Retirement Plan Success: A Tale of Three Hospitals - Summary: HR professionals tell us they are spending huge amounts of time processing 401k loans, hardship withdrawals, wage garnishments and payroll advances. They are also very concerned about the impact employees' financial problems have on workplace performance. In a hospital environment where children's lives are at stake, the implications of employees' financial stress are enormous. Located at: Financial Finesse (PDF file). Click on headline for full article.
OPINION: If 401k Accounts Were a Howling Success, Wouldn't We Know It? - Summary: The goal of a 401k plan is to provide for the quality of retirement living for participants, not to offer "five star" mutual funds or distribute glossy education brochures at enrollment meetings. As long as the truth of how participants are doing is obscured, we can't know if the plan is achieving its goal. Located at: Investment News (free registration required). Click on headline for full article.
SPEECH: Funding Our Future: Ensuring a Strong Public and Private Retirement System - Summary: In his address to the Investment Company Institute's annual General Membership Meeting, ICI President Paul Schott Stevens called for strengthening individual retirement savings and employer-sponsored retirement plans as a way to ensure retirement security for American workers and their families. He specifically urged passage of the GROWTH Act, new bipartisan legislation that would allow mutual fund investors to build a more secure retirement by deferring taxes on reinvested capital gains. Located at: Investment Company Institute. Click on headline for full article.
SPARK Institute Takes Position on Redemption Fees - Summary: SPARK's position is that to the extent that a mutual fund company determines for itself that redemption fees are appropriate or necessary to prevent or deter market timing or excessive trading, the redemption fees should be imposed according to uniform industry standards as proposed herein. Located at: The Spark Institute. Click on headline for full article.
Interested in a Roth 401k plan? - Summary: January 1, 2006, may seem a long way off, but employers and employees looking for ways to get the most out of their retirement benefits should start thinking about it. That's the date on which "Roth 401k" plans become legal, allowing companies to begin offering workers the option of funding a 401k account with after-tax dollars, in addition to or instead of their traditional 401k. Located at: ConcordMonitor.com. Click on headline for full article.
Study Shows Only Modest Improvement in U.S. Employees' 401k Saving and Investing Habits - Summary: Despite increased efforts by employers to educate workers on the importance of actively saving for retirement, a new study by Hewitt Associates, a global human resources services firm, shows only a slight improvement in employees' 401k participation rates, plan balances and diversification efforts. Located at: 401khelpcenter.com. Click on headline for full article.
ERIC Submits Comments to SEC on Mutual Fund Redemption Fees - Summary: ERIC provides a good overview of the issues involved with redemption fees, provides suggestions and urges the SEC to require that each mutual fund to adopt rigorous polices and procedures, and to subject itself to annual audits, to assure compliance with this restriction. Located at: ERIC. Click on headline for full article.
Pension Reform
Portman and Cardin Introduce Comprehensive Pension Legislation - Summary: Representative Portman (R-OH) has introduced H.R. 1960, the Individual and Workplace Retirement Savings Promotion Act, and Representative Cardin (D-MD) has introduced H.R. 1061, the Preservation and Savings Expansion Act. The bills, which propose a broad array of changes to rules for both defined benefit and defined contribution plans, are nearly identical -- the major difference is that Roth 401k's are repealed in Cardin's legislation. Located at: Chicago Consulting Actuaries. Click on headline for full article.
ERIC Hones Position on Automatic Enrollment In 401k Plans - Summary: ERIC members have expressed support for paving the way for plan sponsors to include automatic enrollment in their plans. But they also have strong concern that should be incorporated in any bill. Located at: ERIC. Click on headline for full article.
Fiduciary Issues
The ERISA Fiduciary Tapestry: Torn and Tangled? - Summary: The ERISA tapestry is not torn and tangled; but rather, that its power to guide the management of employee benefit plans is too weak when the tapestry is left hanging on the wall. Located at: 401khelpcenter.com. Click on headline for full article.
Do What You Do Best, and Delegate the Rest - Summary: The prudent fiduciary should follow the time-proven maxim of doing what one does best and delegating the rest to professionals. This article deals with four questions to frame the practices associated with implementing an investment strategy. Located at: Investment News (free registration required). Click on headline for full article.
Making 401k Plans a Win-Win Proposition - Summary: Getting participants to help themselves and fiduciaries to fulfill their responsibilities. This paper discusses the actions that should be taken to minimize the risk of lawsuits and also help participants achieve financial security. Plan sponsors must tell their participants the whole hard truth -- Employees, not employers, are responsible for their retirement security and must make full use of their 401k plans. Located at: Benefits & Compensation Digest (PDF file). Click on headline for full article.
Selecting and Monitoring Investment Professionals - Summary: This article addresses salient legal issues confronting plan fiduciaries today in connection with the investment of employee benefit plan assets. Located at: Benefits & Compensation Digest (PDF file). Click on headline for full article.
Department of Labor and IRS Issues
IRS 2005-36: Closing of the GUST Program - Summary: Pursuant to this Announcement 2005-36, the GUST defined contribution pre-approved program will close as of June 15, 2005. Located at: Benefitslink.com (PDF file). Click on headline for full article.
IRA Resource Guide for Small Business Owners and Individuals - Summary: The IRS has issued a second multimedia publication (Publication 4395, 2-2005) on CD-ROM providing information on retirement planning. The IRS previously issued a multimedia disk (Publication 4050) describing its correction programs for retirement plans. This second CD-ROM covers IRAs, SEPs, and SIMPLE IRAs. There is no charge to order the disk. Located at: McKay Hochman. Click on headline for full article.
ASPPA Comments to DOL on Orphan Plans - Summary: This is a detailed summary of ASPPA's recommendations on the DOLs abandoned individual account plan proposed regulations and class exemption. Located at: ASPPA. Click on headline for full article.
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