August 2006
401(k) Newsletter
General Issues
The Employer Match and Participant Behavior — Summary: This report is intended to assist plan sponsors who are considering changes in their DC plans to attain certain objectives, such as developing stronger incentives for employee savings, implementing a more attractive benefit package for recruitment purposes, and reaching a more desirable mix between employee and employer contributions. Located at: TIAA-CREF Institute (PDF File). Click on headline for full article.
How to Celebrate 401k Day at Your Company — Summary: The Profit Sharing/401k Council of America and employers across the United States who sponsor profit sharing and 401k plans want to help ensure their workers are on track to achieve the retirement they envision. PSCA provides tools for communication and education. Located at: BCSolutionsMag.com (PDF File). Click on headline for full article.
2006 401k Benchmarking Survey — Summary: The Annual 401k Benchmarking Survey was conducted jointly by Deloitte Consulting LLP, the International Foundation and the International Society for Certified Employee Benefits Specialists. A total of 830 responses were received, representing the full spectrum of industries, geographic regions and company sizes. Located at: Deloitte. Click on headline for full article.
Longevity: The Underlying Driver of Retirement Risk — Summary: The purpose of the latest in this series, the 2005 Risks and Process of Retirement Survey, is to evaluate Americans'awareness of such risks, how their awareness has changed since 2003, and how it affects the way they manage their finances. This report focuses on attitudestoward longevity specifically in the context of planning for and managing the financial risk of outliving assets in retirement, and relates the public's understanding of these issues to other studies. Located at: Society of Actuaries (PDF File). Click on headline for full article.
Measuring Retirement Readiness — Summary: Motivating employees to engage in saving for retirement is more important than ever. But, if you don't tell them how much they will need at retirement, how will they know how much to save? Located at: AON (PDF File). Click on headline for full article.
Fiduciary Issues
Ignorance Is Not Fiduciary Bliss — The Duty To Know - Summary: It is almost impossible to comply with ERISA's fiduciary rules without an understanding of the facts. As a result, the first step in almost any prudent process is the duty to learn or know the relevant facts. Located at: Plansponsor.com (free registration required). Click on headline for full article.
Meeting Your Fiduciary Responsibilities — Summary: This booklet addresses the scope of ERISA's protections for private-sector retirement plans. It provides a simplified explanation of the law and regulations. Located at: U.S. Department of Labor. Click on headline for full article.
Fiduciary Investment Issues in DC Plans — Summary: This article reviews trustee fiduciary duties relating to defined contribution plan investments, shielding trustees from fiduciary liability for poor investment performance, and controlling investment costs and fees. Located at: International Foundation of Employee Benefit Plans (PDF File). Click on headline for full article.
Court Cases
Firms Can Keep Company Stock in Plans — Summary: Employers may breathe easier, as two recent court cases indicate fiduciaries are safe to leave company stock in a retirement plan, even if the stock is tanking. Located at: Benefitnews.com. Click on headline for full article.
Two New Stock Drop Decisions--Friendly Skies for ERISA Fiduciaries? —- Summary: Recently, courts issued rulings in two separate employer securities cases. The first decision, issued on June 26, involved the stock of US Airways held in a US Airways 401k plan. The second, issued on June 28, involved the stock of United Airlines held in an ESOP sponsored by United. Although favorable to the defendants, the decisions don't necessarily settle the debate. Located at: BNAtax.com. Click on headline for full article.
DOL and IRS Issues
Labor Department Releases Advance Copies of 2006 Form 5500 — Summary: The U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the Internal Revenue Service and the Pension Benefit Guaranty Corporation has released advance copies of the 2006 Form 5500 and instructions. Located at: 401khelpcenter.com. Click on headline for full article.
This eNewsletter is a digest of information published by a variety of sources on 401(k) and related issues. It is is provided for informational purposes only and is not intended as legal, tax, or investment advice. We hope you find the information useful.