June 2006
401(k) Newsletter
General Issues
Company Efforts Positively Impact Employees' 401k Saving Habits — Summary: Efforts by companies to help U.S. employees save for retirement -- including putting the 401k plan on autopilot, simplifying plan choices and targeting communication -- have resulted in improvements in employees' retirement saving and investing behaviors, according to a new study by Hewitt Associates. Located at: 401khelpcenter.com. Click on headline for full article.
Maximizing Your Retirement Efforts — Summary: Organizations need to deal with retirement issues head on. There is a growing realization that workers will be in the work force longer in order to fund their retirement years. Employees may be overwhelmed or even intimidated by retirement plans, but it is an employers’ responsibility to help them navigate this space if they want to reverse the headlines we’re seeing today. Located at: BCSolutionsMag.com (PDF File). Click on headline for full article.
Do We Still Need Advice? — Summary: Blossoming enthusiasm for advice comes at a time when other developments in the retirement plan market might seem to be obviating the need for it. So, why the continued expansion of interest in offering advice? Located at: Plansponsor.com (free registration required). Click on headline for full article.
Company Increases Participation the Old-fashioned Way — Summary: In the middle of 2005, Tim Timbrook, director of Global Compensation and Benefits at Hanover Industries in Houston, Texas, examined his company's retirement plan participation and did not like what he saw. Less than half of Hanover's 2,713 eligible employees were participating in the plan. In addition, the company was failing its discrimination tests and was consistently having to return deferrals to highly compensated employees. Located at: Plansponsor.com (free registration required). Click on headline for full article.
Engaging Employees to Help Them Save for Retirement — Summary: Read about how employees respond and take action when retirement communication is directed to their individual circumstances. Located at: Aon (PDF File). Click on headline for full article.
Online Year 2006 ERISA Reporting Calendars — Summary: Plan administrators of single and multiemployer pension and welfare benefit plans can visit this online calendar for concise information on filing annual and special reports with the DOL, IRS and PBGC. Located at: Watson Wyatt Worldwide. Click on headline for full article.
Fiduciary Issues
Fiduciary Liability and Its Abatement Under 404(c) — Summary: While much has been written about fiduciary liability, few fiduciaries actually understand it. ERISA Secs. 404(a) and 404(c) provide a roadmap for abating this liability. Advisers to retirement plans should help their clients understand their options and make prudent decisions. Located at: Reish Luftman Reicher & Cohen (PDF File). Click on headline for full article.
ERISA Fiduciary Issues for Plan Sponsors — Summary: This is a brief overview of some of the key items that Groom's ERISA fiduciary practice group are assisting their clients in managing cutting edge and high liability issues facing plan sponsors. Located at: Groom Law Group (PDF File). Click on headline for full article.
404(c) Not Exclusive Means to Satisfy Fiduciary Duty — Summary: The U.S. Court of Appeals for the Seventh Circuit has held that following the safe harbor under ERISA Section 404(c) is not the exclusive means by which a plan trustee may avoid fiduciary liability with respect to a participant-directed 401k plan. Located at: Buck Consultants (PDF File). Click on headline for full article.
DOL and IRS Issues
IRS Plan Compliance Resources — Summary: Practitioners can find a lot of good information these days on the IRS's website when it comes to retirement plan compliance. However, sometimes it is a bit difficult to find what you are looking for. Benefitsblog has put together this resource list. Located at: Benefitsblog. Click on headline for full article.
DOL Issues Guidance on Mutual Fund Settlements — Summary: This article notes that the guidance affecting banks, brokers, insurance companies, and other entities ("intermediaries") that receive mutual fund settlement proceeds for the benefit of ERISA-covered plans is troubling in that DOL takes the position that such an intermediary will be a "fiduciary" for ERISA purposes, even if the intermediary does not otherwise have a fiduciary role to ERISA-covered plans. Located at: Groom Law Group (PDF File). Click on headline for full article.
Terminating Abandoned DC Plans — Summary: The Department of Labor has issued final regulations that allow "qualified termination administrators" (QTAs) to terminate and distribute benefits from individual account plans that have been abandoned by their sponsoring employers. Located at: Buck Consultants (PDF File). Click on headline for full article.
EBSA Finalizes Updates to Voluntary Fiduciary Correction Program — Summary: This update to the VFC Program provides details on how plan sponsors can apply for relief, 19 categories of covered transactions, acceptable corrective methods, and examples of potential violations. In light of this final guidance, employers may find this to be an opportune time to review their employee benefit plans for ERISA compliance and potential fiduciary violations. Located at: Hewitt (PDF File). 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.
