February 2008
401(k) Newsletter
General Issues
Legislative and Regulatory Year in Review and the Outlook for 2008 — Summary: This comprehensive report rounds up key legislation and regulatory guidance enacted in 2007 and forecasts the outlook for legislative and regulatory activity in 2008. Located at: Hewitt. Click on headline for full article.
Much Talk, Little Action During 2007 Legislative Session — Summary: During 2007, lawmakers evinced a continuing desire to enact legislation that would affect employer-sponsored health, retirement and compensation programs – yet very little of that legislation passed. The year also marked the emergence of new issues that would affect plan investments. Located at: Watson Wyatt Worldwide. Click on headline for full article.
Is DC Plan Communication and Education Dead? — Summary: Now that plans can be automated to a large degree, do communication and education have roles to play? They do indeed. Getting workers into a 401k plan, increasing their savings rate, and improving their diversification through default mechanisms is not necessarily synonymous with financial security. Located at: Workforce Management (free registration may be required). Click on headline for full article.
Rethinking the Company Match — Summary: Recent research from Harvard and Yale universities outlines potential reasons that companies may want to rethink offering a 401k match. Located at: Workforce Management (free registration may be required). Click on headline for full article.
Investments That Qualify Under the Final QDIA Regulation — Summary: This article focuses on the types of investments that qualify as QDIAs and is in a Q&A format. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
Pre-Tax Rollovers to Roth IRAs — Summary: Beginning January 1, 2008, a plan participant may roll over directly from an “eligible retirement plan” account to a Roth IRA, subject to the existing limitation on Roth IRA rollovers. Located at: Sungard/Relius. Click on headline for full article.
Spouse Beneficiary Rules — Summary: Under the original and final required minimum distribution regulations, the surviving spouse has always had special opportunities. The surviving spouse of a deceased participant may roll the funds into his or her own IRA or to a qualified plan, if the qualified plan accepts rollovers. Located at: McKay Hochman. Click on headline for full article.
Fiduciary Issues
Conducting a DC Plan Assessment — Summary: It is clearer than ever that DC plan sponsors can no longer afford to take a laissez-faire approach toward plan management. The plan fiduciaries must ensure they are doing everything they can to act exclusively in the interest of the plan's participants. Located at: Sibson Consulting. Click on headline for full article.
2008 Compliance Calendar Checklist for DB/DC/403(b) Plans — Summary: Certain provisions of the Pension Protection Act of 2006 will require plan amendments. Plan amendments should be effective retroactively and will not violate anti-cutback rules if made on or before the last day of the plan year beginning on or after January 1, 2009 (or 2011 for governmental plans). Here is a checklist. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Research
Measuring the Effectiveness of Automatic Enrollment — Summary: An analysis of about 50 plans adopting automatic enrollment confirms that the feature does improve participation rates, particularly among low-income and younger employees. Located at: Vanguard Center for Retirement Research (PDF File). Click on headline for full article.
DOL and IRS Issues
Form 5500 in Transition — Summary: Highlights of the final rules affecting the 2007 and 2008 plan years and transition dates. Located at: Watson Wyatt Worldwide. Click on headline for full article.
DOL Cracking down on 401k Oversight — Summary: The Department of Labor is has proposed levying fines of up to $1,000 a day against retirement plan administrators who fail to disclose certain documents to investors. Located at: Wolters Kluwer Financial. Click on headline for full article.
