January 2008
401(k) Newsletter
General Issues
DC Sponsor Considerations for the New Year — Summary: This is a summary list of key provisions, both optional and mandatory, from the Pension Protection Act of 2006 and other laws affecting defined contribution plans. Located at: Chang, Ruthenberg & Long PC. Click on headline for full article.
Employee Benefit Trends and Predictions — Summary: Employee Benefit Adviser took a look at the benefit trends of 2007 and spoke with experts about predictions for 2008. Located at: Employee Benefit News (free registration may be required). Click on headline for full article.
Pension Protection Act Boosting 401k Participation — Summary: The passage of the Pension Protection Act in 2006 has led to higher participation in 401k plans, in large part due to increased implementation of automatic plan features such as automatic enrollment, according to one survey. Located at: Workforce Management (free registration may be required). Click on headline for full article.
The Retirement Savings Tax Credit - Updated Fact Sheet — Summary: The Pension Protection Act of 2006 (P.L. 109-280) made the retirement savings tax credit permanent. Beginning in 2007, the eligible income brackets were indexed to inflation. The eligible income limits for 2008 are described in fact sheet prepared by the Congressional Research Service. Located at: Benefitslink.com (PDF File). Click on headline for full article.
2008 Sample Compliance Calendar — Summary: This calendar provides general key retirement plan compliance requirements common to most calendar year plans. This material is for the sole purpose of providing general information. Located at: ERISADiagnostics.com. Click on headline for full article.
Companies Reconsidering Their Plan Investment Offerings — Summary: Gone are the days when designing a 401k plan meant little more than offering every kind of fund under the sun and letting employees choose among them. Today, companies realize that the investment behavior of many 401k participants ranges from the discouraging to the downright frightening. Located at: CFO.com. Click on headline for full article.
Most Employers Ease Company Stock Requirements — Summary: Going well beyond what federal law requires, many U.S. employers now allow 401k plan participants to sell matching contributions made in company stock immediately, according to a recent survey. Located at: Workforce.com (free registration may be required). Click on headline for full article.
Fiduciary Issues
Establish an Investment Committee — Summary: Author explains how plan sponsors and plan fiduciaries can limit liability by forming an investment committee with a clearly defined process. Located at: fi360.com (PDF File). Click on headline for full article.
What is a Prudent Process? — Summary: An outlined the steps required for a prudent process based on his experience and observations. Located at: Plansponsor.com (free registration may be required). Click on headline for full article.
Research
Enhancing 401k Value and Participation — Summary: Study to help employers better understand recent trends in 401k design and the pros and cons of automating 401k participation. Located at: National Center for Policy Analysis. Click on headline for full article.
Why Are Companies Freezing Their Pensions? — Summary: In an attempt to identify factors that led specific companies to freeze their plans, this paper explores the relationship between the probability that a plan was frozen and characteristics of the plan, the firm, and the industry. Located at: Center for Retirement Research at Boston College. Click on headline for full article.
Do Financial Literacy and Mistrust Affect 401k Participation? — Summary: Many researchers have explored why employees fail to participate in 401ks. Potential reasons include economic factors, such as insufficient income, as well as behavioral explanations, such as procrastination. Meanwhile, recent efforts to understand financial decision-making more broadly have focused on the role of financial literacy. Located at: Center for Retirement Research at Boston College (PDF File). Click on headline for full article.
DOL and IRS Issues
DOL Proposes Civil Penalty Rules Under the PPA — Summary: The U.S. Department of Labor today announced a proposed regulation for assessing civil penalties against plan administrators who fail to disclose certain documents to participants, beneficiaries and others. Located at: U.S. Department of Labor. Click on headline for full article.
Proposed DOL Fee Disclosure Rule — Summary: This document contains the proposed regulation under ERISA that, upon adoption, would require that contracts and arrangements between employee benefit plans and certain providers of services include provisions that will ensure the disclosure of information to assist plan fiduciaries in assessing the reasonableness of the compensation or fees paid for services that are rendered to the plan and the potential for conflicts of interest that may affect a service provider's performance of services. Located at: U.S. Department of Labor (PDF File). Click on headline for full article.
DOL Issues Final Default Regulations — Summary: This article sets forth a discussion of the PPAs provisions related to default investments, the basic framework of DOLs regulation, and a discussion of some of the more significant regulatory provisions and the problems identified by our clients. Located at: Groom Law Group. Click on headline for full article.
