March 2008
401(k) Newsletter
General Issues
Expert Offer Enrollment Strategy Advice — Summary: If employers wish to see robust participation rates in their 401k plans, they need to have brief and informative educational sessions, easy-to-enroll options and features that allow them to defer decisions to experienced brokers. Located at: Employee Benefit News. Click on headline for full article.
VIDEO: Maintaining Your Plan — Summary: This video was produced by the IRS Office of Employee Plans and is designed to provide useful information to help retirement plan sponsors choose and operate their plans. Located at: IRS. Click on headline for full article.
GenXs Put Retirement at End of Financial Priorities — Summary: Though concerns about their retirement exist, members of Generation X say those concerns are on the backburner while they deal with current financial priorities, according to a recent survey. Located at: Planadviser.com. Click on headline for full article.
When a Distribution Upon Termination Must be Halted — Summary: An employee, who had recently been laid off and requested a distribution from the plan, was rehired in another department of the same company. How do you determine whether the employee can receive the distribution despite the fact that she had been rehired? Located at: Reish Luftman Reicher & Cohen. Click on headline for full article.
State Laws Permitting Same-Sex Marriages Have no Effect on Retirement Benefits — Summary: The legalization of same-sex marriages in some states, such as occurred in Massachusetts in 2004, will not enable same-sex partners to receive spousal retirement benefits under private pension plans, Federal employee pension plans or Social Security, according to a study by the Congressional Research Service. Located at: CCH. Click on headline for full article.
Plan Rollover Chart — Summary: This is a chart of what the Internal Revenue Service regards as permissible when rolling funds over from one type of retirement account to another. Located at: 401khelpcenter.com (PDF File). Click on headline for full article.
Court and Legislative Issues
Participant Can Sue Plan Employer over Loss — Summary: With today's defined contribution plans, fiduciary misconduct need not threaten the entire plan's solvency to reduce an individual participant's benefits below the amount that he or she would otherwise receive. Located at: Goodwin Procter LLP (PDF File). Click on headline for full article.
Supreme Court Says 401k Plan Participants Can Sue — Summary: U.S. Supreme Court issued its decision in LaRue v. DeWolff, Boberg & Associates, Inc., et al., which clarifies that individual participants in 401k and other retirement plans subject to federal pension laws can sue plan fiduciaries to recover investment losses from their accounts. Located at: Ice Miller. Click on headline for full article.
ERISA Litigation - LaRue — Summary: Increasing the likelihood of litigation involving 401k plans, the U.S. Supreme Court in LaRue v. DeWolff, Boberg & Assocs., Inc., reversed the Fourth Circuit ruling that rejected LaRue's claim that the 401k plan fiduciary caused losses of $150,000. Located at: Thompson Hine LLP (PDF File). Click on headline for full article.
Fiduciary Issues
What Makes Me a Fiduciary? — Summary: Lately, the word on the street has been that retirement plan fiduciaries are being put under a high degree of scrutiny for their actions or, more importantly, their inactions. This article will help you determine if you are a fiduciary and what to do if you are. Located at: Milliman (PDF File). Click on headline for full article.
Research
Survey Finds Trend Toward Earlier Participation in 401k Plans — Summary: More employers are allowing earlier participation in their 401k plans than in the past and more are providing matching funds earlier in an employee's career, according to a survey released by The Profit Sharing/401k Council of America. Located at: CCH. Click on headline for full article.
401k Plan Eligibility Survey — Summary: This is the tenth year that PSCA has collected defined contribution plan eligibility data. The changes over time have been significant. Located at: Profit Sharing/401k Council of America (PDF File). Click on headline for full article.
DOL and IRS Issues
Online DOL Resource Helps Chart Retirement Finances — Summary: The U.S. Department of Labor released this new online resource that makes it easier for Americans to prepare for a financially secure retirement. A series of interactive worksheets were developed as a companion to a 2006 publication entitled "Taking the Mystery Out of Retirement Planning." Located at: U.S. Department of Labor. Click on headline for full article.
IRS Rules Against Qualified Long-Term Care Insurance in 401k Plan — Summary: The IRS ruled that the payment of premiums on qualified long-term care insurance by a 401k plan would be treated as a taxable distribution in violation of the distribution restrictions of section 401(k)(2)(B). Located at: Sutherland Asbill & Brennan LLP (PDF File). Click on headline for full article.
Department of Labor Issues Guidance on 401k Plan Fees — Summary: As a result of this DOL guidance on 401k plan fees, plan fiduciaries should have access to the information they need to carry out their duties. But given the large amounts of money at stake, and the sheer competitiveness of the 401k industry, comments on these proposed rules will likely be voluminous and contentious. Located at: Mintz Levin. Click on headline for full article.
