April 2008
401(k) Newsletter
General Issues
More Employees Borrowing Against 401k Plans — Summary: Retirement plan participants are taking out loans on their investments at an accelerated rate jeopardizing their future assets, a leading Boston College researcher says. Located at:
Workforce.com (free registration may be required). Click on headline for full article.
Employers Redouble Efforts to Communicate Need for Diversification — Summary: The value of diversification can't be overstated for employees. That's why more and more employers and their advisers are redoubling their education and communication efforts around this crucial concept. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Miscommunication Happens! Correcting it Through EPCRS — Summary: Miscommunications can happen to even the best intentioned clients and frequently result in a failure that adversely impacts the tax-qualified status of the plan, known as a "qualification failure." When they do, the Internal Revenue Service's consolidated correction program for defects occurring in tax-deferred retirement programs, the EPCRS program, can be used to resolve these issues. Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
PPA Check-Up 2008 — Summary: Drinker Biddle and Watson Wyatt Worldwide presented a webinar on how plan sponsors will comply with the Pension Protection Act of 2006 (PPA), and how they will face the monumental task of implementing the PPA requirements in 2008. Link provided to view the presentation as well as hear the audio portion of this webinar. Located at: Drinker Biddle & Reath LLP. Click on headline for full article.
Pension Protection Act of 2006: Implementation and Aftermath — Summary: This five-section special report provides insights from benefit experts on retirement plan administration in the post-PPA world as well as a look at how the PPA affects critical aspects of plan administration as the dust continues to settle. Located at: Thompson Publishing (PDF File). Click on headline for full article.
Court and Legislative Issues
House Passes PPA Technical Corrections Bill — Summary: The House-passed bill differs slightly from a PPA technical corrections bill (S. 1974) the Senate approved in December 2007. That means the House and Senate bills will need to be reconciled, a process expected to begin in April. Located at:
Benefitslink.com. Click on headline for full article.
Fiduciary Issues
ERISA Fiduciary Responsibility to Monitor and Collect Delinquent Contributions — Summary: Employers maintaining benefit plans that are subject to ERISA's trust requirement and plan fiduciaries should properly assign authority over plan assets, or they may be subject to fiduciary responsibility (and liability) for losses sustained by the plan. Located at: McDermott Will & Emery. Click on headline for full article.
Best Practices for Preventing 401k Plan Lawsuits — Summary: While it is impossible to eliminate the risk of being sued, this article reviews several steps that should help 401k plan fiduciaries reduce their risk of becoming a lawsuit target. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
ERISA Fiduciaries Could Have Disclosure Mandate — Summary: Federal regulators have contended that fiduciaries may still be legally required to disclose plan fees such as revenue sharing even if such a mandate is not explicit in federal benefits law. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Research
Hewitt Survey Reveals New Employer Trends in Retirement — Summary: Companies are increasing their focus on reducing retirement plan risk and ensuring that employees take appropriate advantage of their retirement plans. Located at:
401khelpcenter.com. Click on headline for full article.
DOL and IRS Issues
Deferral Deposit Deadline — Summary: The long-awaited guidance on deadline for depositing elective deferrals arrived in proposed regulation format on February 29, 2008. The proposal offers a "7-business day safe harbor" for employers with less than 100 participants as of the first day of the plan year to make their deposits to the plan, not to allocate them. Located at: McKay Hochman. Click on headline for full article.
IRS Issues Guidance on 2008 Law Changes — Summary: Of interest to defined contribution practitioners, Notice 2008-30 discusses distributions of gap period income for 402(g) corrections, rollovers of pretax plan accounts to Roth IRAs, and qualified optional survivor annuities. Located at: Sungard/Relius. Click on headline for full article.
New Federal Regulations on 401k Plans — Summary: Federal regulators have released several pieces of guidance that should be of help to defined contribution plan fiduciaries and administrators. This article summarizes them. Located at: Milliman (PDF File). Click on headline for full article.
