December 2007
401(k) Newsletter
General Issues
2007 End of Year Plan Sponsor "To Do" Lists — Summary: This is a set of six "to do" lists of issues that may require plan sponsor attention before the end of 2007 or early in 2008, including 401k plans. Many of the action items are a result of the Pension Protection Act of 2006. Located at: Snell & Wilmer LLP (PDF File). Click on headline for full article.
Statement Guidance Recap — Summary: PPA Benefit Statements -- A recap of where we are today or, other than awaiting for final guidance and model benefit statements, where do we stand at this point? Located at: McKay Hochman. Click on headline for full article.
Get Full Benefit of Saver's Credit — Summary: Low- and moderate-income workers can take steps now to save for retirement and earn a special tax credit in 2007 and the years ahead, according to the Internal Revenue Service. Located at: IRS. Click on headline for full article.
Participation Rate Not The Only Plan Success Metric — Summary: A new survey has found many plan sponsors concentrating not just on snagging 401k participants, but helping them to save enough for retirement. Located at: Planadviser.com. Click on headline for full article.
Fiduciary Issues
Information That Sponsors and Participants Need to Understand 401k Plan Fees — Summary: Private Pensions: Information That Sponsors and Participants Need to Understand 401k Plan Fees, by Barbara D. Bovbjerg, Director, Education, Workforce, and Income Security Issues, Government Accountability Office, before the U.S. House Committee on Ways and Means. Located at: Government Accountability Office (PDF File). Click on headline for full article.
Research
2007 Retirement Plan Trends — Summary: This report gives a picture of the ever-evolving trends in the retirement industry and their potential impact on retirement plan sponsors and their participants. It includes an annual review, report card, and forecast, and it also provides plan sponsors with helpful tips that serve to compare your plan with industry benchmarks. Located at: Principal Financial Group (PDF File). Click on headline for full article.
Retirement Plan Participation Drops Two Percentage Points — Summary: Participation in employment-based retirement plans fell about 2 percentage points in 2006 among workers with the strongest connection to the work force, according to a study published today by the nonpartisan Employee Benefit Research Institute (EBRI). Located at: 401khelpcenter.com. Click on headline for full article.
How do Immigrants Fare in Retirement? — Summary: The authors research suggest that although immigrant families may be financially better-off in the U.S. than in their native countries, they do enter retirement at a significant financial disadvantage relative to native born households with similar characteristics. Located at: University of Michigan Retirement Research Center (PDF File). Click on headline for full article.
Hewitt Study Shows Employers Continuing to Automate 401k Plans — Summary: Despite employers' increased adoption of automated 401k plan features like automatic enrollment, employees continue to struggle with proactively saving and investing for retirement, according to a new survey by Hewitt Associates. Located at: 401khelpcenter.com. Click on headline for full article.
DOL and IRS Issues
Regulations on Fiduciary Safe Harbor for QDIA — Summary: The DOL issued its final regulations implementing the fiduciary safe harbor for default investments, which was added to ERISA by the Pension Protection Act of 2006. The final regulations, published on October 24, 2007, finalize the proposed regulations released September 27, 2006 and consider the more than 120 public comments sent to the DOL. Located at: Reinhart Boerner Van Deuren (PDF File). Click on headline for full article.
Sample Automatic Enrollment and Default Investment Notice — Summary: To aid plan sponsors in satisfying the requirements of the IRSs proposed regulations for the 2008 plan year – the first plan year that a plan may include a QACA or EACA – the IRS has posted this sample "Automatic Enrollment Notice" that satisfies notice requirements. Located at: IRS (PDF File). Click on headline for full article.
Form 5500 Regulatory Update — Summary: The Department of Labor's amendments to its regulations governing annual reporting and revisions to the Form 5500 forms and instructions are published in today's Federal Register. Contains links to copies of these documents. Located at: Groom Law Group. Click on headline for full article.
Headline News