, the proposed regulations will specifically provide that National Guard and Reserve members are permitted to continue to contribute to their employer's retirement plan while on active duty. Located at: Benefitslink.com (PDF file). Click on headline for full article.
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